We are a leading designer and manufacturer of zero-emission commercial trucks and buses and charging infrastructure solutions for fleets, large enterprises, original equipment manufacturers, and governments. Our product offerings range from cargo vans, transit and shuttle buses, school buses, specialty work trucks, ambulances and electric powertrains for school buses, transit buses and motorcoaches. Our product solutions help our customers reduce their greenhouse gas emissions, lower operating costs and improve energy efficiency.

We started in 2008 as a manufacturer of hybrid systems for commercial vehicles. In 2017, we redirected our efforts to focus exclusively on the market opportunity in ZEVs. We successfully and quickly adapted to developing ZEVs by leveraging nearly 10 years of extensive knowledge and production infrastructure for the hybrid systems. Our 14-year track-record of research and development, significant customer engagement and validation, and focus on building highly customized vehicles has allowed us to create an electric solution that we believe remains ahead of the competition in terms of technology, reliability, and versatility. We combine internally-developed, optimized modular software, which can be used in multiple platforms and applications, with hardware designs that allows us to address a diverse range of opportunities in the markets in which we operate in a cost-effective manner. Our flexible approach provides a significant time-to-market advantage. We believe we are the only full-range manufacturer of Class 3 to 7 ZEVs in the United States providing end-to-end electrification solutions including advanced analytics software and mobile charging solutions to our customers.

In 2022, we continued to expand our product offerings, business partnerships and technologies.

Our complementary suite of products, software and services are designed to deliver highly reliable and cost-effective solutions to our customers operating vehicles in a wide range of commercial applications. Our goal is to simplify the electrification process for our customers and provide solutions that flow from the vehicle purchase to the charging infrastructure to the after-sale analytics and service support. Lightning’s “fleet electrification equation solution” for fleet

managers covering vehicles, charging infrastructure, software, service, financing and public incentives or funding, offers a customized solution package to address customer needs, uses, and funding and financing options.

Through our free fleet configuration tool, Fleet Planner, fleet managers are able to input their individual fleet characteristics and receive a customized operating cost analysis and carbon reduction metrics based on the recommended ZEV that best fits their specific needs.

Our technology is optimized for ZEVs in Classes 3 to 7, covering gross vehicle weights of approximately 10,000 to 33,000 pounds, running in urban environments, ranging from medium-duty vans to motorcoaches. Typically, the level of customization is higher for ZEVs compared to traditional combustion engine commercial vehicles. Because our software and hardware are modular, we are able to select from our code and hardware libraries to create configurations that suit customers’ needs across a broad category of use applications. Our modular customization strategy allows us to adapt relatively quickly to fulfill orders with multiple configurations.

In addition to building complete ZEVs, we also design and sell electric powertrains to our OEM partners. We train third-party and OEM technicians to install and service the powertrains within the OEMs’ manufacturing facilities.

We offer a wide range of vehicles, including passenger vehicles, cargo vehicles, ambulances, and city transit bus and motorcoach repowers. Our ZEVs are ideal for localized applications such as airport parking, hospitals, universities, and commercial campuses, as well as middle- and last-mile deliveries. All our ZEVs support both Level 2 AC charging and DC fast charge. We offer a standard 5-year or 60,000-mile warranty with our ZEVs, with extended warranty options available. For warranty services, we have a team of direct service technicians who travel to customer sites to perform repairs and updates, as well as trained local service providers, on an as-needed basis.

Our principal platforms are:

In addition, we offer repowered powertrains for class 7 and 8 transit buses and motorcoaches that replace their diesel or CNG engines with our battery-electric drivetrain as an alternative to purchasing a new, more expensive, all-electric vehicle. For example, we are the exclusive motorcoach repower electrification solution provider to ABC Companies, a leading motorcoach distributor in the United States. Our electric repower solution offers a shorter delivery time and a pricing advantage compared to many new electric buses and coaches manufactured by other OEMs.

We are currently developing and testing additional platforms, such as class 5 and 6 trucks and buses, and expect to start production in 2024.

We sell, both mobile and stationary, chargers and energy systems as supporting products to our ZEV customers. There are significant complexities associated with designing, installing and supporting charging infrastructure. We believe that by providing charging infrastructure with the vehicle, we can ensure compatibility and provide the customer with a single point of contact if an issue were to arise. We believe that providing a packaged turnkey vehicle with charging solutions accelerates sales and scale-up cycles and is a competitive advantage.

Our second-generation mobile battery vehicle charger that we manufacture in-house provides flexible charging solutions while permanent infrastructure is being built and also provides a commercial vehicle rescue solution. It offers DC fast charge for up to five electric vehicles with a capacity of 105kWh to up to 420 kWh, making it the ideal charging solution for charging trucks, vans, buses and cars at remote locations, special events and depots.

Our proprietary Lightning Insights telematics and analytics platform, which is installed in each ZEV and powertrain sold, allows us to collect up to 160 data points for every ZEV and optimize drive cycle and vehicle performance data in real-time. Our manned network operations center monitors and analyzes all the vehicle telematics data for service and support issues, and allows us to provide predictive maintenance and support to our customers. This data is also integrated with our charging software. By integrating a complete charging solution with vehicle telematics, fleet managers are able to coordinate their fleet assets to maximize uptime and minimize cost, schedule vehicle charging times to improve energy usage and save money, utilize vehicle-to-grid technology to earn energy credits, use the vehicle and charger data to further EV deployments, intelligently pair vehicles and chargers to meet daily route needs, and much more. This data provides drivers and fleet operators meaningful real-time recommendations about how to improve vehicle performance, routes, and charging strategies and scale their electric vehicle fleets. Lightning Insights also provides fully compliant reporting for all federal, state, and local EV and charger incentive programs such as the California HVIP, the FTA’s Low or No Emission Vehicle Program, or LowNo, the EPA Clean School Bus Program, and the Low Carbon Fuel Standard, or LCFS. Our analytics platform is offered on a subscription basis with all ZEV and powertrain purchases. We are currently developing a mobile application featuring custom driver notifications.

We sell primarily to commercial vehicle fleet operators, making our sales process Business-to-Business focused and our products bespoke to our customers’ needs. We also partner with Collins Bus and its dealer network to sell electric school buses to government entities, such as transit agencies and school districts. Because we work directly with our customers, we are able to assess and meet their needs in a cost-effective manner. We believe our customers choose to partner with us because we are a one-stop shop for ZEVs and charging and energy infrastructure, across Classes 3 to 7 in the United States. We aim to take the complexity out of the EV purchasing process by helping customers specify the vehicles that suit their individual needs based on our in-depth telematics/analytics while also providing them with charging solutions for their fleets. Our vehicles currently on the road with customers, some for as long as 42 months, benefit from extensive validation with customers and end-users, and are deployed in real working conditions, gathering real-time data. Our customers represent some of the largest global fleet operators and logistics providers in the world, as well as a variety of other large enterprises and governments across a variety of commercial vehicle categories.

We have also developed partnerships with specialty vehicle OEMs, who are critical to our growth strategy and enable us to apply our modular technology to an expanding range of markets including recreational vehicles, ambulances, school buses, coaches, etc. We work closely with manufacturing partners including Forest River, Rev Group, Winnebago and ABC Companies to electrify vehicles in their target markets that they manufacture. For example, we are the exclusive motorcoach repower electrification solution provider to ABC Companies, a leading motorcoach distributor in the United States. Our four largest customers accounted for approximately 19%, 16%, 12% and 11% of total revenue for the year ended December 31, 2022. As of and for the year ended December 31, 2022, two customers accounted for 40% and 25% of our total accounts receivables.

Many of our customer purchase orders have long lead times and contain contingencies, such as completing a successful pilot program, obtaining third-party financing, or obtaining government grants such as HVIP. The conversion of our order backlog to revenue is dependent, among other things, on our ability to obtain and secure a steady supply of components used in our manufacturing process, and in some cases particular customizations require longer lead times. For these

reasons, we believe, that our order backlog at any particular date is not necessarily representative of potential sales or future revenue, and we will no longer include an actual dollar amount of backlog in our disclosure.

Our manufacturing facility is located in Loveland, Colorado. At this facility, we design, manufacture, assemble and test our ZEVs, powertrains and charging solutions. We currently operate a single 8-hour shift with capacity to manufacture and assemble 1,500 ZEVs and/or powertrain units per year. Our manufacturing space comprises over 130,000 square feet. We continue to invest in our facility and systems. For example, we use multiple LightGuide projected augmented reality software systems, automated welding collaborative robots, an automatic fastener torque system, and recently deployed a fully digital manufacturing execution system providing visual floor management and electronic work order system. In addition, we are installing two state-of-the-art chassis dynamometers that will allow us to accelerate testing of our ZEVs on-site and continue to improve our quality and optimize efficiency.

Since 2008, we have built an ecosystem of supply-chain partners and specialty vehicle partners. Our suppliers are instrumental to the performance and reliability of our vehicles and enable us to scale in a relatively cost-effective manner. Our key suppliers include General Motors, Inc., Dana Holding Corp., Danfoss, BorgWarner, Inc., ABB, Siemens AG, Proterra and CATL, among others, all of which are industry leading manufacturers of critical components like chassis, bodies, batteries and chargers. While we have experienced supply challenges with battery and chassis manufacturers in the past, primarily related to delivery commitments, quality, and performance, we continue to expand and improve our supply chain partnerships.

As of and for the year ended December 31, 2022, two suppliers accounted for 20% and 15% of our total accounts payable and two suppliers accounted for 34% and 23% of inventory purchases. We aim to optimize our supply chain for quality, reliability, and cost. We believe our long-term relationships with supply chain partners will be a key driver in our ability to scale without unduly sacrificing quality or delivery times and serve as a foundation for our growth. We are building relationships with multiple suppliers for each core component of our vehicles.

Currently, we have a sales force consisting of sales representatives and regional sales managers located across the major markets in the United States. Our education-focused, technically sophisticated sales force markets and sells a complete range of end-to-end electrification solutions directly to urban commercial fleets, which include commercial ZEVs, powertrains and charging services. We also engage with certain commercial vehicle dealers to market and sell our ZEVs. To further broaden awareness of our products and technologies, we regularly display our products at trade shows, such as the NTEA Work Truck show, the Advanced Clean Transportation show, the American Public Transportation Association show and the School Transportation News show, and host Lightning days where we demonstrate our vehicles, inform about our products, and allow hands-on ride and drive opportunities.

Overall, the demand for our products is relatively consistent over the year, based on our limited history. However, in typical market conditions, the North American automobile market experiences a higher level of production in the first half of the year due to fewer holidays and the practice of plant shutdowns in July and December and model year changeovers. We have also experienced delays in customer orders in the fourth quarter and early in the year due to grant funding cycles. Typically, government programs establish a budget for the coming year late in November or December with roll-outs starting in the first quarter of the following year. The market has experienced seasonality because school districts order school buses in late Spring or early Summer to be available for the coming school year.

According to McKinsey & Co., or McKinsey, worldwide sales of light commercial electric vehicles were less than 200,000 units in 2021, and represented 2% of sales in that segment. Further, per McKinsey, 75% of the 200 largest fleet operators in the United States comprising approximately 1.2 million vehicles, have committed to reduce carbon emissions in their fleets

We believe that some of the major drivers for the adoption of ZEVs are the lower operating costs and total cost of ownership versus combustion engine vehicles, the availability of grant and incentive programs, improving charging infrastructure and government mandates requiring low- or zero-emissions vehicles. Some of the challenges in the commercial fleet markets continue to be the availability of financing, the price of ZEVs compared to combustion engine vehicles, and support infrastructure.

Customers of our ZEVs generally see lower operating costs versus a comparable combustion engine vehicle as a result of lower fuel costs, lower maintenance expenses, fewer fluids, such as engine oil, that require regular changing, reduced brake wear due to regenerative braking and fewer moving parts overall as compared to combustion engine vehicles.

We do not incorporate third-party studies or articles into this annual report on Form 10-K.

We believe that our primary competition today is with legacy OEM internal combustion engine-based vehicles. As the regulatory environment is changing over the next several years, we expect to face more competition from manufacturers of electric commercial vehicles. There are both traditional specialty vehicle OEMs and an increasing number of newer companies that have announced offerings of commercial electric trucks, vans or buses. We currently have few competitors in the medium-duty electric vocational van and shuttle bus space, including GreenPower Motor Company, XOS Trucks, Sea Electric, Workhorse and Motiv. We compete with Micro Bird Corporation in the market for Type A school buses. We believe the competitive factors in our markets are talent and culture, technological innovation, product performance and quality, product availability, customization options, service options, customer experience, brand differentiation, product design and style, pricing, manufacturing scale and efficiency. We believe that we have a head start and compete efficiently with our competitors (including the large OEMs) on the basis of these factors; however, the competitive landscape is dynamic and our competitors may develop greater financial, technical, manufacturing, marketing and other resources than we do. Our competitors also compete with us in recruiting and retaining qualified research and development, sales, marketing and management personnel, as well as in acquiring technologies complementary to, or necessary for, our products. Additional mergers and acquisitions in the electric vehicle market may result in even more resources being concentrated in our competitors.

Our primary areas of focus for research and development include, but are not limited to (i) ZEV development and system integration for additional vocational applications and weight classes, development of our built-for-purpose electric vehicle platforms, developed on our Lightning e-chassis, and optimizing cost and efficiencies in our current platforms; (ii) software and algorithms for our electrification solutions; (iii) telematics and data analytics with over-the-air update support; (iv) accelerated lifetime testing processes to improve reliability, maintainability and system-level robustness; (v) sub-systems enhancement; and (vi) mobile and wireless charging solutions. We expect to remain focused on R&D for the foreseeable future as we continue to invest in R&D activities to expand our commercial reach into additional markets.

We protect our growing intellectual property portfolio through a combination of patent, trademark, copyright and trade secret protection, as well as confidentiality and invention assignment agreements with our employees, consultants and suppliers. We seek to control access to, and distribution of, our proprietary information through non-disclosure agreements with our vendors and business partners. Unpatented research, development, know-how, and engineering skills make a vital contribution to our business, and we pursue patent protection when we believe it is possible and consistent with our overall strategy for safeguarding intellectual property. While we currently are in the process of applying for patent protection for some of our inventions, trade-secrets, particularly with respect to our software and supply chain, are our primary form of intellectual property protection. We regularly review our development efforts to assess the existence and patentability of new intellectual property. To that end, we are prepared to file additional patent applications as we consider appropriate under the circumstances relating to the new technologies that we develop.

In the automotive space in which we operate, we are subject to numerous federal, state, and local laws and regulations governing matters including environmental protection, and occupational health and safety. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory and remedial obligations and the issuance of orders enjoining some or all of our operations in affected areas. A brief summary of material government and environmental regulations and incentives is set forth below.

Our vehicles are subject to compliance with the Federal Motor Vehicle Safety Standards, or FMVSS, and other regulatory obligations established by the National Highway Transportation Safety Administration, or NHTSA. Lightning is a registered USDOT Intermediate Stage Manufacturer, Final Stage Manufacturer, Incomplete Vehicle Manufacturer, and Vehicle Alterer. Any chassis or body modifications performed by us must be designed, manufactured, tested, and self-certified to ensure that the final ZEV complies with applicable FMVSS requirements.

We are also required to comply with or demonstrate exemptions from other requirements of federal laws administered by NHTSA, including the Federal Corporate Average Fuel Economy, or CAFÉ, standards, Theft Prevention Act requirements, consumer information labeling requirements, Early Warning Reporting requirements regarding warranty claims, field reports, death and injury reports and foreign recalls, and owner’s manual requirements. Where required, our ZEV are fully compliant with the foregoing referenced standards. We also have systems in place to ensure compliance with all reporting obligations to NHTSA.

The battery packs we use in our ZEVs must conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation. Governing regulations, issued by the Pipeline and Hazardous Materials Safety Administration, are based on the United Nations Recommendations and Model Regulations on the Transport of Dangerous Goods, as well as related UN Manual of Tests and Criteria.

Under the U.S. Clean Air Act, medium and heavy-duty vehicles and powertrains are required to obtain a certificate of conformity issued by the U.S. Environmental Protection Agency, or EPA, and a California executive order issued by CARB. This regulatory process is designed to ensure that all vehicles comply with applicable emission standards for both criteria pollutants, such as nitrogen oxides or NOx, and particulate matter, and greenhouse gases, or GHG, such as CO2 and nitrous oxide. A certificate of conformity is required for vehicles sold in all states, and a CARB executive order is required for vehicles sold in California, and in 17 states and the District of Columbia, that have adopted the California standards that are either already effective or take effect in the next few years. CARB sets more stringent standards for emissions control for certain regulated pollutants for new vehicles and engines sold in California and must obtain a waiver of preemption from the EPA before implementing and enforcing such standards. California’s waiver of preemption with regard to GHG emission standards is currently the subject of legal challenges, and the authority of California to implement and enforce GHG emission standards for vehicles and engines in the future is uncertain. The EPA certificate of conformity and CARB executive order must be obtained for each model year for each class of vehicle. Failure to obtain or comply with the terms of a certificate of conformity or executive order is subject to civil penalty and administrative or judicial enforcement. We currently utilize EPA certified chassis from major OEM’s (an alternative fuel vehicle certification from the EPA is not required for our ZEVs), and maintain ten active CARB executive orders.

Pursuant to its authority under the Clean Air Act, the EPA adopted Phase 1 fuel efficiency and GHG standards for medium-duty vehicles and engines on September 15, 2011. The EPA adopted more stringent fuel efficiency and GHG standards for medium-duty vehicles and engines on October 25, 2016. Manufacturers of vehicles and engines may comply with the GHG standards by selling increasing percentages of ZEVs. CARB also has adopted GHG and fuel efficiency standards for medium and heavy-duty vehicles and engines. The Advanced Clean Trucks, or ACT, Regulation approved by CARB in June 2020 requires medium-duty and heavy-duty vehicle manufacturers to produce and offer for sale in California increasing numbers of ZEVs. These regulatory standards increase annually beginning in 2024, and will require that 30%-50% of new truck sales in California (depending on class) be ZEVs by 2030, and 55%-75% (depending on class) by 2035.

Offset credits for early production of heavy-duty ZEVs became available in model year 2021. We are registered, and bank these credits which can then be sold to truck OEMs that are not in compliance with the ACT regulation for a period of 5 years.

Additional CARB regulations mandating ZEV deployment in specific vocations are in various stages of development or implementation. These include the Zero Emission Fleet Rule, Innovative Clean Transit Regulation, and the Zero Emission Airport Shuttle Regulation.

Receipt of an EPA certificate of conformity and CARB executive order obligates the holder to ensure that the covered engine or vehicle is capable of complying with applicable standards throughout the full useful life of the product, which for medium-duty vehicles may be ten years or from 120,000 to 185,000 miles, whichever comes first and depending on the engine and vehicle size. Emissions control system warranty coverage must be provided for a period of five years or 50,000 to 100,000 miles (CARB warranty obligations increasing to up to 110,000, 150,000 and 350,000 miles in 2022), whichever comes first and depending on the engine and vehicle size. During this time, manufacturers must repair emission-related defects at no cost to the customer. Throughout the full useful life of the engine or vehicle, manufacturers are required to remedy in-use problems that cause engines or vehicles to exceed emission standards for criteria pollutants or GHGs.

Manufacturers may have to conduct recalls, service campaigns or other field actions, or provide extended warranties to address any such in-use issues that may arise. The EPA is considering extending the warranty period, including by adopting the CARB warranty obligations of 110,000, 150,000, or 350,000 miles, depending on the engine size. Manufacturers of medium-duty engines and vehicles also must ensure that their products comply with on board diagnostics, or OBD, requirements. The OBD system is intended to identify and diagnose malfunctions within the engine, after treatment and emission control systems and alert the driver to the underlying issue so the vehicle can be brought in for service. CARB issues approval of the OBD system as part of its issuance of an executive order; the EPA deems demonstration of compliance with CARB's OBD requirements to satisfy the EPA’s requirements. As with emissions compliance, manufacturers are required to ensure that the OBD system functions as designed and can identify component malfunctions throughout the full useful life of the vehicle or engine.

Many customers of electric vehicles utilize state and federal incentive programs to offset the higher initial costs of electric vehicles, as well as to fund the installation of charging equipment. Our customers have historically leveraged the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, or HVIP, as well as Volkswagen Emissions Mitigation Trust Fund funding that is allocated to each state to purchase our vehicles and charging systems. Most recently, the EPA Clean School Bus program, the Low-and No-Emission Vehicle program, and the Federal Inflation Reduction Act passed in 2022, as well as several state programs will provide material new incentives for electric vehicles in 2023 and beyond.

Certain vehicle emissions performance standards as well as our installation of stationary chargers may provide an opportunity for us to sell emissions credits. The registration and sale of ZEVs in California may earn us ZEV credits that we can sell to other OEMs. Other states within the United States that have adopted similar programs include Colorado, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont.

Conformity. In connection with the delivery and placement into service of zero-emission and low-emission vehicles, we may earn tradable GHG credits that can be sold to other manufacturers. Under the EPA’s Greenhouse Gas Rule, plug-in hybrid, all-electric and fuel cell vehicles earn a credit multiplier of 3.5, 4.5, and 5.5, respectively, for use in the calculation of GHG emission credits.

Commercial engine and vehicle manufacturers are required to meet the NOx emission standard for each type of engine or vehicle produced. Typical diesel engine emission control technology limits the fuel economy and GHG improvements that can be made while maintaining compliance with the NOx standard. As the fleet average GHG standards continue to decrease over time, compliance with the NOx standard may increase the difficulty for conventional diesel vehicles to meet the applicable GHG standards. Accordingly, manufacturers of diesel trucks may need to purchase GHG credits to cover their emission deficit. The EPA’s Greenhouse Gas Rule provides the opportunity for the sale of excess credits to other manufacturers who require such credits to comply with these regulatory requirements. Furthermore, the regulation currently does not limit the number of GHG credits sold within the same commercial vehicle categories.

California also has a GHG emissions regulatory program that is similar to the EPA requirements. Like the EPA’s Greenhouse Gas Rule, the CARB rule allows for averaging, banking and trading of credits to comply with the fleet-average GHG standard and the failure to comply with the California GHG standard may lead to the imposition of civil penalties. The delivery and placement into service of our zero-emission vehicles in California may earn us tradable credits that can be sold. Under CARB GHG regulations, advanced technology vehicles also earn a credit multiplier of for use in the calculation of emission credits in the same amounts as under the EPA’s Greenhouse Gas Rule.

Our employees are critical to our success. As of February 28, 2023, we had 269 employees, of which 268 are full-time. To date, we have not experienced any work stoppages and consider our relationship with our employees to be in good standing. None of our employees are subject to a collective bargaining agreement or represented by a labor union.

Our corporate citizenship, social responsibility and commitment to our employees extends beyond the products we make. We strive to maintain a diverse and inclusive workforce and are committed to a culture which values equality and respect. As part of our total rewards philosophy, we believe in offering and maintaining competitive compensation and benefits programs for our employees in order to attract and retain a talented, highly engaged workforce. Our compensation programs are focused on equitable, fair pay practices including market-based compensation, an annual pay-for-performance incentive plan, and employee equity in the form of restricted stock unit grants. In addition to our competitive compensation practices, we offer a competitive benefits package that includes health care plan options with employee premiums lower than the market average, dental, vision, disability and life insurance, health savings and flexible spending accounts, paid time off, company matched 401(k), flexible work schedules, expanded mental health coverage and employee assistance programs.

We are committed to providing a safe work environment for our employees. We provide regular health and safety training both on-site as needed and through our virtual training tool that assigns training requirements based on job profiles and site-specific requirements. Our environmental, health and safety group is responsible for health and safety related to on-site operations including hazard and risk identification. Workplace safety is also reinforced in regularly occurring meetings of our operations team. We are committed to the standards of the Responsible Business Alliance Code of Conduct which promotes labor, health and safety, environmental and business ethics. We monitor our Occupational Safety and Health Administration Total Recordable Incident Rate, or TRIR, as a measure to assess the effectiveness of our workplace safety programs. TRIR is a measure of accidents and injuries relative to hours worked. TRIR is defined as the number of incidents per 100 full-time employees that have resulted in a recordable injury or illness in the pertinent period. During 2022, we had a TRIR of 1.99, compared to an industry-standard of 3.5 in the same period. We had no work-related fatalities in 2022.

We believe in supporting the environment, health and social services across the communities in which we operate and where our employees live. We have partnered with a community college to provide equipment and funding to train technicians and develop skilled labor that may lead to employment opportunities with us or other local companies. We offer each employee eight hours of paid-time off to volunteer with a 501(c)(3) organization of the employee’s choosing. We are also involved with various civic and humanitarian organizations including the Rotary Club and Habitat for Humanity.

On May 6, 2021, GigCapital3, Inc. consummated the merger pursuant to a business combination ~~target,~~agreement, dated December 10, 2020, by and ~~have scheduled~~among a ~~special meeting~~wholly-owned merger subsidiary of ~~stockholders to approve~~GigCapital3, Inc., incorporated in the State of Delaware, and Lightning Systems, Inc., a Delaware corporation. Following the business combination, ~~for April 21, 2021. Upon consummation of the business combination with Lightning, we expect to change our name and be known as~~GigCapital3 Inc. was renamed Lightning eMotors, Inc. ~~(“New Lightning eMotors”).~~

~~We seek~~

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to ~~capitalize~~these reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available free of charge on our website at www.lightningemotors.com or directly through the ~~significant experience~~U.S. Securities and ~~contacts of our management team~~Exchange Commission, or the SEC, at www.sec.gov. Reports filed with or furnished to complete our initial business combination. We believe our management team’s distinctive background and record of acquisition and operational success could have a transformative impact on verified target businesses. Following our initial business combination, our objectivethe SEC will be to implement or support the acquired company’s operating strategies in order to generate additional value for stockholders. General goals may include additional acquisitions and operational improvements.

Our management team has significant hands-on experience helping Technology, Media and Telecommunications (“TMT”) companies optimize their existing and new growth initiatives by exploiting insights from rich data assets that already exist within most TMT companies. We intend to apply a unique “Mentor-Investor” philosophy to partner with Lightning where we will offer financial, operational and executive mentoring in order to accelerate their growth and development from a privately held entity to a publicly traded company. Further, we intend to share best practices and key learnings, gathered fromavailable on our management team’s operating and investing experience, as well as strong relationships in the TMT industry to help shape corporate strategies. Additionally, our management team has operated and invested in leading global TMT companies across their corporate life cycles, and has developed deep relationships with key large multi-national organizations and investors. We believe that these relationships and our management team’s know-how present a significant opportunity to help drive strategic dialogue, access new customer relationships and achieve global ambitions following the completion of our initial business combination. We believe that we are providing an interesting alternative investment opportunity that capitalizes on key trends impacting the capital markets for TMT companies.

~~Business Strategy~~

Our business strategy is to identify and complete our initial business combination with a company that complements the experience of our management team and can benefit from our management team’s operational expertise. Our selection process leveraged our management team’s broad and deep relationship network and unique TMT industry expertise, including proven deal-sourcing and structuring capabilities, to provide us with a multitude of business combination opportunities. Our management team has experience:

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~~operating companies, setting and changing strategies, and identifying, mentoring and recruiting world-class talent;~~

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~~developing and growing companies, both organically and inorganically, and expanding the product ranges and geographic footprints of a number of businesses;~~

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~~sourcing, structuring, acquiring and selling businesses and achieving synergies to create stockholder value;~~

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~~establishing a wide deal flow and efficient methodology of screening superior mergers and acquisitions (“M&A”) targets worldwide;~~

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~~partnering with industry-leading companies to increase sales and improve the competitive position of those companies;~~

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~~addressing business and technological changes in an evolving global TMT landscape;~~

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~~evaluating the viability of emerging TMT business models;~~

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~~fostering relationships with sellers, capital providers and target management teams; and~~

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~~accessing the capital markets across various business cycles, including financing businesses and assisting companies with the transition to public ownership.~~

~~Financial Position~~

With funds available for a business combination as of February 28, 2021 in the amount of $202,034,396, assuming no redemptions, we can offer Lightning a means to fund future expansion and growth of its business. Because we are able to consummate a business combination using the cash proceeds in our trust account, debt or a combination of the foregoing, we have the flexibility to use an efficient structure allowing us to tailor the consideration to be paid to the target business to address the needs of the parties.

~~Lack of Business Diversification~~

For an indefinite period of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating our initial business combination with only a single entity, our lack of diversification may:

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Subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and

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~~Cause us to depend on the marketing and sale of a single product or limited number of products or services.~~

~~Redemption Rights~~

At the meeting called to approve our initial business combination, public stockholders (but not our Founders or management team) may seek to redeem their shares of common stock, regardless of whether they vote for or against the proposed business combination, by converting such shares into their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, less any taxes then due but not yet paid (which taxes may be paid only from the interest earned on the funds in the trust account). We may also require public stockholders seeking redemption, whether they are a record holder or hold their shares in “street name,” to either (i) tender their certificates to our transfer agent or (ii) deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case prior to a date set forth in the proxy materials sent in connection with the proposal to approve the business combination.

There is a nominal cost associated with the above-referenced delivery process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether or not to pass this cost on to the holder. This fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to do so prior to the time that we know that the proposed business combination will be consummated. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. Thus, in the event we require stockholders seeking to exercise redemption rights to deliver their shares prior to the consummation of the proposed business combination and the proposed business combination is not consummated, this may result in an increased cost to stockholders.

Any proxy solicitation materials we furnish to stockholders in connection with a vote for any proposed business combination will indicate whether we are requiring stockholders to satisfy such certification and delivery requirements. Accordingly, a stockholder would have from the time the stockholder received our proxy statement up until the time designated in the proxy statement to deliver his, her or its shares if he, she or it wishes to seek to exercise his, her or its redemption rights. This time period varies depending on the specific facts of each transaction. However, as the delivery process can be accomplished by the stockholder, whether or not he, she or it is a record

holder or his shares are held in “street name,” in a matter of hours by simply contacting the transfer agent or his, her or its broker and requesting delivery of his, her or its shares through the DWAC System, we believe this time period is sufficient for an average investor. However, we cannot assure you of this fact.

The foregoing is different from the procedures historically used by some blank check companies. Traditionally, in order to perfect redemption rights in connection with a blank check company’s business combination, the company would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his, her or its redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him, her or it to deliver his, her or its certificate to verify ownership. As a result, the stockholder then had an “option window” after the consummation of the business combination during which he, she or it could monitor the price of the company’s stock in the market. If the price rose above the conversion price, he could sell his, her or its shares in the open market before actually delivering his, her or its shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become a “continuing” right surviving past the consummation of the business combination until the holder delivered his, her or its certificate or shares. The requirement for physical or electronic delivery prior to the meeting ensures that a holder’s election to convert his, her or its shares is irrevocable once the business combination is approved.

Any request to redeem such shares once made, may be withdrawn at any time up to the vote on the proposed business combination. Furthermore, if a holder of a public share delivered his, her or its certificate or shares in connection with an election of such shares’ redemption and subsequently decides prior to the vote on the proposed business combination not to elect to exercise such rights, he, she or it may simply request that the transfer agent return the certificate or shares (physically or electronically).

If the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account as of two business days prior to the consummation of the initial business combination. In such case, we will promptly return any certificates or shares delivered by public holders. Furthermore, if the initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights will not be entitled to convert their shares into a full pro rata portion of the trust account, as applicable. We will thereafter promptly return any shares delivered by public stockholders. In such case, public stockholders may only share in the assets of the trust account upon our liquidation. This may result in public stockholders receiving less than they would have received if the business combination was completed and they had exercised redemption rights in connection therewith due to potential claims of creditors. If we would be left with less than $5,000,001 of net tangible assets as a result of the holders of public shares properly demanding redemption of their shares, we will likely be unable to consummate a business combination.

~~Liquidation if No Business Combination~~

If we have not completed an initial business combination by the date required by our amended and restated certificate of incorporation, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account and net of interest that may be used to pay taxes our franchise and income taxes payable, and less up to $100,000 of interest to pay dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

Our Founder and management team have agreed that they will not propose any amendment to our amended and restated certificate of incorporation that would stop our public stockholders from converting or selling their shares of common stock to us in connection with a business combination or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination by November 18,

2021, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, net of franchise and income taxes payable, divided by the number of then outstanding public shares. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our Founders, any executive officer, director or director nominee, or any other person.

Under the Delaware General Corporation law (“DGCL”), stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our outstanding public shares in the event we do not complete our initial business combination within the required time period may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90‑day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not complete our initial business combination within the required time period is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution. However, if we are unable to complete a business combination within the prescribed time frame, we will proceed as provided for in our amended and restated certificate as described above. Accordingly, it is our intention to redeem our public shareswebsite as soon as reasonably ~~possible following the expiration of the time periods described above and, therefore, we do not intend to comply~~practicable after they are filed with the procedures required by Section 280 of the DGCL, which would limit the amount and duration of our stockholders’ liability with respect to liquidating distributions as described above. As such, our stockholders could potentially be liable for any claimsor furnished to the ~~extent of distributions received by them (but no more) and any liability of~~SEC. The information found on our ~~stockholders may extend well beyond the third anniversary of such date.~~

Because we will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.

We anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and anticipate it will take no more than ten business days to effectuate such distribution. Our Founders and management team have waived their rights to participate in any liquidation distribution with respect to the Founder Shares and the Placement Shares. There will be no distribution from the trust account with respect to our warrants or rights, which will expire worthless. We will pay the costs of any subsequent liquidation from our remaining assets outside of the trust account and the interest earned on the funds held in the trust account that we are permitted to withdraw to pay such expenses.

Our public stockholders shall be entitled to receive funds from the trust account only in the event of our failure to complete a business combination within the required time period or if the stockholders seek to have us redeem or purchase their respective shares upon a business combination which is actually completed by us or upon certain amendments to our amended and restated certificate of incorporation as described elsewhere herein. In no other circumstances shall a stockholder have any right or interest of any kind to or in the trust account.

~~If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which~~website is not ~~dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included~~

~~in our bankruptcy estate and subject to the claims~~part of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot make any assurance of the amount we will be able to return to our public stockholders.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after November 18, 2021, this may be viewed or interpreted as giving preference to our public stockholders over any potential creditors with respect to access to or distributions from our assets. Furthermore, our board may be viewed as having breached their fiduciary duties to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

~~Amended and Restated Certificate of Incorporation~~

Our amended and restated certificate of incorporation contains certain requirements and restrictions that will apply to us until the consummation of our initial business combination. These provisions cannot be amended without the approval of at least 65% of our outstanding common stock. If we seek to amend any provisions of our amended and restated certificate of incorporation that would stop our public stockholders from converting or selling their shares to us in connection with a business combination or affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete a business combination by November 18, 2021, we will provide dissenting public stockholders with the opportunity to redeem their public shares in connection with any such vote. This redemption right shall apply in the event of the approval of any such amendment, whether proposed by our Founders, any executive officer, director or director nominee, or any other ~~person. Our Founders~~report filed with or furnished to the SEC.

We announce material information to the public through a variety of means, including filings with the SEC, our website, press releases, blogs, podcasts, YouTube videos and ~~management team have agreed~~social media, including our Twitter account (twitter.com/LightningeMtrs), our LinkedIn page (linkedin.com/company/lightningemotors) and our Facebook account (facebook.com/LightningeMotors) to ~~waive any redemption rights~~communicate with ~~respect~~investors and the public about our Company, products, technologies, services, development activities and other matters. Therefore, we encourage investors, the media, and others interested in our Company to ~~any common stock held by them, including any~~review the information we make public ~~shares they may hold,~~ in ~~connection with any vote~~these locations, as such information could be deemed to ~~amend~~be material information. Information on, or that can be accessed through, our ~~amended~~websites or these social media channels is not part of this Form 10-K, and ~~restated certificate of incorporation. Specifically, our amended and restated certificate of incorporation provides, among other things, that:~~

▪

We shall either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), or (2) provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein;

▪

We will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval, a majority of the shares of common stock voted at a stockholder meeting are voted in favor of the business combination;

▪

~~If our initial business combination is not consummated by November 18, 2021, then we will redeem all of the outstanding public shares and thereafter liquidate and dissolve the Company;~~

▪

~~The proceeds of our IPO, including such proceeds from the exercise of the underwriters’ over-allotment option, shall be placed into the trust account; and~~

▪

~~Prior to our initial business combination, we may not issue additional stock that participates in any manner in the proceeds of the trust account, or that votes as a class with the common stock.~~

~~Competition~~

If we succeed in effecting the business combination with Lightning, there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete effectively.

~~Employees~~

~~We have two executive officers. These individuals are not obligated to devote any specific number of hours~~references to our ~~matters~~website addresses and ~~intend to devote only as much time as they deem necessary to our affairs. The amount~~social media channels are inactive textual references only.

We have a history of losses as we pursue our business plan of developing and commercializing fleets of ZEVs. We reported a net income of $15,170 and a net loss of $100,769 for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022, our accumulated deficit amounted to $166,394. We had working capital of $106,437 and $184,981 as of December 31, 2022 and 2021, respectively. During the years ended December 31, 2022 and 2021, net cash used in operating activities amounted to $104,523 and $65,807, respectively. In addition, as of December 31, 2022, we had outstanding indebtedness of approximately $77 million, all of which matures in 2024. We believe that we will continue to incur operating losses for the foreseeable future. Our potential profitability is dependent upon our ability to successfully develop and gain commercial acceptance of our ZEVs, which may not occur. We cannot guarantee we will become profitable or achieve the levels of profit anticipated. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

We expect to continue to incur significant expenses in future periods as we:

Because we will incur the costs and expenses from these efforts before we grow incremental revenue, our losses in future periods will be significant and may continue to grow until we become profitable. In addition, we may find that these efforts are more expensive than we currently anticipate or these efforts may not result in revenues, which would further increase our losses. The ZEV market is relatively new, ever-changing and is subject to rapid technological advances. Accordingly, it is difficult to predict our future revenues and appropriately budget for our expenses. In the event that actual results differ from our expectations, our operating results and financial position could be materially affected.

We require a significant amount of capital to continue to develop and grow our business, including developing and manufacturing our ZEVs. We expect to continue to incur significant expenses which will impact our profitability, including research and development expenses, raw material procurement costs, lease costs, sales and distribution expenses as we build our brand and market our ZEVs and zero-emission powertrains, and general and administrative expenses as we scale our operations. Our ability to become profitable in the future will not only depend on our ability to successfully market our ZEVs and zero-emission powertrains and other products and services, but also to control our costs. If we are unable to cost efficiently design, manufacture, market, sell, distribute and service our ZEVs, zero-emission powertrains and services, our margins, potential profitability and prospects would be materially and adversely affected.

We will require additional capital to fund ongoing operations, continue research, development and design efforts and improve infrastructure. Until we can generate sufficient cash flow from operations, we expect to finance our operations through a combination of the merger proceeds we received from the Business Combination and common stock issuances under our equity line of credit agreement as well as from additional equity offerings, debt financings or other capital markets transactions, collaborations or licensing arrangements. We cannot be certain that additional funds will be available to us on favorable terms when required, or at all. If we cannot raise additional funds when we need them, our financial condition, results of operations, business and prospects could be materially adversely affected.

Our ability to obtain the necessary financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business model. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we will have to significantly reduce our spending, delay or cancel our planned activities or substantially change our corporate structure. We might not be able to obtain any funding, and we might not have sufficient resources to conduct our business as projected, both of which could mean that we would be forced to curtail or discontinue our operations.

In addition, our future capital needs and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could dilute our stockholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Common Stock. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and may make it more difficult for us to obtain additional capital, pay dividends to our stockholders or pursue business opportunities, including potential acquisitions.

If we cannot raise additional funds when we need or want them, our operations and prospects could be negatively affected.

As of December 31, 2022, we had outstanding indebtedness of approximately $77 million, all of which matures in 2024 (see Note 8 for terms of our outstanding indebtedness). Our outstanding debt could:

Our ability to meet our debt service obligations or refinance our debt depends on our future operating and financial performance and ability to generate cash. This will be affected by our ability to successfully implement our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control, such as the disruption caused by the COVID-19 pandemic. If we cannot generate sufficient cash to meet our debt service obligations or fund our other business needs, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay planned capital expenditures or sell assets. We cannot be assured that we will be able to generate sufficient cash through any of the foregoing. If we are not able to refinance any of our debt that is coming due in 2024, obtain additional financing or sell assets on commercially reasonable terms or at all, we may not be able to satisfy our obligations with respect to our outstanding debt.

Our common stock is currently listed on the New York Stock Exchange, or NYSE. Continued listing of a security on the NYSE is conditioned upon compliance with certain continued listing requirements and continued listing standards set forth in the NYSE listing rules. There can be no assurance we will continue to satisfy the requirements for maintaining a NYSE listing.

On December 14, 2022, we received a delisting notice from the NYSE for failure to comply with the minimum closing bid price requirement of $1.00 per share of common stock. Delisting of our common stock could adversely affect the liquidity of our common stock because alternatives, such as the OTC Bulletin Board and the pink sheets, are generally considered to be less efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy our common stock on an over-the-counter market. Many investors likely would not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. The delisting of our common stock could also trigger a repurchase obligation under the 7.5% Senior Convertible Notes due 2024, which could impact our overall liquidity. A delisting of our common stock is likely to inhibit or preclude our ability to effect strategic acquisitions, raise additional financing and may also materially and adversely impact our credit terms with our vendors.

Although we expect to regain compliance with the minimum bid requirement of NYSE through a reverse stock split, should the market price of our common stock decline after the reverse stock split the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in our overall market capitalization. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of our Company, as measured by our stock capitalization, will be reduced. In some cases, the per-share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, we cannot assure you that the total market value of your shares will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on our stock price due to the reduced number of shares outstanding after the reverse stock split. The reverse stock split may decrease the liquidity of the common stock.

Our quarterly and annual operating results may fluctuate significantly, which makes it difficult for us to predict our future operating results. These fluctuations may occur due to a variety of factors, many of which are outside of our control, including:

As a result of ~~a number~~these factors, we believe that quarter-to-quarter comparisons of ~~known~~our financial results, especially in the short term, are not necessarily meaningful and ~~unknown risks and uncertainties,~~that these comparisons cannot be relied upon as indicators of future performance. Moreover, our ~~actual~~financial results may not meet expectations of equity research analysts, ratings agencies or ~~performance~~investors, who may be ~~materially different from those expressed~~focused only on quarterly financial results. If any of this occurs, the trading price of our common stock could fall substantially, either suddenly or ~~implied by these forward-looking statements. Some factors that could cause actual results~~over time.

In addition, our results of operations could be adversely affected by declines in demand for our product offerings. Demand for our product offerings may be negatively affected by a number of factors, including geopolitical uncertainty, unavailability of grant funding or financing, inflation, competition, cybersecurity incidents, decline in our reputation and ~~those~~saturation in the markets where we operate.

Our four largest customers accounted for approximately 19%, 16%, 12% and 11% of ~~New Lightning eMotors may differ significantly from any unaudited pro forma financial data that we have separately disclosed for any combination between us and Lightning.~~

We are a blank check company and we have no operating history and no revenues. The final prospectus/proxy statement (the “Final Prospectus/Proxy Statement”) that we filed with the Securities and Exchange Commission

(“SEC”) on March 26, 2021 contained unaudited pro forma condensed combined financial statements for New Lightning eMotors. The unaudited pro forma condensed combined statement of operations of New Lightning eMotors combines the historical audited results of operations of the Companytotal revenue for the year ended December 31, ~~2020, with the historical audited results~~2022. As a result, our revenue could fluctuate materially and could be disproportionately impacted by purchasing decisions of ~~operations~~these customers or any other significant future customer. Most of Lightning for the year ended December 31, 2020, respectively, and gives pro forma effect to the business combination as if it had been consummated on January 1, 2020. The unaudited pro forma condensed combined balance sheet of New Lightning eMotors combined the historical balance sheets of the Company as of December 31, 2020 and of Lightning as of December 31, 2020 and gives pro forma effect to the business combination as if it had been consummated on December 31, 2020.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statementsour customers are not ~~necessarily indicative~~contractually committed to purchase a specified number of ~~the results of operations and financial position that would have been achieved had the business combination and the acquisitions by Lightning been consummated~~vehicles or powertrains, rather they purchase vehicles on the dates indicated above, or the future results of operations or financial position of New Lightning eMotors. Accordingly, New Lightning eMotors’ business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document.

~~Unanticipated changes in effective tax rates or adverse outcomes resulting from examination~~a purchase order basis. Any of our ~~income~~significant customers may decide to purchase less than they have in the past, alter their purchasing patterns at any time with limited notice, or ~~other tax returns~~decide not to continue to purchase our products at all, any of which could cause our revenue to decline and adversely affect our financial condition and results of operations.

If we are unable to diversify our customer base, maintain our existing strategic partnerships and expand our supply network with other partners, we will continue to be susceptible to risks associated with customer concentration.

While conditions related to the global COVID-19 pandemic generally improved in 2022, the pandemic continues to have an adverse impact on the global economy and our business operations, in particular, in areas such as supply chain delays and industry-wide shortages of raw materials utilized in manufacturing our ZEVs and powertrains.

A resurgence of the virus in certain regions or the emergence of variants of the virus or another virus for which existing vaccines could be less effective may cause future delays or shutdowns of medium-duty commercial vehicle OEMs or our

suppliers and could impact our ability to meet customer orders. In addition, the COVID-19 pandemic has resulted in extreme volatility in the global financial markets, which could increase our cost of capital or limit our ability to access financing. Difficult macroeconomic conditions, such as decreases in per capita income ~~taxes~~and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could continue to have a material adverse effect on the demand for ZEVs. Under difficult economic conditions, potential customers may seek to reduce spending by foregoing ZEVs for other traditional options. Decreased demand for ZEVs, particularly in the United States, and ~~other jurisdictions,~~higher costs could negatively affect our business.

Global trade disruptions and consumer trends that originated during the pandemic continue to persist and may also have long-lasting adverse impact on us and our ~~tax liabilities~~industries independently of the progress of the pandemic. For example, pandemic-related issues have exacerbated port congestion and intermittent supplier shutdowns and delays, resulting in additional expenses to expedite delivery of critical parts. In addition, labor shortages resulting from the pandemic, including worker absenteeism, may lead to increased difficulty in hiring and retaining manufacturing and service workers, as well as increased labor costs. Sustaining our production trajectory will require the ongoing readiness and solvency of our suppliers and vendors and a stable and motivated production workforce.

We cannot predict the duration or direction of current global trends and economic disruptions or their sustained impact. Ultimately, we continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, and we will have to accurately project demand and infrastructure requirements and deploy our production, workforce and other resources accordingly. If we experience unfavorable global market conditions, or if we cannot or do not maintain operations at a scope that is commensurate with such conditions or are later required to or choose to reduce or suspend such operations, our business, prospects, financial condition and operating results may be harmed.

Lithium-ion battery cells, including those used in some of the battery packs in our ZEVs, have caught fire in certain circumstances. On occasion, if not appropriately managed and controlled, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials. There can be no assurance that a field failure of the battery packs used in our ZEVs will not occur, which could damage the vehicle or lead to personal injury or death and may subject us to lawsuits. Furthermore, there is some risk of electrocution if individuals who attempt to repair battery packs on our ZEVs do not follow applicable maintenance and repair protocols. Any such damage or injury would likely lead to adverse publicity and potentially a safety recall. Any such adverse publicity could adversely affect our business, prospects, financial condition and operating results.

There can be no assurance that a field failure of our charging infrastructure will not occur, which would damage the vehicle or lead to personal injury or death and may subject us to lawsuits. Furthermore, there is some risk of electrocution if our customers attempt to repair or service charging infrastructure we have provided or if our customers do not follow applicable maintenance and repair protocols. Any such damage or injury would likely lead to adverse publicity and potentially a safety recall. Any such adverse publicity could adversely affect our business, prospects, financial condition and operating results.

In connection with the audit of our financial statements for the year ended December 31, 2021, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, we found that we did not have in place an effective control environment with formal policies and procedures to allow for a detailed review of accounting transactions that would identify errors in a timely manner. In addition, due to our small size, we did not have proper segregation of duties in certain areas of the

financial reporting process, including but not limited to cash receipts and disbursements, journal entry processing and IT general controls, and did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of U.S. Generally Accepted Accounting Principles, or GAAP, commensurate with our complexity and financial accounting and reporting requirements.

During 2021, we completed remediation measures related to these material weaknesses. However, completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly. If we are unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and adversely impact our stock price. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

Customers may be less likely to purchase our ZEVs if they are not convinced that our business will succeed or that our service and support and other operations will continue in the long term. Similarly, suppliers and other third parties will be ~~subject~~less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, in order to continue to build and maintain our business, we must maintain confidence among customers, suppliers, analysts, ratings agencies and other parties in our ZEVs, long-term financial viability and business prospects. Maintaining such confidence may be particularly complicated by certain factors including those that are largely outside of our control, such as our limited operating history, customer unfamiliarity with our ZEVs, any delays in scaling production, delivery and service operations to meet demand, competition and uncertainty regarding the ~~allocation~~future of ~~expenses~~hybrid electric and ZEVs, including our ZEVs and our production and sales performance compared with market expectations.

Our ~~future effective tax rates~~business and prospects are heavily dependent on our ability to develop, maintain and strengthen our brand. If we do not continue to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Promoting and positioning our brand will likely depend significantly on our ability to provide high quality ZEVs and engage with our customers as intended, and we have limited experience in these areas. In addition, our ability to develop, maintain and strengthen our brand will depend heavily on the success of our customer development and branding efforts. Such efforts may be non-traditional and may not achieve the desired results. To promote our brand, we may be required to change our customer development and branding practices, which could result in substantially increased expenses. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results will be materially and adversely impacted.

In addition, if incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to ~~volatility~~adverse publicity. In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in our brand. Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ vehicles.

In addition, from time to time, our ZEVs may be evaluated and reviewed by third parties. Any negative reviews or reviews which compare us unfavorably to our competitors could adversely affect consumer perception about our ZEVs.

Our industry is relatively new and is subject to rapid technological change that has the potential to render our products and business plan obsolete. Significant developments in alternative technologies, such as advanced diesel, ethanol, or compressed natural gas or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Other fuels or sources of energy may emerge as customers’ preferred alternative to our zero-emission powertrains for medium-duty trucks platform. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced zero-emission powertrains, which could result in the loss of competitiveness of our powertrains, decreased revenue and a ~~number~~loss of ~~factors, including:~~

market share to competitors. Our research and development efforts may not be sufficient to adapt to changes in electric powertrain technology. As technologies change, we plan to upgrade or adapt our zero-emission powertrains and introduce new models in order to continue to provide vehicles with the latest technology. However, our electrified powertrain solutions may not compete effectively with alternative systems and could be rendered obsolete.

We may experience challenges in servicing and repairing our ZEVs. In addition, drivers often have less familiarity with ZEVs and the charging and service needs to maintain them, and thus require greater support and servicing than traditional combustion engine vehicles. Servicing electric vehicles is different than servicing vehicles with combustion engines and requires specialized skills, including high voltage training and servicing techniques. We currently employ trained service engineers to perform maintenance on our ZEVs. In some cases, we use and train third-party service providers to perform some of the maintenance on our ZEVs, and there may be a risk that these third-party service providers will not perform the required services with the same skill and care as our own service engineers or follow the detailed work instructions we provide. Our customers also depend on our customer support team to resolve technical and operational issues relating to the integrated software underlying our electrified powertrain solutions. Our ability to provide effective customer support is largely dependent on our ability to attract, train and retain qualified personnel with experience in supporting customers on platforms such as ours. As we continue to grow, additional pressure may be placed on our customer support team, and we may be unable to respond quickly enough to accommodate short-term increases in customer demand for technical support. We also may be unable to modify the future scope and delivery of our technical support to compete with changes in the ~~valuation~~technical support provided by our competitors. Increased customer demand for support, without corresponding revenue, could increase costs and negatively affect our operating results. If we are unable to successfully address the service requirements of our ~~deferred tax assets and liabilities;~~

We have entered into, and may in the future enter into additional, strategic alliances, including joint ventures or minority equity investments with various third parties to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our ~~income, sales~~association with any such third party.

Strategic business relationships will be an important factor in the growth and ~~other transaction taxes by taxing authorities. Outcomes~~success of our business. However, there are no assurances that we will be able to continue to identify or secure suitable business relationship opportunities in the future or our competitors may capitalize on such opportunities before we do. Moreover, identifying such opportunities could require substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If we are unable to successfully source and execute on strategic relationship opportunities in the future, our overall growth could be impaired, and our business, prospects, financial condition and operating results could be materially adversely affected.

When appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder approval, we may need approvals and licenses from ~~these audits~~relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial ~~condition~~results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and ~~results of operations~~

~~If we are unable~~exposure to ~~complete an initial business combination, our public stockholders may receive only approximately $10.10 per share on the liquidation~~potential unknown liabilities of the ~~Trust Account (or less than $10.10 per share in certain circumstances where a third party brings a claim against us that our Sponsor is unable to indemnify),~~acquired business. Moreover, the costs of identifying and ~~our warrants will expire worthless.~~

If we are unable to complete an initial business combination by the applicable deadline, our public stockholders may receive only approximately $10.10 per share on the liquidation of the Trust Account (or less than $10.10 per share in certain circumstances where a third-party brings a claim against us that our Sponsor is unable to indemnify (as described herein)) and our warrants will expire worthless.

~~If we are unable to consummate our initial business combination by November 18, 2021, our public stockholders~~consummating acquisitions may be ~~forced to wait beyond such times before redemption from our trust account.~~

If we are unable to consummate our initial business combination by November 18, 2021, we will, as promptly as reasonably possible but not more than ten business days thereafter, distribute the aggregate amount then on deposit in the trust account (net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), pro rata to our public stockholders by way of redemption and cease all operations except for the purposes of winding up of our affairs by way of a voluntary liquidation, as further described herein. Any redemption of public

significant.

We operate in a highly competitive, quickly changing environment, and ~~the combined company’s~~our future success depends on ~~its~~our ability to develop ~~or acquire,~~ and introduce ~~new products and services~~ZEVs that achieve broad market acceptance. ~~New Lightning eMotors’ ability to successfully introduce and market new products is unproven.~~ Because ~~New Lightning eMotors will have a limited operating history and~~ the market for ~~its products, including newly acquired or developed products,~~our ZEVs is rapidly evolving, it is difficult to predict ~~the combined company’s~~our operating results, particularly with respect to any new ~~products~~ZEVs that itwe may introduce. ~~New Lightning eMotors’ future~~Our success will depend in large part upon ~~its~~our ability to identify demand trends in the market in which ~~it will~~we operate and quickly develop or acquire, and design, manufacture and sell, ~~products and services~~ZEVs that satisfy these demands in a cost-effective manner.

In addition, ~~New Lightning eMotors~~we may acquire companies and technologies in the future. In these circumstances, ~~the combined company~~we may not be able to successfully manage integration of the new product and service lines with ~~the combined company’s~~our existing suite of products and services. If ~~New Lightning eMotors is~~we are unable to effectively and successfully further develop these new product and service lines, ~~New Lightning eMotors~~we may not be able to increase or maintain sales, ~~(as compared to sales of Lightning on a standalone basis),~~ and ~~New Lightning eMotors’~~our gross margin ~~(as compared to sales of Lightning on a standalone basis)~~ may be adversely affected.

Furthermore, the success of ~~New Lightning eMotors’~~our new products will depend on several factors, including, but not limited to, market demand costs, timely completion and introduction of these products, prompt resolution of any defects or bugs in these products, ~~New Lightning eMotors’~~our ability to support these products, differentiation of new products from those of ~~New Lightning eMotors’~~our competitors, market acceptance of these products, delays and quality issues in releasing new products and services. The occurrence of one or more of the foregoing factors may result in lower quarterly revenue than expected, and ~~New Lightning eMotors~~we may in the future experience product or service introductions that fall short of ~~its~~our projected rates of market adoption.

During 2021 and 2022, we hired a significant number of additional personnel, including software engineers, design and production personnel and service technicians for our operations. Individuals with sufficient training in automotive manufacturing or electric vehicles may not be available to hire, and as a result, we will need to expend significant time and expense training any newly hired employees. Our success depends, in part, on our ability to retain our key personnel. The

unexpected loss of or failure to retain one or more of our key employees could adversely affect our business. Our success also depends, in part, on our continuing ability to identify, hire, attract, train and develop other highly qualified personnel.

Competition for these employees can be intense, and ~~market products that are recognized~~our ability to hire, attract and ~~accepted as reliable, enabling and cost-effective. Some potential customers of the combined company~~retain them depends on our ability to provide competitive compensation. We may ~~already use products similar~~not be able to ~~what Lightning currently offers and similar to what New Lightning eMotors may offer~~attract, assimilate, develop or retain qualified personnel in the future, and our failure to do so could adversely affect our business, including the execution of our global business strategy. Any failure by our management team to perform as expected may have a material adverse effect on our business, prospects, financial condition and results of operations.

In particular, we are highly dependent on the services of Timothy Reeser, our Chief Executive Officer. Mr. Reeser is the source of many, if not most, of the ideas and execution driving our growth. If Mr. Reeser were to discontinue his service to us due to death, disability or any other reason, we would be significantly disadvantaged.

We rely on third-party suppliers for the provision and development of many of the key components and materials used in our ZEVs and powertrains. While we strive to obtain components from multiple sources whenever possible, some of the components used in our ZEVs are purchased by us from a single source. If our suppliers experience substantial financial difficulties, cease operations, experience supply chain disruptions or otherwise face business disruptions, we may experience production disruptions, which would have an adverse impact on our business and results of operations. We occasionally have disagreements, including related to timing or quality issues, with our suppliers, which can and have resulted in disputes, including litigation.

We have experienced disruptions to our supply chain, including access to critical components, such as batteries, motors, wire harness connectors and chassis. Many of these products are early generation products for our suppliers and therefore the supply chain can be fragile require substantial lead time. These supply issues have caused, and we expect them to continue to cause, further disruptions to our operations, delays in our revenues, and an adverse impact on our revenue forecasts. In particular, as a result of the COVID-19 pandemic and related factors, we have been experiencing significant delivery delays from our suppliers since April 2020. In addition, we often do not get informed of delivery delays until or after the expected delivery dates, which does not allow for timely mitigation plans. We increased our raw material inventories and added new suppliers to attempt to manage and mitigate this risk. For example, we lost significant sales volume during the fourth quarter of 2022 because Romeo Power Systems, Inc., a subsidiary of Nikola Corporation, unexpectedly notified us that it would not honor its commitments to supply battery packs, or to provide further service or support under its long-term supply agreement with us. While we had designed-out Romeo batteries for our newer ZEV platforms, Romeo’s abrupt action prevented us from being able to ship ZEVs and powertrains built on prior platforms. There can be no assurance that new suppliers will not experience delays in production or delivery. Without being able to complete the final vehicle commissioning due to these supply chain constraints, the lack of visibility from suppliers on shipments, and ramp time required to integrate new suppliers into our operations, our ability to forecast precise ship dates

for completed vehicles is limited. Any disruption could affect our ability to deliver vehicles and could increase our costs and margin and negatively affect our liquidity and financial performance.

We have experienced an industry-wide shortage in chassis, a critical component in our vehicles. Major OEMs such as Ford and GM have publicly spoken to limited chassis availability, which is expected to continue for the foreseeable future. We are currently working on a path to address the industry chassis shortage with our own Lightning-branded stripped chassis and cab-chassis. Additionally, we are exploring adding additional suppliers to our network; however, there can be no assurance that any alternate supply arrangements will be finalized on terms that are favorable to us, or at all or that we will not encounter supply disruptions under any such agreements.

If we are unable to obtain necessary components and materials used in our ZEVs or electrified powertrain solutions from our suppliers at prices, volumes, performance and specifications acceptable to us, or if our suppliers decide to create or supply a competing product, our business could be adversely affected.

As of and for the year ended December 31, 2022, two suppliers accounted for 20% and 15% of our accounts payable and two suppliers accounted for 34% and 23% of inventory purchases. As of and for the year ended December 31, 2021, three suppliers accounted for 20%, 19% and 11% of our accounts payable and one supplier accounted for 10% of purchases. If any one of our suppliers is unable to timely deliver our required materials due to labor shortages, supply chain disruptions, entry into exclusivity agreements with our competitors or for any other reason, our business will be negatively impacted. There can be no assurance that our suppliers will continue to supply the materials necessary for our vehicle operations.

We may experience increases in the cost of or a sustained interruption in the supply or shortage of raw materials, which may particularly affect our commercial production of zero-emission vehicles and powertrains. Any such cost increase, supply interruption or shortage could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials and commodities for components and parts including aluminum, steel, carbon fiber, non-ferrous metals (such as copper), cobalt, aluminum and rubber. The prices for these raw materials fluctuate depending on global and regional market conditions, including inflation, and global demand and could adversely affect our business and operating results. Inflation may continue in the future to be rampant, resulting in higher commodity costs.

Furthermore, fluctuations or shortages in petroleum from market uncertainties, the military conflict between Russia and Ukraine and other economic conditions may cause us to experience significant increases in freight charges and raw material costs. Increases in the prices for our raw materials would increase our operating costs to the extent that we do not have firm pricing from our suppliers or our suppliers are not able to honor such prices, and could reduce our margins if the increased costs cannot be recouped through increased ZEV prices. Any disruption in the supply of necessary components could temporarily disrupt production of our ZEVs or our zero-emission powertrains until a different supplier is fully qualified. There can be no assurance that we will be able to recoup increasing costs of raw materials by increasing prices.

Our ZEVs and zero-emission powertrains are complex and may contain defects in design and manufacture that may cause them not to perform as expected or may require repair. We currently have a limited frame of reference by which to evaluate the performance of our zero-emission powertrains upon which our business prospects depend. Our zero-emission powertrains also may not perform consistent with customers’ expectations or consistent with other powertrains which may become available. There can be no assurance that we will be able to detect and fix any defects in the powertrains’ hardware or software prior to commencing customer sales. Some defects may only be discovered after our ZEVs have shipped to our customers. Failure of our ZEVs to perform to specifications, or other product defects, could lead to substantial damage to our ZEVs. Any such defect may cause us to incur significant warranty, support and repair or replacement costs, write off the value of related inventory, cause us to lose market share, and divert the attention of our personnel from our product development efforts to find and correct the issue. In addition, an error or defect in our products after commencement of commercial shipments could result in failure to achieve market acceptance, harm our relationships with customers and partners and harm consumers’ perceptions of our brand. Furthermore, NHTSA may require a manufacturer to recall and

repair vehicles that contain safety defects or fail to comply with U.S. federal motor vehicle safety standards. During 2022, we initiated two voluntary recalls, one related to our glass display cockpit, and a second for battery issues attributble to the battery supplier. Although we have warranties on critical components of our ZEVs, we may be ~~reluctant~~required to reimburse our customers, partners or consumers, including costs to repair or replace ~~those~~ products in the field, and even if we have contractual claims against third parties under such warranties or other indemnification rights, we may not be able to get full reimbursement of all or parts of our expenses. Any product defects or any other failure of our zero-emission powertrains to perform as expected could harm our reputation and result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects. Additionally, problems and defects experienced by other alternative fuel truck companies or electric consumer vehicles could by association have a negative impact on perception and customer demand for our electrified powertrain solutions. If a product liability claim is brought against us, the cost of defending the claim could be significant and would divert the efforts of our technical and management personnel, and harm our business. Further, our business liability insurance may be inadequate or future coverage may be unavailable on acceptable terms, which could adversely impact our financial results.

We provide a manufacturer’s warranty on all ZEVs and zero-emission powertrains we sell. We maintain warranty reserves to cover warranty-related claims. If our warranty reserves are inadequate to cover warranty claims on our ZEVs or zero-emission powertrains, our business, prospects, financial condition and operating results could be materially and adversely affected. We may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims.

All ZEVs sold must comply with ~~what Lightning currently offers~~federal and state motor vehicle safety standards. Vehicles that meet or exceed all federally mandated safety standards are certified by the manufacturer under the federal regulations. Rigorous design, testing and the use of approved materials and equipment are among the requirements for achieving federal certification. Failure by us to have our ZEVs satisfy all applicable motor vehicle standards would have a material adverse effect on our business and operating results.

We and our suppliers may rely on complex machinery for the ~~combined company~~production, assembly and installation of our electrified powertrain solutions, which will involve a significant degree of uncertainty and risk in terms of operational performance and costs. Our production facilities and the facilities of our suppliers consist of large-scale machinery combining many components. These components may suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. For example, our production facility has had and may in the future experience a temporary outage. Outages at production facilities or unexpected malfunctions of these components may significantly affect the intended operational efficiency. In June 2021, a drivetrain supplier shifted production to a new international factory which resulted in production startup issues and delays on delivery of parts. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, fire, seismic activity and natural disasters. Should operational risks materialize, it may result in personal injury to or death of workers, the loss of production equipment, damage to production facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, prospects, financial condition or operating results.

Companies, organizations or individuals, including our competitors, may own or obtain patents, trademarks or other proprietary rights that would prevent or limit our ability to make, use, develop or sell our zero-emission powertrains, which could make it more difficult for us to operate our business. We have received, and may in the future receive, inquiries from patent or trademark owners inquiring whether we infringe their proprietary rights. Companies owning patents or other intellectual property rights relating to zero-emission powertrains may allege infringement of such rights. In response to a determination that we have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

A successful claim of infringement against us could materially adversely affect our business, prospects, operating results and financial condition. Any litigation or claims, whether valid or invalid, could result in substantial costs and diversion of resources.

We license software and other technology from time to time. Our use of licensed technology may infringe on the rights of one or more third parties. In such cases, we will seek indemnification from our licensors. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses. In such cases, we will seek indemnification from our licensors. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses.

Failure to adequately establish and protect our intellectual property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results. Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we will rely on a combination of trade secrets (including know-how), patents, employee and third-party nondisclosure agreements, copyright, trademarks, intellectual property licenses and other contractual rights to establish and protect our rights in our technology.

The protection of our intellectual property rights will be important to our future business opportunities. However, the measures we take to protect our intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be difficult. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the United States.

Also, while we have registered trademarks in an effort to protect our investment in our brand and goodwill with customers, competitors may challenge the validity of those trademarks and other brand names in which we have invested. Such challenges can be expensive and may adversely affect our ability to maintain the goodwill gained in connection with a particular trademark.

We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular patent application, or if we are the first party to file such a patent application. If another party has filed a patent application to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may own or license in the future, nor can we be sure that any of our existing patents or any patents we may own or license in the future will be useful in protecting our technology. In addition, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial condition or operating results.

We collect, transmit and store confidential and personal and sensitive information of our employees and customers, including names, accounts, user IDs and passwords, vehicle information, and payment or transaction related information. We are also subject to certain laws and regulations, such as “Right to Repair” laws, that require us to provide third-party access to our network and/or vehicle systems.

Increasingly, companies are subject to a wide variety of attacks on their networks and information technology infrastructure on an ongoing basis. Traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, denial of service attacks, ransomware attacks and sophisticated nation-state and nation-state supported actors engage in intrusions and attacks that create risks for our (and our suppliers’) internal networks, vehicles, infrastructure, and cloud deployed products and the information they store and process. Although we have implemented security measures to prevent such attacks, our networks and systems may be breached due to the actions of outside parties, employee error, malfeasance, a combination of these, or otherwise, and as a result, an unauthorized party may obtain access to our systems, networks, or data.

We may face difficulties or delays in identifying or otherwise responding to any attacks or actual or potential security breaches or threats. A breach in our data security could create system disruptions or slowdowns and provide malicious parties with access to information stored on our networks, resulting in data being publicly disclosed, altered, lost, or stolen, which could subject us to liability and adversely impact our financial condition. Further, any breach in our data security could allow malicious parties to access sensitive systems, such as our product lines and the vehicles themselves. Such access could adversely impact the safety of our employees and customers.

In addition, we may incur significant financial and operational costs to investigate, remediate and implement additional tools, devices and systems designed to prevent actual or perceived security breaches and other security incidents, as well as costs to comply with any notification obligations resulting from any security incidents. Any of these negative outcomes could adversely impact the market perception of our products and customer and investor confidence in our company, and would materially and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

We have designed, implemented and tested security measures intended to prevent unauthorized access to our information technology networks, our zero-emission powertrains and related systems. However, hackers have attempted and may attempt to gain unauthorized access to modify, alter and use such networks, powertrains and systems to gain control of or to change our powertrains’ functionality, user interface and performance characteristics, or to gain access to data stored in or generated by the powertrain. Future vulnerabilities could be identified and our efforts to remediate such vulnerabilities may not be successful. Any unauthorized access to or control of our powertrains or their systems, or any loss of customer data, could result in legal claims or proceedings. In addition, regardless of their veracity, reports of unauthorized access to our powertrains, systems or data, as well as other factors that may result in the perception that our powertrains, systems or data are capable of being “hacked,” could negatively affect our brand and harm our business, prospects, financial condition and operating results.

We are subject to or affected by a number of federal, state and local laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security, and govern our collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal information including that of our employees, customers and others. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data. Such laws may be inconsistent or may change or additional laws may be adopted. In addition, our agreements with certain customers may require us to notify them in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, result in penalties or fines, result in litigation, may cause our customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. We may not be able to monitor and react to all developments in a timely manner. For example, California adopted the California Consumer Privacy Act, or CCPA, which became effective in January 2020. The CCPA establishes a privacy framework for covered businesses, including an expansive definition of personal information and data privacy rights for California residents. The CCPA includes a framework with potentially severe statutory damages and private rights of action. The CCPA requires covered businesses to provide new disclosures to California residents, provide them new ways to opt-out of certain disclosures of personal information, and allow for a new cause of action for data breaches. Moreover, California voters approved the California Privacy Rights Act of 2020, or CPRA, which amends the CCPA and became effective on January 1, 2023. Among other things, the CPRA gives California residents additional rights with respect to data pertaining to them, expands the types of data breaches subject to the CCPA’s private right of action, and establishes a new California Privacy Protection Agency to implement and enforce the new law. As we expand our operations, the CCPA may increase our compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States. Both Virginia and Colorado recently passed privacy laws that become effective on January 1 and July 1, 2023, respectively, and other states have considered similar laws. Compliance with any applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to comply with such laws and regulations.

We collect, store, transmit and otherwise process data from customers, employees and others as part of our business and operations, which may include personal data or confidential or proprietary information. We also work with partners and third-party service providers or vendors that collect, store and process such data on our behalf and in connection with our ZEVs. There can be no assurance that any security measures that we or our third- party service providers or vendors have implemented will be effective against current or future security threats. If a compromise of data were to occur, we may become liable under our contracts with other parties and under applicable law for damages and incur penalties and other costs to respond to, investigate and remedy such an incident. Our systems, networks and physical facilities could be breached or personal information could otherwise be compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our employees or our customers to disclose information or user names and/or passwords. Third parties may also exploit vulnerabilities in, or obtain unauthorized access to, platforms, systems, networks and/or physical facilities utilized by our service providers and vendors.

We use our ZEV's electronic systems to log information about each vehicle’s use in order to aid us in vehicle telematics, diagnostics, repair and maintenance. Our customers may object to the use of this data, which may increase our vehicle maintenance costs and harm our business prospects. Possession and use of our customers’ information in conducting our business may subject us to legislative and regulatory burdens in the United States and other jurisdictions that could require notification of data breaches, restrict our use of such information and hinder our ability to acquire new customers or market to existing customers. The regulatory framework for data privacy and security is rapidly evolving, and we may not be able to monitor and react to all developments in a timely manner. As legislation continues to develop, we will likely be required to expend significant additional resources to continue to modify or enhance our protective measures and internal processes to comply with such legislation. Non-compliance or a major breach of our network security and systems could have serious negative consequences for our business and future prospects, including possible fines, penalties and damages, reduced customer demand for our ZEVs, and harm to our reputation and brand.

Our ZEVs, our zero-emission powertrains, and the sale of electric motor vehicles in general, are subject to substantial regulation under international, federal, state, and local laws. For example, we currently maintain executive orders issued by CARB, which is a requirement to sell ZEVs in California as well as various other states. We continue to evaluate requirements for licenses, approvals, certificates and governmental authorizations necessary to manufacture, sell or service our electrified powertrain or commercial vehicle solutions in the jurisdictions in which we plan to operate and intend to take such actions necessary to comply. We may experience difficulties in obtaining or complying with various licenses, approvals, certifications and other governmental authorizations necessary to manufacture, sell or service their electrified powertrain solutions in any of these jurisdictions. For instance, our electrified powertrain solutions and our ZEVs may not be readily classified into categories by governmental agencies. If we or our suppliers are unable to obtain or comply with any of the licenses, approvals, certifications or other governmental authorizations necessary to carry out our operations in the jurisdictions in which we currently operate, or those jurisdictions in which we plan to operate in the future, our business, prospects, financial condition and operating results could be materially adversely affected. We expect to incur significant costs in complying with these regulations. For example, if the battery packs installed in our electrified powertrain solutions are deemed to be transported, we will need to comply with the mandatory regulations governing the transport of “dangerous goods,” and any deficiency in compliance may result in us being prohibited from selling our electrified powertrain solutions until compliant batteries are installed. Regulations related to the electric vehicle industry and alternative energy are currently evolving and we face risks associated with changes to these regulations, including but not limited to:

To the extent that laws or regulations change, our ZEVs or electric powertrains may not comply with applicable international, federal, state or local laws, which would have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results would be adversely affected. Further, delays, reduction, or elimination of applicable international, federal, or state laws or regulations requiring or incentivizing reductions in emissions of greenhouse gases or other pollutants from internal combustion engines or requiring or incentivizing manufacturers to offer for sale increasing numbers of ZEVs may result in the diminished competitiveness of the alternative fuel and electric vehicle industry generally. This could materially and adversely affect the growth of the electric vehicle markets and our business, prospects, financial condition and operating results.

The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our business. In addition, we cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim. As a recently public company with limited operating history we may find it difficult to obtain and maintain certain categories of insurance such as adequate D&O insurance, product liability insurance, garage keepers insurance, cybersecurity insurance, etc.

Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of the electric vehicle industry or other reasons may result in the diminished competitiveness of the electric vehicle industry generally. This could materially and adversely affect the growth of our business, prospects, financial condition and operating results.

While certain tax credits and other incentives for alternative energy production and electric vehicles have been available in the past, there is no guarantee these programs will be available in the future. ~~Market acceptance~~If current tax incentives are not available in the future, our financial position could be harmed. As federal, state, or local legislation related to electric vehicles or data protection continues to develop, we will likely be required to expend significant additional resources to continue to modify or enhance our products, protective measures and internal processes to comply with such legislation.

In particular, we are influenced by federal, state and local tax credits, rebates, grants and other government programs. These include various government programs such as LCFS programs, which encourage low carbon “compliant” transportation fuels (including CNG) in the California or Oregon marketplaces by allowing producers of ~~New Lightning eMotors’ products~~these fuels to generate LCFS credits that can be sold to noncompliant regulated parties. Additionally, we are influenced by laws, rules and ~~technology will depend on many factors, including New Lightning eMotors’ ability~~regulations requiring or incentivizing reductions in emissions of greenhouse gases or other pollutants from internal combustion engines or requiring, incentivizing manufacturers to convince potential customers that New Lightning eMotors’ products and technology are an attractive alternative to existing products and technology. Prior to adopting New Lightning eMotors’ products and technology, some potential customersoffer for sale increasing numbers of ZEVs, or consumers purchasing ZEVs. Lawmakers, regulators, policymakers, environmental or advocacy organizations, OEMs, trade groups, suppliers or other groups may ~~need to devote~~invest significant time and ~~effort~~money in efforts to ~~testing~~delay, repeal or otherwise negatively influence regulations and ~~validating New Lightning eMotors’ systems. Any failure~~programs that promote electric vehicles. Many of ~~New Lightning eMotors’ systems to meet~~ these ~~customer benchmarks~~parties have substantially greater resources and influence than we do. Further, changes in federal, state or local political, social or economic conditions, including a lack of legislative focus on these programs and regulations, could result in ~~potential customers choosing~~their modification, delayed adoption or repeal. Any failure to ~~retain their existing systems~~adopt, delay in implementation, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other alternative fuels or alternative vehicles over electric vehicles, would reduce the market for electrified powertrains or ZEVs and harm our operating results, liquidity and financial condition. For instance, California lawmakers and regulators have implemented various measures designed to ~~purchase systems~~increase the use of electric, hydrogen and other ~~than~~zero-emission vehicles, including establishing firm goals for the ~~combined companies.~~

number of these vehicles offered for sale or operated within the state by specified dates and enacting various laws and other programs in support of these goals. Although the influence and applicability of these or similar measures on our business and electrified powertrain and ZEV adoption in general remains uncertain, a reduction in focus by these groups on, or loss of legal authority to incentivize or require the sale of, ZEVs or vehicles with an overall net carbon negative emissions profile, could adversely affect the market for our electrified powertrain solutions. The state of California’s legal authority to develop and implement greenhouse gas emission standards is currently the subject of legal challenges, and the authority of California to implement and enforce GHG emission standards for vehicles and engines in the future is uncertain. Additionally, the Biden administration recently announced an effort by the EPA and NHTSA to reverse rollbacks in GHG and the CAFE standards enacted by the previous administration. The Biden administration also announced a goal of 50% EV sales by 2030. The Biden administration’s new GHG and CAFE standards, if and when finalized, will mandate fleet-wide increases in fuel economy and decreases in GHG emissions from internal combustion equipped vehicles produced by all manufacturers. If these economic incentives or regulatory programs are reduced, eliminated or never finalized and enacted, there could be a reduction in demand for our ZEVs, which could have a material adverse effect on our business, prospects, financial condition and operating results.

From time to time, we have been and may be named as a defendant in lawsuits, government investigations, indemnity claims and other legal proceedings involving alleged product liability, personal injury, intellectual property, privacy, consumer protection, securities, tax, labor and employment, environmental, commercial disputes and other matters that may harm our business, financial conditions and results of operations. For example, on October 15, 2021, a purported stockholder of the Company filed a putative class action in the U.S. District Court for the District of Colorado alleging that, among other things, we and certain senior members of our management team violated federal securities laws. Product liability claims, even those without merit or those that do not ~~meet~~involve our ZEVs, could harm our business, prospects, financial condition and operating results. The automobile industry in particular experiences significant product liability claims, and we face inherent risk of exposure to claims in the ~~expectations~~event our ZEVs do not perform or are claimed to not have performed as expected. As is true for other ZEV suppliers, we expect in the future that our ZEVs will be involved in crashes or other events (including fires, explosions and malfunctions) resulting in death or personal injury. Additionally, product liability claims that affect our competitors or suppliers may cause indirect adverse publicity for us and our ZEVs.

Lawsuits, including a product liability claim, could result in substantial damages and be costly and time-consuming for us to defend. Moreover, a product liability claim against us or our competitors could generate substantial negative publicity about our ZEVs and business and could have a material adverse effect on our brand, business, prospects, financial condition and operating results. We may self-insure against the risk of ~~investors, stockholders~~product liability claims for vehicle exposure, meaning that any product liability claims will likely have to be paid from company funds, not by insurance.

We have, and may in the future, voluntarily or involuntarily, initiate a recall if any of our ZEVs or powertrain components, such as wiring or batteries, prove to be defective or noncompliant with applicable federal motor vehicle safety standards. For example, in 2022, we initiated a voluntary recall for certain of our ZEVs due to issues with the glass cockpit and battery issues. If a large number of vehicles are the subject of a recall or if needed replacement parts are not in adequate supply, we may not be able to re-deploy recalled vehicles for a significant period of time. Such recalls involve significant expense and diversion of management attention and other resources, which could adversely affect our brand image in our target markets, as well as our business, prospects, financial ~~analysts,~~condition and results of operations.

Our operations are and will continue to be subject to federal, state, and/or local environmental laws and regulations, including laws relating to water use; air emissions; use of recycled materials; energy sources; the protection of human health and the environment; and the use, handling, storage, disposal and human exposure to hazardous materials. Environmental and health and safety laws and regulations can be complex, and we expect that we will be affected by future amendments to such laws or other new environmental and health and safety laws and regulations which may require us to change our operations, potentially resulting in a material adverse effect on our business, prospects, financial condition, and operating results. Violations of these laws, regulations, and permits, certificates and registrations can give rise to liability for administrative oversight and correction costs, clean-up costs, property damage, bodily injury and fines and penalties.

Fluctuations in the price of ~~the Company’s~~our securities could contribute to the loss of all or part of your investment. ~~Prior~~For example, during 2022 our stock price has ranged from $0.21 to ~~the business combination, there has not been a public market for Lightning’s stock~~$7.02, and ~~trading~~traded as high as $11.60 in ~~the shares of Company common stock has not been active. Accordingly,~~

the valuation ascribed to Lightning and Company common stock in the business combination may not be indicative of the price that will prevail in the trading market following the business combination. If an active market for the Company’s securities develops and continues, the2021. The trading price of ~~the Company’s~~our securities ~~following the business combination could be~~has been volatile and subject to wide fluctuations in response to various factors, some of which are beyond ~~the Company’s~~our control. Any of the factors listed below could have a material adverse effect on ~~your investment~~the market value of our securities.

Broad market and industry factors may materially harm the market price of ~~the Company’s~~our securities irrespective of ~~its~~our operating performance. The stock market in general ~~and the NYSE have~~has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of ~~the Company’s~~our securities, may not be predictable. A loss of investor confidence in the market for ~~retail~~automotive stocks or the stocks of other companies which investors perceive to be similar to ~~the Company~~us could depress ~~the Company’s~~our stock price regardless of ~~the Company’s~~our business, prospects, financial condition or results of operations. A decline in the market price of ~~the Company’s~~our securities also could adversely affect ~~the Company’s~~our ability to issue additional securities and ~~the Company’s~~our ability to obtain additional financing in the future.

~~Following~~

Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our stockholders sell, or the market perceives that we or our stockholders intend to sell, a substantial amount of our common stock in the public market, the market price of our common stock could decline significantly.

Our second amended and restated certificate of incorporation authorizes us to issue up to 250,000,000 shares of our common stock and up to 1,000,000 shares of preferred stock with such rights and preferences as included in our second

amended and restated certificate of incorporation. We may issue common stock or securities convertible into common stock from time to time in connection with a financing, acquisition, investment, our equity incentive plans or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our common stock to decline.

We do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, holders of our common stock may need to rely on sales of their shares after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

As of December 31, 2022, we had outstanding public warrants issued as part of our business combination exercisable for 14,999,970 shares of common stock at $11.50 per share, placement warrants issued as part of our business combination exercisable for 670,108 shares of common stock at an exercise price of $11.50 per share, and warrants related to the senior convertible note to purchase up to 8,695,641 shares of common stock for a per share exercise price of $11.50. There is no guarantee that the warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. Further, the additional shares of common stock issued upon the exercise of these warrants will result in dilution to our holders of common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our common stock.

In addition, the public warrants were issued in registered form under the amended and restated warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The amended and restated warrant agreement provides that the terms of the public warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding warrants to make any other change. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, modify the exercise price of the warrants, shorten the exercise period or decrease the number of shares and their respective affiliates and associates have of common stock purchasable upon exercise of a warrant.

We issued warrants exercisable for 670,108 shares of common stock at an exercise price of $11.50 per share in private placements that occurred concurrently with the Business Combination. These private warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private warrants are held by someone other than the initial purchasers or their permitted transferees, the private warrants will be redeemable by us and exercisable by such holders on the same basis as the warrants included in the units sold in our Business Combination, in which case the 670,108 private warrants could be redeemed by us for $6,701. Under GAAP, we are required to evaluate contingent exercise provisions of these warrants and then their settlement provisions to determine whether they should be accounted for as a warrant liability or as equity. Any settlement amount not equal to the difference between the fair value of a fixed number of our equity shares and a fixed monetary amount precludes these warrants from being considered indexed to its own stock, and therefore, from being accounted for as equity. As a result of the provision that the private warrants, when held by someone other than the initial purchasers or their permitted transferees, will be redeemable by us, the requirements for accounting for these warrants as equity are not satisfied. Therefore, we are required to account for these private warrants as a warrant liability and record (a) that liability at fair value, which was determined as the same as the fair value of the warrants included in the units sold in the Business Combination, and (b) any subsequent changes in fair value as of the end of each period for which earnings are reported. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.

The trading market for ~~New Lightning eMotors’~~our securities ~~will be~~is influenced by the research and reports that industry or securities analysts may publish about ~~New Lightning eMotors, its~~us, our business, ~~its~~our market, or ~~its~~our competitors.

Securities and industry analysts do not currently, and may never, publish research on New Lightning eMotors. If no securities or industry analysts commence coverage of New Lightning eMotors, New Lightning eMotors’ stock price and trading volume would likely be negatively impacted. If any of the analysts who ~~may~~ cover ~~New Lightning eMotors,~~us, change their recommendation regarding ~~New Lightning eMotors’~~our stock adversely, or provide more favorable relative recommendations about ~~New Lightning eMotors’~~our competitors, the price of ~~New Lightning eMotors’~~our securities would likely decline. If any analyst who ~~may cover New Lightning eMotors~~covers us were to cease ~~coverage of New Lightning eMotors~~covering us or fail to regularly publish reports on ~~it, New Lightning eMotors~~us, we could lose visibility in the financial markets, which could cause ~~its~~our stock price or trading volume to decline.

~~The future sales of shares by existing stockholders may adversely affect the market price of the Company’s common stock.~~

Sales of a substantial number of shares of the Company’s common stock in the public market could occur at any time. If the Company’s stockholders sell, or the market perceives that the Company’s stockholders intend to sell, substantial amounts of the Company’s common stock in the public market, the market price of the Company’s common stock could decline.

Our public stockholders will experience dilution as a consequence of, among other transactions, the issuance of common stock as consideration in the business combination with Lightning, the PIPE Investment and the Convertible Note investment. Having a minority share position may reduce the influence that our current stockholders have on the management of New Lightning eMotors.

The issuance of the common stock in the business combination with Lightning and in the PIPE Investment (as defined below), as well as the conversion of the Convertible Notes (as defined below), will dilute the equity interest of our existing stockholders and may adversely affect prevailing market prices for our public shares and/or public warrants.

It is anticipated that, upon completion of the business combination with Lightning: (i) the Company’s public stockholders (other than the purchaser in the PIPE Investment (the “PIPE Investor”) and the Convertible Note Investors) will retain an ownership interest of approximately 24.3% in New Lightning eMotors; (ii) the PIPE Investor will own approximately 3% of New Lightning eMotors (such that public stockholders, including PIPE Investor, will own approximately 27.3% of New Lightning eMotors); (iii) our Initial Stockholders (including our Sponsor) will own approximately 7.2% of New Lightning eMotors; and (iv) the former Lightning equity holders will own approximately 65.5% of New Lightning eMotors, not including any shares issued as part of any stockholder earnout pursuant to the terms of the business combination Agreement (the “Stockholder Earnout Shares”), or the shares of common stock that will be issuable upon conversion of the Convertible Notes or the exercise of any warrants, including the Convertible Note Warrants. The PIPE Investor has agreed to purchase 2,500,000 shares of common stock in the aggregate, for $25,000,000 of gross proceeds. The Convertible Note Investors have agreed to purchase an aggregate principal amount of $100,000,000 of Convertible Notes. The ownership percentage with respect to New Lightning eMotors following the business combination does not take into account (i) warrants to purchase common stock that will remain outstanding immediately following the business combination, (ii) the issuance of Stockholder Earnout Shares should the earnout conditions in the business combination Agreement be satisfied, (iii) conversion of any of the Convertible Notes or (iv) the issuance of any shares upon completion of the business combination under the terms of the equity incentive plan that we intend to adopt in conjunction with the business combination. If the actual facts are different than these assumptions, the percentage ownership retained by the Company’s existing stockholders in New Lightning eMotors will be different.

~~The NYSE may not list our securities on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.~~

In connection with the business combination with Lightning, in order to obtain the listing of New Lightning eMotors’ securities on the NYSE, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements. We will seek to have New Lightning eMotors’ securities listed on the NYSE upon consummation of the business combination. We cannot assure you that we will be able to meet all initial listing requirements. Even if New Lightning eMotors’ securities are listed on the NYSE, we may be unable to maintain the listing of its securities in the future.

If we fail to meet the initial listing requirements and the NYSE does not list New Lightning eMotors’ securities on its exchange, Lightning would not be required to consummate the business combination. In the event that Lightning elected to waive this condition, and the business combination was consummated without New Lightning eMotors’ securities being listed on the NYSE or on another national securities exchange, we could face significant material adverse consequences, including:

~~a limited availability of market quotations for our securities;~~

~~reduced liquidity for our securities;~~

•

a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

~~a limited amount of news and analyst coverage; and~~

~~a decreased ability to issue additional securities or obtain additional financing in the future.~~

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” If New Lightning eMotors’ securities were not listed on the NYSE, such securities would not qualify as covered securities and we would be subject to regulation in each state in which we offer our securities because states are not preempted from regulating the sale of securities that are not covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the State of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.

Resales of the shares of common stock included in the merger consideration being paid pursuant to the terms of the Business Combination Agreement (the “Merger Consideration”) could depress the market price of our common stock.

We will have approximately 82.3 million shares of common stock outstanding immediately following the business combination with Lightning, and there may be a large number of shares of common stock sold in the market following the completion of the business combination or shortly thereafter. The shares held by the Company’s public stockholders are freely tradable, and the shares of common stock held by the PIPE Investor will be freely tradable following effectiveness of the registration statement that we have agreed to file in connection with the business combination covering the resales of such shares. In addition, the Company will be obligated to register the resale of shares of some of the shares of common stock issued as Merger Consideration, which shares will become available for resale following the expiration of any applicable lockup period, as well as the shares of common stock into which the Convertible Notes will convert and are issuable upon exercise of the Convertible Note Warrants. We also expect that Rule 144 will become available for the resale of shares of our common stock that are not registered for resale once one year has elapsed from the date that we file the Current Report on Form 8-K following the closing of the business combination with Lightning that includes the required Form 10 information that reflects we are no longer a shell company. Such sales of shares of common stock or the perception of such sales may depress the market price of our common stock.

~~New Lightning eMotors may redeem the unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their warrants worthless.~~

New Lightning eMotors has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date New Lightning eMotors sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by New Lightning eMotors, New Lightning eMotors may exercise its redemption right even if New Lightning eMotors is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you (i) to

exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants and warrants underlying the units issuable upon conversion of working capital loan will be redeemable by New Lightning eMotors so long as they are held by their initial purchasers or their permitted transferees.

Anti-takeover provisions contained in ~~the proposed~~our Second Amended and Restated Certificate of Incorporation as well as provisions of Delaware law, could impair a takeover attempt.

~~The proposed Second Amended~~

Our second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation that we expect to adopt in conjunction with the business combination with Lightning will contain~~incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. ~~New Lightning eMotors is~~We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make ~~more difficult~~ the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for ~~New Lightning eMotors’~~our securities. These provisions ~~will~~ include:

These provisions, alone or together, could delay hostile takeovers and changes in control of ~~New Lightning eMotors~~us or changes in ~~the New Lightning eMotors board~~ ~~of directors~~our Board and ~~New Lightning eMotors’~~ management.

As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, or DGCL, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of ~~New Lightning eMotors~~our common stock. Any provision of the ~~Second Amended~~second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation~~incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of SOX; (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the

earliest of (i) the last day of the fiscal year: (a) following May 18, 2025, the fifth anniversary of our IPO; (b) in which we have total annual gross revenue of at least $1.07 billion; or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. 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 election to opt out is irrevocable. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of SOX, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. To comply with the requirements of being a public company, New Lightning eMotors will be required to provide management’s assessment on internal controls commencing with the annual report for fiscal year ended December 31, 2021, and we may need to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. The standards required for a public company under Section 404 of SOX are significantly more stringent than those required of Lightning as a privately held company. Further, as an emerging growth company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event that it is not satisfied with the level at which the controls of New Lightning eMotors are documented, designed or operating.

Testing and maintaining these controls can divert our management’s attention from other matters that are important to the operation of our business. If we identify material weaknesses in the internal control over financial reporting of New Lightning eMotors or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we no longer qualify as an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

Activities taken by the Company’s affiliates to purchase, directly or indirectly, public shares will increase the likelihood of approval of the business combination with Lightning and the other proposals contained in the Final Prospectus/ Proxy Statement and may affect the market price of the Company’s securities.

The Company’s Initial Stockholders, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions either prior to or following the consummation of the business combination with Lightning. None of the Company’s Initial Stockholders, directors, officers, advisors or their affiliates will make any such purchases when such parties are in possession of any material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Although none of the Company’s Initial Stockholders, directors, officers, advisors or their affiliates currently anticipate paying any premium purchase price for such public shares, in the event such parties do, the payment of a premium may not be in the best interest of those stockholders not receiving any such additional consideration. There is no limit on the number of shares that could be acquired by the Company’s Initial Stockholders, directors, officers, advisors or their affiliates, or the price such parties may pay.

If such transactions are effected, the consequence could be to cause the business combination with Lightning to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the business combination with Lightning and other proposals and would likely increase the chances that such proposals would be approved. If the market does not view the business combination positively, purchases of public shares may have the effect of counteracting the market’s view, which would otherwise be reflected in a decline in the market price of the Company’s securities. In addition, the termination of the support provided by these purchases may materially adversely affect the market price of the Company’s securities.

As of the date of this Annual Report, no agreements with respect to the private purchase of public shares by the Company or the persons described above have been entered into with any such investor or holder. The Company will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the proposal regarding the business combination or other proposals.

~~Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect the Company’s business, investments and results of operations.~~

The Company is subject to laws, regulations and rules enacted by national, regional and local governments. In particular, the Company is required to comply with certain SEC, NYSE and other legal or regulatory requirements, including the NYSE upon the transfer of its listing. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on the Company’s business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on the Company’s business and results of operations.

We have not registered the shares of common stock issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise public warrants, thus precluding such investor from being able to exercise its public warrants except on a cashless basis and potentially causing such public warrants to expire worthless.

We have not registered the shares of common stock issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective and to maintain a current prospectus relating to the common stock issuable upon exercise of the public warrants, until the expiration of the public warrants in accordance with the provisions of the Warrant Agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the public warrants are not registered under the Securities Act, we will be required to permit holders to exercise their public warrants on a cashless basis. However, no public warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares

to holders seeking to exercise their public warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our common stock is at the time of any exercise of a public warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their public warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any public warrant, or issue securities or other compensation in exchange for the public warrants in the event that we are unable to register or qualify the shares underlying the public warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the public warrants is not so registered or qualified or exempt from registration or qualification, the holder of such public warrant shall not be entitled to exercise such public warrant and such public warrant may have no value and expire worthless. In such event, holders who acquired their public warrants as part of a purchase of public units will have paid the full unit purchase price solely for the shares of common stock included in the public units. If and when the public warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in the IPO. However, there may be instances in which holders of our public warrants may be unable to exercise such public warrants but holders of our private warrants may be able to exercise such private warrants.

~~Our board of directors did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination.~~

Our board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the business combination with Lightning. In analyzing the business combination, our board of directors and management conducted due diligence on Lightning and researched the industry in which it operates and concluded that the business combination was in the best interest of our stockholders. Accordingly, investors will be relying solely on the judgment of our board of directors in valuing Lightning’s business, and our board of directors may not have properly valued such business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the proposed business combination or demand redemption of their shares for cash, which could potentially impact the ability to consummate the business combination or the operations of New Lightning eMotors.

The Company may be a “controlled company” within the meaning of the applicable rules of the NYSE and, as a result, may qualify for exemptions from certain corporate governance requirements. If the Company relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Upon the closing of the business combination with Lighting, depending on the number of shares of common stock redeemed by the Company’s public stockholders, the current stockholders of Lightning may control a majority of the voting power of New Lightning eMotors’ outstanding common stock, and the Company may then be a “controlled company” within the meaning of applicable rules of the NYSE upon the closing of the business combination. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:

~~that a majority of the board consists of independent directors;~~

~~for an annual performance evaluation of the nominating and corporate governance and compensation committees;~~

that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

•

~~that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.~~

If available, New Lightning eMotors may use these exemptions now or in the future. As a result, New Lightning eMotors’ stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

~~The Company’s proposed~~Our Second Amended and Restated Certificate of Incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America ~~will be~~is the sole and exclusive forums for substantially all disputes between ~~the Company~~us and ~~its~~our stockholders, which could limit ~~the Company’s~~our stockholders’ ability to obtain a favorable judicial forum for disputes with ~~the Company~~Lightning eMotors or ~~its~~our directors, officers, or employees.

Our ~~Second Amended~~second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation will require,~~incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act, as to which the Court of Chancery and the

federal district court for the District of Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our ~~Second Amended~~second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation.~~incorporation. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or employees which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. However, there is no assurance that a court would enforce the choice of forum provision contained in our ~~Second Amended~~second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation.~~incorporation. If a court were to find such provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Our ~~Second Amended~~second amended and ~~Restated Certificate~~restated certificate of ~~Incorporation will provide~~incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

As a public company, and particularly after we are no longer an emerging growth company, we have incurred and will continue to incur significant legal, accounting, and other expenses that we did not incur as a private company. The ~~future exercise~~SEC rules and regulations, including the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Exchange Act as well as the listing requirements of ~~registration rights~~NYSE and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. We have hired, and expect that we will need to continue to hire, additional accounting, finance, and other personnel in connection with our becoming, and our efforts to comply with the requirements of being, a public company, and our management and other personnel have devoted and will continue to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements have increased and will continue to increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that the rules and regulations applicable to us as a public company may make it more difficult and more expensive for us to maintain director and officer liability insurance, which could make it more difficult for us to attract and retain qualified members of our Board. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Our exemption from certain public company requirements, including sections of the Sarbanes-Oxley Act, will end once we are no longer considered an emerging growth company at the earliest of (i) December 31, 2025, which is the last day of our first fiscal year following the fifth anniversary of our initial public offering, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC with at least $700.0 million of our common equity held by non-affiliates or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three-year period.

We are an emerging growth company, or EGC, as defined in the JOBS Act. The JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial

statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We cannot predict if investors will find our common stock less attractive because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, contractors and other collaborators from authorizing, promising, offering or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. We can be held liable for the corrupt or other illegal activities of our employees, agents, contractors and other collaborators, even if we do not explicitly authorize or have actual knowledge of such activities. Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences.

We are ~~obligated~~subject to ~~register~~laws, regulations and rules enacted by national, regional and local governments. In particular, we are required to comply with certain ~~securities, including all~~SEC, NYSE and other legal or regulatory requirements. Compliance with, and monitoring of, the shares of common stock held by the Initial Stockholders, shares of common stock received by certain significant Lightning stockholders as part of the business combination, the shares of common stock being issued to the PIPE Investorapplicable laws, regulations and the shares of common stock into which the Convertible Notes are convertible, if applicable. We are obligated to (i) file a resale “shelf” registration statement to register such securities (and any shares of Lightning eMotors common stock into which theyrules may be ~~exercised following the consummation~~difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of the business combination) within 15 business days after of the closing of the business combination with Lightning and (ii) use reasonable best efforts to cause such registration statement to be declared effective by the SEC as soon as reasonably practicable after the filing. Sales of a substantial number of shares of common stock pursuant to the resale registration statement in the public market could occur at any time the registration statement remains effective.operations. In addition, ~~certain registration rights holders can request underwritten offerings~~a failure to ~~sell their~~

~~securities. These sales, or the perception in the market that the holders~~comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on our business and results of ~~a large number of shares intend to sell shares, could reduce the market price of our common stock.~~

~~There is uncertainty regarding the U.S. federal income tax consequences of the redemption to the holders of our common stock.~~

There is some uncertainty regarding the U.S. federal income tax consequences to holders of our common stock who exercise their redemption rights. The uncertainty of tax consequences relates primarily to the individual circumstances of the taxpayer and include (i) whether the redemption results in a dividend or a sale taxable as capital gain, and (ii) whether such capital gain is “long-term” or “short-term.” Whether the redemption qualifies for sale treatment will depend largely on whether the holder owns (or is deemed to own) any shares of our common stock following the redemption, and if so, the total number of shares of our common stock held by the holder both before and after the redemption relative to all shares of our common stock outstanding both before and after the redemption. The redemption generally will be treated as a sale, rather than a dividend, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in the Company or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Due to the personal and subjective nature of certain of such tests and the absence of clear guidance from the IRS, there is uncertainty as to whether a holder who elects to exercise its redemption rights will be treated as receiving a dividend or recognizing capital gain.

operations.

None.

We ~~currently maintain~~lease our ~~corporate offices at 1731 Embarcadero Rd., Suite 200, Palo Alto, CA 94303.~~236,000 square foot, multi-building headquarters located in Loveland, Colorado through February 28, 2027, with an option to renew for two consecutive 5-year terms. At this facility, we design, manufacture, assemble and test our ZEVs, powertrains and charging solutions. Our manufacturing facility has the capacity to produce 1,500 ZEVs per year while operating one eight-hour shift per day in a facility that has over 130,000 square feet of manufacturing space between two buildings. The ~~cost for this space is included in the $20,000~~same facility and equipment can produce 3,000 ZEVs annually by increasing labor to two eight-hour shifts per ~~month fee that we pay an affiliate of our Sponsor for office space, administrative and support services.~~day. We believe ~~based on fees for similar services in the San Francisco Bay Area,~~ that ~~the fee charged by~~ our ~~Sponsor~~facility is ~~at least as favorable as we could have obtained from an unaffiliated party. We consider our current office space, combined with the other office space otherwise available to our executive officers,~~suitable and adequate for our ~~current operations.~~

purposes.

The information with respect to this Part I, Item 3 can be found in Note 14 to the consolidated financial statements included in Item 8 of the Company filed a putative class action complaint in the Supreme Court of the State of New York, captioned Shingote v. GigCapital3, Inc., et al. (Case No. 650109-2021) on behalf of a purported class of stockholders. The lawsuit names the Company and each of its current directors, Dr. Avi Katz, Neil Miotto, John Mikulsky, Dr. Raluca Dinu, Andrea Betti-Berutto, and Peter Wang, as defendants. The lawsuit alleges that the individual defendants breached their fiduciary duties by, among other things, failing to take appropriate steps to maximize the value of the Company and failing to disclose all material information necessary for the stockholders to make an informed decision on whether to vote their shares in favor of the business combination with Lightning. The lawsuit also alleges that the Company aided and abetted the individual defendants’ breaches of fiduciary duty. The lawsuit seeks, among other relief, injunctive relief enjoining the business combination or recission of the business combination and an order directing the defendants to amend the Company’s Registration Statementthis annual report on Form ~~S-4. The lawsuit also purports to seek a declaration that the defendants violated their fiduciary duties, damages,~~10-K and ~~recovery~~is incorporated herein by reference.

Board of Directors and

Stockholders ~~of GigCapital3,~~

The preparation of financial statements in conformity with GAAP requires ~~the Company’s~~ management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of ~~revenues~~revenue and expenses during the reporting period.

The Company’s most significant estimates and judgments involve deferred income taxes, allowance for doubtful accounts, warranty liability, write downs and write offs of obsolete and damaged inventory, lower of cost or net realizable value of inventory and valuations of share-based compensation, warrant liability, convertible note derivative liability and earnout share liability. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those ~~estimates.~~

estimates, and such differences could be material to the Company’s consolidated financial statements.

As of and for the year ended December 31, 2022, two customers accounted for 40% and 25% of total accounts receivable. As of and for the year ended December 31, 2021, three customers accounted for 40%, 20% and 17% of total accounts receivable. The net sales to the following customers comprised more than 10% of revenues for the periods presented.

As of and for the year ended December 31, 2022, two suppliers accounted for 20% and 15% of the Company’s total accounts payable and two suppliers accounted for 34% and 23% of inventory purchases. As of and for the year ended December 31, 2021, three suppliers accounted for 20%, 19% and 11% of the Company’s total accounts payable and one supplier accounted for 10% of inventory purchases.

Cash and cash equivalents include cash held in banks and in money market funds. The Company’s cash and cash equivalents are placed with high-credit-quality financial institutions and issuers, and at times exceed federally insured limits. To date, the Company has not experienced any credit loss relating to its cash and cash equivalents. The carrying value of the cash equivalents approximates fair value, which represents a Level 1 input.

Accounts receivable are recorded at invoiced amounts, net of discounts, and allowances. The Company grants credit in the ~~amount~~normal course of ~~$12,732,907~~business to its customers. The Company periodically performs credit analyses and monitors the financial condition of its customers to reduce credit risk. The Company reduces the carrying value for estimated uncollectible accounts based on a variety of factors including the length of time receivables are past due, economic trends and conditions

affecting the Company’s customer base, and historical collection experience. Specific provisions are recorded for individual receivables when the Company becomes aware of a customer’s inability to meet its financial obligations. The Company writes off accounts receivable when they are deemed uncollectible. The following table details the change in the allowance for doubtful accounts for the periods indicated:

Inventories consist of ~~legal, accounting, underwriting fees~~raw materials, work in progress, and ~~other costs incurred through~~finished goods and are stated at the lower of cost or net realizable value, with cost determined on the average cost method. A valuation adjustment is made to inventory for any excess, obsolete or slow-moving items based on management’s review of on-hand inventories compared to historical and estimated future sales and usage profiles.

Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful asset lives. Leasehold improvements are stated at cost and amortized on the straight-line basis over their estimated economic useful lives or the lease term, whichever is shorter. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. Depreciation is included in our consolidated statements of operations in "Cost of revenues", "Research and development" and "Selling, general and administrative". When property is retired or otherwise disposed of, the cost and accumulated depreciation are removed from our consolidated balance sheets and the resulting gain or loss, if any, is reflected in “Other expense, net.” The estimated useful lives of the Company's major classes of property and equipment are as follows:

Long-lived assets to be held and used in the Company’s operations are evaluated for impairment when events or circumstances indicate the carrying value of a long-lived asset or asset group is less than the undiscounted cash flows from its use and eventual disposition over its remaining economic life. The Company assesses recoverability by comparing the sum of projected undiscounted cash flows from the use and eventual disposition over the remaining economic life of a long-lived asset or asset group to its carrying value, and records a loss from impairment if the carrying value is more than its undiscounted cash flows. Assets or asset groups to be abandoned or from which no future benefit is expected are written down to zero in the period it is determined they will no longer be used and are removed entirely from service. There were no impairments of long-lived assets recognized during the years ended December 31, 2022 and 2021.

Prior to the Business Combination, the Company had redeemable preferred stock outstanding that was classified as temporary equity in the mezzanine section of the balance sheet ~~date that are directly related~~due to the ~~Offering. Offering costs were charged to stockholders’ equity and recorded in additional paid-in capital as a reduction to the gross proceeds received upon completion~~contingently redeemable nature of the ~~Offering.~~

~~Common Stock Subject~~preferred stock. For the periods in which the redeemable convertible preferred stock was outstanding, the Company did not believe that the related contingent events and the redemption of the preferred stock was probable to ~~Possible Redemption~~

~~Common~~occur and did not accrete the preferred stock ~~subject~~ to ~~mandatory~~ redemption ~~(if any) is classified~~value.

The following table disaggregates revenue by major source:

The Company manufactures and sells medium and heavy-duty ZEVs, such as delivery vans and buses. The Company manufactures ZEVs by removing the internal combustion engine and certain associated components (collectively, "decontented parts") and installing and integrating its internally-developed, zero-emission powertrain into a ~~liability instrument~~vehicle chassis supplied by OEMs or from the customer. At times, the Company also installs and ~~is measured~~integrates its zero-emission powertrains into a used vehicle chassis supplied by the customer ("repower").

The Company recognizes revenue at ~~fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the~~a point in time when its performance obligation has been satisfied and control of the ~~holder~~ZEV is transferred to the customer, which generally aligns with shipping terms. Contract shipping terms include ExWorks (“EXW”), “FOB Shipping Point” and “FOB Destination” all as defined in the Incoterms. Under EXW (meaning the seller fulfills its obligation to deliver when it makes goods available at its premises, or ~~subject~~another specified location, for the buyer to ~~redemption~~collect), the performance obligation is satisfied and control is transferred at the point when the customer is notified that the ZEV is available for pickup. Under “FOB Shipping Point,” control is transferred to the customer at the time the good is transferred to the shipper and under “FOB Destination,” at the time the good is delivered to a customer's specified delivery location. At times, the Company sells ZEVs that require additional upfitting from a third party before the final sale to the customer. The Company is acting as the principal in such transactions and revenue is recognized on a gross basis.

Other revenue includes the sale of stand-alone zero-emission powertrains, charging systems, engineering consulting services, telematics and analytics subscription services and decontented parts. Revenue for zero-emission powertrains, chargers and decontented parts are generally recognized based on contract shipping terms. At times, chargers may be drop shipped directly to the customer from the manufacturer, in which revenue is recognized at the time of shipment. The Company is acting as the principal in such transactions and revenue is recognized on a gross basis. Services are recognized as revenue over time as either percentage of completion (i.e. engineering service contracts) or as the service is transferred to the customer (i.e. telematics and analytics subscription services).

The Company made an accounting policy election to account for any shipping and handling costs that occur after control has transferred to the customer as fulfillment costs that are accrued to cost of revenues at the time control transfers. Shipping and handling costs billed to customers are initially recorded in deferred revenue and recognized as revenue once shipping is complete.

The Company often applies for governmental funding programs, including California's Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (“HVIP”), on behalf of its customers for ZEV sales. Generally, as a condition of the program, the amount billed to the customer must be reduced by the amount that will be funded by the government program, and the Company will receive the funds directly from the government program. However, the discount to the customer is contingent upon the ~~occurrence~~Company’s receipt of ~~uncertain events not solely within~~ the ~~Company’s control)~~funding. Revenue is ~~classified as temporary equity. At~~recognized on the gross amount of the ZEV at the time substantially all ~~other times, common stock is classified as stockholders’ equity.~~ of the conditions of the government program required of the Company have been met and control of the ZEV has transferred to the customer based on shipping terms.

None of the Company’s contracts have a significant financing component. Any cash that is received prior to revenue recognition is treated as deferred revenue (a contract liability) until the good is delivered or service is rendered. Payment terms are identified when the contract has commercial substance and collectability of consideration is probable. The Company generally utilizes payment terms of a twenty percent deposit once a contract is executed with the remainder due upon receipt.

The transaction price of a contract is the amount of consideration to ~~possible redemption is presented~~which the Company expects to be entitled in exchange for transferring promised goods to a customer. Transaction prices do not include amounts collected on behalf of third parties (e.g., sales taxes). Sales taxes collected on sales are recorded as ~~temporary equity, outside~~a sales tax liability and are included in “Accrued expenses and other current liabilities.”

To determine the transaction price of a contract, the Company considers its customary business practices and the terms of the ~~stockholders’ equity section~~contract. For the purpose of determining transaction prices, the Company assumes that the goods and/or services will be transferred to the customer as promised in accordance with existing contracts and that the contracts will not be canceled, renewed, or modified. The Company’s revenue terms do not include retrospective or prospective volume discounts, rights of return, rebates, performance bonuses or other forms of variable consideration.

The Company’s contracts with customers have fixed transaction prices that are denominated in U.S. dollars and payable in cash.

The Company has applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed (i.e. analytical data subscription services).

As of December 31, 2022, the Company had remaining performance obligations related to a non-cancellable (other than for a breach by the Company) minimum-quantity purchase commitment. The customer was obligated to purchase a fixed number of ZEVs from January 1, 2022 through December 31, 2023, with a fixed price for orders placed in 2022 and another fixed price for orders placed in 2023. The Company estimates that the future revenues associated with this contract to be $10.5 million in 2023. The timing of the ~~Company’s balance sheet.~~

~~Stock-based Compensation~~

~~Stock-based compensation related~~revenue associated with these estimates will change if the ZEVs are commissioned and/or shipped subsequent to ~~restricted stock awards are~~the year in which they were ordered, as revenue will not be recognized until control of the ZEV transfers to the customer based on the purchase order shipping terms.

The Company has elected the practical expedient to expense contract acquisition costs, which consist of sales commissions, when the amortization period is one year or less. The expense to obtain or fulfill a contract with a customer are reported within “Selling, general, and administrative” expenses.

All ZEVs that customers purchase from the Company are covered by five-year and 60-thousand-mile limited product warranties. At the time revenue is recognized, the Company estimates the cost of expected future warranty claims and accrues estimated future warranty costs based upon the history of warranty claims. The Company periodically reviews the adequacy of its product warranties and adjusts, if necessary, the warranty estimate and accrued warranty liability for actual historical experience. The warranty liability is included in “Accrued expenses and other current liabilities” and the cost of warranties is included in the “Cost of revenues.”

At times, the Company may sell its ZEVs with an extended product warranty, with coverage beyond the five-year and 60-thousand-mile limited standard warranty. The Company considers these extended warranties to be separate performance obligations. The consideration allocated to the extended warranty is deferred and recognized over the term of the extended warranty. The Company’s deferred revenue associated with extended warranties is currently all classified as long-term within “Other long-term liabilities.”

The Company records product recall reserves when a liability is probable and the related amounts are reasonably estimable.

On December 16, 2022, the Company initiated a voluntary recall for certain 2021-2022 model year Lightning eMotors FE4-129 vehicles due to multiple software and hardware discrepancies internal to the Romeo Power battery packs installed in the FE4-129 series vehicles. The affected vehicles may fail to operate in cold temperatures, fail to start , or may lose traction power while driving, increasing the risk of an accident. The potential remedies for the recall remains under development. Romeo Power has been formally notified of the recall and the Company will seek to recover the costs and expenses associated with the recall from Romeo Power. Because the remedy is still being developed, and due to the uncertainty of Romeo Power's performance of its warranty obligation to the Company, the Company is unable to reasonably estimate a range of the potential losses associated with the recall.

A fair value ~~of common stock~~hierarchy was established that prioritizes fair value measurements based on the ~~grant date. The shares underlying the Company’s restricted stock awards are subject to forfeiture if these individuals resign or are terminated for cause prior to the completion~~types of the Business Combination. Therefore, the related stock-based compensation will be recognized upon the completion of a Business Combination, unless the related shares are forfeited prior to a Business Combination occurring.

~~Income Taxes~~

~~The Company follows the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized~~inputs used for the ~~estimated future tax consequences attributable to differences between the~~various valuation techniques (market approach, income approach, and cost approach). The Company’s financial ~~statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax~~ assets and liabilities are measured using ~~enacted tax rates expected~~inputs from the three levels of the fair value hierarchy. The three levels of the hierarchy and the related inputs are as follows:

An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to ~~apply~~the fair value measurement. Valuation techniques used need to ~~taxable income~~maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:

The Company believes its valuation methods are appropriate and consistent with other market participants, however, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The Company’s recurring fair value measurements categorized within Level 3 discussed below contain significant unobservable inputs. A change in those significant unobservable inputs could result in a significantly higher or lower fair value measurement at the reporting date.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, warrant liabilities, long-term debt, derivative liabilities and earnout liabilities. The carrying value of cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of those instruments.

Long-term debt is not presented at fair value on the consolidated balance sheets, as it is recorded at carrying value, net of unamortized debt discounts. However, the 7.5% $100,000 convertible senior note (the “Convertible Note”) has an embedded conversion option accounted for as a derivative liability, which is presented at fair value on the consolidated balance sheets. The fair value of the Convertible Note, including the conversion option, was $58,155 and $76,614 as of December 31, 2022 and 2021, respectively. The Company’s term note and working capital facility (“Facility”) had an outstanding term note with a principal amount of $3,000 as of both December 31, 2022 and 2021 and a fair value of $3,125 and $4,173 as of December 31, 2022 and 2021, respectively.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were measured at fair value on a recurring basis in the ~~years~~Consolidated Balance Sheets.

As of December 31, 2022 and 2021, the Company had cash equivalents held in a money market account. The Company has concluded that due to the highly liquid nature of the money market account, the carrying value approximates fair value, which represents a Level 1 input.

As a result of the Business Combination, the Company assumed the liability associated with the Gig warrants. The Company accounts for the warrants as liabilities at fair value with subsequent changes in fair value recorded in the consolidated statement of operations for each reporting period. The fair value is determined using the Black-Scholes-Merton option-pricing model ("BSM") where the share price input represents the Company’s stock price as of the valuation date. The BSM is a commonly-used mathematical model for pricing an option or warrant. In particular, the model estimates the variation in value over time of financial instruments. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

The Company estimates the fair value of its derivative liability associated with the Convertible Note at each reporting date, as well as at each conversion date. The Convertible Note and embedded conversion option are valued using a Binomial Lattice Model designed to capture incremental value attributed to the conversion options in addition to the value of the Convertible Note. The value of the Convertible Note without the conversion feature is valued utilizing the income approach, specifically the discounted cash flow method. Cash flows are discounted utilizing the U.S. Treasury rate and the credit spread to estimate the appropriate risk-adjusted rate. The conversion feature utilizes the Company’s stock price as of the valuation date as the starting point of the valuation. A Binomial Lattice Model is used to estimate the Company’s credit spread by solving for a premium to the U.S. Treasury rate that produces a value of the Convertible Note. As of issuance, the value of the Convertible Note and warrants related to the Convertible Note are set to equal $100,000 to solve for the credit spread which is then updated quarterly. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

As a result of the Business Combination, the Company recognized additional earnout shares with performance conditions as a liability measured at fair value with subsequent changes in fair value recorded in the consolidated statement of operations for each reporting period. The earnout shares are valued using the Company’s stock price as of the valuation date. The valuation methodology used is a Monte Carlo Simulation model (“MCS”) utilizing a Geometric Brownian motion process to capture meeting the various performance conditions. MCS is a technique that uses a stochastic process to create a range of potential future outcomes given a variety of inputs. Stochastic processes involve the use of both predictive assumptions (e.g., volatility, risk-free rate) and random numbers to create potential outcomes of value. MCS assumes that stock prices take a random walk and cannot be predicted; therefore, random number generators are used to create random outcomes for stock prices. The fair value measurements are considered Level 3 measurements within the fair value hierarchy.

Prior to the Business Combination, the Company had common and preferred stock warrants issued in connection with the issuance of debt, the conversion of debt to preferred stock, and the issuance of redeemable convertible preferred stock that were measured and recorded at fair market value as of the date of each transaction. These common and preferred stock warrants were classified in warrant liabilities and were measured and adjusted to their fair market value as of each reporting period as described in the paragraphs below.

The Company estimated the fair value of its common stock, Series C preferred stock, and Series C preferred warrants, which value was used in the determination of the value of warrants issued in connection with certain debt and preferred stock transactions and when measuring at the end of the reporting period. The Company considered the measurement of such liability-classified warrants in Level 3 due to significant unobservable inputs in this valuation.

The valuations were based on a combination of the income and market approach allocated to stockholders using an Option Pricing Model and applying a Discount for Lack of Marketability judgement based on the Finnerty put-option model. The key inputs to the valuation models that were utilized to estimate the fair value of the warrant liabilities included volatility, risk free rate, probability of subsequent funding, and discounts for lack of marketability.

These valuations were determined using a Probability Weighted Expected Return Method (PWERM) and a combination of several income and market approaches to determine the enterprise value of the Company. The enterprise value was adjusted for the probabilities of various scenarios/liquidity events that could have occurred and would have to create an overall weighted value of common stock as of each valuation date. Each liquidity scenario had unique probabilities based on the Company’s opinion, which was based on various discussions with potential investors, advisors, and market participants, which included unique facts and circumstances as of the valuation dates. Each liquidity scenario had unique probabilities based on the Company’s opinion, which was based on various discussions with potential investors, advisors,

and market participants, which included unique facts and circumstances as of the valuation dates. The scenarios included early liquidation, a private merger and acquisition (“M&A”) transaction, staying a privately held company, and a special purpose acquisition company (“SPAC”) transaction/merger.

Each scenario was based on a different valuation methodology based on the unique risks, opportunities and a likely investor’s or market participant’s perspective. These included (a) Early liquidation: based on an Asset Approach using the existing equity value as of the valuation date; (b) Private M&A: based on a guideline transaction (market) approach using an assembled group of comparable transactions and trailing revenue metric/multiples; (c) Stay private: based on a discounted cash flow (income) approach using the Company’s non-SPAC forecast and a market-based discount rate; and (d) SPAC transaction: based on a guideline public company (market) approach using an assembled peer group of comparable companies and forward revenue metrics/multiples. Value was allocated to all outstanding securities through the PWERM using capitalization tables unique to each liquidity scenario.

The preliminary valuation was then discounted by applying a Discount for Lack of Marketability (“DOLM”) based on a Finnerty put-option model to determine a non-marketable, minority value of one share of common stock and one Series C preferred share.

The Company’s non-financial assets, which primarily consist of property and equipment, are not required to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable, these along with other non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value.

The beneficial conversion feature guidance requires recognition of the conversion option’s in-the-money portion, the intrinsic value of the option, in equity, with an offsetting reduction to the carrying amount of the instrument. The resulting discount is amortized as interest over the life of the instrument. When there is a subsequent change to the conversion ratio based on a future occurrence, the new conversion price may trigger the recognition of an additional beneficial conversion feature on occurrence.

As a result of the Business Combination, the unamortized portion of the beneficial conversion feature was recorded to additional paid-in capital.

The Company utilizes the Black-Scholes model to determine the fair value of the stock option awards, which requires the input of subjective assumptions. These assumptions include estimating (a) the length of time grantees will retain their vested stock options before exercising them for employees and the contractual term of the option for non-employees (“expected term”), (b) the volatility of the Company’s common stock price over the expected term, (c) expected dividends, and (d) the fair value of a share of common stock prior to the Business Combination. After the closing of the Business Combination, the Company’s board of directors determined the fair value of each share of common stock underlying stock-based awards based on the closing price of the Company’s common stock as reported by the NYSE on the date of grant. The Company has elected to recognize the adjustment to share-based compensation expense in the period in which ~~those~~forfeitures occur.

The assumptions used in the Black-Scholes model are management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment (see Note 11). As a result, if other assumptions had been used,

the recorded share-based compensation expense could have been materially different from that recorded in the financial statements.

The Company initially values RSUs based on the grant date closing price of the Company’s common stock. The Company recognizes stock-based compensation expense based on the fair value of the awards issued at the date of grant and amortized on a straight-line basis as the employee renders services over the requisite service period. Forfeitures are accounted for as they occur by reversing the expense previously recognized for non-vested awards that were forfeited during the period.

As a result of the Business Combination, the Company assumed the liability associated with the Gig warrants. The Company accounts for the warrants for shares of the Company’s common stock that are not indexed to its own stock as liabilities at fair value on the consolidated balance sheets. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a “(Gain) loss from change in fair value of warrant liabilities” in the consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants. At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to “Additional paid-in capital”.

The Lightning Systems common and preferred warrants, prior to the Business Combination, were accounted for in accordance with the authoritative guidance which requires that free-standing financial instruments with certain cash settlement features and/or associated with redeemable convertible preferred stock, which is classified as temporary ~~differences are expected~~equity, to be ~~recovered or settled.~~ recorded at the fair value of the warrants. All outstanding common (with the exception of certain warrants that were issued to vendors discussed below) and all preferred warrants are recorded as “warrant liabilities” based on their fair value on the date of the transaction. See the “Fair value” significant accounting policy for a description of the determination of fair value. Any changes in the fair value of these instruments are reported as “(Gain) loss from change in fair value of warrant liabilities.”

Warrants are separated from the host contract and reported at fair value when the warrant is a freestanding financial instrument that may ultimately require the issuer to settle the obligation by transferring assets. Under certain circumstances, most notably in the case of a deemed liquidation, the warrants issued in conjunction with Lightning Systems’ debt and preferred stock transactions may have been ultimately required to be settled by a transfer of assets, and as a result the warrants are reported as liabilities at fair value each reporting period.

In February 2021, the Company granted common warrants to certain vendors for services provided prior to March 31, 2021. Refer to Note 10 — Capital Structure.

As a result of the Business Combination, the remaining outstanding Lightning Systems warrants were converted to the Company’s common stock based on the Exchange Ratio.

Research and development costs are primarily expensed when incurred and consist of personnel-related expenses including salaries, benefits, travel and stock-based compensation for personnel performing research and development activities; expenses related to materials, supplies and testing; and consulting and occupancy expenses. In addition, costs for certain property and equipment utilized for research and development are capitalized and depreciated to “Research and development” over the useful life of the asset based on the property and equipment policy discussed above.

Advertising costs are expensed when incurred and are included in “Selling, general, and administrative” expenses and total $580 and $262 for the years ended December 31, 2022 and 2021, respectively.

meets all criteria of a derivative instrument, it was accounted for and recorded as a derivative liability at fair value on the Company’s balance sheet with subsequent changes in fair value recorded in the consolidated statement of operations each reporting period.

Income taxes are accounted for using the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of ~~a change in~~temporary differences between the carrying amounts and the tax basis of other assets and liabilities. The Company provides for income taxes at the current and future enacted tax rates ~~is recognized~~and laws applicable in ~~income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.~~

each taxing jurisdiction. The Company ~~prescribes~~uses a ~~recognition threshold~~two-step approach for recognizing and ~~a measurement attribute for the financial statement recognition and measurement of~~measuring tax ~~positions~~benefits taken or expected to be taken in a tax ~~return. For those benefits to be recognized, a~~return and disclosures regarding uncertainties in income tax ~~position must be more-likely-than-not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2020.~~positions. The Company recognizes ~~accrued~~ interest and penalties related to ~~unrecognized tax benefits as~~ income tax ~~expense. No amounts were accrued~~matters in income tax expense in the consolidated statement of operations.

Basic earnings (loss) per share (“EPS”) are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the ~~payment~~period. Diluted EPS attributable to common shareholders is computed by adjusting net earnings by the weighted average number of ~~interest~~common shares and ~~penalties as~~potential common shares outstanding (if dilutive) during each period. Potential common shares include shares issuable upon exercise of ~~December 31, 2020.~~ stock options and vesting of restricted stock awards. Anti-dilutive securities are excluded from diluted EPS.

The Company applied the treasury stock method to account for the dilutive impact of its options, warrants and restricted stock units and the if converted method for its Convertible Note.

In June 2016, the FASB issued ASU 2016-13 related to the measurement of credit losses on financial instruments and has since modified the standard with several ASUs (collectively, the “credit loss standard”). The credit loss standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected

to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The credit loss standard took effect for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. As amended in ASU 2019-10, for smaller reporting companies, the credit loss standard will take effect for fiscal years beginning after December 15, 2022, and for interim periods within those fiscal years. Early adoption is permitted for all entities for fiscal years beginning after December 15, 2018. The adoption of this ASU will require a cumulative-effect adjustment to accumulated deficit as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company adopted this standard on January 1, 2023, and this ASU did not have material impact to the Company's financial statements.

On May ~~18, 2020,~~6, 2021, GigCapital3, Inc. consummated the Business Combination with Lightning Systems, with Lightning Systems surviving the merger as a wholly-owned subsidiary of Gig. In connection with the Business Combination, certain Gig shareholders exercised their right to redeem certain of their outstanding shares for cash, resulting in the redemption of 5,816,664 shares of Gig common stock for gross redemption payments of $58,759. In addition, an investor purchased from the Company ~~completed~~2,500,000 shares of common stock (the “PIPE Shares”) for a purchase price of $10.00 per share and an aggregate purchase price of $25,000 pursuant to a separate subscription agreement dated as of December 10, 2020 (the “PIPE Financing”). The PIPE Financing investment closed simultaneously with the consummation of the Business Combination.

Upon the closing of the ~~Offering whereby~~Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things change the name of the corporation to Lightning eMotors, Inc. and to increase the total number of authorized shares of capital stock to 251,000,000, consisting of (a) 250,000,000 of common stock, par value $0.0001 per share and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share.

Immediately prior to the closing of the Business Combination, each issued and outstanding share of Lightning Systems redeemable, convertible preferred stock, was converted into shares of Lightning Systems common stock. This resulted in a conversion of 38,007,793 shares of Lightning Systems redeemable, convertible preferred stock into Lightning Systems common stock. Outstanding Lightning Systems short-term convertible notes were converted into an aggregate of 5,830,723 shares of Lightning Systems common stock. In addition, Lightning Systems had outstanding warrants that converted into 4,379,795 shares of Lightning Systems common stock.

Outstanding stock options, whether vested or unvested, to purchase shares of Lightning Systems common stock under the 2019 plan (see Note 11) converted into stock options for shares of the Company’s common stock upon the same terms and conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving effect to the Exchange Ratio.

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method, Gig was treated as the ‘acquired” company for financial reporting purposes. See Note 1 for further details. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Lightning Systems issuing stock for the

net assets of Gig, accompanied by a recapitalization. The net assets of Gig are stated at historical cost, with no goodwill or intangible assets recorded. The Company expensed $9,098 of acquisition costs associated with the Business Combination to “Selling, general and administrative” expense on the statement of operations during the year ended December 31, 2021.

Prior to the Business Combination, Lightning Systems and Gig filed separate standalone federal, state and local income tax returns. As a result of the Business Combination, structured as a reverse acquisition for tax purposes, Lightning Systems became the parent of the consolidated filing group with Gig as a subsidiary.

Unless otherwise indicated, all of the Company’s common stock as well as previously issued stock options and redeemable convertible preferred stock presented in the accompanying retroactively revised consolidated statements of stockholders’ equity (deficit) or in the related notes are presented on an as- or as if-converted basis, converted at the Exchange Ratio of 0.9406 and presented as shares or awards of the Company's common stock.

The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended December 31, 2021:

The number of shares of Common Stock outstanding immediately following the consummation of the Business Combination:

At December 31, 2022 and 2021, inventories consist of the following:

During the years ended December 31, 2022 and 2021, the Company reduced the cost of certain inventory to net realizable value by $5,019 and $917, respectively, which is included in “Cost of revenues.”

At December 31, 2022 and 2021, Prepaid expenses and other current assets consist of the following:

Cost and accumulated depreciation as of December 31, 2022 and 2021 are as follows:

Depreciation and amortization expense for the years ended December 31, 2022 and 2021 totaled $1,718 and $874, respectively, of which $451 and $182, respectively, are included in “Cost of revenues”, $140 and zero, respectively, are included in “Research and development” and $1,127 and $692, respectively, are included in “Selling, general, and administrative” expenses.

At December 31, 2022 and 2021, accrued expenses and other current liabilities consist of the following:

Changes in warranty liability (included in accrued expenses and other current liabilities) were as follows:

Notes payable as of December 31, 2022 and 2021 consist of the following:

In conjunction with the Business Combination, the Company issued $100,000 of 7.5% Convertible Notes due 2024 (the "Convertible Note") and paid issuance costs of $5,000. The Convertible Note has a maturity date of May 15, 2024 and has semi-annual interest payments due May 15 and November 15 of each year starting on November 15, 2021. The Convertible Note has a conversion feature at a conversion price of $11.50 and warrants to purchase up to 8,695,641 shares of common stock for a per share price of $11.50. The Convertible Note has a mandatory conversion option that: a) is exercisable at the option of the Company on or after May 15, 2022; b) occurs when the Company’s stock price (1) is greater than 120% of the conversion price of $11.50, or $13.80 for 20 trading days in a period of 30 consecutive trading days and (2) the 30-day average daily trading volume during the applicable exercise period, i.e., consecutive 30 trading day period, is greater than or equal to $3,000; and c) the Company will make payments in accordance with the interest make-whole (defined below) amount in cash or issuance of additional shares of the Company’s common stock.

The interest make-whole amount means, with respect to the conversion of the Convertible Note, in an amount denominated in U.S. dollars, the sum of all regularly scheduled interest payments, if any, due on such Convertible Note on each interest payment date occurring after the conversion date for such conversion and on or before the maturity date; provided, however, that (A) for these purposes, the amount of interest due on the interest payment date immediately after such conversion date will be deemed to be the following amount: (x) if such conversion date is prior to January 15, 2023, an amount equal to twelve months of interest and (y) if such conversion date is on or after January 15, 2023, any accrued and unpaid interest, if any, at such conversion date, plus any remaining amounts that would be owed to, but excluding, the maturity date in respect of such Convertible Note, including all regularly scheduled interest payments; and (B) if such conversion date occurs after the Company has sent a mandatory conversion notice, then the interest make-whole amount for such conversion shall be the sum of all regularly scheduled interest payments, if any, due on such Convertible Note on each interest payment date occurring after the conversion date for such conversion to, but excluding, the maturity date.

If the Company incurs other unpermitted indebtedness, it is required to redeem the Convertible Notes in full including outstanding principal and accrued and unpaid interest, plus (a) a prepayment premium equal to twelve months of interest on the principal amount of the Convertible Notes if such indebtedness event occurred prior to January 15, 2023; or (b) a prepayment premium equal to the amount of interest which would have accrued on the Convertible Notes through maturity (the “Redemption Feature”). In addition, the Company is required to issue to the holders a fixed number of warrants to purchase shares of Common Stock. The fixed number of warrants will be based on the principal balance of the Convertible Notes, divided by $11.50 (“Redemption Warrants”). The Redemption Warrants will be exercisable from the date of repayment of the Convertible Notes through the original maturity date of the Convertible Notes. In addition, an adjustment

to the exercise price of the warrants will occur when (1) the Company issues additional shares of common stock for capital raising purpose at a price less than $9.20 per share (2) the aggregate proceeds from such issuance represents more than 65% of the total equity proceeds; and (3) the volume weighted average trading price of common stock during the 20 trading-day period starting on the trading day prior to the completion of the Business Combination is below $9.20.

If the number of outstanding shares of common stock is increased by a stock split or other similar event, the number of shares issuable on exercise of each warrant shall be increased proportionately and the exercise price shall be decreased proportionately. Consequently, if the number of outstanding shares of common stock is decreased by a reverse stock split, consolidation, combination or reclassification of shares of common stock or other similar event, the number of shares of common stock issuable on exercise of each warrant shall be decreased proportionately and the exercise price shall be increased proportionately.

The Company has identified certain embedded derivatives related to its Convertible Note. Since the Convertible Note has a conversion feature whereby the principal amount will convert into a variable number of shares based on the future trading price of the Company’s common stock, the conversion feature is recorded as a derivative liability. Therefore, the fair value of the convertible feature at inception on May 6, 2021 in the amount of $17,063 was recorded as a debt discount and an addition to “Derivative liability” on the consolidated balance sheets. The derivative liability is adjusted to fair value each reporting period, with the changes in fair value reported as “Loss (gain) from change in fair value of derivative liability” on the consolidated statements of operations. The debt discount is amortized over the life of the Convertible Notes.

During the year ended December 31, 2021, $12,137 of Convertible Notes were converted into 1,055,388 shares of the Company’s common stock. The Company recognized a gain on extinguishment of $2,194 in “Gain on extinguishment of debt” on the consolidated statement of operations associated with the difference between (1) the sum of the fair value of the common stock issued of $10,089 and cash paid for the remaining annual interest due May 2022 of $668 and (2) the sum of the carrying amount of the converted debt $7,966 and the fair value of the convertible note derivative liability of $4,985.

On November 21, 2022, the Company completed an exchange with certain holders of the Convertible Notes via privately negotiated exchange agreements, pursuant to which the holders agreed to exchange $14,000 in aggregate principal amount of the Company's outstanding Convertible Notes for 13,276,430 newly issued shares of the Company's common stock, par value $0.0001 per share, at a price of $1.05 per share. The Company recognized a gain on extinguishment of $2,921 in “Gain on extinguishment of debt” on the consolidated statement of operations associated with the difference between (1) the sum of the fair value of the common stock issued of $8,138 and (2) the sum of the carrying amount of the converted debt $11,021 and the fair value of the convertible note derivative liability of $38.

The following table provides a reconciliation of the beginning and ending balances for the convertible note derivative liability measured at fair value using significant unobservable inputs (Level 3):

The Convertible Note warrants are considered free-standing instruments and meet the criteria for equity classification because they are indexed to the Company’s own stock and provide a fixed number of shares. Therefore, the fair value of the Convertible Note warrants on May 6, 2021 in the amount of $14,522 was recorded as a debt discount and an addition to “Additional paid-in capital” on the consolidated balance sheets.

Interest expense for the year ended December 31, 2022 and 2021 was $15,800 and $9,911, of which $6,459 and $4,544, respectively, related to contractual interest expense and $9,341 and $5,367, respectively, related to amortization of the discount.

The Facility provides for both term and working capital loans for borrowings up to $9,900 as of December 31, 2022. However, the Company’s Convertible Note requirements limit the Company’s permitted indebtedness to $5,000. Interest is payable quarterly on borrowings at a fixed annual rate of 15%. Borrowings under the Facility are secured by substantially all the Company’s assets, are subject to borrowing base limitations, and require the Company to meet certain covenants. The Facility borrowings, with a maturity date of October 21, 2024, were $3,000 as of both December 31, 2022 and 2021. Interest expense related to the Facility was $465 and $1,265 for the years ended December 31, 2022 and 2021, respectively.

In connection with entering into this Facility, the Company issued warrants in 2020 and 2019, exercisable into 60,241 and 301,205, respectively, shares of Series C preferred stock at the conversion price of $1.66 per share. At the time of issuance, the Company estimated the fair value of the warrants at $6 and $66, respectively, and recorded a debt discount, which is being recognized over the life of the Facility borrowings, and a warrant liability, which was adjusted to fair value each reporting period, with the changes in fair value reported as a component of “other income, net.” As a result of the Business Combination, the warrants were converted to shares of common stock based on the Exchange Ratio.

In August and September 2020, Lightning Systems borrowed $9,679 under convertible note purchase agreements from third parties ($6,454) and related parties ($3,225). The related parties included officers, a director, and individuals whose companies are represented on the Board of Lightning Systems. These convertible notes bore interest at 8%. Interest was payable monthly, with principal and unpaid interest due June 30, 2021. The notes were convertible into 5,830,723 Series C redeemable convertible preferred shares at the conversion price of $1.66 per share. These notes were subordinate to the Facility and third-party unsecured facility agreement.

The 2020 short-term notes were convertible into shares of Series C redeemable convertible preferred stock upon the 1) a change in control (“~~Common Stock”~~CIC”) having a value in excess of $200,000; 2) a debt or equity financing with aggregated gross proceeds in excess of $10,000; or 3) at maturity. Should the notes be converted at maturity, the debt holders would receive a beneficial conversion feature allowing the conversion at 75% of the lowest issue price. The Company recorded the beneficial conversion feature at its intrinsic value of $3,071. This was recorded as a debt discount and an addition to “Additional paid-in capital.” During the years ended December 31, 2022 and 2021, amortization of the debt discount of zero and $1,296, respectively, was recorded to “Interest expense”.

As a result of the Business Combination, these convertible notes were converted to Series C redeemable convertible preferred stock which converted into common stock based on the Exchange Ratio with the balance of $9,679 recorded to “Additional paid-in capital”. In addition, the accrued interest through the date of the closing of the Business Combination was forgiven.

In March 2015, Lightning Systems borrowed $1,500 due under an unsecured facility agreement. As a result of the Business Combination, the amount outstanding was paid in full.

In February 2020, Lightning Systems borrowed $3,000 under two convertible note payable agreements from companies represented on the Board of Lightning Systems. The convertible notes bore interest at 8% and were subject to certain covenants. In May 2020, the notes were subject to a mandatory redemption in connection with a qualified equity offering of $3,000, resulting in a conversion into 2,118,819 Series C preferred stock at a weighted average conversion price of $1.42 per share. The mandatory redemption was treated as a debt extinguishment for accounting purposes. To record the extinguishment, the fair value of consideration received and debt relieved was compared to the fair value of consideration paid and equity instruments issued. The fair value of consideration received was greater than the consideration paid. The excess fair value of $1,844 was recorded as a contribution to “Additional paid-in capital”.

In connection with the redemption, the Company issued short and long-term warrants, exercisable into 3,614,457 and 831,326, respectively, shares of Series C preferred stock at the conversion price of $1.66 per share. The Company estimated the fair value of the warrants at issuance at $336. The change in fair value is reported within “(Gain) loss from

change in fair value of warrant liabilities.” As a result of the Business Combination, the warrants were converted to common stock based on the Exchange Ratio.

In February 2021, Lightning Systems borrowed $3,000 by entering into a promissory note with a third-party lender. The note was secured by substantially all of Lightning Systems’ assets and bore an annual interest rate of 20%, of which 10% was to be paid in cash and ~~three-fourths (3/4)~~10% was to be paid-in-kind by adding such interest to the principal balance. Interest was to be paid quarterly beginning on April 30, 2021 until the earliest of the following events were to occur: the maturity date of February 19, 2022; or 14 days after the closing of the Business Combination. The promissory note was paid upon the closing of the Business Combination.

The total balance of all debt matures as follows:

The Company adopted authoritative guidance related to leases effective January 1, 2020 using the modified retrospective method. A contract is or contains a lease when, (1) the contract contains an explicitly or implicitly identified asset and (2) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract in exchange for consideration. The Company assesses whether an arrangement is or contains a lease at inception of the contract. For all leases, other than those that qualify for the short-term recognition exemption, the Company recognizes as of the lease commencement date on the balance sheet a liability for its obligation related to the lease and a corresponding asset representing the Company’s right to use the underlying asset over the period of use.

The Company leases its manufacturing center, distribution center, and office space (collectively “Operating Facility”) and certain information technology ("IT") equipment under non-cancelable operating leases. The Company also leases equipment utilized in the manufacturing process under non-cancelable financing leases. These financing leases include either a bargain purchase option or the equipment reverts ownership to the Company at the end of the lease term.

For the purpose of this Note 10, the "Equity Line of Credit" and “Warrants” relate to the current capital structure of the Company while the “Redeemable Convertible Preferred Stock – Lightning Systems”, “Warrant Liabilities – Lightning Systems” and “Warrants issued to vendors - Lightning Systems” relate to the redeemable ~~warrant (a “Public Warrant”~~convertible preferred stock and warrants issued by Lightning Systems prior to the Business Combination, and that were converted to shares of common stock of the Company as of the date of the Business Combination.

As of December 31, 2022, there are 24,365,719 warrants outstanding, of which 14,999,970 are public warrants, 8,695,641 are Convertible Note warrants and 670,108 are private placement warrants. Each whole ~~Public Warrant is exercisable for~~warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per ~~full share. As a result, increments of four Public Warrants must be exercised in order~~share, subject to ~~obtain whole shares of Common Stock upon the exercise of the Public Warrants. The exercise price of the Public Warrants may be adjusted in certain circumstances~~adjustment as discussed in Note 6. Under the terms of the warrant agreement (the “Warrant Agreement”), the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion of the Company’s Business Combination.

No fractional shares will be issued upon exercise of the Public Warrants. If, upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearestbelow. Only whole number the number of shares of Common Stock to be issued to the Public Warrant holder. Each Public Warrant will become exercisable on the later of 30 days after the completion of the Company’s Business Combination or 12 months from the closing of the Offering andwarrants are exercisable. The warrants will expire ~~five years after~~at 5:00 p.m., New York City time, on May 26, 2026, the fifth anniversary of the completion of the Company’s Business Combination, or earlier upon redemption or liquidation. ~~However, if the Company does not complete a Business Combination on or prior~~

The private placement warrants are identical to the ~~18-month period allotted to complete the Business Combination, the Public Warrants will expire at the end of~~public warrants except that such ~~period. If the Company is unable to deliver registered shares of Common Stock to the holder upon exercise of the Public Warrants during the exercise period, there~~private placement warrants will be ~~no net~~exercisable for cash ~~settlement of these Public Warrants and the Public Warrants will expire worthless, unless they may be exercised~~or on a cashless basis, at the holder’s option, and will not be redeemable by the Company, in each case so long as they are still held by the ~~circumstances described in the Warrant Agreement.~~ sponsor or its affiliates.

Once the ~~Public Warrants~~warrants become exercisable, the Company may redeem the outstanding ~~Public Warrants~~ warrants (excluding the private placement warrants):

The fair value of the private placement warrants on May 6, 2021 in the amount of $1,253 was recorded as a “Warrant liability” and a reduction to “Additional paid-in capital” on the consolidated balance sheets. The change in fair value was recognized in “Gain (loss) from change in fair value of warrant liabilities” on the consolidated statements of operations. The fair value of the Convertible Note warrants on May 6, 2021 in the amount of $14,522 was recorded as a debt discount and an addition to “Additional paid-in capital” on the consolidated balance sheets.

Series A, B and C redeemable convertible preferred shares were eligible for a cumulative annual simple return of 8% (the “preferred return”) on amounts paid to purchase their preferred shares upon a liquidation, winding up or dissolution of Lightning Systems, or if declared by the Board. No preferred dividends had been declared.

Lightning Systems’ preferred shares were not redeemable at the option of the holders. However, the holders of preferred shares could request that Lightning Systems redeem all outstanding preferred shares in accordance with their liquidation preferences in the event of a deemed liquidation in which Lightning Systems did not effect a dissolution of Lightning Systems under Delaware General Corporation Law within 90 days after such deemed liquidation event. Deemed liquidation events are defined to include (i) a merger or consolidation in which Lightning Systems is a constituent party, (ii) sale, lease, exclusive license or other disposition or the sale or disposition of substantially all of Lightning Systems’ assets, or (iii) a “change in control” transaction in which then-current stockholders’ controlled less than 50% of the voting power of the entity resulting from the transaction. Accordingly, these shares were considered contingently redeemable and were classified as temporary equity.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of Lightning Systems, any remaining assets of Lightning Systems were to be distributed as follows: (i) first, to holders of Series C preferred shares, an amount equivalent to 1.25 times the original purchase price per share plus the accrued but unpaid preferred return per share; (ii) second, to holders of Series B preferred shares, an amount equivalent to 1.25 times the original purchase price per share plus the preferred accrued but unpaid return per share; (iii) third, to holders of Series A preferred shares, an amount equivalent to 1.00 times the original purchase price per share plus the accrued but unpaid preferred return per share; and (iv) any remaining assets after satisfying the required distributions to preferred stockholders are distributed pro rata among preferred and common stockholders on an if-converted basis.

Series A, Series B and Series C preferred shares were to be convertible into common shares at any time at the option of the holder, and are automatically converted into common shares upon the affirmative election of more than 70% of the Series B and Series C preferred stockholders, or upon the closing of a sale of common shares in an initial public offering with gross proceeds to Lightning Systems of $50,000 or more accompanied by a listing of such common shares on the Nasdaq’s National Market, the New York Stock Exchange, or another exchange approved by the Board.

See Note 8 for description of the convertible debt conversion transactions and warrant liabilities under this Note 10 regarding warrants issued in connection with the preferred share purchases.

In connection with the 2019 Series C preferred stock issued for cash, Lightning Systems issued warrants, exercisable into 702,811 shares of Series C preferred shares at the conversion price of $1.66 per share. Lightning Systems estimated the fair value of the warrants at $155 and recorded a warrant liability, which is reported at fair value at each reporting period, with the change in fair value reported as “(Gain) loss from change in fair value of warrant liabilities.”

In connection with the 2020 Series C preferred stock issued in connection with the redemption of related party 2020 convertible notes payable of $3,000 and cash of $3,000, Lightning Systems issued warrants, exercisable into 4,445,783 shares of Series C preferred stock at the weighted average conversion price of $1.42 per share. Lightning Systems estimated the fair value of the warrants at $336 and recorded a warrant liability, which is reported at fair value at each reporting period, with the change in fair value reported as “(Gain) loss from change in fair value of warrant liabilities.”

As a result of the Business Combination, the preferred series A, B and C shares were converted to shares of the Company's common stock based on the Exchange Ratio. As a result, the balances of $18,036, $4,101 and $35,203, respectively, were charged to "Addition paid-in capital".

Lightning Systems issued warrants that enabled the ~~Company has agreed~~holder to ~~use its best efforts~~exercise in exchange for common shares or Series C preferred shares. The warrant agreements were reissued on December 31, 2019 upon Lightning Systems’ conversion from an LLC partnership to a C corporation. All terms remained identical. See Note 8 and under the section redeemable convertible preferred stock of this Note 10 for descriptions of the underlying transactions.

Series C warrants were exercisable by the holder at any time at the stated exercise price, which price is subject to adjustment to provide anti-dilution protection to the holder. Upon the closing of an initial public offering, or a merger, sale or other transaction involving substantially all of the assets of Lightning Systems (a “Deemed Liquidation”) the holder may require Lightning Systems to purchase any unexercised warrants at net value equal to the difference between the exercise price of the warrant and the proceeds the holder would have otherwise received as a result of the Deemed Liquidation or initial public offering. Lightning Systems had no obligation to file ~~a new registration statement under the Securities Act, following the completion of the Company’s initial Business Combination,~~ for ~~the~~ registration of the shares ~~of Common Stock~~ issuable upon exercise of the ~~Warrants included~~warrants under the Securities Act.

As described above in the ~~Units and Private Placement Units.~~

Asredeemable convertible preferred stock section of ~~December~~this Note 10, during the three months ended March 31, ~~2020, there were 15,670,098 Warrants outstanding.~~

~~Stock-based Compensation~~

~~Also included in~~2021 one of the ~~outstanding~~preferred warrant holders exercised their warrants to purchase 903,614 shares of ~~Common Stock are 15,000 shares issued~~Series C preferred stock at an exercise price of $1.66 for cash proceeds of $1,500. At the time of the exercise, the fair value of the warrants was deemed to be $5.87-$5.90 per warrant. In connection with the exercise, the warrant liability was reduced by $5,310 with the offset recorded to Series C redeemable convertible preferred stock in ~~consideration of future services~~addition to the ~~Insiders,~~cash proceeds received. During the three months ended June 30, 2021, one of the preferred warrant holders exercised their warrants to purchase 963,855 shares of Series C preferred stock at an exercise price of $1.66 for cash proceeds of $1,600. At the time of the exercise, the fair value of the warrants was deemed to be $5.87-$5.90 per warrant. In connection with the exercise, the warrant liability was reduced by $5,658 with the offset recorded to Series C redeemable convertible preferred stock in addition to the cash proceeds received.

The following table presents information for the Common and ~~these~~Series C preferred warrants, that have been converted to common stock as a result of the Business Combination, and outstanding Gig private warrants that were assumed in the Business Combination:

In connection with the Business Combination, the stockholders approved the 2021 Equity Incentive Plan (the "2021 Plan"). The 2021 Plan provides the Company the ability to grant incentive stock options, non-qualified stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance units, performance shares, ~~have not been~~cash-based awards and other stock-based awards. The purpose of the 2021 Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward persons for performing services and by motivating such persons to contribute to the growth and profitability of the Company and its subsidiaries. As of December 31, 2022, there were 17,794,239 shares reserved and 12,522,150 shares available for grant under the 2021 Plan.

The legacy Lightning Systems 2019 Equity Incentive Plan (“2019 Plan”) provided for the grant of incentive stock options, non-qualified stock options, and other awards. As a result of the Business Combination, the 2019 Plan was superseded by the 2021 Plan; therefore, no further awards will be granted under the 2019 Plan. In connection with the Business Combination, awards outstanding were converted into options exercisable for common stock of the Company based on the Exchange Ratio. As of December 31, 2022, there were 1,793,924 stock options previously ~~forfeited,~~granted and unexercised under the 2019 Plan, which remain subject to the terms and conditions of the 2019 Plan.

To date, the Company has issued stock option and restricted stock unit (“RSU”) awards. The Company recognizes stock-based compensation expense based on the fair value of the ~~Common Stock on~~awards issued at the date of grant and amortized on a straight-line basis as the ~~shares vest will be~~employee renders services over the requisite service period. Forfeitures are accounted for as they occur by reversing the expense previously recognized ~~as stock-based compensation in~~for non-vested awards that were forfeited during the ~~Company’s statements of operations and comprehensive income when the completion of the Business Combination becomes probable.~~

~~7. FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

~~Level 1:~~

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

~~Level 2:~~

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

~~Level 3:~~

~~Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities.~~

period. The following table presents ~~information about~~the stock-based compensation related to stock option and RSU awards for the periods presented:

The estimated unrecognized expense for stock options and RSUs not vested as of December 31, 2022, which will be recognized over the remaining vesting period, is as follows:

Stock option awards are issued to employees with an exercise price equal to the estimated fair market value per share at the date of grant and a term of 10 years. Stock option awards generally vest over 4 years. It is the Company’s ~~assets~~policy to issue new shares upon option exercise. Changes in the Company’s stock options for the year ended December 31, 2022 are presented in the table below.

Changes in the status of the Company’s non-vested share awards for the year ended December 31, 2022 are presented in the table below.

The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was $1,550 and $9,008, respectively. During the years ended December 31, 2022 and 2021, stock options issued were valued using a Black-Scholes option pricing model using the following assumptions:

The expected volatility was derived from the volatility of historical stock prices of similar publicly traded companies. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options. The risk-free interest rate is based on the U.S. Treasury yield curve rates with maturities consistent with the expected term of the related stock options. The expected term represents the period of time that the Company anticipates the stock options to be outstanding based on historical experience and future expectations.

The Company grants RSU awards to employees that generally vest over 3 years. RSU awards are ~~measured at fair value~~valued based on the closing market price of the Company's common stock on the grant date.

The Company has an employee-directed 401(k) savings plan (the “401(k) Plan”) for all eligible employees over the age of 21. Under the 401(k) Plan, employees may make voluntary contributions based on a ~~recurring basis~~percentage of their pretax income, subject to statutory limitations. The Company matches 100% for the first 3% of each employee’s contribution and 50% for the next 2% of each employee’s contribution. The Company’s cash contributions are fully vested upon the date of match. The Company made matching cash contributions of $808 and $353 for the years ended December 31, 2022 and 2021, respectively.

The provision for income taxes is recorded at the end of each interim period based on the Company’s best estimate of its effective income tax rate expected to be applicable for the full fiscal year. There is no provision for income taxes because the Company has incurred operating losses since inception. The Company’s effective income tax rate was 0% for the years ended December 31, 2022 and 2021 and the realization of any deferred tax assets is not more likely than not.

The components of the federal and state income tax provision included in the consolidated statements of operations are all attributable to continuing operations and are summarized as follows:

The provision for (benefit from) income taxes differs from the amount that would be computed by applying the statutory federal income tax rate of 21% to income before income taxes as a result of the following:

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes; and (b) operating losses and tax credit carryforwards. The tax effects of significant items comprising the Company’s deferred taxes are as follows:

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance.

The Company’s federal net operating loss and tax credit carryforward as of December 31, 2022 was $122,437 and has no expiration date. The Company also files in various state jurisdictions and has net operating loss and tax credit carryforwards of $89,942 as of December 31, 2022 that will begin to expire in 2040 if not utilized.

The Company has no uncertain tax positions.

Basic income or loss per common share is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted income or loss per share of common stock is computed by dividing net income or loss by the weighted average number of shares of common stock outstanding, plus the issuance of potentially dilutive shares of common stock that could result from the exercise of outstanding stock options and warrants, vesting of restricted stock and conversion of convertible notes. No potentially dilutive common shares are included in the computation of any diluted per share amount when a loss is reported, which was the case for the year ended December 31, 2021. The Company applied the treasury stock method to account for the dilutive impact of its stock options, warrants and RSUs and the if converted method for its Convertible Note.

Potential weighted average shares that were excluded from the computation of diluted net income per share because their effect was anti-dilutive for the year ended December 31, 2022 consisted of the following. The Company also excluded the earnout shares as they are not currently issued and outstanding and will not be issued until satisfaction of the applicable stock price levels as described in Note 3.

All potentially dilutive common shares in the following table were excluded from the computation of diluted loss per share

The Company is party to firm purchase commitments with some of its suppliers. A firm purchase commitment represents an agreement that specifies all significant terms, including price and timing of the transactions, and includes a disincentive for non-performance that is sufficiently large to make performance probable. This disincentive is generally in the form of a take-or-pay provision, which requires the Company to pay for committed volumes regardless of whether the Company actually acquires the materials. The Company evaluates these agreements and records a loss, if any, on firm purchase commitments using the same lower of cost or market approach as that used to value inventory.

The Company is involved in various legal proceedings in the ordinary course of business. The Company records an accrual for legal contingencies when it determines that it is probable that it has incurred a liability and it can reasonably estimate the amount of the loss.

On August 4, 2021, a purported stockholder of the Company filed a putative class action complaint in the Delaware Chancery Court, captioned Delman v. GigCapitalAcquisitions3, LLC, et al. (Case No. 2021-0679) on behalf of a purported class of stockholders. The lawsuit names GigCapitalAcquisitions3, LLC and the Company’s former directors Dr. Katz, Dr. Dinu, and Messrs. Betti-Berutto, Mikulsky, Miotto and Wang, as defendants. The lawsuit alleges that the defendants breached their fiduciary duty stemming from Gig’s merger with Lightning Systems and unjust enrichment of certain of the defendants. The lawsuit seeks, among other relief, unspecified damages, redemption rights, and attorneys’ fees. Neither the Company nor any of its current officers or directors are parties to the lawsuit. The Company’s former directors are subject to certain indemnification obligations of the Company. On January 4, 2023, the Delaware Chancery Court denied the defendant's motion to dismiss.

In addition, on October 15, 2021, the Company and certain of its officers were named as defendants in a putative securities class action. The action is pending in the U.S. District Court for the District of Colorado, and is captioned Shafer v. Lightning eMotors, Inc., et al., Case No. 1:21-cv02774. The lawsuit alleges violations of Sections 10(b), Section 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder for purported false or misleading statements regarding the Company’s business operations and financial condition. A related lawsuit captioned Cohen v. Lightning eMotors, Inc., et al., Case No. 1:21-cv-03215, was filed in the United States District Court for the District of Colorado on December 1, 2021. On December 17, 2021, the Cohen lawsuit was consolidated with the Shafer lawsuit. On April 22, 2022, the court appointed a lead plaintiff in the consolidated lawsuit. The lead plaintiff’s filed a consolidated complaint on May 20, 2022. On July 13, 2022, the Company and the other defendants filed a motion to dismiss the class action. On February 21, 2023, the court denied the motion to dismiss. The plaintiffs seek damages in an unspecified amount, attorneys’ fees, and other remedies. The Company believes the allegations are without merit and intends to defend vigorously against such allegations.

On February 6, 2023, a purported stockholder of the Company filed a derivative complaint in the Delaware Chancery Court, captioned Uvaydov v. Robert Fenwick-Smith, Tim Reeser, et al. (Case No. 2023-0137-LWW). The lawsuit names

certain current and former officers and directors of the Company as defendants. The lawsuit alleges that the defendants breached their fiduciary duty stemming from GigCapital3’s merger with Lightning Systems. The lawsuit seeks, among other relief, unspecified damages, redemption rights, and attorneys’ fees. The Company believes the allegations are without merit and intends to defend vigorously against them.

On February 24, 2023, a purported stockholder of the Company filed a derivative complaint in the U.S. District Court for the District of Colorado, captioned Lanham v. Robert Fenwick-Smith, et al. (Case No. 1:23-cv00507). The lawsuit names certain current and former officers and directors of the Company as defendants. The lawsuit alleges, among others, that the defendants breached their fiduciary duty stemming from GigCapital3’s merger with Lightning Systems. The lawsuit seeks, among other relief, unspecified damages, and attorneys’ fees. The Company believes the allegations are without merit and intends to defend vigorously against them.

On December 16, 2022, the Company initiated a voluntary recall for certain 2021-2022 model year Lightning eMotors FE4-129 vehicles due to multiple software and hardware discrepancies internal to the Romeo Power battery packs installed in the FE4-129 series vehicles. The affected vehicles may fail to operate in cold temperatures, fail to start, or may lose traction power while driving, increasing the risk of an accident. The potential remedies for the recall remains under development. Romeo Power has been formally notified of the recall and the Company will seek to recover the costs and expenses associated with the recall from Romeo Power. Because the remedy is still being developed, and due to the uncertainty of Romeo Power's performance of its warranty obligation to the Company, the Company is unable to reasonably estimate a range of the potential losses associated with the recall.

On February 10, 2023, the Company issued 4,208,860 shares of common stock, par value $0.0001 per share, at a price of $0.79 per share to certain holders of the Company’s unsecured 7.5% convertible senior notes due in 2024 in exchange for the cancellation of $3.5 million in aggregate principal amount of the outstanding convertible notes. The Company relied on the Section 4(a)(2) exemption from securities registration under the federal securities laws for transactions not involving any public offering. No advertising or general solicitation was employed in offering the securities. The securities were issued to accredited investors. The securities were offered for investment purposes only and not for the purpose of resale or distribution.

On May 11, 2021, the Audit Committee of our Board of Directors approved the appointment of Grant Thornton LLP (“Grant Thornton”) as our independent registered public accounting firm to audit the Company’s financial statements for the year ending December 31, 2021. Prior to that, BPM LLP (“BPM”) served as the independent registered public accounting firm of Gig. Grant Thornton served as the independent registered public accounting firm of Lightning Systems prior to the Business Combination.

Since Lightning Systems was considered the “accounting acquiror” in the Business Combination, BPM was informed on May 11, 2021 that it would be replaced by Grant Thornton as our independent registered public accounting firm following its completion of the review of the 10-Q for the quarter ended March 31, 2021, which consisted only of the accounts of the pre-Business Combination special purpose acquisition company, Gig. BPM’s services to us concluded on May 17, 2021 upon the filing with the SEC of the Form 10-Q for the quarter ended March 31, 2021.

The report of BPM on Gig’s balance sheet as of December 31, 2020 and ~~indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:~~

Description:

Level

December 31, 2020

Assets:

Cash and marketable securities held in Trust Account

1

$
202,029,414

The marketable securities held in the Trust Account are considered trading securities as they are generally used with the objective of generating profits on short-term differences in price and therefore, the realized and unrealized gain and loss are recorded in the statements of operations and comprehensive loss, ~~for the periods presented.~~

~~Additionally, there was $1,716 of interest accrued, but not yet credited to the Trust Account, which was recorded in the balance sheet in interest receivable on~~stockholders’ equity and cash ~~and marketable securities held in the Trust Account as of December 31, 2020.~~

~~8. INCOME TAX~~

~~The sources of loss before provision for income taxes are as follows~~flows for the period from February 3, 2020 (inception) through December 31, ~~2020:~~

Period from
February 3,
2020
(Inception)
through
December 31,
2020

Domestic

$
(2,715,768
)
Foreign

—

Total

$
(2,715,768
)

~~The provision for income taxes~~2020 did not contain an adverse opinion or disclaimer of opinion and was ~~comprised of~~not qualified or modified as to uncertainties, audit scope or accounting principles, except that such audit report contained an explanatory paragraph in which BPM expressed substantial doubt about the ~~following for~~Company’s ability to continue as a going concern.

During the period from February 3, 2020 (inception) through December 31, ~~2020:~~

Period from
February 3,
2020
(Inception)
through
December 31,
2020

Current:

Federal

$
9,209

State and local

3,877

Foreign

—

Total Current

13,086

Deferred:

Federal

—

State and local

—

Foreign

—

Total deferred income tax expense

—

Total provision for income taxes

$
13,086

~~Reconciliation~~2020, and the subsequent interim period through the date of BPM’s dismissal, there were no “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) between us and BPM on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of BPM, would have caused BPM to make reference to the subject matter of the ~~federal statutory income tax rate to the effective income tax rate is as follows:~~

disagreements in connection with its reports on our financial statements for such periods.

Period from
February 3,
2020
(Inception)
through
December 31,
2020

Statutory income tax benefit

$
(570,311
)
State income taxes, net of federal

(189,659
)
Valuation allowance on start-up costs

773,056

Provision for income taxes

$
13,086

During the period from February 3, 2020 (inception) through December 31, 2020, and the ~~U.S. statutory rate primarily due~~subsequent interim period through the date of BPM’s dismissal, we did not consult with Grant Thornton regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the financial statements of Gig or us, and no written report or oral advice was provided that Grant Thornton concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).

We have provided BPM with a copy of the foregoing disclosures and have requested that BPM furnish us with a letter addressed to the ~~valuation allowance~~SEC stating whether it agrees with the statements made by us set forth above. A copy of BPM’s letter, dated May 12, 2021, was attached to the Current Report on Form 8-K filed with the ~~start-up costs~~SEC on May 12, 2021 as Exhibit 16.1.

Management, under the supervision and with ~~nondeductible permanent adjustments.~~

~~The tax effects of temporary differences that gave rise to significant portions~~the participation of the ~~deferred tax assets~~Chief Executive Officer (“CEO”) (our Principal Executive Officer) and ~~liabilities~~Chief Financial Officer (“CFO”) (our Principal Financial Officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, ~~2020 were as follows:~~

December 31,
2020

Deferred Tax Assets:

Start-up costs

$
773,056

Valuation allowance

(773,056
)
Net deferred tax assets (liabilities)

$
—

~~As of December 31, 2020,~~2022. Based on that evaluation, the ~~Company has recorded a valuation allowance of $773,056 to offset deferred tax assets related to its start-up costs. As of December 31, 2020,~~CEO and CFO concluded that the Company has no unrecognized tax benefits for which a liability should be recorded. The Company records interest and penalties associated with unrecognized tax benefits as a component of tax expense. As of December 31, 2020, the Company has not accrued interest or penalties on unrecognized tax benefits, as there are no positions recorded as of 2020. No changes to the uncertain tax positions balance are anticipated within the next 12 months, and are not expected to materially impact the financial statements.

~~Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.~~

~~None.~~

~~Item 9A. Controls and Procedures.~~

~~Disclosure~~disclosure controls and procedures ~~are controls and other procedures that are designed to ensure~~were effective in providing reasonable assurance that information required to be disclosed in ~~our~~ reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods ~~specified in~~required by the SEC’s rules and ~~forms. Disclosure controls~~forms and ~~procedures include, without limitation, controls and procedures designed to ensure~~ that such information ~~required to be disclosed in our reports filed or submitted under the Exchange Act~~ is accumulated and communicated to ~~our~~ management, including ~~our Chief Executive Officer~~the CEO and ~~Chief Financial Officer,~~CFO, to allow timely decisions regarding required ~~disclosure.~~

~~Evaluation~~disclosures.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange ~~Act, our Chief Executive Officer~~Act). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and ~~Chief Financial Officer carried out an~~the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

There was no change in ~~our~~the Company's internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, ~~our~~ internal control over financial reporting.

None.

The following persons are composed solely of independent directors. Each committee operates under a charter that is approved by our board and has the composition and responsibilities described below. The committee assignments set forth below were in effect as of December 31, 2020.

~~Audit Committee~~

We have established an audit committee of the board of directors. Messrs. Miotto, Mikulsky and Wang will serve as members of our audit committee. Mr. Miotto serves as chairman of the audit committee. Under the NYSE listing standards and applicable SEC rules, we are required to have three members of the audit committee all of whom must be independent. Messrs. Miotto, Mikulsky and Wang are independent.

Each member of the audit committee is financially literate and our board of directors has determined that Mr. Miotto qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

~~We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:~~

▪

assisting the board of directors in the oversight of (1) the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company, (2) the preparation and integrity of the financial statements of the Company, (3) the compliance by the Company with financial statement and regulatory requirements, (4) the performance of the Company’s internal finance and accounting personnel and its independent registered public accounting firm, and (5) the qualifications and independence of the Company’s independent registered public accounting firm;

▪

reviewing with each of the internal auditors and independent registered public accounting firm the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation.

▪

reviewing and discussing with management and internal auditors the Company’s system of internal control and discussing with the independent registered public accounting firm any significant matters regarding internal controls over financial reporting that have come to its attention during the conduct of its audit;

▪

reviewing and discussing with management, internal auditors and the independent registered public accounting firm the Company’s financial and critical accounting practices, and policies relating to risk assessment and management;

▪

receiving and reviewing reports of the independent registered public accounting firm discussing 1) all critical accounting policies and practices to be used in the firm’s audit of the Company’s financial statements, 2) all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm, and 3) other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences;

▪

~~reviewing and discussing with management and the independent registered public accounting firm the annual and quarterly financial statements and section entitled “Management’sDiscussionandAnalysis of FinancialConditions and Results ofOperations” of the Company prior to the filing of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q;~~

▪

reviewing, or establishing, standards for the type of information and the type of presentation of such information to be included in, earnings press releases and earnings guidance provided to analysts and rating agencies;

▪

discussing with management and the independent registered public accounting firm any changes in Company’s critical accounting principles and the effects of alternative GAAP methods, off-balance sheet structures and regulatory and accounting initiatives;

▪

~~reviewing material pending legal proceedings involving the Company and other contingent liabilities;~~

▪

meeting periodically with the Chief Executive Officer, Chief Financial Officer, the senior internal auditing executive and the independent registered public accounting firm in separate executive sessions to discuss results of examinations;

▪

reviewing and approving all transactions between the Company and related parties or affiliates of the officers of the Company requiring disclosure under Item 404 of Regulation S-K prior to the Company entering into such transactions;

▪

establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or accounting matters;

▪

reviewing periodically with the Company’s management, independent registered public accounting firm and outside legal counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities; and

▪

~~establishing policies for the hiring of employees and former employees of the independent registered public accounting firm.~~

~~Compensation Committee~~

We have established a compensation committee of the board of directors. The members of our Compensation Committee are Messrs. Mikulsky and Betti-Berutto. Mr. Mikulsky serves as chairman of the compensation committee. We have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:

▪

~~reviewing the performance of the Chief Executive Officer and executive management;~~

▪

~~assisting the board of directors in developing and evaluating potential candidates for executive positions (including Chief Executive Officer);~~

▪

reviewing and approving goals and objectives relevant to the Chief Executive Officer and other executive officer compensation, evaluate the Chief Executive Officer’s and other executive officers’ performance in light of these corporate goals and objectives, and set Chief Executive Officer and other executive officer compensation levels consistent with its evaluation and the company philosophy;

▪

~~approving the salaries, bonus and other compensation for all executive officers;~~

▪

~~reviewing and approving compensation packages for new corporate officers and termination packages for corporate officers as requested by management;~~

▪

~~reviewing and discussing with the board of directors and senior officers plans for officer development and corporate succession plans for the Chief Executive Officer and other senior officers;~~

▪

~~reviewing and making recommendations concerning executive compensation policies and plans;~~

▪

~~reviewing and recommending to the board of directors the adoption of or changes to the compensation of the Company’s directors;~~

▪

~~reviewing and approving the awards made under any executive officer bonus plan, and provide an appropriate report to the board of directors;~~

▪

reviewing and making recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans, and, except as otherwise delegated by the board of directors, acting on as the “Plan Administrator” for equity-based and employee benefit plans;

▪

~~approving all special perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s executive officers and employees;~~

▪

~~reviewing periodic reports from management on matters relating to the Company’s personnel appointments and practices;~~

▪

~~assisting management in complying with the Company’s proxy statement and annual report disclosure requirements;~~

▪

~~issuing an annual report of the Compensation Committee on Executive Compensation for the Company’s annual proxy statement in compliance with applicable SEC rules and regulations;~~

▪

~~annually evaluating the Committee’s performance and the committee’s charter and recommending to the board of directors any proposed changes to the charter or the committee; and~~

▪

undertaking all further actions and discharge all further responsibilities imposed upon the Committee from time to time by the board of directors, the federal securities laws or the rules and regulations of the SEC.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.

~~Nominating and Corporate Governance Committee~~

We have established a nominating and corporate governance committee of the board of directors. The members of our nominating and corporate governance are Messrs. Wang, Mikulsky and Miotto. Mr. Mikulsky serves as chair of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including:

▪

~~developing and recommending to the board of directors the criteria for appointment as a director;~~

▪

~~identifying, considering, recruiting and recommending candidates to fill new positions on the board of directors;~~

▪

~~reviewing candidates recommended by stockholders;~~

▪

~~conducting the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates; and~~

▪

~~recommending director nominees for approval by the board of directors and election by the stockholders at the next annual meeting.~~

The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and will be directly responsible for approving the search firm’s fees and other retention terms.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders. Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination to our board of directors.

~~Director Independence~~

NYSE requires that a majority of our board must be composed of “independent directors,” which is defined generally as a person other than an executive officer or employee of the Company or its subsidiaries or any other individual having a relationship, which, in the opinion of the Company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director.

Messrs. Miotto, Mikulsky, Wang and Betti-Berutto are our independent directors. Our independent directors have regularly scheduled meetings at which only independent directors are present. Any affiliated transactions will be on terms no less favorable to us than could be obtained from independent parties. Any affiliated transactions must be approved by a majority of our independent and disinterested directors.

~~Code of Ethics~~

We have adopted a Code of Ethics applicable to our management team and employees in accordance with applicable federal securities laws. We have filed a copy of our form of Code of Ethics and our board committee charters as exhibits to the initial registration statement. You are able to review these documents by accessing our public filings at the SEC’s web site at ~~www.sec.gov~~. In addition, a copy of the Code of Ethics will be provided without charge upon request from us, or may accessed on our company website at https://www.gigcapitalglobal.com/investors. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

~~Conflicts of Interest~~

~~Investors should be aware of the following potential conflicts of interest:~~

~~None of our management team is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities.~~

▪

In the course of their other business activities, our Sponsor and management team may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. However, our management teams have agreed to present to us all suitable target business opportunities, subject to any fiduciary or contractual obligations.

▪

Unless we consummate our initial business combination, our management team and Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the trust account.

▪

The Founder Shares and Placement Shares will be released from lockup only if an initial business combination is successfully completed, and the private warrants and private rights will expire worthless if an initial business combination is not consummated. For the foregoing reasons, our board may have a conflict of interest in determining whether a particular target business is appropriate for effecting an initial business combination.

~~In general, executive officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:~~

▪

~~the corporation could financially undertake the opportunity;~~

▪

~~the opportunity is within the corporation’s line of business; and~~

▪

~~it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.~~

Accordingly, as a result of multiple business affiliations, our management team may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the above mentioned conflicts will be resolved in our favor.

In order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our management team has contractually agreed, pursuant to a written agreement with us, until the earliest of our execution of a definitive agreement for a business combination, our liquidation or such time as he ceases to be an officer or director, to present to our company for our consideration, prior to presentation to any other entity, any

suitable business opportunity which may reasonably be required to be presented to us, subject to any fiduciary or contractual obligations he might have. Accordingly, our amended and restated certificate of incorporation will provide that the doctrine of corporate opportunity will not apply with respect to any of our management team in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have.

~~Below is a table summarizing the entities to which~~ our executive officers and directors ~~currently have fiduciary duties or contractual obligations.~~

as of March 13, 2023.

The further information required by this Item is incorporated by reference to the definitive proxy statement for our ~~initial business combination~~2023 annual meeting of stockholders to ~~our public stockholders for a vote, our Founders, as well as all~~be filed with the Securities and Exchange Commission within 120 days after the end of our management team have agreed to vote any shares held by them in favor of our initial business combination. In addition, they have agreed to waive their respective rights to participate in any liquidation distribution with respect to their Founder Shares or the Placement Shares. If they purchase shares of common stock, however, they would be entitled to participate in any liquidation distribution in respect of such shares but have agreed not to redeem or sell such shares to us in connection with the consummation of an initial business combination.

All ongoing and future transactions between us and any of our Sponsor or management team, or their respective affiliates, will be on terms believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require prior approval by a majority of our uninterested “independent” directors or the members of our board of directors who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our disinterested “independent” directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.

~~Section 16(a) Beneficial Ownership Reporting Compliance~~

Section 16(a) of the Exchange requires our management team and persons who beneficially own more than ten percent of our common stock to file reports of ownership and changes in ownership with the SEC. These reporting persons are also required to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of such forms, we believe that during the periodfiscal year ended December 31, ~~2020 there were no delinquent filers.~~

2022, or the 2023 Proxy Statement.

None.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ~~as amended,~~ the ~~Registrant~~registrant has duly caused this ~~Report~~report to be signed on its behalf by the undersigned, thereunto duly authorized,.

on March 13, 2023.

Pursuant to the requirements of the Securities Exchange Act of 1934, ~~as amended,~~ this ~~Report~~report has been signed below on March 13, 2023 by the following persons on behalf of the ~~Registrant~~registrant and in the capacities ~~and on the dates indicated.~~

indicated:

~~Delaware~~	~~84-4605714~~
Delaware		84-4605714
(State ~~or other jurisdiction~~ of Other Jurisdiction of incorporation or ~~organization)~~ Organization)		(I.R.S. Employer Identification No.)
~~1731 Embarcadero Rd.,~~815 14th Street SW, Suite ~~200~~ ~~Palo Alto, CA~~ A100, Loveland, Colorado		~~94303~~ 80537
(Address of principal executive offices)		(Zip ~~Code)~~ code)

	~~Page~~
		Page
PART I
~~Item 1.~~		~~Business~~		2
Item 1. Business		4

Item 1A.		Risk Factors	7 14

Item 1B.		Unresolved Staff Comments	30 39
~~Item 2.~~		~~Properties~~		30
Item 2. Properties		39

Item 3.		Legal Proceedings	30 39

Item 4.		Mine Safety Disclosures	32 40

PART II

Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33 40
~~Item 6.~~		~~Selected Financial Data~~		35
Item 6. Reserved		41

Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	36 41

Item 7A.		Quantitative and Qualitative Disclosures About Market Risk	40 52

Item 8.		Financial Statements and Supplementary Data	41 53

Item 9.		Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial Disclosure	61 90

Item 9A.		Controls and Procedures	61 90

Item 9B.		Other Information	61 91

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		91

PART III

Item 10.		Directors, Executive Officers and Corporate Governance	62 92

Item 11.		Executive Compensation	71 92

Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72 92

Item 13.		Certain Relationships and Related Transactions, and Director Independence	73 92

Item 14.		Principal Accounting Fees and Services	77 92

PART IV

Item 15.		Exhibits and Financial Statement Schedules	78 92

Item 16		16. Form 10-K Summary	80 94

Signatures		95

	Units (GIK.U)				Common Stock (GIK)				Warrants (GIK.WS)
	High		Low		High		Low		High		Low
Year ended December 31, 2020:
Quarter ended March 31, 2020	$	—	$	—	$	—	$	—	$	—	$	—
Quarter ended June 30, 2020 ⁽¹⁾	$	10.11	$	9.80	$	—	$	—	$	—	$	—
Quarter ended September 30, 2020 ⁽²⁾	$	10.67	$	10.02	$	10.15	$	9.79	$	2.83	$	0.38
Quarter ended December 31, 2020	$	18.96	$	10.20	$	15.86	$	9.83	$	4.20	$	0.48


	Year Ended December 31,
	2022		2021		$ Change		% Change
	(dollar amounts in thousands)
Revenues	$	24,413	$	20,992	$	3,421	16	%
Units sold	227		146		81		55	%


	Year Ended December 31,
	2022			2021			$ Change		% Change
	(dollar amounts in thousands)
Cost of revenues	$	36,251		$	26,293		$	9,958	38	%
Gross loss	$	(11,838)		$	(5,301)		$	(6,537)	(123)	%
Gross margin	(48)		%	(25)		%

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

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~FOR THE TRANSITION PERIOD FROM TO~~


Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights (1)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by security holders (2)	6,526,286	$	2.28	12,522,150
Equity compensation plans not approved by security holders	—	—		—
Total	6,526,286			12,522,150

	Period from February 3, 2020 (Inception) through December 31, 2020
Net loss	$	(2,728,854	)
Less: net income attributable to common stock subject to redemption		(22,176	)
Net loss attributable to common stockholders	$	(2,751,030	)
Weighted-average common shares outstanding, basic and diluted		6,247,527
Net loss per share common share, basic and diluted	$	(0.44	)

~~Report of Independent Registered Public Accounting Firm~~	42

~~Balance Sheet as of December 31, 2020~~	43

~~Statement of Operations and Comprehensive Loss for the Period from February 3, 2020 (Date of Inception) through December 31, 2020~~	44

~~Statement of Stockholders’ Equity for the Period from February3, 2020 (Date of Inception) through December 31, 2020~~	45

~~Statement of Cash Flows for the Period from February 3, 2020 (Date of Inception) through December 31, 2020~~	46

~~Notes to Financial Statements~~	47

	December 31, 2020
ASSETS
Current Assets
Cash	$	1,170,301
Prepaid expenses and other current assets		149,725
Total current assets		1,320,026
Cash and marketable securities held in Trust Account		202,029,414
Interest receivable on cash and marketable securities held in the Trust Account		1,716
Other non-current assets		43,083
TOTAL ASSETS	$	203,394,239
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	84,089
Payable to related parties		5,778
Accrued liabilities		1,805,980
Other current liabilities		363
Total current liabilities		1,896,210
Deferred underwriting fee payable		8,000,000
Total liabilities		9,896,210
Commitments and contingencies (Note 5)
Common stock subject to possible redemption, 18,663,171 shares, at a redemption value of $10.10 per share		188,498,028
Stockholders’ equity
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; none issued or outstanding		—
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized; 7,230,308 shares issued and outstanding (excluding 18,663,171 shares subject to possible redemption) (1)		723
Additional paid-in capital		7,728,132
Accumulated deficit		(2,728,854	)
Total stockholders’ equity		5,000,001
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY	$	203,394,239

~~(1)~~	~~This number excludes~~
/s/ GRANT THORNTON LLP

We have served as the ~~750,000 Founder Shares (as described in Note 4) that were forfeited because the over-allotment option was not exercised by the Underwriters.~~ Company’s auditor since 2020.
PCAOB ID: 248
Denver, Colorado
March 13, 2023


	December 31, 2022		December 31, 2021
Assets
Current assets
Cash and cash equivalents	$	56,011	$	168,538
Accounts receivable, net of allowance of $2,028 and $3,349 as of December 31, 2022 and 2021, respectively	9,899		9,172
Inventories	47,066		14,621
Prepaid expenses and other current assets	9,401		7,067
Total current assets	122,377		199,398
Property and equipment, net	11,519		4,891
Operating lease right-of-use asset, net	7,735		8,742
Other assets	1,928		379
Total assets	$	143,559	$	213,410
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	7,961	$	6,021
Accrued expenses and other current liabilities	6,270		5,045
Warrant liability	60		2,185


Current portion of operating lease obligation	1,649		1,166
Total current liabilities	15,940		14,417
Long-term debt, net of debt discount	62,103		63,768

Operating lease obligation, net of current portion	7,735		9,260
Derivative liability	78		17,418
Earnout liability	2,265		83,144
Other long-term liabilities	880		191
Total liabilities	89,001		188,198
Commitments and contingencies (Note 15)
Stockholders’ equity
Preferred stock, par value $0.0001, 1,000,000 shares authorized no shares issued and outstanding as of December 31, 2022 and December 31, 2021	—		—
Common stock, par value $.0001, 250,000,000 shares authorized as of December 31, 2022 and December 31, 2021; 89,843,138 and 75,062,642 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	9		8
Additional paid-in capital	220,943		206,768
Accumulated deficit	(166,394)		(181,564)
Total stockholders’ equity	54,558		25,212
Total liabilities and stockholders’ equity	$	143,559	$	213,410

	Period from February 3, 2020 (Inception) through December 31, 2020
Revenues	$	—
General and administrative expenses		2,759,621
Loss from operations		(2,759,621	)
Other income
Interest income on cash and marketable securities held in Trust Account		43,853
Loss before provision for income taxes		(2,715,768	)
Provision for income taxes		13,086
Net loss and comprehensive loss	$	(2,728,854	)
Net loss attributable to common stockholders	$	(2,751,030	)
Weighted-average common shares outstanding, basic and diluted (1)		6,247,527
Net loss per share common share, basic and diluted	$	(0.44	)

	Common Stock						Additional
Period from February 3, 2020 (Inception) through December 31, 2020	Shares			Amount			Paid-In Capital			Accumulated Deficit			Stockholders’ Equity (Deficit)
Balance as of February 3, 2020 (Inception)		—		$	—		$	—		$	—		$	—
Sale of common stock to Founder at $0.0044 per share		5,735,000			574			24,426			—			25,000
Sale of common stock to Founder in private placement at $10 per share		650,000			65			6,499,935			—			6,500,000
Sale of common stock to Underwriters in private placement at $10 per share		243,479			24			2,434,766			—			2,434,790
Issuance of common stock to Insiders for no consideration		15,000			2			(2	)		—			—
Sale of common stock in initial public offering, net of offering costs		20,000,000			2,000			187,265,093			—			187,267,093
Forfeiture of common stock sold to Founder due to over-allotment not being exercised (1)		(750,000	)		(75	)		75			—			—
Shares subject to redemption		(18,663,171	)		(1,867	)		(188,496,161	)		—			(188,498,028	)
Net loss		—			—			—			(2,728,854	)		(2,728,854	)
Balance as of December 31, 2020		7,230,308		$	723		$	7,728,132		$	(2,728,854	)	$	5,000,001

	Period from February 3, 2020 (Inception) through December 31, 2020
OPERATING ACTIVITIES
Net loss	$	(2,728,854	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on cash and marketable securities held in Trust Account		(42,137	)
Interest receivable on cash and marketable securities held in Trust Account		(1,716	)
Change in operating assets and liabilities:
Prepaid expenses		(149,725	)
Other non-current assets		(43,083	)
Accounts payable		84,089
Payable to related parties		5,778
Accrued liabilities		1,770,980
Other current liabilities		363
Net cash used in operating activities		(1,104,305	)
INVESTING ACTIVITIES
Investment of cash in Trust Account, net		(202,000,000	)
Cash withdrawn from Trust Account		12,723
Net cash used in investing activities		(201,987,277	)
FINANCING ACTIVITIES
Proceeds from sale of common stock to Founders		25,000
Proceeds from sale of Units, net of underwriting discounts paid		196,000,000
Proceeds from sale of Private Placement Units to Founder		6,500,000
Proceeds from sale of Private Placement Units to Underwriters		2,434,790
Borrowing from a related party		100,000
Repayment of borrowing from a related party		(100,000	)
Payment of deferred offering costs		(697,907	)
Net cash provided by financing activities		204,261,883
Net change in cash during period		1,170,301
Cash, beginning of period		—
Cash, end of period	$	1,170,301
SUPPLEMENTAL DISCLOSURES
Cash paid for income taxes	$	12,723
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
Deferred underwriting fee payable upon business combination	$	8,000,000
Change in value of common stock subject to possible redemption	$	1,230,935
Offering costs included in accrued liabilities	$	35,000


	Common Stock		Additional Paid-in Capital		Stockholders’ Accumulated Deficit		Total Stockholders’ (Deficit) Equity
		Shares	Par Value
Balance — December 31, 2020		32,949,507	$	3	$	54,097	$	(80,795)	$	(26,695)
Exercise of common warrants		69,232	—		646		—		646
Issuance of Series C redeemable convertible preferred stock upon exercise of Series C warrants		1,756,525	—		14,068		—		14,068
Issuance of common stock warrants		—	—		433		—		433
Business Combination and PIPE Financing		37,843,390	4		109,801		—		109,805
Warrants issued in connection with the Convertible Note		—	—		14,522		—		14,522
Exercise of stock options		1,282,820	1		574		—		575
Vesting of restricted stock units, net of taxes		105,780	—		—		—		—
Stock—based compensation expense		—	—		2,538		—		2,538
Conversion of convertible notes payable		1,055,388	—		10,089		—		10,089
Net loss		—	—		—		(100,769)		(100,769)
Balance — December 31, 2021		75,062,642	8		206,768		(181,564)		25,212

Exercise of stock options		770,635	—		151		—		151
Vesting of restricted stock units, net of taxes		433,940	—		(115)		—		(115)
Stock—based compensation expense		—	—		5,151		—		5,151
Conversion of convertible notes payable		13,276,430	1		8,137		—		8,138
Common stock issued for commitment shares		299,491	—		851		—		851
Net income		—	—		—		15,170		15,170
Balance — December 31, 2022		89,843,138	$	9	$	220,943	$	(166,394)	$	54,558


	Year Ended December 31,
	2022		2021
Cash flows from operating activities
Net income (loss)	$	15,170	$	(100,769)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,820		874
Provision for doubtful accounts	2,459		3,349
Inventory obsolescence and write-downs	5,019		917
Loss on disposal of fixed asset	58		39
Gain on extinguishment of debt	(2,921)		(2,194)
Change in fair value of warrant liability	(2,125)		28,812
Change in fair value of earnout liability	(80,879)		4,183
Change in fair value of derivative liability	(17,302)		5,341
Stock-based compensation	5,151		2,538
Amortization of debt discount	9,356		6,670
Non-cash impact of operating lease right-of-use asset	1,160		991
Issuance of common stock for commitment shares	851		—
Issuance of common stock warrants for services performed	—		433

Changes in operating assets and liabilities:
Accounts receivable	(4,596)		(8,399)
Inventories	(36,113)		(9,795)
Prepaid expenses and other assets	(3,167)		(6,380)
Accounts payable	1,930		3,578
Accrued expenses and other liabilities	(394)		4,005
Net cash used in operating activities	(104,523)		(65,807)
Cash flows from investing activities
Purchase of property and equipment	(7,919)		(3,244)
Proceeds from disposal of property and equipment	—		55
Net cash used in investing activities	(7,919)		(3,189)
Cash flows from financing activities
Proceeds from convertible notes payable, net of issuance costs paid	—		95,000
Proceeds from Business combination and PIPE Financing, net of issuance costs paid	—		142,796
Proceeds from facility borrowings	—		7,000
Repayments of facility borrowings	—		(11,500)
Proceeds from the exercise of Series C redeemable convertible preferred warrants	—		3,100
Proceeds from exercise of common warrants	—		157
Payments on finance lease obligations	(121)		(54)
Proceeds from exercise of stock options	151		575
Tax withholding payment related to net settlement of equity awards	(115)		—
Net cash (used in) provided by financing activities	(85)		237,074
Net (decrease) increase in cash	(112,527)		168,078
Cash - Beginning of year	168,538		460
Cash - End of year	$	56,011	$	168,538


Supplemental cash flow information - Cash paid for interest	$	6,950	6,245
Significant noncash transactions
Earnout liability at inception	$	—	$	78,960
Warrant liability at inception	—		1,253
Derivative liability at inception	—		17,063
Conversion of short-term convertible notes for common stock	—		9,679
Conversion of convertible notes for common stock	8,138		10,089
Conversion of warrant liabilities for common stock	—		37,580
Property and equipment included in accounts payable and accruals	639		—
Finance lease right-of-use asset in exchange for a lease liability	786		208
Inventory repossessed for accounts receivable	1,410		—


	Allowance for Doubtful Accounts
As of December 31, 2020	$	—
Charges to expense	3,491
Deductions	(142)
As of December 31, 2021	$	3,349
Charges to expense	2,459
Deductions	(3,780)
As of December 31, 2022	$	2,028


Major class of property and equipment						Useful Lives
Machinery and equipment						7 years
Vehicles						5 years
Leasehold improvements						5 years
Computer equipment						3 years
Software						3 years
Furniture and fixtures						7 years


As of December 31, 2020	$	267
Revenues recognized (1)	(981)
Increase due to billings	861
As of December 31, 2021	$	147
Revenues recognized (2)	(2,889)
Increase due to billings	3,536
As of December 31, 2022	$	794


	Level 1		Level 2		Level 3
As of December 31, 2022
Financial assets
Cash equivalents	$	51,351	$	—	$	—
Financial Liabilities
Warrant liability	$	—	$	—	$	60
Derivative liability	$	—	$	—	$	78
Earnout liability	$	—	$	—	$	2,265
As of December 31, 2021
Financial assets
Cash equivalents	$	150,022	$	—	$	—
Financial Liabilities
Warrant liability	$	—	$	—	$	2,185
Derivative liability	$	—	$	—	$	17,418
Earnout liability	$	—	$	—	$	83,144


	Level 3
Initial recognition May 6, 2021	$	78,961
Loss	4,183
As of December 31, 2021	$	83,144
Gain	(80,879)
As of December 31, 2022	$	2,265


	Recapitalization
Cash - Gig's trust and cash (net of redemptions and transaction costs)	$	117,796
Cash - PIPE Financing	25,000
Net Cash provided by Business Combination and PIPE Financing	142,796
Less: non-cash items charged against additional paid-in capital	(32,995)
Net contributions from Business Combination and PIPE Financing	$	109,801


			Number of Shares
Common stock, outstanding prior to Business Combination			25,893,479
Less: redemption of Gig shares			(5,816,664)
Common stock Gig			20,076,815
Shares issued in PIPE Financing			2,500,000
Business Combination and PIPE Financing shares			22,576,815
Lightning Systems shares			50,652,890
Total shares of common stock outstanding immediately after Business Combination			73,229,705


	December 31, 2022		December 31, 2021
Raw materials	$	30,763	$	10,802
Work in progress	3,357		2,979
Finished goods	12,946		840
Total inventories	$	47,066	$	14,621


	December 31, 2022		December 31, 2021
Vendor deposits	$	4,447	$	2,720

Prepaid insurance	2,367		1,975
Other prepaid expenses	2,559		2,324
Other current assets	28		48
Total prepaid expenses and other current assets	$	9,401	$	7,067


	December 31, 2022		December 31, 2021

Accrued professional services	597		1,645
Accrued interest	806		841
Accrued payroll and benefits	1,451		1,014
Other accrued expense	1,436		368
Warranty liability	1,268		994
Customer deposits	427		85
Deferred revenue	106		62
Current portion of finance lease obligation	179		36
Total accrued expenses and other current liabilities	$	6,270	$	5,045


	December 31, 2022		December 31, 2021
Convertible Note	$	73,863	$	87,863
Facility	3,000		3,000






Total debt principal	$	76,863	$	90,863
Unamortized debt discount - Convertible Note	(14,735)		(27,055)
Unamortized debt discount - Facility	(25)		(40)
Total long-term debt	$	62,103	$	63,768


Period ending December 31,	Amount
2023	$	—
2024	76,863
2025	—
2026	—
2027	—
	$	76,863


	December 31, 2022						December 31, 2021
	Operating			Finance			Operating			Finance
Assets
Right-of-use assets, net (1)	$	7,735		$	893		$	8,742		$	208
Liabilities
Lease obligation - current portion (2)	$	1,649		$	179		$	1,166		$	36
Lease obligation - long-term portion (3)	7,735			619			9,260			159
Total lease obligations	$	9,384		$	798		$	10,426		$	195

Weighted average remaining lease terms (in years)	4.2			4.8			5.2			5.0
Weighted average discount rate	15		%	4		%	15		%	4		%


	Number of Warrants	Warrant Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Life
Warrants to purchase common stock
Outstanding at December 31, 2020	610,202	$	2,270	$	0.27	3.6
Exercise of common warrants	(69,232)	(489)		$	0.27	—
Change in fair value	—	3,102		—		—
Issued in connection with the Business Combination as common stock - charged to APIC	(540,970)	(4,883)		—		—
Outstanding — December 31, 2021	—	$	—	$	—	—
Warrants to purchase Series C preferred stock
Outstanding at December 31, 2020	5,938,193	$	18,885	$	1.76	2.6
Exercise of warrants to purchase redeemable convertible preferred stock	(1,756,526)	(10,968)		$	1.76	—
Change in fair value	—	24,779		—		—
Issued in connection with the Business Combination as common stock - charged to APIC	(4,181,667)	(32,696)		—		—
Outstanding — December 31, 2021	—	$	—	—		—
Private warrants assumed through Business Combination
Outstanding at December 31, 2020	—	—		—		—
Warrants assumed	670,108	1,253		$	11.50	5.0
Change in fair value	—	932		—		—
Outstanding — December 31, 2021	670,108	$	2,185	$	11.50	4.3
Change in fair value	—	(2,125)		—		—
Outstanding — December 31, 2022	670,108	$	60	$	11.50	3.4


	Years ended December 31,
	2022		2021
Stock options expense
Cost of revenues	$	17	$	27
Research and development	30		42
Selling, general and administrative	737		731
Total stock options expense	$	784	$	800
Restricted stock units expense
Cost of revenues	$	312	$	45
Research and development	183		13
Selling, general and administrative	3,872		1,680
Total restricted stock units expense	$	4,367	$	1,738
Total stock-based compensation	$	5,151	$	2,538


Stock options unrecognized expense (in thousands)	$	2,120
Stock options weighted-average remaining vesting period (in years)	2.2
Restricted stock units unrecognized expense (in thousands)	$	11,258
Restricted stock units weighted-average remaining vesting period (in years)	2.5