Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 15, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37673 | ||
Entity Registrant Name | WORKHORSE GROUP INC. | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 26-1394771 | ||
Entity Address, Address Line One | 100 Commerce Drive | ||
Entity Address, City or Town | Loveland | ||
Entity Address, State or Province | OH | ||
Entity Address, Postal Zip Code | 45140 | ||
City Area Code | 513 | ||
Local Phone Number | 360-4704 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | WKHS | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | true | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,129,851,463 | ||
Entity Common Stock, Shares Outstanding | 123,506,483 | ||
Entity Central Index Key | 0001425287 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 46,817,825 | $ 23,868,416 |
Restricted cash held in escrow (Note 1) | 194,411,242 | 1,000,000 |
Accounts receivable, less allowance for credit losses of $0 at December 31, 2020 and 2019 (Note 4) | 884,367 | 7,921 |
Lease receivable, current | 153,099 | 33,100 |
Inventory, net (Note 2) | 15,467,012 | 1,798,146 |
Prepaid expenses | 32,759,216 | 4,812,088 |
Total current assets | 290,492,761 | 31,519,671 |
Property, plant and equipment, net (Note 5) | 11,398,166 | 6,830,181 |
Lease receivable, long-term | 94,698 | 129,177 |
Total Assets | 632,542,369 | 50,673,829 |
Current liabilities: | ||
Accounts payable | 4,790,763 | 1,678,983 |
Accrued liabilities (Note 1) | 5,995,302 | 3,408,184 |
Warranty liability (Note 1) | 5,400,000 | 6,001,864 |
Current portion of convertible notes, at fair value (Note 6) | 0 | 19,620,000 |
PPP Term Note (Note 6) | 1,411,000 | 0 |
Total current liabilities | 17,597,065 | 47,044,031 |
Other long-term liabilities | 207,040 | 0 |
Deferred tax liability (Note 8) | 21,833,930 | 0 |
Convertible notes | 197,700,000 | 19,400,000 |
Mandatorily redeemable Series B preferred stock (Note 7) | 0 | 19,142,908 |
Total Liabilities | 237,338,035 | 85,586,939 |
Commitments and contingencies | ||
Stockholders’ Equity (Deficit): | ||
Series A preferred stock, par value of $0.001 per share 75,000,000 shares authorized, zero shares issued and outstanding at December 31, 2020 and 2019 (Note 12) | 0 | 0 |
Common stock, par value of $0.001 per share 250,000,000 shares authorized, 121,922,532 shares issued and outstanding at December 31, 2020 and 67,105,000 shares issued and outstanding at December 31, 2019 (Note 12) | 121,923 | 67,105 |
Additional paid-in capital | 504,112,442 | 143,826,315 |
Accumulated deficit | (109,030,031) | (178,806,530) |
Total stockholders' equity (deficit) | 395,204,334 | (34,913,110) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 632,542,369 | $ 50,673,829 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Preferred stock, par value per share (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value per share (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 121,922,532 | 67,105,000 |
Common stock, shares outstanding (in shares) | 121,922,532 | 67,105,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales (Note 4) | $ 1,392,519 | $ 376,562 |
Cost of sales | 13,067,108 | 5,844,891 |
Gross loss | (11,674,589) | (5,468,329) |
Operating expenses | ||
Selling, general and administrative | 20,157,658 | 10,199,534 |
Research and development | 9,148,931 | 8,199,074 |
Total operating expenses | 29,306,589 | 18,398,608 |
Other income (Note 3, Note 14) | 323,111,944 | 15,849,800 |
Income (loss) from operations | 282,130,766 | (8,017,137) |
Interest expense, net | 190,520,337 | 29,145,690 |
Income (loss) before provision for income taxes | 91,610,429 | (37,162,827) |
Provision for income taxes (Note 8) | 21,833,930 | 0 |
Net income (loss) | $ 69,776,499 | $ (37,162,827) |
Net income (loss) attributable to common stockholders per share - basic (in usd per share) | $ 0.75 | $ (0.58) |
Net income (loss) attributable to common stockholders per share - diluted (in usd per share) | $ 0.70 | $ (0.58) |
Weighted average number of common shares outstanding - basic (in shares) | 92,871,936 | 64,314,756 |
Weighted average number of common shares outstanding - diluted (in shares) | 99,949,868 | 64,314,756 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Deficit) - USD ($) | Total | Common Stock | Series A Preferred Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ (15,422,443) | $ 58,271 | $ 0 | $ 126,076,782 | $ (141,557,496) |
Beginning balance (in shares) at Dec. 31, 2018 | 58,270,934 | 0 | |||
Issuance of common stock | 5,928,235 | $ 7,184 | 5,921,051 | ||
Issuance of common stock (in shares) | 7,183,488 | ||||
Stock options and warrants exercised, and vesting of restricted shares | 35,306 | $ 630 | 34,676 | ||
Stock options and warrants exercised and vesting of restricted shares (in shares) | 630,141 | ||||
Reclassification of warrants to equity | 857,072 | 857,072 | |||
Deemed dividend | 0 | $ 116 | 86,091 | (86,207) | |
Deemed dividend (in shares) | 116,496 | ||||
Value of warrants issued with Series B Preferred Stock | 6,709,961 | $ 0 | 6,709,961 | ||
Value of warrants issued with Series B Preferred Stock (in shares) | 0 | ||||
Value of warrants issued with convertible notes | 430,000 | 430,000 | |||
Common stock issued for preferred stock dividends | 1,166,771 | $ 719 | 1,166,052 | ||
Common stock issued for preferred stock dividend (in shares) | 718,755 | ||||
Conversion of convertible notes | 564,817 | $ 185 | 564,632 | ||
Conversion of convertible notes (in shares) | 185,186 | ||||
Stock-based compensation | 1,979,998 | 1,979,998 | |||
Net income | (37,162,827) | (37,162,827) | |||
Ending balance at Dec. 31, 2019 | (34,913,110) | $ 67,105 | $ 0 | 143,826,315 | (178,806,530) |
Ending balance (in shares) at Dec. 31, 2019 | 67,105,000 | 0 | |||
Stock options and warrants exercised, and vesting of restricted shares | 82,093,632 | $ 33,933 | 82,059,699 | ||
Stock options and warrants exercised and vesting of restricted shares (in shares) | 33,932,827 | ||||
Common stock issued for preferred stock dividends | 1,491,860 | $ 922 | 1,490,938 | ||
Common stock issued for preferred stock dividend (in shares) | 920,901 | ||||
Conversion of convertible notes | $ 270,794,684 | $ 19,605 | 270,775,079 | ||
Conversion of convertible notes (in shares) | 19,600,000 | 19,605,013 | |||
Common stock issued for interest on convertible notes | $ 1,939,964 | $ 358 | 1,939,606 | ||
Common stock issued for interest on convertible notes (in shares) | 358,791 | ||||
Stock-based compensation | 4,020,805 | 4,020,805 | |||
Net income | 69,776,499 | 69,776,499 | |||
Ending balance at Dec. 31, 2020 | $ 395,204,334 | $ 121,923 | $ 0 | $ 504,112,442 | $ (109,030,031) |
Ending balance (in shares) at Dec. 31, 2020 | 121,922,532 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) shares in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 69,776,499 | $ (37,162,827) |
Adjustments to reconcile net income (loss) to net cash used in operations: | ||
Depreciation | 809,645 | 388,401 |
Tooling expense | 350,500 | 0 |
Amortization of discount and debt issuance costs on long-term debt | 6,550,212 | 3,518,356 |
Amortization of discount and loss on redemption of mandatorily redeemable Series B preferred stock | 5,857,092 | 852,869 |
Change in fair value of convertible notes and loss on conversion to common stock | 160,749,118 | 1,064,817 |
Change in fair value of warrant liability | 12,176,690 | 15,369,253 |
Change in fair value of investment in LMC and fair value of anti-dilution shares | (318,361,944) | 0 |
Dividends for mandatorily redeemable Series B preferred stock paid in common stock | 1,491,860 | 1,166,771 |
Interest on convertible notes paid in common stock | 1,939,964 | 0 |
Stock-based compensation | 4,020,805 | 1,979,998 |
Write down of inventory | 0 | 694,448 |
Gain on divestiture | 0 | (3,655,000) |
Investment received from license of intellectual property | 0 | (12,194,800) |
Loss on sale of fixed assets | 0 | 19,367 |
Effects of changes in operating assets and liabilities: | ||
Accounts and lease receivable | (961,966) | 76,163 |
Inventory | (13,668,866) | 41,022 |
Prepaid expenses | (27,947,128) | (4,367,928) |
Accounts payable and accrued liabilities | 5,499,464 | (3,605,682) |
Warranty liability | (601,864) | (1,056,905) |
Other long-term liabilities | 207,040 | 0 |
Deferred tax liability | 21,833,930 | 0 |
Net cash used in operating activities | (70,278,949) | (36,871,677) |
Cash flows from investing activities: | ||
Capital expenditures | (5,728,130) | (2,005,498) |
Net proceeds received on divestiture | 0 | 3,655,000 |
Proceeds from sale of fixed assets | 0 | 5,000 |
Net cash (used in) provided by investing activities | (5,728,130) | 1,654,502 |
Cash flows from financing activities: | ||
Proceeds from notes payable | 0 | 5,854,140 |
Payments on notes payable | 0 | (5,854,140) |
(Redemption of), proceeds from issuance of mandatorily redeemable Series B preferred stock | (25,000,000) | 25,000,000 |
Proceeds from issuance of convertible notes | 262,374,788 | 38,950,000 |
Repayment of Duke financing obligation | 0 | (1,340,700) |
Proceeds from PPP Term Note | 1,411,000 | 0 |
Payments on long-term debt | 0 | (10,000,000) |
Proceeds from issuance of common stock | 0 | 5,928,235 |
Proceeds from exercise of warrants and options | 53,581,942 | 35,306 |
Net cash provided by financing activities | 292,367,730 | 58,572,841 |
Change in cash, cash equivalents and restricted cash | 216,360,651 | 23,355,666 |
Cash, cash equivalents, and restricted cash beginning balance | 24,868,416 | 1,512,750 |
Cash, cash equivalents, and restricted cash ending balance | 241,229,067 | 24,868,416 |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid | 12,700,000 | 7,200,000 |
Interest paid, convertible notes | 7,600,000 | |
Interest paid, financing fees | 400,000 | |
Total cash, cash equivalents and restricted cash held in escrow | $ 241,229,067 | 1,512,750 |
Conversion of convertible notes (in shares) | 19.6 | |
Conversion of convertible notes | $ 270,794,684 | $ 564,817 |
Warrants to purchase of common stock shares (in shares) | 6.7 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Principles | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING PRINCIPLES | SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING PRINCIPLES Nature of operations and basis of presentation Workhorse Group Inc. (“Workhorse”, the “Company”, “we”, “us” or “our”) is a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector. As an American manufacturer, we create all-electric delivery trucks and drone systems, including the technology that optimizes the way these mechanisms operate. We are last-mile delivery’s first purpose-built electric mobility solution and we are currently focused on our core competency of bringing the C-Series electric delivery trucks to market and fulfilling our existing backlog of orders. The consolidated financial statements are prepared in conformity with U.S. GAAP. Principles of consolidation The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reclassifications Certain reclassifications were made to the prior year consolidated financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or stockholders’ equity. Cash and cash equivalents Cash includes cash equivalents which are highly liquid investments that are readily convertible to cash. A cash equivalent is a highly liquid investment that at the time of acquisition has a maturity of three months or less. Restricted cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash received through financing transactions that have not been released for use by us and cash held as collateral for certain payments. We record restricted cash in the Consolidated Balance Sheets and determine current or non-current classification based on the expected duration of the restriction. Financial instruments The carrying amounts of financial instruments including cash and cash equivalents, restricted cash, inventory, and accounts payable approximate fair value because of the relatively short maturity of these instruments. Accounts receivable Accounts receivable consists of collectible amounts for products and services rendered. The Company carries its accounts receivable at invoice amount less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based on a history of past write-offs, collections, and current and future credit conditions. Inventory, net Inventory is stated at the lower of cost or net realizable value. Manufactured inventories are valued at standard cost, which approximates actual costs on a first-in, first-out basis. We record inventory reserves for excess or obsolete inventories based upon assumptions about our current and future demand forecasts. Property, plant and equipment, net Property, plant and equipment, net is stated at cost less accumulated depreciation. Major renewals and improvements are capitalized while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed as incurred. When property, plant and equipment is retired or otherwise disposed of, a gain or loss is realized for the difference between the net book value of the asset and the proceeds realized thereon. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Buildings and improvements 15 - 39 years Land improvements 15 years Equipment and vehicles 3 - 6 years Tooling 5 years Impairment of long-lived assets Long-lived assets, such as property, plant, and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. Valuation of investment In October of 2020, we began measuring our investment in Lordstown Motor Corp. (“LMC”) at fair value as permitted under Accounting Standards Codification (“ASC”) 820, Fair Value Measurement . On October 26, 2020, LMC shares of Class A Common Stock began trading on the Nasdaq Global Select market under the ticker symbol “RIDE.” Therefore, the carrying value of our investment is equal to the quote market price of LMC's common stock. If the price of LMC's common stock decreases, we would record a decrease in the value of our investment and a charge to earnings. We have classified the LMC investment as non-current within the accompanying Consolidated Balance Sheets due to our intention to hold this investment for purposes of continued affiliation and business advantage. We previously elected the measurement alternative allowed under generally accepted accounting principles (“GAAP”) for our investment in LMC, which, prior to October 2020, did not have a readily determinable fair value. Under the measurement alternative, we measured this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions in an identical or similar investment in LMC. Accrued Liabilities Accrued liabilities consist of the following: December 31, 2020 2019 Accrued payroll and taxes $ 2,537,353 $ 954,225 Loan interest payable 1,711,111 112,750 Customer allowance accrual 1,412,500 1,412,500 Other 334,338 928,709 Total accrued liabilities $ 5,995,302 $ 3,408,184 Warranty We generally offer warranty coverage for our products. We accrue warranty related costs under standard warranty terms and for certain claims outside the contractual obligation period that we choose to pay as accommodations to our customers. Provisions for estimated assurance warranties are recorded at the time of sale and are periodically adjusted to reflect actual experience. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring Company obligations under the warranty plans. Historically, the cost of fulfilling the Company’s warranty obligations has principally involved replacement parts, towing and transportation costs, labor and sometimes travel for any field retrofit campaigns. The Company’s estimates are based on historical experience, the extent of pre-production testing, the number of units involved and the extent of features/components included in product models. The Company reviews actual warranty claims experience to determine if there are systemic defects that would require a field campaign. Although we believe that the estimates and judgments discussed herein are reasonable, actual results could differ and we may be exposed to increases or decreases in our warranty accrual that could be material. Activity for the Company's warranty accrual is as follows: December 31, 2020 2019 Balance, beginning of year $ 6,001,864 $ 7,058,769 Accrual for warranty (1) 2,115,762 92,191 Warranty costs incurred (2,717,626) (1,149,096) Balance, end of year $ 5,400,000 $ 6,001,864 (1) The increase to the warranty accrual in 2020 primarily relates to a change in estimate in the amount of labor required to maintain our current warranty program with our 2016 and 2017 E-Series trucks. The expense includes estimated costs for labor and transportation and excludes any contribution from vendors. Fair value option As permitted under ASC 825, Financial Instruments , the Company has elected the fair value option to account for its convertibles notes. In accordance with ASC 825, the Company records its convertible notes at fair value with changes in fair value recorded in Interest Expense in the Consolidated Statement of Operations. As a result of applying the fair value option, direct costs and fees related to the convertible notes were recognized in earnings as incurred and were not deferred. Common stock On May 3, 2019, the Company filed an amendment to its Articles of Incorporation to increase the authorized number of shares of common stock from 100,000,000 to 250,000,000. Income taxes We file a consolidated U.S. federal income tax return and separate state and local income tax returns. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax benefit carryforwards. Deferred tax assets and liabilities at the end of each period are determined using enacted tax rates. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Research and development costs The Company expenses research and development costs as they are incurred. Research and development costs consist primarily of personnel costs for engineering and research, prototyping costs, and contract and professional services. Basic and diluted earnings (loss) per share Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted earnings per share are calculated using the treasury stock method, on the basis of the weighted average number of shares outstanding plus the dilutive effect, if any, of stock options, unvested restricted stock and warrants. The if converted method is used for determining the impact of the convertible notes. The following table shows the computation of basic and diluted earnings per share: Years Ended December 31, 2020 2019 Net income (loss) $ 69,776,499 $ (37,162,827) Deemed dividends — 86,207 Net income (loss) attributable to common stockholders $ 69,776,499 $ (37,249,034) Basic weighted average shares outstanding 92,871,936 64,314,756 Dilutive effect of options and warrants 1,410,605 — Dilutive effect of convertible notes 5,667,327 — Diluted weighted average shares outstanding 99,949,868 64,314,756 Anti-dilutive options and warrants excluded from diluted average shares outstanding 1,041,531 36,021,502 Approximately 13.3 million shares of common stock representing the conversion of the High Trail Convertible Note (as defined in Note 6) were excluded from basic and diluted weighted average shares outstanding in the table above for the year ended December 31, 2019. As the High Trail Convertible Note was fully converted during the year, the number of shares issued upon conversion is included in the basic weighted average shares outstanding for the year ended December 31, 2020. Stock-based compensation The Company recognizes in its Consolidated Statements of Operations the grant-date fair value of share-based awards issued to employees and non-employees over the awards' vesting period which equals the service period. Forfeitures are recognized as they occur. The fair value of restricted stock awards is the price of our common stock on the date of the award. The fair value for stock options is estimated on the grant date using a Black-Scholes valuation model that uses the assumptions of expected volatility, expected term, and the expected risk-free rate of return. The expected volatility was estimated by management as 50% based on results from other public companies in our industry. The expected term of the awards granted was assumed to be the contract life of the option as determined in the specific arrangement. The risk-free rate of return was based on market yields in effect on the date of each grant for United States Treasury debt securities with a maturity equal to the expected term of the award. Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Significant estimates and assumptions are used for, but are not limited to warranty liability, warrant liability, fair value of the convertible notes and litigation-related accruals. Actual results could differ from our estimates. Impact of COVID-19 Pandemic In December 2019, a novel coronavirus disease (“COVID-19”) was reported. On January 30, 2020, the World Health Organization (“WHO”) declared COVID-19 a Public Health Emergency of International Concern. On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic. As of December 31, 2020, our locations and primary suppliers continue to operate. However, during the fourth quarter of 2020, the Company experienced an outbreak of COVID-19 cases amongst our employees. Approximately 40% of our production employees tested positive for COVID-19. Additionally, several of our suppliers experienced capacity constraints due to the pandemic, which has limited their shipment volumes. As a result, we experienced a significant reduction to our planned production volume in the fourth quarter of 2020. See Risk Factors for further discussion of the possible impact of the COVID-19 pandemic on our business. |
Inventory, Net
Inventory, Net | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY, NET | INVENTORY, NET Inventory, net consists of the following: December 31, 2020 2019 Raw materials $ 16,759,232 $ 3,741,097 Work in process 422,176 422,176 Finished goods 277,419 — 17,458,827 4,163,273 Less: inventory reserve (1,991,815) (2,365,127) Inventory, net $ 15,467,012 $ 1,798,146 |
Investments in LMC
Investments in LMC | 12 Months Ended |
Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Investments in LMC | INVESTMENT IN LMC The Company has an approximate ten percent ownership interest in Lordstown Motors Corp. with a fair value of $330.6 million and $12.2 million as of December 31, 2020 and December 31, 2019, respectively. The following table sets forth a reconciliation of the Investment in LMC: December 31, 2020 2019 Balance, beginning of year $ 12,194,800 $ — Initial fair value of ownership interest (1) — 12,194,800 Change in fair value of investment (2) 317,497,044 — Fair value of anti-dilution shares (3) 864,900 — Balance, end of year $ 330,556,744 $ 12,194,800 (1) Represents the Company's ownership interest in the common stock of LMC obtained pursuant to the LMC Transaction (as described below). The initial fair value of the LMC ownership interest received is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2019. (2) The Company obtained approximately 16.5 million shares of Class A Common Stock in connection with the LMC Merger (as described below), which were valued at $20.06 per share as of December 31, 2020. The change in fair value of the investment is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2020. (3) During the three months ended March 31, 2020, the Company received additional shares as part of its anti-dilution feature with LMC, which were valued at approximately $0.9 million. The change in fair value of the investment related to the anti-dilution shares is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2020. LMC Merger On August 1, 2020, LMC entered into an Agreement and Plan of Merger (the “Merger Agreement”) with DiamondPeak Holdings Corp., in which LMC agreed to merge with and into a subsidiary of DiamondPeak (the “LMC Merger”). The stockholders of LMC in the aggregate received 58% of the issued and outstanding shares of Class A Common Stock of DiamondPeak as of the closing of the LMC Merger. Further, on August 1, 2020, DiamondPeak entered into subscription agreements with certain investors in which DiamondPeak agreed to issue and sell an aggregate of 50.0 million shares of Class A Common Stock for $10.00 per share. In connection with the LMC Merger, the Company and LMC entered into an Agreement on August 1, 2020, which confirmed that the Company will own 9.99% of DiamondPeak and no longer have anti-dilution rights or similar protections following the closing of the merger. The Agreement also defined the Royalty Advance as approximately $4.8 million, which is recorded in Other Income in the Consolidated Statements of Operations for the year ended December 31, 2020. Further, DiamondPeak has agreed to register the Company’s shares of Class A Common Stock held in DiamondPeak. The Company has agreed, subject to certain exceptions, to not sell any of its shares of Class A Common Stock for a period of six months ending April 23, 2021, following the closing of the LMC Merger. On October 23, 2020, DiamondPeak announced the completion of its merger with LMC and on October 26, 2020, the LMC shares of Class A Common Stock began trading on the Nasdaq Global Select market under the ticker symbol “RIDE.” Following the merger, the entity now operates under the name Lordstown Motors Corp. LMC Transaction On November 7, 2019, the Company entered into a transaction with LMC (the “LMC Transaction”). LMC will endeavor to, among other things, raise sufficient third-party capital for the acquisition, retrofitting, and restart of the Lordstown Assembly Complex, and the ongoing operating costs, which amounts are expected to be significant (the “Capital Raise”). In connection with the LMC Transaction, the Company granted LMC a perpetual and worldwide license to certain intellectual property relating to the Company’s W-15 electric pickup truck platform and its related technology (the “Licensed Intellectual Property”) for consideration as described below: • A ten percent ownership interest in the common stock of LMC in exchange for the Company’s obligations under the License Agreement. The LMC common stock received provided the Company with anti-dilution rights for two years. • One percent of the aggregate debt and equity commitments funded to LMC upon completion of the Capital Raise (the “Royalty Advance”). Any amount paid to the Company from the Capital Raise is non-refundable. • A one percent royalty on the gross sales price of the first 200,000 vehicles sold, to the extent that the aggregate amount of such royalty fees exceeds the amount paid as the Royalty Advance. • Upon completion of the Capital Raise, the Company intends to transfer approximately 6,000 existing vehicle orders to LMC. LMC will pay a four percent commission on the gross sales price of any transferred orders fulfilled by LMC. The consideration includes a fixed and variable component. The fixed component consists of the ten percent ownership interest in LMC and any amounts received under the Royalty Advance. The variable component consists of the four percent commission and the one percent royalty. Variable consideration will be recognized when each vehicle for which a royalty or commission is owned is sold. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue Recognition Net sales include products and shipping and handling charges, net of estimates for customer allowances. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue by transferring the promised products to the customer, with the majority of revenue recognized at the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. The majority of our contracts have a single performance obligation and are short term in nature. Revenues related to repair and maintenance services are recognized over time as services are provided. Payment for vehicles, services, and merchandise are typically received at the point when control transfers to the customer or in accordance with payment terms customary to the business. Accounts Receivable Credit is extended based upon an evaluation of the customer’s financial condition. Accounts receivable are stated at their estimated net realizable value. The allowance for credit losses is based on an analysis of customer accounts, which considers history of past write-offs, collections, and current and future credit conditions. As the majority of our contracts have a single performance obligation which are satisfied within one year from a given reporting date, we omit disclosures of the transaction price apportioned to remaining performance obligations on open orders. Disaggregation of Revenue Our revenues related to the following types of business were as follows: Years Ended December 31, 2020 2019 Automotive $ 1,285,327 $ 240,280 Aviation 71,830 — Other 35,362 136,282 Total revenues $ 1,392,519 $ 376,562 Automotive – consists of sales of any of our truck platforms. We recognize revenue when control transfers upon shipment to the customer. Aviation – consists of sales of any of our drone systems. We recognize revenue when control transfers upon shipment to the customer. Other – consists of grant-related research work and non-warranty after-sales vehicle services. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consists of the following: December 31, 2020 2019 Land and improvements $ 794,875 $ 700,000 Buildings and improvements 6,005,505 5,900,000 Equipment and vehicles 1,847,696 953,985 Tooling 2,079,471 — Construction in progress 4,129,568 1,925,500 14,857,115 9,479,485 Less: accumulated depreciation (3,458,949) (2,649,304) Property, plant and equipment, net $ 11,398,166 $ 6,830,181 Depreciation expense during the years ended December 31, 2020 and December 31, 2019 was $0.8 million and $0.4 million, respectively. |
Convertible Notes and Long-Term
Convertible Notes and Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES AND LONG-TERM DEBT | CONVERTIBLE NOTES AND LONG-TERM DEBT Convertible Notes December 31, 2020 2019 Convertible notes, at fair value $ 197,700,000 $ 39,020,000 Less: current portion — (19,620,000) Convertible notes, net of current portion $ 197,700,000 $ 19,400,000 4.0% Senior Secured Convertible Notes Due 2024 On October 14, 2020 the Company issued $200.0 million par value convertible notes (the “2024 Notes”) due October 14, 2024. The 2024 Notes are a senior secured obligation of the Company, and rank senior to all unsecured debt of the Company. Interest is payable quarterly beginning January 15, 2021 at a rate of 4.0% per annum. The interest rate on the 2024 Notes may be reduced to 2.75% if the Company meets certain conditions. The 2024 Notes are convertible at a rate of $35.29 per share, subject to change for anti-dilution adjustments and adjustments for certain corporate events. The 2024 Notes will generally not be redeemable at the option of the Company prior to the third anniversary of their issue date. There are no required redemptions on the 2024 Notes. Accordingly, the Company has classified the full balance of the 2024 Notes as long-term on the Consolidated Balance Sheets as of December 31, 2020. The 2024 Notes are guaranteed by all the Company’s current and future subsidiaries and are secured by substantially all the assets of the Company and its subsidiaries. The 2024 Notes include certain covenants, including a minimum sales backlog beginning the fiscal period ending on March 31, 2022, limitations on liens, additional indebtedness, investments, dividends and other restricted payments, and customary events of default. The Company paid fees in connection with the 2024 Notes of approximately $6.6 million, resulting in net proceeds to the Company of approximately $193.4 million. As we have elected to account for our convertible notes using the fair value option allowed under GAAP, all direct costs related to the issuance of our convertible notes were recognized in Interest Expense in the Consolidated Statements of Operations for the year ended December 31, 2020. The Company is required to hold the proceeds in escrow until it completes certain requirements related to the collateral. In January 2021, such requirements were met and the proceeds were released from escrow. As of December 31, 2020, the contractual principal balance of the 2024 Notes was $200.0 million and the fair value was $197.7 million. The $2.3 million decrease in the fair value of the Convertible Notes is recorded in Interest Expense in the Consolidated Statements of Operations. In electing the fair value option, the Company recognizes changes in fair value related to changes in credit risk, if any, in Other Comprehensive Income and the remaining change in fair value in Interest Expense. No portion of the change in fair value was related to changes in credit risk. High Trail Convertible Note II On July 16, 2020, the Company issued a $70.0 million par value convertible note (the“High Trail Convertible Note II” or “Note II”) due July 1, 2023. Interest was payable quarterly beginning October 1, 2020 at a rate of 4.5% per annum. The High Trail Convertible Note II was initially convertible at a rate of $19.00 per share, subject to change for anti-dilution and adjustments for certain corporate events. The Company paid fees in connection with the issuance of Note II of approximately $1.1 million, reducing the proceeds to the Company to approximately $68.9 million. All direct costs related to the issuance of our convertible notes were recognized in Interest Expense in the Consolidated Statements of Operations. During the year ended December 31, 2020, the fair value of the Note II increased approximately $52.9 million, which is recorded in Interest Expense in the Consolidated Statements of Operations. On October 14, 2020, the Company exchanged the full $70.0 million outstanding principal balance of Note II at a premium for approximately 5.2 million shares. The settlement cost of approximately $121.8 million was calculated as the number of shares issued in exchange for Note II multiplied by the closing price of Workhorse common stock on October 13, 2020, which was $23.63 per share. High Trail Convertible Note On December 9, 2019, the Company issued a $41.0 million par value convertible note (“High Trail Convertible Note” or “the Note”) due November 2022. The fair value of the Note was $38.5 million upon issuance. Interest was payable quarterly beginning February 1, 2020, at a rate of 4.50% per annum. The Note was initially convertible at a rate of $3.05 per share, subject to change for anti-dilution adjustments or certain corporate events. The Note was issued with approximately 15.5 warrants to purchase common stock of the Company at an initial exercise price of $3.05 per share. The Note and the warrants were determined to be freestanding instruments and were accounted for separately. The warrants were classified as equity instruments and the fair value was estimated to be approximately $0.4 million on December 9, 2019. The fair value of the warrants was recorded as an increase to Additional Paid-In Capital. The fair value of the High Trail Convertible Note as of December 31, 2020 and December 31, 2019 was zero and $39.0 million, respectively, and the contractual principal balance as of December 31, 2020 and December 31, 2019 was zero and $40.5 million, respectively. Fair value adjustments for the year ended December 31, 2020 were approximately $74.1 million, which were recorded in Interest Expense in the Consolidated Statements of Operations. Fair value adjustments for the year ended December 31, 2019 were $1.0 million, which is recorded in Interest Expense. During the year ended December 31, 2020, the Company converted $40.5 million par value of the Note into approximately 14.4 million shares of common stock, resulting in a loss of approximately $35.9 million. During the year ended December 31, 2019, the Company converted $0.5 million par value of the Note into approximately 0.2 million shares of common stock, resulting in a gain of approximately $0.1 million. Gains and losses related to conversions of par value to common stock were recorded in Interest Expense in the Consolidated Statements of Operations. The warrants were only exercisable at the option of the Company following the full or partial redemption of the Convertible Note. The percentage of the warrants exercisable upon full or partial redemption of the Note is equal to a percentage of the original principal amount redeemed at such time. Therefore, as the principal balance of the Convertible Note was fully converted during the year, the number of warrants exercisable as of December 31, 2020 is zero. PPP Term Note December 31, 2020 2019 Long-term debt $ 1,411,000 $ — Less: current portion (1,411,000) — Long-term debt, net of current portion $ — $ — On April 14, 2020, the Company entered into a Paycheck Protection Program Term Note ( “PPP Note”) with PNC Bank, N.A. under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The Company received total proceeds of $1.4 million from the PPP Note, which was due on April 13, 2022. In accordance with the requirements of the CARES Act, the Company used the proceeds primarily for payroll costs. Interest accrues on the PPP Note at the rate of 1.0% per annum. In October 2020, the Company applied for forgiveness of the amount due on the PPP Note. On January 15, 2021, the outstanding principal and interest accrued on the Note was fully forgiven and the full amount of the Note is classified as current at December 31, 2020 on the Consolidated Balance Sheets. |
Mandatory Redeemable Series B P
Mandatory Redeemable Series B Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
MANDATORY REDEEMABLE SERIES B PREFERRED STOCK | MANDATORILY REDEEMABLE SERIES B PREFERRED STOCK On June 5, 2019, the Company closed agreements for the sale of 1,250,000 units consisting of one share of Series B Preferred Stock (the “Preferred Stock”), with a stated value of $20.00 per share (the “Stated Value”) and a common stock purchase warrant to purchase 7.41 shares of the common stock (the “Warrants”) for an aggregate purchase price of $25.0 million. The Preferred Stock was not convertible and did not have voting rights. The Preferred Stock ranked senior to the Company’s common stock with respect to dividend rights and rights upon liquidation, winding-up or dissolution. The Preferred Stock was entitled to annual dividends at a rate equal to 8.0% per annum on the Stated Value. The Warrants had an exercise price of $1.62 per share and expired seven years from the date of issuance. Accrued dividends were payable quarterly in shares of common stock of the Company based on a fixed share price of $1.62. During the years ended December 31, 2020 and December 31, 2019, the Company issued 0.9 million and 0.7 million shares of common stock to the holders of the Preferred Stock, respectively. As the Preferred Stock was mandatorily redeemable, it was classified as a liability on the Consolidated Balance Sheets. All dividends payable on the Preferred Stock were classified as Interest Expense. The Preferred Stock and Warrants were considered freestanding financial instruments and were accounted for separately. The Warrants were considered equity instruments and not marked-to-market at each reporting period. On the date of issuance, the value of the Warrants was $6.7 million, which was determined using the Black-Scholes valuation model. The fair value of the Warrants was recorded as an increase to Additional Paid-In Capital and a discount of the Preferred Stock. The discount was amortized to Interest Expense using the effective interest method. Amortization of the discount was $1.1 million and $0.9 million for the years ended December 31, 2020 and December 31, 2019, respectively. On September 28, 2020, the Company redeemed its Series B Preferred Stock in full for cash. Dividends on all shares of Series B Preferred Stock were paid in full as of the redemption date and will cease to accumulate. The Company recognized a loss on redemption of approximately $4.7 million related to the remaining unamortized discount, which was recorded in Interest Expense. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | . INCOME TAXES For the years ended December 31, 2020 and 2019, the Company had net income and loss, respectively, but due to timing differences in recognizing income for tax, no current tax expense or benefit was recorded. The Company recorded a full valuation allowance on its deferred tax assets as of December 31, 2019. As of December 31, 2020, the Company released a portion of the valuation allowance, with the exception of certain tax credits and net operating losses that were determined to be unrealizable. The Company recorded deferred tax liabilities of approximately $21.8 million, with a corresponding deferred provision for federal and state income taxes. The components of the provision for income taxes are as follows: Years Ended December 31, 2020 2019 Current: Federal $ — $ — State and Local — — Total Current — — Deferred: Federal 21,864,569 — State and Local (30,639) — Total Deferred 21,833,930 — Total provision for income taxes $ 21,833,930 $ — The reconciliation of taxes at the federal statutory rate to our provision for income taxes was as follows: Years Ended December 31, 2020 2019 Federal tax benefit at statutory rates 21.0 % 21.0 % State and local tax at statutory rates (0.1) % (0.6) % Fair value adjustments on warrant liability 37.1 % (9.3) % Fair value adjustments on convertible notes 2.8 % — % Stock-based compensation deductions (6.6) % — % Other permanent differences and credits — % (0.8) % Change in valuation allowance (30.4) % (10.3) % Total tax benefit 23.8 % — % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2020, management determined that there is sufficient positive evidence to conclude that it is more likely than not that deferred tax assets of approximately $27.8 million are realizable. Management's determination was based on the Company's achievement of three years of cumulative pretax income in the U.S. federal tax jurisdiction, which was primarily driven by the change in fair value of our investment in LMC. We therefore reduced the valuation allowance accordingly. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31 2020 2019 Deferred Tax (Liabilities) Assets: Accrued expenses and reserves $ 853,199 $ 802,526 Warranty reserve 1,150,830 1,275,047 Non-qualified stock options 358,808 961,919 Property, plant and equipment (319,632) 202,755 Fair value adjustment of investment in LMC (66,674,379) — Issuance fees on convertible notes 1,031,658 — Other temporary differences — (88,200) Net operating losses 47,344,755 30,213,192 Total Deferred Tax (Liabilities) Assets (16,254,761) 33,367,239 Valuation Allowance (5,579,169) (33,367,239) Total Deferred Tax Liabilities, net of valuation allowance $ (21,833,930) $ — At December 31, 2020 and 2019, the Company has approximately $90.6 million of federal net operating loss (“NOL”) carry-forwards which expire through 2037. Additionally, at December 31, 2020 and 2019, the Company had approximately $130.9 million and $49.0 million, respectively, of federal NOLs that carry-forward indefinitely. Additionally, at December 31, 2020 Additionally, at December 31, 2020 and 2019, the Company had approximately $0.9 million and $0.8 million, respective of state and local NOL carry-forwards, which expire through 2039. The NOL carry-forwards may be limited in certain circumstances, including ownership changes. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carry-forwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Certain tax attributes are subject to an annual limitation as a result of certain cumulative changes in ownership interest of significant shareholders which could constitute a change of ownership as defined under Internal Revenue Code Section 382. The Company has completed a full analysis of historical ownership changes and determined that a portion of the net operating losses to date have a limitation on future deductibility. Approximately $8.4 million of net operating losses incurred prior to 2014 will be unable to offset future taxable income and have been reserved via a valuation allowance to reduce the deferred tax asset to the expected realizable amount. Tabular reconciliation of unrecognized tax benefits 2020 2019 Unrecognized tax benefits - January 1 $ 1,163,282 $ 1,163,282 Gross increases - tax positions in prior period — — Gross decreases - tax positions in prior period — — Gross increases - tax positions in current period — — Settlement — — Lapse of statute of limitations — — Unrecognized tax benefits - December 31 $ 1,163,282 $ 1,163,282 The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2020, and 2019, due to the Company’s continued losses, no amounts of interest and penalties have been recognized in the Company’s consolidated statements of operations. If the unrecognized tax benefits were reversed, a deferred tax asset and corresponding valuation allowance would be recorded, and thus the reversal would have no impact on the effective rate. The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and local jurisdictions. Generally, the Company’s 2017 through 2019 tax years remain open and subject to examination by federal, state and local taxing authorities. However, federal, state, and local net operating losses from 2009 through 2019 are subject to review by taxing authorities in the year utilized. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 — Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities measured at fair value and fair value measurement level were as follows: December 31, 2020 December 31, 2019 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Investment in LMC $ 330,556,744 $ 330,556,744 $ — $ — $ 12,194,800 $ — $ — $ 12,194,800 Total assets at fair value $ 330,556,744 $ 330,556,744 $ — $ — $ 12,194,800 $ — $ — $ 12,194,800 Liabilities Convertible notes $ 197,700,000 $ — $ — $ 197,700,000 $ 39,020,000 $ — $ — $ 39,020,000 Warrant liability — — — — 16,335,000 — — 16,335,000 Total liabilities at fair value $ 197,700,000 $ — $ — $ 197,700,000 $ 55,355,000 $ — $ — $ 55,355,000 Investment in LMC As of December 31, 2020, the Company's investment in LMC is measured at fair value using Level 1 inputs because it is valued using a quoted price in an active market. Previously, the Company's investment in LMC was recorded using the measurement alternative at issuance and at each reporting date through September 30, 2020. Under the measurement alternative, we measured the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions in an identical or similar investment in LMC. Convertible Notes The Company's convertible notes are measured at fair value using Level 3 inputs on issuance and at each reporting date. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value model include estimates of the redemption dates, credit spreads and the market price and volatility of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The following table sets forth a reconciliation of the convertible notes: December 31, 2020 2019 Convertible notes, beginning of year $ 39,020,000 $ — Convertible notes at issuance 268,925,000 38,520,000 Conversion of convertible notes into common stock (270,794,684) (481,728) Change in fair value 160,549,684 981,728 Convertible notes, end of year $ 197,700,000 $ 39,020,000 Warrant Liability On December 31, 2018, the Company entered into a Credit Agreement with Marathon Asset Management, LP. Upon entering into the Credit Agreement, the Company issued a Common Stock Purchase Warrant to purchase 8,053,390 shares of common stock at an exercise price of $1.25 per share (the “Initial Warrants”). The Credit Agreement and Initial Warrants were determined to be freestanding instruments and were accounted for separately. The Initial Warrants do not qualify for equity classification and were classified as liability instruments. The liability for the Initial Warrants was marked-to-market quarterly in accordance with liability accounting, with a corresponding charge to Interest Expense. The Company's warrant liability was measured at fair value using Level 3 inputs on issuance and at each reporting date. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the Company’s estimates are not necessarily indicative of the amounts that the Company, or holders of the instruments, could realize in a current market exchange. Significant assumptions used in the fair value models include estimates of the redemption dates, credit spreads, dividend payments and the market price and volatility of the Company’s common stock. The use of different assumptions and/or estimation methodologies could have a material effect on the estimated fair values. The following table sets forth a reconciliation of the Warrant Liability: December 31, 2020 2019 Warrant liability, beginning of year $ 16,335,000 $ 1,822,819 Exercise of warrants (28,511,690) — Change in fair value of warrant liability 12,176,690 15,369,253 Reclassification to additional paid-in capital — (857,072) Warrant liability, end of year $ — $ 16,335,000 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company maintains, as approved by the board of directors, the 2019 Stock Incentive Plan (the “Plan”) providing for the issuance of stock-based awards to employees, officers, directors or consultants of the Company. Non-qualified stock options may only be granted with an exercise price equal to the market value of the Company’s common stock on the grant date. Awards under the plans may be either vested or unvested options, or unvested restricted stock. The Plan has authorized 8.0 million shares for issuance of stock-based awards. As of December 31, 2020 and December 31, 2019, there were approximately 6.6 million and 8.0 million shares available for issuance of future stock awards, respectively, which includes shares available under the 2019 and 2017 incentive plans. Stock-based compensation expense The following table summarizes stock-based compensation expense: Years Ended December 31, 2020 2019 Stock options $ 792,055 $ 1,542,644 Restricted stock 3,228,750 437,354 Total stock-based compensation expense $ 4,020,805 $ 1,979,998 In November 2019, the vesting for 1.0 million stock options issued to an officer of the Company were accelerated, resulting in the remaining unvested compensation of approximately $0.5 million being recognized in the year ended December 31, 2019. Stock options The following table summarizes stock option activity: Number of Options Weighted Weighted Weighted Balance, December 31, 2018 3,867,621 $ 4.1 Granted 2,450,000 1.0 0.5 Exercised (736,552) 0.7 Forfeited (907,500) 4.5 Expired (948,569) 5.0 Balance, December 31, 2019 3,725,000 2.3 Granted 877,575 1.9 0.6 Exercised (2,112,392) 2.4 Forfeited (118,943) 5.8 Expired (20,000) 2.4 Balance, December 31, 2020 2,351,240 $ 2.0 5.5 Number of options exercisable at December 31, 2020 1,972,740 $ 2.1 5.8 As of December 31, 2020, unrecognized compensation expense was $0.2 million for unvested options, which is expected to be recognized over the next 1.8 years. Restricted stock The following table summarizes restricted stock activity: Number of Unvested Shares Weighted Average Grant Date Fair Value per Share Balance, December 31, 2018 — $ — Granted 1,805,222 2.6 Vested (36,496) 2.7 Forfeited — — Balance, December 31, 2019 1,768,726 2.6 Granted 657,135 2.9 Vested (1,047,972) 2.6 Forfeited — — Balance, December 31, 2020 1,377,889 $ 2.7 |
Recent Pronouncements
Recent Pronouncements | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Pronouncements | RECENT PRONOUNCEMENTS Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires entities to use a new impairment model based on current expected credit losses rather than incurred losses. Estimated credit losses under the ASU consider relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets, resulting in recognition of lifetime expected credit losses at initial recognition of the related asset. The Company adopted the ASU as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company's financial condition and operations. Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impacts of this ASU on our financial statements. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Warrants In connection with the issuance of debt, common stock and preferred stock, the Company has issued warrants to purchase shares of the Company's common stock. The following table summarizes warrant activity: Number of Warrants Weighted Average Exercise Price per Warrant Balance, December 31, 2018 17,818,844 $ 1.84 Granted, Series B Preferred Stock 9,262,500 1.62 Granted, Marathon Credit Agreement 3,379,466 2.26 Granted, Other 66,966 5.28 Exercised — — Balance, December 31, 2019 30,527,776 1.82 Granted, Marathon Credit Agreement 1,176,203 28.26 Exercised (30,502,763) 1.78 Expired (45,540) 1.60 Balance, December 31, 2020 1,155,676 $ 28.74 2019 Stock Offerings In February 2019, the Company sold approximately 1.6 million shares of common stock to investors (the “February 2019 Investors”) for net proceeds of $1.5 million. Through July 2019, if the Company issued shares of its common stock for a lower price per share than the price paid by the February 2019 Investors (a “Down Round”), the Company was required to issue additional shares of common stock (for no additional consideration) resulting in the effective purchase price per share being equal to the purchase price per share paid in the Down Round. On May 1, 2019 the Down Round provision of the agreement was triggered and an additional 116,496 shares of common stock were issued to the February 2019 Investors which was accounted for as a $86,207 deemed dividend. The deemed dividend was recorded as a reduction to Retained Earnings and increase in Additional Paid-in-Capital and increased the net loss to common stockholders by the same amount. Benjamin Samuels and Gerald Budde, directors of the Company, acquired 841,928 and 26,310 shares of common stock, respectively, as part of the February 2019 offering at a price per share of $0.95, which was above the closing price the date prior to close. They did not receive the Down Round protection. On June 22, 2017, the Company entered into an at the market issuance sales agreement with Cowen and Company, LLC, under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $25.0 million. During the three months ended March 31, 2019, the Company issued 1.6 million shares of common stock under the agreement for net proceeds of approximately $1.5 million. The agreement was canceled in the first quarter of 2019. On May 1, 2019, the Company closed a registered public offering for the sale of approximately 4.0 million shares of common stock for a purchase price of $0.74 per share. The proceeds to the Company were approximately $2.9 million. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIESThe Company obtains its property and casualty insurance through AssuredPartners NL, LLC (“Assured”). Gerald Budde, a director of the Company, is Eastern Regions Chief Financial Officer of AssuredPartners, Inc., the parent company of AssuredPartners Capital, Inc. and its subsidiary, AssuredPartners NL, LLC. The placement of insurance was completed by an agent outside of the Eastern Region and Mr. Budde did not participate in any decisions about insurance, nor was he paid any portion of the brokerage fee. Assured earned brokerage fees of approximately $121,000 and $86,000 for the years ended December 31, 2020 and 2019, respectively. |
Divestiture of Surefly
Divestiture of Surefly | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture of Surefly | DIVESTITURE OF SUREFLYOn November 27, 2019, the Company completed the sale of SureFly™ for $4.0 million. The gain on divestiture was $3.7 million, net of selling costs of $0.3 million. SureFly was the Company's hybrid electrically powered vertical takeoff and landing aircraft project. The Company had no revenues associated with SureFly in 2019. Operating expenses associated with the development of Surefly were $1.4 million in 2019. |
Other Transaction
Other Transaction | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Other Transaction | OTHER TRANSACTION On October 31, 2019, the Company and ST Engineering Hackney, Inc. (“Hackney”) entered into an Asset Purchase Agreement to purchase certain assets and assume certain liabilities of Hackney. Upon execution of the agreement, the Company deposited $1.0 million in cash and shares of its common stock having an initial value of $6.6 million into an escrow account. The number of shares held in escrow is subject to adjustment if the value of the shares is less than $5.28 million or greater than $7.92 million on certain dates. The purchase price for the acquired assets was $7.0 million, $1.0 million of which was released from the escrow account in January 2020 upon satisfaction of certain conditions, and the remaining $6.0 million (the “Second Payment”) is payable in cash within 45 days if additional conditions are met. The Company is required to make additional payments to Hackney in the event the Second Payment is not made within 45 days of when the payment is due. In the event the Second Payment is not made within 105 days of when the payment is due, Hackney may require that the Escrow Agent release the shares held in escrow with a value (based on the then-current market price of the shares) equal to $6.0 million in satisfaction of the Second Payment. The transaction was accounted for as customer acquisition costs as the primary asset acquired is the right to bid on a customer contract. As each payment is made, the Company will determine if there is future benefit associated with the contract. If it is determined that there is future benefit, the payment will be capitalized as a customer acquisition cost and expensed over the period of benefit. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSÂ The Company has evaluated subsequent events for potential recognition and disclosures through the date the Consolidated Financial Statements were filed.On February 23, 2021, the USPS announced it awarded a contract to Oshkosh Defense to assemble 50,000 to 165,000 vehicles over the next ten years. |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Principles (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The consolidated financial statements are prepared in conformity with U.S. GAAP. |
Principles of Consolidation | Principles of consolidation The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications were made to the prior year consolidated financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or stockholders’ equity. |
Cash and Cash Equivalents, Restricted Cash | Cash and cash equivalents Cash includes cash equivalents which are highly liquid investments that are readily convertible to cash. A cash equivalent is a highly liquid investment that at the time of acquisition has a maturity of three months or less. Restricted cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash received through financing transactions that have not been released for use by us and cash held as collateral for certain payments. We record restricted cash in the Consolidated Balance Sheets and determine current or non-current classification based on the expected duration of the restriction. |
Financial Instruments | Financial instruments The carrying amounts of financial instruments including cash and cash equivalents, restricted cash, inventory, and accounts payable approximate fair value because of the relatively short maturity of these instruments. |
Accounts Receivable | Accounts receivableAccounts receivable consists of collectible amounts for products and services rendered. The Company carries its accounts receivable at invoice amount less an allowance for credit losses. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for credit losses based on a history of past write-offs, collections, and current and future credit conditions. |
Inventory, Net | Inventory, netInventory is stated at the lower of cost or net realizable value. Manufactured inventories are valued at standard cost, which approximates actual costs on a first-in, first-out basis. We record inventory reserves for excess or obsolete inventories based upon assumptions about our current and future demand forecasts. |
Property, Plant and Equipment, Net | Property, plant and equipment, net Property, plant and equipment, net is stated at cost less accumulated depreciation. Major renewals and improvements are capitalized while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed as incurred. When property, plant and equipment is retired or otherwise disposed of, a gain or loss is realized for the difference between the net book value of the asset and the proceeds realized thereon. Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Buildings and improvements 15 - 39 years Land improvements 15 years Equipment and vehicles 3 - 6 years Tooling 5 years |
Impairment of Long Lived Assets | Impairment of long-lived assets Long-lived assets, such as property, plant, and equipment are reviewed for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. |
Valuation of Investment | Valuation of investment In October of 2020, we began measuring our investment in Lordstown Motor Corp. (“LMC”) at fair value as permitted under Accounting Standards Codification (“ASC”) 820, Fair Value Measurement . On October 26, 2020, LMC shares of Class A Common Stock began trading on the Nasdaq Global Select market under the ticker symbol “RIDE.” Therefore, the carrying value of our investment is equal to the quote market price of LMC's common stock. If the price of LMC's common stock decreases, we would record a decrease in the value of our investment and a charge to earnings. We have classified the LMC investment as non-current within the accompanying Consolidated Balance Sheets due to our intention to hold this investment for purposes of continued affiliation and business advantage. We previously elected the measurement alternative allowed under generally accepted accounting principles (“GAAP”) for our investment in LMC, which, prior to October 2020, did not have a readily determinable fair value. Under the measurement alternative, we measured this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions in an identical or similar investment in LMC. |
Warranty | Warranty We generally offer warranty coverage for our products. We accrue warranty related costs under standard warranty terms and for certain claims outside the contractual obligation period that we choose to pay as accommodations to our customers. Provisions for estimated assurance warranties are recorded at the time of sale and are periodically adjusted to reflect actual experience. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring Company obligations under the warranty plans. Historically, the cost of fulfilling the Company’s warranty obligations has principally involved replacement parts, towing and transportation costs, labor and sometimes travel for any field retrofit campaigns. The Company’s estimates are based on historical experience, the extent of pre-production testing, the number of units involved and the extent of features/components included in product models. The Company reviews actual warranty claims experience to determine if there are systemic defects that would require a field campaign. Although we believe that the estimates and judgments discussed herein are reasonable, actual results could differ and we may be exposed to increases or decreases in our warranty accrual that could be material. |
Fair Value Option | Fair value option As permitted under ASC 825, Financial Instruments , the Company has elected the fair value option to account for its convertibles notes. In accordance with ASC 825, the Company records its convertible notes at fair value with changes in fair value recorded in Interest Expense in the Consolidated Statement of Operations. As a result of applying the fair value option, direct costs and fees related to the convertible notes were recognized in earnings as incurred and were not deferred. |
Common Stock | Common stock On May 3, 2019, the Company filed an amendment to its Articles of Incorporation to increase the authorized number of shares of common stock from 100,000,000 to 250,000,000. |
Income Taxes | Income taxes We file a consolidated U.S. federal income tax return and separate state and local income tax returns. We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax benefit carryforwards. Deferred tax assets and liabilities at the end of each period are determined using enacted tax rates. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. We recognize the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. |
Research and Development Costs | Research and development costs The Company expenses research and development costs as they are incurred. Research and development costs consist primarily of personnel costs for engineering and research, prototyping costs, and contract and professional services. |
Basic and diluted earnings (loss) per share | Basic and diluted earnings (loss) per share Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted earnings per share are calculated using the treasury stock method, on the basis of the weighted average number of shares outstanding plus the dilutive effect, if any, of stock options, unvested restricted stock and warrants. The if converted method is used for determining the impact of the convertible notes. |
Stock Based Compensation | Stock-based compensation The Company recognizes in its Consolidated Statements of Operations the grant-date fair value of share-based awards issued to employees and non-employees over the awards' vesting period which equals the service period. Forfeitures are recognized as they occur. The fair value of restricted stock awards is the price of our common stock on the date of the award. The fair value for stock options is estimated on the grant date using a Black-Scholes valuation model that uses the assumptions of expected volatility, expected term, and the expected risk-free rate of return. The expected volatility was estimated by management as 50% based on results from other public companies in our industry. The expected term of the awards granted was assumed to be the contract life of the option as determined in the specific arrangement. The risk-free rate of return was based on market yields in effect on the date of each grant for United States Treasury debt securities with a maturity equal to the expected term of the award. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the periods presented. Significant estimates and assumptions are used for, but are not limited to warranty liability, warrant liability, fair value of the convertible notes and litigation-related accruals. Actual results could differ from our estimates. |
Recent Pronouncements | Accounting Standards Recently Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which requires entities to use a new impairment model based on current expected credit losses rather than incurred losses. Estimated credit losses under the ASU consider relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets, resulting in recognition of lifetime expected credit losses at initial recognition of the related asset. The Company adopted the ASU as of January 1, 2020. The adoption of this guidance did not have a material impact on the Company's financial condition and operations. Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity and requires the use of the if-converted method for calculating diluted earnings per share. The ASU removes separation models for convertible debt with a cash conversion feature. Such convertible instruments will be accounted for as a single liability measured at amortized cost. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted after December 15, 2020. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. The Company is currently evaluating the impacts of this ASU on our financial statements. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Principles (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Estimated Useful Lives | Depreciation is calculated using the straight-line method, based upon the following estimated useful lives: Buildings and improvements 15 - 39 years Land improvements 15 years Equipment and vehicles 3 - 6 years Tooling 5 years |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: December 31, 2020 2019 Accrued payroll and taxes $ 2,537,353 $ 954,225 Loan interest payable 1,711,111 112,750 Customer allowance accrual 1,412,500 1,412,500 Other 334,338 928,709 Total accrued liabilities $ 5,995,302 $ 3,408,184 |
Schedule of Warranty Accrual | Activity for the Company's warranty accrual is as follows: December 31, 2020 2019 Balance, beginning of year $ 6,001,864 $ 7,058,769 Accrual for warranty (1) 2,115,762 92,191 Warranty costs incurred (2,717,626) (1,149,096) Balance, end of year $ 5,400,000 $ 6,001,864 (1) The increase to the warranty accrual in 2020 primarily relates to a change in estimate in the amount of labor required to maintain our current warranty program with our 2016 and 2017 E-Series trucks. The expense includes estimated costs for labor and transportation and excludes any contribution from vendors. |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the computation of basic and diluted earnings per share: Years Ended December 31, 2020 2019 Net income (loss) $ 69,776,499 $ (37,162,827) Deemed dividends — 86,207 Net income (loss) attributable to common stockholders $ 69,776,499 $ (37,249,034) Basic weighted average shares outstanding 92,871,936 64,314,756 Dilutive effect of options and warrants 1,410,605 — Dilutive effect of convertible notes 5,667,327 — Diluted weighted average shares outstanding 99,949,868 64,314,756 Anti-dilutive options and warrants excluded from diluted average shares outstanding 1,041,531 36,021,502 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net consists of the following: December 31, 2020 2019 Raw materials $ 16,759,232 $ 3,741,097 Work in process 422,176 422,176 Finished goods 277,419 — 17,458,827 4,163,273 Less: inventory reserve (1,991,815) (2,365,127) Inventory, net $ 15,467,012 $ 1,798,146 |
Investments in LMC (Tables)
Investments in LMC (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, All Other Investments [Abstract] | |
Reconciliation of Investment in LMC | The following table sets forth a reconciliation of the Investment in LMC: December 31, 2020 2019 Balance, beginning of year $ 12,194,800 $ — Initial fair value of ownership interest (1) — 12,194,800 Change in fair value of investment (2) 317,497,044 — Fair value of anti-dilution shares (3) 864,900 — Balance, end of year $ 330,556,744 $ 12,194,800 (1) Represents the Company's ownership interest in the common stock of LMC obtained pursuant to the LMC Transaction (as described below). The initial fair value of the LMC ownership interest received is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2019. (2) The Company obtained approximately 16.5 million shares of Class A Common Stock in connection with the LMC Merger (as described below), which were valued at $20.06 per share as of December 31, 2020. The change in fair value of the investment is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2020. (3) During the three months ended March 31, 2020, the Company received additional shares as part of its anti-dilution feature with LMC, which were valued at approximately $0.9 million. The change in fair value of the investment related to the anti-dilution shares is recorded in Other Income on the Consolidated Statements of Operations for the year ended December 31, 2020. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Our revenues related to the following types of business were as follows: Years Ended December 31, 2020 2019 Automotive $ 1,285,327 $ 240,280 Aviation 71,830 — Other 35,362 136,282 Total revenues $ 1,392,519 $ 376,562 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment, net consists of the following: December 31, 2020 2019 Land and improvements $ 794,875 $ 700,000 Buildings and improvements 6,005,505 5,900,000 Equipment and vehicles 1,847,696 953,985 Tooling 2,079,471 — Construction in progress 4,129,568 1,925,500 14,857,115 9,479,485 Less: accumulated depreciation (3,458,949) (2,649,304) Property, plant and equipment, net $ 11,398,166 $ 6,830,181 |
Convertible Notes and Long-Te_2
Convertible Notes and Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Convertible Notes December 31, 2020 2019 Convertible notes, at fair value $ 197,700,000 $ 39,020,000 Less: current portion — (19,620,000) Convertible notes, net of current portion $ 197,700,000 $ 19,400,000 PPP Term Note December 31, 2020 2019 Long-term debt $ 1,411,000 $ — Less: current portion (1,411,000) — Long-term debt, net of current portion $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income taxes are as follows: Years Ended December 31, 2020 2019 Current: Federal $ — $ — State and Local — — Total Current — — Deferred: Federal 21,864,569 — State and Local (30,639) — Total Deferred 21,833,930 — Total provision for income taxes $ 21,833,930 $ — |
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of taxes at the federal statutory rate to our provision for income taxes was as follows: Years Ended December 31, 2020 2019 Federal tax benefit at statutory rates 21.0 % 21.0 % State and local tax at statutory rates (0.1) % (0.6) % Fair value adjustments on warrant liability 37.1 % (9.3) % Fair value adjustments on convertible notes 2.8 % — % Stock-based compensation deductions (6.6) % — % Other permanent differences and credits — % (0.8) % Change in valuation allowance (30.4) % (10.3) % Total tax benefit 23.8 % — % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2020, management determined that there is sufficient positive evidence to conclude that it is more likely than not that deferred tax assets of approximately $27.8 million are realizable. Management's determination was based on the Company's achievement of three years of cumulative pretax income in the U.S. federal tax jurisdiction, which was primarily driven by the change in fair value of our investment in LMC. We therefore reduced the valuation allowance accordingly. Significant components of the Company’s deferred tax assets and liabilities are as follows: |
Schedule of Deferred Tax Assets and Liabilities | December 31 2020 2019 Deferred Tax (Liabilities) Assets: Accrued expenses and reserves $ 853,199 $ 802,526 Warranty reserve 1,150,830 1,275,047 Non-qualified stock options 358,808 961,919 Property, plant and equipment (319,632) 202,755 Fair value adjustment of investment in LMC (66,674,379) — Issuance fees on convertible notes 1,031,658 — Other temporary differences — (88,200) Net operating losses 47,344,755 30,213,192 Total Deferred Tax (Liabilities) Assets (16,254,761) 33,367,239 Valuation Allowance (5,579,169) (33,367,239) Total Deferred Tax Liabilities, net of valuation allowance $ (21,833,930) $ — |
Schedule of Unrecognized Tax Benefits Roll Forward | Tabular reconciliation of unrecognized tax benefits 2020 2019 Unrecognized tax benefits - January 1 $ 1,163,282 $ 1,163,282 Gross increases - tax positions in prior period — — Gross decreases - tax positions in prior period — — Gross increases - tax positions in current period — — Settlement — — Lapse of statute of limitations — — Unrecognized tax benefits - December 31 $ 1,163,282 $ 1,163,282 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | A financial asset or liability’s classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities measured at fair value and fair value measurement level were as follows: December 31, 2020 December 31, 2019 Fair Value Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Assets Investment in LMC $ 330,556,744 $ 330,556,744 $ — $ — $ 12,194,800 $ — $ — $ 12,194,800 Total assets at fair value $ 330,556,744 $ 330,556,744 $ — $ — $ 12,194,800 $ — $ — $ 12,194,800 Liabilities Convertible notes $ 197,700,000 $ — $ — $ 197,700,000 $ 39,020,000 $ — $ — $ 39,020,000 Warrant liability — — — — 16,335,000 — — 16,335,000 Total liabilities at fair value $ 197,700,000 $ — $ — $ 197,700,000 $ 55,355,000 $ — $ — $ 55,355,000 |
Fair Value, Liabilities Measured on a Recurring Basis | The following table sets forth a reconciliation of the convertible notes: December 31, 2020 2019 Convertible notes, beginning of year $ 39,020,000 $ — Convertible notes at issuance 268,925,000 38,520,000 Conversion of convertible notes into common stock (270,794,684) (481,728) Change in fair value 160,549,684 981,728 Convertible notes, end of year $ 197,700,000 $ 39,020,000 The following table sets forth a reconciliation of the Warrant Liability: December 31, 2020 2019 Warrant liability, beginning of year $ 16,335,000 $ 1,822,819 Exercise of warrants (28,511,690) — Change in fair value of warrant liability 12,176,690 15,369,253 Reclassification to additional paid-in capital — (857,072) Warrant liability, end of year $ — $ 16,335,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation Arrangements | The following table summarizes stock-based compensation expense: Years Ended December 31, 2020 2019 Stock options $ 792,055 $ 1,542,644 Restricted stock 3,228,750 437,354 Total stock-based compensation expense $ 4,020,805 $ 1,979,998 The following table summarizes stock option activity: Number of Options Weighted Weighted Weighted Balance, December 31, 2018 3,867,621 $ 4.1 Granted 2,450,000 1.0 0.5 Exercised (736,552) 0.7 Forfeited (907,500) 4.5 Expired (948,569) 5.0 Balance, December 31, 2019 3,725,000 2.3 Granted 877,575 1.9 0.6 Exercised (2,112,392) 2.4 Forfeited (118,943) 5.8 Expired (20,000) 2.4 Balance, December 31, 2020 2,351,240 $ 2.0 5.5 Number of options exercisable at December 31, 2020 1,972,740 $ 2.1 5.8 The following table summarizes restricted stock activity: Number of Unvested Shares Weighted Average Grant Date Fair Value per Share Balance, December 31, 2018 — $ — Granted 1,805,222 2.6 Vested (36,496) 2.7 Forfeited — — Balance, December 31, 2019 1,768,726 2.6 Granted 657,135 2.9 Vested (1,047,972) 2.6 Forfeited — — Balance, December 31, 2020 1,377,889 $ 2.7 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrant Activity | In connection with the issuance of debt, common stock and preferred stock, the Company has issued warrants to purchase shares of the Company's common stock. The following table summarizes warrant activity: Number of Warrants Weighted Average Exercise Price per Warrant Balance, December 31, 2018 17,818,844 $ 1.84 Granted, Series B Preferred Stock 9,262,500 1.62 Granted, Marathon Credit Agreement 3,379,466 2.26 Granted, Other 66,966 5.28 Exercised — — Balance, December 31, 2019 30,527,776 1.82 Granted, Marathon Credit Agreement 1,176,203 28.26 Exercised (30,502,763) 1.78 Expired (45,540) 1.60 Balance, December 31, 2020 1,155,676 $ 28.74 |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Principles - Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Buildings and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 39 years |
Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Equipment and vehicles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Equipment and vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 6 years |
Tooling | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Principles - Accrued Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued payroll and taxes | $ 2,537,353 | $ 954,225 |
Loan interest payable | 1,711,111 | 112,750 |
Customer allowance accrual | 1,412,500 | 1,412,500 |
Other | 334,338 | 928,709 |
Total accrued liabilities | $ 5,995,302 | $ 3,408,184 |
Summary of Business and Signi_6
Summary of Business and Significant Accounting Principles - Warranty Accrual (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance, beginning of year | $ 6,001,864 | $ 7,058,769 |
Accrual for warranty (1) | 2,115,762 | 92,191 |
Warranty costs incurred | (2,717,626) | (1,149,096) |
Balance, end of year | $ 5,400,000 | $ 6,001,864 |
Summary of Business and Signi_7
Summary of Business and Significant Accounting Principles (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | May 03, 2019 | |
Related Party Transaction [Line Items] | ||||
Number of authorized shares of common stock (in shares) | 250,000,000 | 250,000,000 | 250,000,000 | |
Expected volatility rate of stock | 50.00% | |||
Employees tested positive for COVID-19, percentage | 40.00% | |||
Convertible Notes | ||||
Related Party Transaction [Line Items] | ||||
Debt instrument, number of shares convertible (in shares) | 13,300,000 | |||
Common Stock | Minimum | ||||
Related Party Transaction [Line Items] | ||||
Number of authorized shares of common stock (in shares) | 100,000,000 | |||
Common Stock | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Number of authorized shares of common stock (in shares) | 250,000,000 |
Summary of Business and Signi_8
Summary of Business and Significant Accounting Principles - Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss) | $ 69,776,499 | $ (37,162,827) |
Deemed dividends | 0 | 86,207 |
Net income (loss) attributable to common stockholders | $ 69,776,499 | $ (37,249,034) |
Basic weighted average shares outstanding (in shares) | 92,871,936 | 64,314,756 |
Diluted weighted average shares outstanding (in shares) | 99,949,868 | 64,314,756 |
Anti-dilutive options and warrants excluded from diluted average shares outstanding | 1,041,531 | 36,021,502 |
Options and Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of options, warrants and convertible notes (in shares) | 1,410,605 | 0 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Dilutive effect of options, warrants and convertible notes (in shares) | 5,667,327 | 0 |
Inventory, Net (Details)
Inventory, Net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 16,759,232 | $ 3,741,097 |
Work in process | 422,176 | 422,176 |
Finished goods | 277,419 | 0 |
Inventory, gross | 17,458,827 | 4,163,273 |
Less: inventory reserve | (1,991,815) | (2,365,127) |
Inventory, net | $ 15,467,012 | $ 1,798,146 |
Investments in LMC (Details)
Investments in LMC (Details) $ / shares in Units, vehicle in Thousands, order in Thousands, shares in Millions | Aug. 01, 2020USD ($)$ / sharesshares | Nov. 07, 2019vehicleorder | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Feb. 28, 2019$ / shares | Dec. 31, 2018USD ($) |
Private Placement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sale of stock (in usd per share) | $ / shares | $ 0.95 | |||||
Lordstown Motors Corp | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Fair value of ownership interest | $ | $ 330,556,744 | $ 12,194,800 | $ 0 | |||
Ownership percentage | 10.00% | 10.00% | ||||
Percentage of issued and outstanding common stock | 58.00% | |||||
Royalty advance on debt and equity | 1.00% | |||||
Royalty on sales | 1.00% | |||||
Number of vehicles sold | vehicle | 200 | |||||
Commission on sales | 4.00% | |||||
Existing vehicle orders | order | 6 | |||||
DiamondPeak | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Sale of stock (in usd per share) | $ / shares | $ 10 | |||||
DiamondPeak | Private Placement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued in transaction (in shares) | shares | 50 | |||||
DiamondPeak | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Ownership percentage | 9.99% | |||||
Royalty advance | $ | $ 4,800,000 |
Investments in LMC - Rollforwar
Investments in LMC - Rollforward (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
RIDE Class A Common Stock | |||
Equity Method Investment [Roll Forward] | |||
Shares obtained (in shares) | 16.5 | ||
Price per share (in usd per share) | $ 20.06 | ||
Lordstown Motors Corp | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | |||
Equity Method Investment [Roll Forward] | |||
Balance, beginning of year | $ 12,194,800 | $ 12,194,800 | $ 0 |
Initial fair value of ownership interest | 0 | 12,194,800 | |
Change in fair value of investment | 317,497,044 | 0 | |
Fair value of anti-dilution shares | $ 900,000 | 864,900 | 0 |
Balance, end of year | $ 330,556,744 | $ 12,194,800 |
Revenue (Details)
Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 1,392,519 | $ 376,562 |
Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 1,285,327 | 240,280 |
Aviation | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 71,830 | 0 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 35,362 | $ 136,282 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,857,115 | $ 9,479,485 |
Less: accumulated depreciation | (3,458,949) | (2,649,304) |
Property, plant and equipment, net (Note 5) | 11,398,166 | 6,830,181 |
Depreciation | 800,000 | 400,000 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 794,875 | 700,000 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,005,505 | 5,900,000 |
Equipment and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,847,696 | 953,985 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,079,471 | 0 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 4,129,568 | $ 1,925,500 |
Convertible Notes and Long-Te_3
Convertible Notes and Long-Term Debt - Type (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Paycheck Protection Program Term Note | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,411,000 | $ 0 |
Less current portion | (1,411,000) | 0 |
Other long-term liabilities | 0 | 0 |
Convertible Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 197,700,000 | 39,020,000 |
Less current portion | 0 | (19,620,000) |
Other long-term liabilities | $ 197,700,000 | $ 19,400,000 |
Convertible Notes and Long-Te_4
Convertible Notes and Long-Term Debt (Details) - USD ($) | Oct. 14, 2020 | Oct. 13, 2020 | Jul. 16, 2020 | Apr. 14, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 09, 2019 |
Debt Instrument [Line Items] | ||||||||
Proceeds from issuance of convertible notes | $ 262,374,788 | $ 38,950,000 | ||||||
Convertible notes | $ 197,700,000 | 197,700,000 | 19,400,000 | |||||
Proceeds from notes payable | 0 | 5,854,140 | ||||||
Convertible Debt Warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Class of warrant or right outstanding (in shares) | 15,500,000 | |||||||
Warrant exercise price (in usd per share) | $ 3.05 | |||||||
Warrants, fair value | $ 400,000 | |||||||
Paycheck Protection Program Term Note | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 1.00% | |||||||
Long-term debt, gross | 1,411,000 | 1,411,000 | 0 | |||||
Proceeds from notes payable | $ 1,400,000 | |||||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 197,700,000 | $ 197,700,000 | 39,020,000 | |||||
Convertible Notes | Senior Secured Convertible Notes Due 2024 | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 200,000,000 | |||||||
Interest rate | 4.00% | |||||||
Interest rate reduction | 2.75% | 2.75% | ||||||
Conversion price (in usd per share) | $ 35.29 | $ 35.29 | ||||||
Debt issuance costs | $ 6,600,000 | |||||||
Proceeds from issuance of convertible notes | $ 193,400,000 | |||||||
Convertible notes | $ 197,700,000 | $ 197,700,000 | ||||||
Change in fair value | (2,300,000) | |||||||
Convertible Notes | High Trail Convertible Note II | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 70,000,000 | |||||||
Interest rate | 4.50% | |||||||
Conversion price (in usd per share) | $ 19 | |||||||
Debt issuance costs | $ 1,100,000 | |||||||
Proceeds from issuance of convertible notes | 68,900,000 | |||||||
Change in fair value | 52,900,000 | |||||||
Debt conversion, amount | $ 70,000,000 | |||||||
Debt conversion, amount | $ 121,800,000 | |||||||
Convertible debt, shares issued on conversion | 5,200,000 | |||||||
Convertible Notes | High Trail Convertible Note II | Workhorse Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Share price (in usd per share) | $ 23.63 | |||||||
Convertible Notes | High Trail Convertible Note | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount | $ 41,000,000 | |||||||
Interest rate | 4.50% | |||||||
Conversion price (in usd per share) | $ 3.05 | |||||||
Convertible notes | $ 0 | 0 | 39,000,000 | $ 38,500,000 | ||||
Debt conversion, amount | $ 40,500,000 | $ 500,000 | ||||||
Convertible debt, shares issued on conversion | 14,400,000 | 200,000 | ||||||
Class of warrant or right outstanding (in shares) | 0 | 0 | ||||||
Long-term debt, gross | $ 0 | $ 0 | $ 40,500,000 | |||||
Change in fair value | 74,100,000 | 1,000,000 | ||||||
Gain (loss) on extinguishment of debt | $ 100,000 | |||||||
Convertible Notes | High Trail Convertible Note | Interest Expense | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on debt conversion | $ 35,900,000 |
Mandatory Redeemable Series B_2
Mandatory Redeemable Series B Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 28, 2020 | Jun. 05, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||
Warrants term | 7 years | |||
Stock issued for payment of preferred stock (in shares) | 900,000 | 700,000 | ||
Loss on redemption | $ 4.7 | |||
Mandatorily Redeemable Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 1.62 | |||
Value of warrants issued with preferred stock | $ 6.7 | |||
Series B Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Shares issued (in shares) | 1,250,000 | |||
Preferred stock stated value (in usd per share) | $ 20 | |||
Aggregate purchase price, warrants | $ 25 | |||
Amortization of discount | $ 1.1 | $ 0.9 | ||
Loss on redemption | $ 4.7 | |||
Series B Preferred Stock | Mandatorily Redeemable Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Warrant exercise price (in usd per share) | $ 7.41 | |||
Preferred stock dividend rate (percentage) | 8.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Current tax expense | $ 0 | $ 0 |
Total Deferred | 21,833,930 | 0 |
Valuation allowance, increase (decrease) | (27,800,000) | |
Deferred tax assets | 33,367,239 | |
Interest and penalties | 0 | 0 |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets | 8,400,000 | |
Operating loss carryforward subject to expiration | 90,600,000 | |
Operating loss carryforward not subject to expiration | 130,900,000 | 49,000,000 |
State and Local | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforward subject to expiration | $ 900,000 | $ 800,000 |
Income Taxes - Components of Lo
Income Taxes - Components of Loss Before Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ 0 | $ 0 |
State and Local | 0 | 0 |
Total Current | 0 | 0 |
Federal | 21,864,569 | 0 |
State and Local | (30,639) | 0 |
Total Deferred | 21,833,930 | 0 |
Provision for income taxes (Note 8) | $ 21,833,930 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Federal Income Tax (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Federal tax benefit at statutory rates | 21.00% | 21.00% |
State and local tax at statutory rates | (0.10%) | (0.60%) |
Fair value adjustments on warrant liability | 37.10% | (9.30%) |
Fair value adjustments on convertible notes | 2.80% | 0.00% |
Stock-based compensation deductions | (6.60%) | 0.00% |
Other permanent differences and credits | 0.00% | 0.80% |
Change in valuation allowance | 30.40% | 10.30% |
Total tax benefit | 23.80% | 0.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Accrued expenses and reserves | $ 853,199 | $ 802,526 |
Warranty reserve | 1,150,830 | 1,275,047 |
Non-qualified stock options | 358,808 | 961,919 |
Property, plant and equipment | (319,632) | |
Property, plant and equipment | 202,755 | |
Fair value adjustment of investment in LMC | (66,674,379) | 0 |
Issuance fees on convertible notes | 1,031,658 | 0 |
Other temporary differences | 0 | (88,200) |
Net operating losses | 47,344,755 | 30,213,192 |
Total Deferred Tax (Liabilities) Assets | (16,254,761) | |
Total Deferred Tax (Liabilities) Assets | 33,367,239 | |
Valuation Allowance | (5,579,169) | (33,367,239) |
Total Deferred Tax Liabilities, net of valuation allowance | $ (21,833,930) | 0 |
Total Deferred Tax Liabilities, net of valuation allowance | $ 0 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits - January 1 | $ 1,163,282 | $ 1,163,282 |
Gross increases - tax positions in prior period | 0 | 0 |
Gross decreases - tax positions in prior period | 0 | 0 |
Gross increases - tax positions in current period | 0 | 0 |
Settlement | 0 | 0 |
Lapse of statute of limitations | 0 | 0 |
Unrecognized Tax Benefits - December 31 | $ 1,163,282 | $ 1,163,282 |
Fair Value Measurement- Assets
Fair Value Measurement- Assets and Liabilities Measured at Fair Value (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Liabilities | ||
Convertible notes | $ 197,700,000 | $ 19,400,000 |
Fair Value, Recurring | ||
Assets | ||
Investment in LMC | 330,556,744 | 12,194,800 |
Total assets at fair value | 330,556,744 | 12,194,800 |
Liabilities | ||
Convertible notes | 197,700,000 | 39,020,000 |
Warrant liability | 0 | 16,335,000 |
Total liabilities at fair value | 197,700,000 | 55,355,000 |
Level 1 | Fair Value, Recurring | ||
Assets | ||
Investment in LMC | 330,556,744 | 0 |
Total assets at fair value | 330,556,744 | 0 |
Liabilities | ||
Convertible notes | 0 | 0 |
Warrant liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Assets | ||
Investment in LMC | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities | ||
Convertible notes | 0 | 0 |
Warrant liability | 0 | 0 |
Total liabilities at fair value | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Assets | ||
Investment in LMC | 0 | 12,194,800 |
Total assets at fair value | 0 | 12,194,800 |
Liabilities | ||
Convertible notes | 197,700,000 | 39,020,000 |
Warrant liability | 0 | 16,335,000 |
Total liabilities at fair value | $ 197,700,000 | $ 55,355,000 |
Fair Value Measurement - Conver
Fair Value Measurement - Convertible Notes (Details) - Convertible Notes - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value, liability, beginning balance | $ 39,020,000 | $ 0 |
Exercise of warrants | 268,925,000 | 38,520,000 |
Conversion of convertible notes into common stock | (270,794,684) | (481,728) |
Change in fair value | 160,549,684 | 981,728 |
Fair value, liability, ending balance | $ 197,700,000 | $ 39,020,000 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - Credit Agreement | Dec. 31, 2018$ / sharesshares |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Number of securities called by warrants or rights (in shares) | shares | 8,053,390 |
Warrant exercise price (in usd per share) | $ / shares | $ 1.25 |
Fair Value Measurement - Warran
Fair Value Measurement - Warrants (Details) - Warrant - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value, liability, beginning balance | $ 16,335,000 | $ 1,822,819 |
Exercise of warrants | (28,511,690) | 0 |
Change in fair value | 12,176,690 | 15,369,253 |
Reclassification to additional paid-in capital | 0 | (857,072) |
Fair value, liability, ending balance | $ 0 | $ 16,335,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option | |||
Stock Based Compensation (Textual) | |||
Options authorized (in shares) | 8,000,000 | ||
Shares available for issuance (in shares) | 6,600,000 | 8,000,000 | |
Stock options, accelerated vesting (in shares) | 1,000,000 | ||
Stock options, accelerated vesting, amount | $ 0.5 | ||
Stock Option | Directors, officers consultants and employees | |||
Stock Based Compensation (Textual) | |||
Unrecognized compensation expense | $ 0.2 | ||
Unrecognized compensation expense, unvested awards, period for recognition | 1 year 9 months 18 days | ||
Restricted Stock | Directors, officers consultants and employees | |||
Stock Based Compensation (Textual) | |||
Unrecognized compensation expense | $ 2.9 | ||
Unrecognized compensation expense, unvested awards, period for recognition | 1 year 10 months 24 days |
Stock-Based Compensation - Shar
Stock-Based Compensation - Share Based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 4,020,805 | $ 1,979,998 |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 792,055 | 1,542,644 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 3,228,750 | $ 437,354 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Options | ||
Number of options exercisable (in shares) | 1,972,740 | |
Weighted Average Exercise Price per Option | ||
Weighted average exercise price per option, exercisable (in usd per share) | $ 2.1 | |
Weighted Average Grant Date Fair Value per Option | ||
Weighted average remaining contractual term, outstanding | 5 years 6 months | |
Weighted average remaining contractual term, exercisable | 5 years 9 months 18 days | |
Stock Option | Directors, officers consultants and employees | ||
Number of Options | ||
Number of options outstanding, beginning balance (in shares) | 3,725,000 | 3,867,621 |
Number of options granted (in shares) | 877,575 | 2,450,000 |
Number of options exercised (in shares) | (2,112,392) | (736,552) |
Number of options forfeited (in shares) | (118,943) | (907,500) |
Number of options exercised (in shares) | (20,000) | (948,569) |
Number of options outstanding, ending balance (in shares) | 2,351,240 | 3,725,000 |
Weighted Average Exercise Price per Option | ||
Weighted average exercise price per option outstanding, beginning balance (in usd per share) | $ 2.3 | $ 4.1 |
Weighted average exercise price per option outstanding, grants in period (in usd per share) | 1.9 | 1 |
Weighted average exercise price per option outstanding, exercised in period (in usd per share) | 2.4 | 0.7 |
Weighted average exercise price per option outstanding, forfeited in period (in usd per share) | 5.8 | 4.5 |
Weighted average exercise price per option outstanding, expirations in period (in usd per share) | 2.4 | 5 |
Weighted average exercise price per option outstanding, ending balance (in usd per share) | 2 | 2.3 |
Weighted Average Grant Date Fair Value per Option | ||
Weighted average grant date fair value per option, grants in period (in usd per share) | $ 0.6 | $ 0.5 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - Restricted Stock - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Unvested Shares | ||
Equity Instruments outstanding, beginning balance (in shares) | 1,768,726 | 0 |
Granted during period (in shares) | 657,135 | 1,805,222 |
Vested during period (in shares) | (1,047,972) | (36,496) |
Forfeited during period (in shares) | 0 | 0 |
Equity Instruments outstanding, ending balance (in shares) | 1,377,889 | 1,768,726 |
Weighted Average Grant Date Fair Value per Share | ||
Weighted average grant date fair value, RSUs outstanding, beginning balance (in usd per share) | $ 2.6 | $ 0 |
Weighted average grant date fair value, RSUs outstanding, granted in period (in usd per share) | 2.9 | 2.6 |
Weighted average grant date fair value, RSUs outstanding, exercised in period (in usd per share) | 2.6 | 2.7 |
Weighted average grant date fair value, RSUs outstanding, forfeitures during period (in usd per share) | 0 | 0 |
Weighted average grant date fair value, RSUs outstanding, ending balance (in usd per share) | $ 2.7 | $ 2.6 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Warrants | ||
Number of warrants, granted, series B preferred stock (in shares) | 9,262,500 | |
Weighted Average Exercise Price per Warrant | ||
Weighted average exercise price per warrant, granted, series B preferred stock (in usd per share) | $ 1.62 | |
Warrant | ||
Number of Warrants | ||
Warrant or right, outstanding, number, beginning balance (in shares) | 30,527,776 | 17,818,844 |
Number of warrants, granted, marathon debt (in shares) | 1,176,203 | 3,379,466 |
Number of warrants, granted, other (in shares) | 66,966 | |
Number of warrants, exercised (in shares) | (30,502,763) | 0 |
Number of warrants, expired (in shares) | (45,540) | |
Warrant or right, outstanding, number, beginning balance (in shares) | 1,155,676 | 30,527,776 |
Weighted Average Exercise Price per Warrant | ||
Weighted average exercise price per warrant outstanding, beginning balance (in usd per share) | $ 1.82 | $ 1.84 |
Weighted average exercise price per warrant, granted, marathon debt (in usd per share) | 28.26 | 2.26 |
Weighted average exercise price per warrant, granted, other (in usd per share) | 5.28 | |
Weighted average exercise price per warrant, exercised (in usd per share) | 1.78 | 0 |
Weighted average exercise price per warrant, expired (in usd per share) | 1.60 | |
Weighted average exercise price per warrant outstanding, ending balance (in usd per share) | $ 28.74 | $ 1.82 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | May 01, 2019 | Jun. 22, 2017 | Feb. 28, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||||
Deemed dividends | $ 0 | $ 86,207 | ||||
Issuance of common stock | $ 5,928,235 | |||||
Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Purchase price per share (in usd per share) | $ 0.95 | |||||
Registered Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in transaction (in shares) | 4,000,000 | |||||
Proceeds from issuance of common stock | $ 2,900,000 | |||||
Purchase price per share (in usd per share) | $ 0.74 | |||||
Cowen Agreement | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from issuance of common stock | $ 1,500,000 | |||||
Issuance of common stock | $ 25,000,000 | |||||
Common stock sold (in shares) | 1,600,000 | |||||
Benjamin Samuels | Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in transaction (in shares) | 841,928 | |||||
Gerald Budde | Private Placement | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in transaction (in shares) | 26,310 | |||||
Subscription Agreements | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in transaction (in shares) | 1,600,000 | |||||
Proceeds from issuance of common stock | $ 1,500,000 | |||||
Purchase of common stock (in shares) | 116,496 | |||||
Deemed dividends | $ 86,207 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Assured Partners LP | ||
Related Party Transaction [Line Items] | ||
Premiums paid | $ 121 | $ 86 |
Divestiture of Surefly (Details
Divestiture of Surefly (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Nov. 27, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on divestiture | $ 0 | $ 3,655,000 | |
Operating expenses | $ 29,306,589 | 18,398,608 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Consideration received on disposal of SureFly | $ 4,000,000 | ||
Gain on divestiture | 3,700,000 | ||
Selling costs on disposal | 300,000 | ||
Revenues | 0 | ||
Operating expenses | $ 1,400,000 |
Other Transaction (Details)
Other Transaction (Details) - ST Engineering Hackney, Inc. - USD ($) $ in Thousands | Oct. 31, 2019 | Dec. 31, 2020 | Jan. 31, 2020 |
Other Transactions [Line Items] | |||
Cash deposited into escrow | $ 1,000 | ||
Shares held in escrow | 6,600 | ||
Cash payments for acquired assets | 7,000 | ||
Minimum | |||
Other Transactions [Line Items] | |||
Shares held in escrow | 5,280 | ||
Maximum | |||
Other Transactions [Line Items] | |||
Shares held in escrow | 7,920 | ||
First Payment | |||
Other Transactions [Line Items] | |||
Liabilities payable for assets acquired | $ 1,000 | ||
Second Payment | |||
Other Transactions [Line Items] | |||
Liabilities payable for assets acquired | $ 6,000 | ||
Production payment payable period | 45 days | ||
Second Payment | Maximum | |||
Other Transactions [Line Items] | |||
Production payment payable period | 105 days |
Subsequent Events (Details)
Subsequent Events (Details) - Oshkosh Defense - Subsequent Event | Feb. 23, 2021director |
Subsequent Event [Line Items] | |
Contract term | 10 years |
Minimum | |
Subsequent Event [Line Items] | |
Number of vehicles to be assembled | 50,000 |
Maximum | |
Subsequent Event [Line Items] | |
Number of vehicles to be assembled | 165,000 |