Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38795 | |
Entity Registrant Name | ROMEO POWER, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2289787 | |
Entity Address, Address Line One | 4380 Ayers Avenue | |
Entity Address, City or Town | Vernon, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90058 | |
City Area Code | 833 | |
Local Phone Number | 467-2237 | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | RMO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 134,137,938 | |
Central Index Key | 0001757932 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | 2021 | |
Document Fiscal Year Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 53,278 | $ 292,442 |
Investments | 127,798 | 0 |
Accounts receivable, net of allowance for expected credit loss of $117 and $238 at September 30, 2021 and December 31, 2020, respectively | 2,623 | 841 |
Inventories, net | 15,256 | 4,937 |
Insurance receivable | 6,000 | 6,000 |
Deferred costs | 88 | 0 |
Prepaid inventories | 11,891 | 493 |
Prepaid expenses and other current assets | 4,893 | 776 |
Total current assets | 221,827 | 305,489 |
Restricted cash | 3,000 | 1,500 |
Property, plant and equipment, net | 10,618 | 5,484 |
Equity method investments | 37,183 | 35,000 |
Operating lease right-of-use assets | 5,287 | 5,469 |
Deferred assets | 5,018 | 0 |
Prepayment - long-term supply agreement | 64,703 | 0 |
Other noncurrent assets | 2,807 | 3,100 |
Total assets | 350,443 | 356,042 |
Current liabilities | ||
Accounts payable | 10,287 | 2,900 |
Accrued expenses | 9,595 | 2,844 |
Contract liabilities | 709 | 815 |
Current maturities of long-term debt | 10 | 2,260 |
Operating lease liabilities, current | 855 | 853 |
Legal settlement payable | 6,000 | 6,000 |
Other current liabilities | 1,120 | 384 |
Total current liabilities | 28,576 | 16,056 |
Long-term debt, net of current portion | 32 | 1,082 |
Public and private placement warrants | 3,718 | 138,466 |
Operating lease liabilities, net of current portion | 4,533 | 4,723 |
Other noncurrent liabilities | 0 | 17 |
Total liabilities | 36,859 | 160,344 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2021 and December 31, 2020) | 0 | 0 |
Common stock ($0.0001 par value, 250,000,000 shares authorized, 134,096,818 and 126,911,861 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively) | 13 | 12 |
Additional paid-in capital | 447,684 | 377,253 |
Accumulated other comprehensive loss | (55) | 0 |
Accumulated deficit | (134,058) | (181,567) |
Total stockholders’ equity | 313,584 | 195,698 |
Total liabilities and stockholders’ equity | $ 350,443 | $ 356,042 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable-allowance for doubtful accounts | $ 117 | $ 238 |
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 134,096,818 | 126,911,861 |
Common stock, shares outstanding (in shares) | 134,096,818 | 126,911,861 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues: | |||||
Revenue | [1] | $ 5,759 | $ 675 | $ 7,739 | $ 4,326 |
Cost of revenues: | |||||
Cost of revenues | 10,469 | 1,796 | 21,241 | 7,851 | |
Gross loss | (4,710) | (1,121) | (13,502) | (3,525) | |
Operating expenses: | |||||
Research and development | 4,732 | 1,817 | 10,295 | 5,213 | |
Selling, general and administrative | 17,607 | 4,945 | 54,393 | 10,303 | |
Total operating expenses | 22,339 | 6,762 | 64,688 | 15,516 | |
Operating loss | (27,049) | (7,883) | (78,190) | (19,041) | |
Interest expense | (4) | (265) | (16) | (783) | |
Change in fair value of public and private placement warrants | 6,134 | 0 | 124,254 | 0 | |
Gain from extinguishment of PPP loan | 3,300 | 0 | 3,300 | 0 | |
Investment gain (loss), net | 266 | 0 | (23) | 0 | |
Other expense | 0 | (228) | 0 | (1,614) | |
(Loss) income before income taxes and loss in equity method investments | (17,353) | (8,376) | 49,325 | (21,438) | |
Loss in equity method investments | (611) | (540) | (1,817) | (1,272) | |
Benefit from income taxes | 11 | 0 | 1 | 0 | |
Net (loss) income | (17,953) | (8,916) | 47,509 | (22,710) | |
Other comprehensive income (loss) | |||||
Change in net unrealized losses, net of income taxes | (61) | 0 | (369) | 0 | |
Net losses reclassified to earnings, net of income taxes | 161 | 0 | 314 | 0 | |
Total other comprehensive income (loss), net of income taxes | 100 | 0 | (55) | 0 | |
Comprehensive (loss) income | $ (17,853) | $ (8,916) | $ 47,454 | $ (22,710) | |
Net (loss) income per share | |||||
Basic (USD per share) | $ (0.13) | $ (0.11) | $ 0.36 | $ (0.30) | |
Diluted (USD per share) | $ (0.13) | $ (0.11) | $ 0.35 | $ (0.30) | |
Weighted average number of shares outstanding | |||||
Basic (in shares) | 134,017,528 | 78,639,037 | 131,307,617 | 76,900,247 | |
Diluted (in shares) | 134,017,528 | 78,639,037 | 135,342,504 | 76,900,247 | |
Product revenues | |||||
Revenues: | |||||
Revenue | $ 2,740 | $ 51 | $ 3,818 | $ 2,097 | |
Cost of revenues: | |||||
Cost of revenues | 7,904 | 716 | 17,884 | 5,182 | |
Service revenues | |||||
Revenues: | |||||
Revenue | 3,019 | 624 | 3,921 | 2,229 | |
Cost of revenues: | |||||
Cost of revenues | $ 2,565 | $ 1,080 | $ 3,357 | $ 2,669 | |
[1] | Total revenues included related party revenues of $449 and $558 fo r the three months ended September 30, 2021 and 2020, respectively, and $1,735 and $2,027 for the nine months ended September 30, 2021 and 2020, respectively. See Note 14. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Total related party revenues | $ 449 | $ 558 | $ 1,735 | $ 2,027 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | APIC | Notes Receivable from Stockholders | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Common stock beginning balance (in shares) at Dec. 31, 2019 | 74,449,847 | |||||
Stockholders' equity beginning balance at Dec. 31, 2019 | $ 2,573 | $ 7 | $ 181,567 | $ (9,175) | $ 0 | $ (169,826) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 4,191,198 | |||||
Issuance of common stock | 5,042 | $ 1 | 5,041 | |||
Stock based compensation | 784 | 784 | ||||
Net (loss) income | (22,710) | (22,710) | ||||
Common stock ending balance (in shares) at Sep. 30, 2020 | 78,641,045 | |||||
Stockholders' equity ending balance at Sep. 30, 2020 | (14,311) | $ 8 | 187,392 | (9,175) | 0 | (192,536) |
Common stock beginning balance (in shares) at Jun. 30, 2020 | 78,638,872 | |||||
Stockholders' equity beginning balance at Jun. 30, 2020 | (5,535) | $ 8 | 187,252 | (9,175) | 0 | (183,620) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 2,173 | |||||
Issuance of common stock | 8 | 8 | ||||
Stock based compensation | 132 | 132 | ||||
Net (loss) income | (8,916) | (8,916) | ||||
Common stock ending balance (in shares) at Sep. 30, 2020 | 78,641,045 | |||||
Stockholders' equity ending balance at Sep. 30, 2020 | (14,311) | $ 8 | 187,392 | (9,175) | 0 | (192,536) |
Common stock beginning balance (in shares) at Dec. 31, 2020 | 126,911,861 | |||||
Stockholders' equity beginning balance at Dec. 31, 2020 | 195,698 | $ 12 | 377,253 | 0 | 0 | (181,567) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 6,534,957 | |||||
Issuance of common stock | 50,481 | $ 1 | 50,480 | |||
Issuance of common stock as contract consideration (in shares) | 650,000 | |||||
Issuance of common stock as contract consideration | 5,018 | 5,018 | ||||
Stock based compensation | 14,933 | 14,933 | ||||
Other comprehensive income (loss) | (55) | (55) | ||||
Net (loss) income | 47,509 | 47,509 | ||||
Common stock ending balance (in shares) at Sep. 30, 2021 | 134,096,818 | |||||
Stockholders' equity ending balance at Sep. 30, 2021 | 313,584 | $ 13 | 447,684 | 0 | (55) | (134,058) |
Common stock beginning balance (in shares) at Jun. 30, 2021 | 132,995,060 | |||||
Stockholders' equity beginning balance at Jun. 30, 2021 | 313,699 | $ 13 | 429,946 | 0 | (155) | (116,105) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock (in shares) | 1,101,758 | |||||
Issuance of common stock | 6,275 | 6,275 | ||||
Proceeds received for common stock issuance in the prior quarter | 7,148 | 7,148 | ||||
Stock based compensation | 4,315 | 4,315 | ||||
Other comprehensive income (loss) | 100 | 100 | ||||
Net (loss) income | (17,953) | (17,953) | ||||
Common stock ending balance (in shares) at Sep. 30, 2021 | 134,096,818 | |||||
Stockholders' equity ending balance at Sep. 30, 2021 | $ 313,584 | $ 13 | $ 447,684 | $ 0 | $ (55) | $ (134,058) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 47,509 | $ (22,710) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 1,833 | 1,404 |
Amortization of investment premium paid | 1,486 | 0 |
Stock-based compensation | 14,933 | 784 |
Inventory provision | 1,617 | 0 |
Change in fair value of public and private placement warrants | (124,254) | 0 |
Gain from extinguishment of PPP loan | (3,300) | 0 |
Loss in equity method investments | 1,817 | 1,272 |
Non-cash lease expense - operating leases | 182 | 176 |
Non-cash lease expense - finance leases | 212 | 211 |
Derivative expense | 0 | 1,614 |
Other | 303 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,782) | (689) |
Inventories | (11,936) | (1,902) |
Prepaid and other current assets | (14,930) | (218) |
Prepayment - long-term supply agreement | (64,703) | 0 |
Accounts payable | 7,014 | 2,734 |
Accrued expenses | 5,415 | 2,163 |
Interest accrued on notes payable | 0 | 741 |
Deferred costs | (88) | 0 |
Contract liabilities | (106) | 458 |
Operating lease liabilities | (188) | (165) |
Other, net | 189 | 1 |
Net cash used in operating activities | (138,777) | (14,126) |
Cash flows from investing activities: | ||
Purchase of investments | (308,970) | 0 |
Proceeds from maturities of investments | 120,030 | 0 |
Proceeds from sales of investments | 59,296 | 0 |
Equity method investment | (4,000) | 0 |
Capital expenditures | (4,998) | (561) |
Net cash used in investing activities | (138,642) | (561) |
Cash flows from financing activities: | ||
Issuance of convertible notes | 0 | 1,924 |
Issuance of term notes | 0 | 4,450 |
Proceeds from PPP loan | 0 | 3,300 |
Issuance of common stock | 0 | 5,027 |
Exercise of stock options | 18,481 | 15 |
Exercise of stock warrants | 21,580 | 0 |
Warrant redemption payments | (72) | 0 |
Principal portion of finance lease liabilities | (234) | (212) |
Net cash provided by financing activities | 39,755 | 14,504 |
Net change in cash, cash equivalents and restricted cash | (237,664) | (183) |
Cash, cash equivalents and restricted cash, beginning of period | 293,942 | 1,929 |
Cash, cash equivalents and restricted cash, end of period | 56,278 | 1,746 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||
Cash and cash equivalents | 53,278 | 246 |
Restricted cash | 3,000 | 1,500 |
Total cash, cash equivalents and restricted cash | 56,278 | 1,746 |
Supplemental cash flow information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | 10 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Purchases of property, plant and equipment in accounts payable and accrued expenses at the end of period | 2,292 | 686 |
Deferred offering costs in accounts payable and accrued expenses at period end | 0 | 2,804 |
Issuance of common stock as contract consideration | 5,018 | 0 |
Extinguishment of PPP loan | $ 3,300 | $ 0 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Romeo Power, Inc. (f/k/a RMG Acquisition Corp.) was originally incorporated under the name RMG Acquisition Corp. (“RMG”) as a blank check company incorporated in Delaware on October 22, 2018 for the purpose of effecting a merger, capital stock-exchange, asset acquisition, share purchase, reorganization, or similar business combination. On October 5, 2020, RMG and RMG Merger Sub, Inc. a Delaware corporation and a wholly owned subsidiary of RMG (“Merger Sub”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Romeo Systems, Inc., a Delaware corporation (“Legacy Romeo”). On December 29, 2020, pursuant to the terms of the Merger Agreement, the business combination with Legacy Romeo was effected through the merger of Merger Sub with and into Legacy Romeo, with Legacy Romeo continuing as the surviving company and as our wholly owned subsidiary (the “Merger” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”). Upon the closing of the Business Combination, we changed our name to Romeo Power, Inc. Romeo Power, Inc. designs, engineers, and manufactures lithium ion cylindrical battery packs for electric vehicles and energy storage solutions, with a focus on battery innovation, functionality, energy density, safety, and performance. We are headquartered in Vernon, California. Unless the context otherwise requires, “Romeo,” the “Company,” “we,” “us,” or “our” refers to the combined company and its subsidiaries following the Business Combination and “Legacy Romeo” refers to Romeo Systems, Inc. In 2019, Legacy Romeo and BorgWarner, Inc. (“BorgWarner”) formed BorgWarner Romeo Power LLC (the “Joint Venture” or “JV”) of which we own 40%. The Joint Venture was intended to accelerate our reach into international regions in a capital efficient way. See Note 17 - Subsequent Events for further information on BorgWarner’s election to sell its ownership in the JV to the Company. Basis of Presentation The Business Combination was accounted for as a reverse recapitalization (the “Recapitalization Transaction”) in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations . For accounting and financial reporting purposes, Legacy Romeo was considered the acquirer based on facts and circumstances, including the following: • Legacy Romeo’s former stockholders hold a majority ownership interest in the combined company; • Legacy Romeo’s senior management team became the senior management of the combined company; • Legacy Romeo was the larger of the companies based on historical operating activity and employee base; and • Legacy Romeo’s operations comprise the ongoing operations of the combined company. Accordingly, all historical financial information presented in these condensed consolidated financial statements represents the accounts of Legacy Romeo and its wholly owned subsidiaries “as if” Legacy Romeo is the predecessor and legal successor. The historical operations of Legacy Romeo are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Legacy Romeo prior to the Business Combination; (ii) the combined results of RMG and Legacy Romeo following the Business Combination on December 29, 2020; and (iii) RMG’s equity structure for all periods presented. No step-up basis of RMG’s assets and liabilities and no intangible assets or goodwill were recorded in connection with the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization. In connection with the Business Combination each share of Legacy Romeo common stock and preferred stock issued and outstanding immediately prior to the Business Combination (with each share of Legacy Romeo preferred stock being treated as if it were converted into Legacy Romeo common stock immediately prior to the Business Combination) converted into the right to receive 0.121730 shares (the “Exchange Ratio”) of common stock, par value $0.0001 (the “Common Stock”). The recapitalization of the number of shares of Common Stock attributable to Legacy Romeo is reflected retroactively to the earliest period presented based upon the Exchange Ratio and is utilized for calculating earnings per share in all prior periods presented. The accompanying condensed consolidated financial statements include the results of Romeo Power, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated and the effect of variable interest entities have been considered in the consolidation. Unaudited Interim Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information, the instructions to Form 10-Q, and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements presented herein have not been audited by an independent registered public accounting firm, but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the period. These results are not necessarily indicative of results for any other interim period or for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the SEC. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on April 15, 2021 (the “2020 Form 10-K”). Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. Actual amounts could differ from these estimates. The condensed consolidated financial statements have been prepared under the assumption that Romeo will continue as a going concern. Reclassification of Presentation in Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income Revenues of comparative prior periods in our condensed consolidated statements of operations and comprehensive (loss) income are reclassified to conform with our current revenue presentation. In the condensed consolidated statements of operations, we’ve combined related party revenues with product revenues and service revenues and disclosed the amount of related party revenues in a captioned note. Reclassification of Presentation in Note 3 of our Condensed Consolidated Financial Statements Revenues of comparative prior periods presented in Note 3 of our condensed consolidated financial statements are reclassified to conform with our current revenue presentation. Since April 1, 2021, we have presented disaggregated revenue by product and service instead of further disaggregating product by battery packs and modules. Immaterial Correction of Previously Issued Consolidated Financial Statement s During the quarter ended September 30, 2021, we identified a misstatement in our accounting for performance and market-based options granted in 2020 to our former Chairman and Chief Executive Officer (“CEO”), who was awarded 4,633,978 stock options at an exercise price of $6.69 per share. All shares covered by such award were subject to time based, performance and market condition vesting requirements. As of December 29, 2020, the date of the Business Combination, the performance condition was satisfied (the “Performance Condition Date”), and we began recognizing stock-based compensation expense, based on the fair value of the award at August 12, 2020 which was the stock option grant date (the “Grant Date”). We recognized expense prospectively, over the remaining requisite service period, which was six months from the date of the Business Combination and included the period of December 29, 2020 through June 27, 2021. However, in accordance with ASC 718, Compensation—Stock Compensation, we should have recognized a cumulative catch-up adjustment upon the performance condition being satisfied on December 29, 2020 for the services rendered from the Grant Date through the Performance Condition Date. This resulted in an understatement of $4.1 million in stock-based compensation expense, included within selling, general and administrative expense and additional paid-in capital as of December 31, 2020 and a subsequent overstatement of stock-based compensation expense, included within selling, general and administrative expense, during the interim periods ended March 31, 2021 and June 30, 2021. The Company evaluated the materiality of the error both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, and determined the effect of the correction was not material to the previously issued financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Except as described below, no material changes have been made to our significant accounting policies disclosed in Note 2 of the notes to consolidated financial statements in Part II, Item 8 of the 2020 Form 10-K. Change in Segments — During the third quarter of 2021, we hired a new CEO who became our Chief Operating Decision Maker (“CODM”), in place of the previous senior leadership team which consisted of two individuals. Our new CODM changed how we manage our business and allocate resources, which resulted in modifications to our organizational and segment structure. As a result, we reorganized from two segments (Romeo Power North America and Joint Venture Support) to a single operating segment for the consolidated business. Our operations are now comprised of a single reportable segment. As a result, the note on segment information is not presented in this Quarterly Report on Form 10-Q. The CODM evaluates and monitors performance primarily through consolidated sales and gross profit. Asset information is not regularly reported to the CODM for purposes of the allocation of resources or assessing segment performance. All of our revenues (based on location of customer) and long-lived assets were within North America for the three and nine months ended September 30, 2021 and 2020. Available-for-Sale Debt Investments — We classify our investments in fixed income debt securities as available-for-sale debt investments. Our available-for-sale debt investments primarily consist of U.S. government securities, municipal securities, corporate debt, commercial paper, and U.S. agency mortgage-backed securities. These available-for-sale debt investments are primarily held in the custody of a major financial institution. These investments are reported on the condensed consolidated balance sheets at fair value. Unrealized gains and losses on these investments, to the extent the investments are unhedged, are included as a separate component of accumulated other comprehensive loss, net of tax. A specific identification method is used to determine the cost basis of available-for-sale debt investments and any realized gains or losses when sold. We classify our investments as current based on the nature of the investments and their availability for use in current operations. Deferred Assets — Deferred assets represent upfront payments of the Company’s common stock issued to a customer and will be amortized as a reduction of revenue as the related products or services are provided to the customer . Prepayment for Long-Term Supply Agreement — Prepayment for long-term supply agreement represents an upfront cash payment to a major supplier, which will be applied as an advance for the cells to be purchased from July 1, 2023 through June 30, 2028. See Note 15 - Commitments and Contingencies for further information. Recently Adopted Accounting Pronouncements In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, ASC subtopic 825-10, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which revised an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. This accounting guidance also amended certain disclosure requirements associated with the fair value of financial instruments. Under ASU No. 2016-01, entities must measure certain equity investments at fair value and recognize any changes in fair value in net income, unless the investments qualify for a new practicality exception. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We adopted the standard on January 1, 2021, when we began making significant investments in available-for-sale debt securities and formulating a company investment policy to support the use and management of the proceeds from the Business Combination. In December 2019, the FASB issued ASU No. 2019-12, ASC 740, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The guidance is effective for all public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption is also permitted. We adopted the standard on January 1, 2021 and the adoption of the new guidance does not have a material impact on our financial position, operating results or cash flows. Other recently issued accounting updates are either not expected to have a material impact or are not relevant to our condensed consolidated financial statements. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Contract Liabilities —Contract liabilities in the accompanying condensed consolidated balance sheets relate to payments received in advance of satisfying performance obligations under our contracts and are realized when the associated revenue is recognized under the contracts. During the three and nine months ended September 30, 2021, changes in contract liabilities were as follows (in thousands): Three Months Ended Nine Months Ended Beginning balance $ 3,123 $ 815 Revenues recognized (2,791) (3,610) Increase due to billings 377 3,504 Ending balance $ 709 $ 709 Contract liabilities are earned as services and prototypes are transferred to the customer. The remaining contract liability balance as of September 30, 2021 is expected to be earned and recognized as revenue within the next twelve months. As of September 30, 2021, we had executed certain contracts with customers to deliver specific battery packs, modules, and battery management system and software services. These contracts contain minimum quantity purchase requirements that are non-cancellable (other than for a breach by Romeo), and we have enforceable rights to pursue payments due under these contracts under make-whole provisions, or through customary remedies for breach of contract if the minimum quantities are not ordered. The following table presents the non-cancellable minimum purchase commitments under such contracts as of September 30, 2021 (in thousands): Contractual Minimum Purchase Commitments Purchase contracts with make-whole provisions (1) $ 310,269 Purchase contracts with provisions of customary remedies for breach of contract (2) 236,686 Total $ 546,955 (1) For the $310.3 million of unsatisfied performance obligations related to minimum quantity purchase commitments, if the customers do not follow through on their minimum purchase commitments, we would receive a maximum of $290.8 million under certain make-whole provisions included in these contracts. (2) For the remaining $236.7 million of unsatisfied performance obligations related to minimum quantity purchase commitments included in these contracts, if the customers do not follow through on their minimum purchase commitments, we would seek damages through customary remedies for breach of contract. The following table presents the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2021 (in thousands): Revenues Expected October 1, 2021 through December 31, 2021 $ 9,825 January 1, 2022 through December 2023 447,852 Thereafter 89,278 Total $ 546,955 This backlog includes the total value of our existing customer contracts and includes products that are within the scope of the license granted to the JV, based on the types of customer vehicles in which the products will be used. To the extent that those product deliveries are fulfilled by the JV, or pursuant to an agreement with the JV, we may not recognize the full amount of such contracted backlog as revenue. The realization and timing of the recognition of our backlog is dependent, among other things, on our ability to obtain and secure a sufficient supply of battery cells from our suppliers as well as our ability to meet the acceptance requirements in contracts, such as design and quality tests. In addition, these amounts exclude any potential adjustments for variable consideration which could arise from provisions in our contracts where the price for a product or service can change based on future events. Based on practical expedient elections permitted by ASC 606, Revenue from Contracts with Customers , the Company does not disclose the value of unsatisfied performance obligations for variable consideration that is allocated entirely to a wholly unsatisfied performance obligation. Disaggregation of Revenues —We earn revenue through the sale of products and services. Product and service lines are the disaggregation of revenues primarily used by management, as this disaggregation allows for the evaluation of market trends, and certain product lines and services vary in recurring versus non-recurring nature. We do not have any material sales outside of North America. The following tables disaggregate revenues by type of revenues for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Product revenues Total product revenues $ 2,740 $ 3,818 Service revenues Total service revenues 3,019 3,921 Total revenues $ 5,759 $ 7,739 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Product revenues Total product revenues $ 51 $ 2,097 Service revenues Total service revenues 624 2,229 Total revenues $ 675 $ 4,326 The following table disaggregates revenues by when control is transferred for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Point in time $ 5,328 $ 117 $ 6,406 $ 2,299 Over time 431 558 1,333 2,027 Total $ 5,759 $ 675 $ 7,739 $ 4,326 |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY As of September 30, 2021 and December 31, 2020, inventory consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 13,400 $ 4,064 Work-in-process 1,280 531 Finished goods 576 342 Total inventories $ 15,256 $ 4,937 We provide inventory write downs for slow-moving and obsolete inventory items when the net realizable value of inventory items is less than their carrying value. During the three months ended September 30, 2021 and 2020 , we recorded $0.4 million and no inventory provision, respectively, in cost of revenues. During the nine months ended September 30, 2021 and 2020, we recorded $1.6 million and no inventory provision, respectively, in cost of revenues. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS BorgWarner Romeo Power LLC Legacy Romeo and BorgWarner formed BorgWarner Romeo Power LLC on June 28, 2019. Legacy Romeo and BorgWarner received a 40% interest and 60% interest in the Joint Venture, respectively. Subsequently, Legacy Romeo and BorgWarner agreed to contribute an additional $10.0 million in total to the Joint Venture which represented funding for 2021 capital needs. In January 2021, we invested $4.0 million in the Joint Venture, which represented our pro rata share of the agreed upon funding. During the three months ended September 30, 2021 and 2020 , and the nine months ended September 30, 2021 and 2020, we recorded our share of the net loss of the JV as “Loss in equity method investments” in our condensed consolidated statements of operations and comprehensive (loss) income. For information on our transactions with the JV, see Note 14 - Transactions with Related Parties. See Note 17 - Subsequent Events for further information on BorgWarner’s election to sell its ownership in the JV to the Company. Heritage Battery Recycling, LLC On October 2, 2020, we entered into a Battery Recycling Agreement (the “Battery Recycling Arrangement”) with Heritage Battery Recycling, LLC (“HBR”), an affiliate of Heritage Environmental Services, Inc. (“HES”). Under the Battery Recycling Arrangement, HBR has agreed to design, build and operate a system for redeploying, recycling or disposing of lithium-ion batteries (the “System”) to be located at HES’s facility in Arizona. Immediately following the Business Combination on December 29, 2020, we contributed $35.0 million to HBR, a related party to an investor in Legacy Romeo and an investor of $25.0 million in the private placement of shares of Common Stock (the “PIPE Shares”) that were sold in connection with the Business Combination. While the arrangement is in effect, it establishes a strategic arrangement with HES for the collection of our battery packs for recycling, and it gives our customers priority at the recycling facility. We also have agreed to fund, in principal, up to $10.0 million for a pilot program that, if successful, could lead to the purchase of commercial vehicles containing Romeo batteries by HBR’s affiliate. The terms of the pilot program have not yet been finalized and reflected in an executed agreement. |
PUBLIC AND PRIVATE PLACEMENT WA
PUBLIC AND PRIVATE PLACEMENT WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
PUBLIC AND PRIVATE PLACEMENT WARRANTS | |
PUBLIC AND PRIVATE PLACEMENT WARRANTS | PUBLIC AND PRIVATE PLACEMENT WARRANTS In February 2019, in connection with the RMG initial public offering (the “RMG IPO”), RMG issued 7,666,648 warrants (the “Public Warrants”) to purchase shares of Common Stock at $11.50 per share. Simultaneously with the consummation of the RMG IPO, RMG issued 4,600,000 warrants (the “Private Placement Warrants” and, together with the Public Warrants, the “Public and Private Placement Warrants”) to purchase shares of Common Stock at $11.50 per share, to RMG Sponsor, LLC (the “Sponsor”), certain funds and accounts managed by subsidiaries of BlackRock, Inc., and certain funds and accounts managed by Alta Fundamental Advisers LLC. On February 16, 2021, we announced the redemption of all of the outstanding Public Warrants to purchase shares of our Common Stock, that were issued under the Warrant Agreement, dated February 7, 2019, by and between RMG and American Stock Transfer & Trust Company, LLC, as warrant agent. All Public Warrants could be exercised until April 5, 2021 to purchase shares of our Common Stock, at the exercise price of $11.50 per share, and any Public Warrants that remained unexercised were voided and no longer exercisable. On April 5, 2021, 7,223,683 Public Warrants were redeemed at the redemption price of $0.01 per Public Warrant. The Company paid Public Warrant holders a total of $72,237 in connection with the redemption. The Public and Private Placement warrants are recorded as liabilities in our condensed consolidated balance sheets. As of September 30, 2021, we had 3,178,202 Private Warrants and no Public Warrants outstanding. As of December 31, 2020, we had 4,600,000 Private Warrants and 7,666,648 Public Warrants outstanding. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATIONWe estimate the grant date fair value of stock options containing only a service condition using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of our Common Stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. Prior to the Business Combination, when there was no public market for Legacy Romeo’s common stock, the fair value of its common stock was estimated with the assistance of an independent third-party valuation firm using a combination of a market and income approach. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option. We use the simplified method to calculate the expected term. The dividend yield assumption is based on the dividends expected to be paid over the expected life of the stock option. Our volatility is derived from several publicly traded peer companies, due to our limited history as a publicly traded company. The grant date fair value of awards with market conditions is estimated using a Monte Carlo simulation or other appropriate fair value method with the assistance of an independent third-party valuation firm. The fair value of our restricted stock units (“RSUs”) and performance-related restricted stock units (“PSUs”) is based on the closing price of our Common Stock on the date of grant. 2016 Stock Plan Following the Business Combination, the outstanding stock options issued under the Romeo Systems, Inc. 2016 Stock Plan may be exercised (subject to their original vesting, exercise and other terms and conditions) to purchase a number of shares of Common Stock equal to the number of shares of Legacy Romeo common stock subject to such Legacy Romeo options multiplied by the Exchange Ratio (rounded down to the nearest whole share) at an exercise price per share divided by the Exchange Ratio (rounded up to the nearest whole cent). The information presented herein is as if the exchange of stock options and Common Stock occurred as of the earliest period presented. Time-based awards During the nine months ended September 30, 2021 we did not grant any stock options to employees. During the three months ended September 30, 2021, our employees exercised stock options totaling 958,815 shares for total proceeds of $6.3 million. During the nine months ended September 30, 2021, our employees exercised stock options totaling 3,607,851 shares for total proceeds of $18.5 million. The fair value of the time-based stock options granted during the nine months ended September 30, 2020 was determined using the following assumptions: Assumption Range Fair Value Assumptions: Minimum Maximum Risk-free interest rate 0.28% ~ 0.92% Expected term (in years) 5.5 ~ 6.5 Expected volatility 60.0% ~ 77.0% Dividend yield 0% Grant date fair value per share $1.48 ~ $8.63 Performance and market-based option award In August 2020, we awarded 4,633,978 stock options to our then Chairman and CEO at an exercise price of $6.69 per share. All of the shares covered by such award are subject to time-based, performance and market condition vesting requirements. As of December 29, 2020, the date of the Business Combination, the performance condition was satisfied, and we began recognizing stock-based compensation expense based upon the grant date fair value of the award. We recognized the stock-based compensation expense over the requisite service period, which was from August 12, 2020 through June 27, 2021. We estimated the grant date fair value of the award to be $9.6 million, which was determined using a Monte Carlo simulation with the assistance of an independent third-party valuation firm. Out of the $9.6 million stock-based compensation expense, $4.1 million was recognized at December 29, 2020. Also see Note 1 – “Immaterial Correction of Previously Issued Consolidated Financial Statements” for further discussion regarding this stock option award. According to the table of exercisable shares below and the average of the closing price per share of our Common Stock on each of the five Average Closing Share Price: Cumulative Number Of Shares $6.6869 - $8.9452 926,795 $8.9453 - $11.9272 1,853,591 $11.9273 - $14.9092 3,243,781 $14.9093 4,633,978 2020 Stock Plan On December 29, 2020, our stockholders approved the Romeo Power, Inc. 2020 Long-Term Incentive Plan (the “2020 Plan”). The purpose of the 2020 Plan is to attract, retain, incentivize and reward top talent through stock ownership, to improve operating and financial performance and strengthen the mutuality of interest between eligible service providers and stockholders. As of September 30, 2021, we have granted RSUs and PSUs under the 2020 Plan, as described further below. RSUs and PSUs On June 11, 2021, we granted 1,411,961 RSUs to employees, 133,492 RSUs to our directors, and 1,354,313 PSUs to certain executives. On July 26, 2021, we granted 308,067 RSUs to employees and 327,468 PSUs to certain executives. On August 16, 2021, we granted 269,709 RSUs and 588,458 PSUs to our new CEO. The RSUs granted to our employees are generally eligible to vest over three years from the commencement date, subject to continued employment on each vesting date. One third of these shares vest on the one-year anniversary of the vesting commencement date the remaining shares vest equally over eight quarters thereafter. The RSUs granted to our directors on June 11, 2021 vested in full on July 1, 2021. The PSUs vest after three years from the commencement date based on the achievement of certain predetermined performance and market goals and are payable in cash or shares of our Common Stock, at our election. The market based goal will be measured by reference to the highest 100-consecutive-trading-day average closing price for our Common Stock through December 31, 2023. The performance-based goal will be measured by the achievement of certain backlog targets and percentage reductions in bill-of-material costs per Kilowatt-Hour by December 31, 2021. The actual number of shares to be issued for the PSUs will be the higher of the market-based vesting percentage or the performance-based vesting percentage, subject to a market-based limitation, and can range from 0% to 200% of the target number of shares set at the time of grant. Stock-based compensation expense for the PSUs is recognized on a straight-line basis over the service period based upon the value determined using the Monte Carlo valuation method for the market goal plus an incremental value, if any, determined by expected achievement of the performance-based goals. The Monte Carlo valuation method incorporates stock price correlation and other variables over the time horizons matching the performance periods. Management will review and assess the achievement of the performance-based goals quarterly through the performance assessment period ending December 31, 2021. The grant date fair value of the PSUs granted on June 11, 2021, July 26, 2021 and August 16, 2021 derived from the Monte Carlo simulation, was based, in part, on the following assumptions: Assumption Range Fair Value Assumptions: Minimum Maximum Grant date stock price $5.82 ~ $9.23 Risk-free interest rate 0.24% ~ 0.29% Simulation term (in years) 2.4 ~ 2.6 Expected volatility 63.7% ~ 64.4% Dividend yield 0% Grant date fair value per share $2.60 ~ $9.23 During the three months ended September 30, 2021, we recorded $3.3 million of stock-based compensation expense related to RSUs and PSUs. For the nine months ended September 30, 2021, we recorded $5.1 million of stock-based compensation expense related to RSUs and PSUs. At September 30, 2021, the unrecognized stock-based compensation related to RSUs and PSUs was $25.1 million which is expected to be recognized over a weighted-average period of 1.76 years. RSU and PSU activity during the nine months ended September 30, 2021 was as follows: Shares Weighted Average Fair Value Outstanding at December 31, 2020 — $ — Granted 4,393,468 $ 7.18 Vested (142,943) $ 9.23 Forfeited (152,342) $ 9.04 Outstanding at September 30, 2021 4,098,183 $ 7.04 The fair value of all RSUs and PSUs granted during the nine months ended September 30, 2021 was $31.5 million. Award modification On August 6, 2021 our Board of Directors announced that our former CEO would resign from the Company, effective August 16, 2021. In connection with the former CEO’s cessation of employment we agreed to modify the terms of 81,153 unvested stock options to allow the shares to continue vesting during the former CEO’s consulting period. In connection with the modification, we recorded a reduction of $0.3 million in stock-based compensation expense. Stock-based compensation expense During the three months ended September 30, 2021 and 2020, we recognized a total of $4.3 million and $0.1 million, respectively, of stock-based compensation expense related to the vesting of stock options, RSUs and PSUs. During the nine months ended September 30, 2021 and 2020, we recognized a total of $14.9 million and $0.8 million, respectively, of stock-based compensation expense related to the vesting of stock options, RSUs and PSUs. The following table summarizes our stock-based compensation expense by line item in the condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenues $ 289 $ 47 $ 451 $ 277 Research and development 819 — 1,386 — Selling, general, and administrative 3,207 85 13,096 507 Total $ 4,315 $ 132 $ 14,933 $ 784 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESOur income tax provision consists of federal and state income taxes. The tax provision for the three and nine months ended September 30, 2021 and 2020 was based on the estimated effective tax rates applicable for the three and nine months ended September 30, 2021 and 2020. The Company’s overall effective tax rate of zero percent is different than the federal statutory tax rate because the Company has established a full valuation allowance against its net deferred income tax assets. As of September 30, 2021, the Company continued to record a full valuation allowance against the deferred tax asset balance as realization was uncertain. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Available-for-sale debt investments The following table summarizes our available-for-sale debt investment holdings at September 30, 2021 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value U.S. government securities $ 38,009 $ 6 $ (4) $ 38,011 Municipal securities 44,039 56 (34) 44,061 Corporate debt securities 23,480 1 (38) 23,443 Asset-backed securities 9,295 — (7) 9,288 U.S. agency mortgage-backed securities 6,539 — (42) 6,497 Commercial paper 6,491 7 — 6,498 Total (1) $ 127,853 $ 70 $ (125) $ 127,798 (1) There were no unsettled sales of available-for-sale debt investments at September 30, 2021. The following table presents the gross realized gains and gross realized losses related to available-for-sale debt investments for the three and nine months ended September 30, 2021(in thousands): Three Months Ended Nine Months Ended Gross realized gains $ 25 $ 62 Gross realized losses (186) (376) Gross realized loss, net $ (161) $ (314) The following tables present the breakdown of the available-for-sale debt investments with gross unrealized losses and the duration that those losses had been unrealized at September 30, 2021 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross U.S. government securities $ 14,000 $ (4) $ — $ — $ 14,000 $ (4) Municipal securities 31,702 (34) — — 31,702 (34) Corporate debt securities 21,041 (38) — — 21,041 (38) Asset-backed securities 7,988 (7) — — 7,988 (7) U.S. agency mortgage-backed securities 6,497 (42) — — 6,497 (42) Total $ 81,228 $ (125) $ — $ — $ 81,228 $ (125) The following table summarizes the maturities of our available-for-sale debt investments at September 30, 2021 (in thousands): Amortized Cost Fair Value Less than 1 year $ 55,850 $ 55,855 1 year through 5 years 65,464 65,446 Mortgage-backed securities with no single maturity 6,539 6,497 Total $ 127,853 $ 127,798 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE Fair Value of Financial Instruments — The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and establishes the disclosure requirements regarding fair value measurements. Fair value is defined as the price that would be received in the sale of an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 Inputs —Unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date. Level 2 Inputs —Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 Inputs —Unobservable inputs reflecting our assessment of assumptions that market participants would use in pricing the asset or liability. We develop these inputs based on the best information available. Our available-for-sale debt investments are measured at fair value on a recurring basis, consisting of investment grade high quality fixed income assets, which are priced using quoted market prices for similar instruments or unbinding market prices that are corroborated by observable market data. The Public and Private Placement Warrants are measured at fair value on a recurring basis. We will continue to adjust these liabilities for changes in the fair value of the Public and Private Placement Warrants until the warrants are exercised, redeemed or cancelled. Prior to the redemption of the Public Warrants on April 5, 2021, the Public Warrants were traded on the NYSE and were recorded at fair value using the closing stock price as of the measurement date, which represents a Level 1 fair value measurement. The fair value of the Private Placement Warrants is established using both Level 1 and Level 2 inputs and determined using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of our Common Stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The fair value of our Common Stock is considered a Level 1 input as our Common Stock is freely traded on the NYSE. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected term of the Private Placement Warrants, which is 4.25 years. The dividend yield assumption is based on the dividends expected to be paid over the expected life of the warrant. Our volatility is derived from several publicly traded peer companies. As of September 30, 2021 and December 31, 2020, assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): September 30, 2021 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 263 $ 263 $ — $ — Subtotal 263 263 — — Available-for-sale debt investments: U.S. government securities 38,011 — 38,011 — Municipal securities 44,061 — 44,061 — Corporate debt securities 23,443 — 23,443 — Asset-backed securities 9,288 — 9,288 — U.S. agency mortgage-backed securities 6,497 — 6,497 — Commercial paper 6,498 — 6,498 — Subtotal 127,798 — 127,798 — Total $ 128,061 $ 263 $ 127,798 $ — Financial Liabilities: Private Placement Warrants $ 3,718 $ — $ 3,718 $ — Total $ 3,718 $ — $ 3,718 $ — December 31, 2020 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: U.S. Treasury Bills $ 16,000 $ 16,000 $ — $ — Total $ 16,000 $ 16,000 $ — $ — Financial liabilities: Public Warrants $ 71,453 $ 71,453 $ — $ — Private Placement Warrants 67,013 — 67,013 — Total $ 138,466 $ 71,453 $ 67,013 $ — The key assumptions used to determine the fair value of the Private Placement Warrants as of September 30, 2021 and December 31, 2020 using the Black-Scholes model were as follows: Fair Value Assumptions September 30, 2021 December 31, 2020 Risk-free interest rate 0.81% 0.17% Expected term (in years) 4.25 5 Expected volatility 58% 57% Dividend yield — — Fair value of common stock $4.95 $22.49 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES As of September 30, 2021 and December 31, 2020, accrued expenses consisted of the following (in thousands): September 30, 2021 December 31, 2020 Accrued professional service fees $ 4,941 $ 1,130 Accrued payroll expenses 1,576 617 Accrued construction in progress 1,336 — Accrued tax liabilities 427 — Accrued warranty expenses 295 103 Other accrued expenses 1,020 994 Total accrued expenses $ 9,595 $ 2,844 |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
NET (LOSS) INCOME PER SHARE | NET (LOSS) INCOME PER SHARE The basic and diluted net (loss) income per share is computed by dividing our net loss or net income by the weighted average shares outstanding during the period. The calculation of basic and diluted net (loss) income per share for the three and nine months ended September 30, 2021 and 2020 is presented below (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net (loss) income $ (17,953) $ (8,916) $ 47,509 $ (22,710) Weighted average common shares outstanding – basic 134,017,528 78,639,037 131,307,617 76,900,247 Dilutive effect of potentially issuable shares — — 4,034,887 — Weighted average common shares outstanding – diluted 134,017,528 78,639,037 135,342,504 76,900,247 Basic net (loss) income per share $ (0.13) $ (0.11) $ 0.36 $ (0.30) Diluted net (loss) income per share $ (0.13) $ (0.11) $ 0.35 $ (0.30) Potentially dilutive shares that were considered in the determination of diluted net (loss) income per share include stock options and warrants to purchase our Common Stock as well as RSUs and PSUs. Antidilutive shares excluded from the calculation of diluted net (loss) income per share were 10,763,171 and 25,167,451, respectively, for the three months ended September 30, 2021 and 2020, and 7,200,464 and 23,125,325, respectively, for the nine months ended September 30, 2021 and 2020. As the inclusion of common stock share equivalents in the calculation of diluted loss per share would be anti-dilutive for the three months ended September 30, 2021 and the three and nine months ended September 30, 2020, diluted net loss per share was the same as basic net loss per share. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | TRANSACTIONS WITH RELATED PARTIES In the ordinary course of business, the Company enters into transactions with related parties to sell products and services. The following table presents the net revenues and cost of revenues associated with our related parties, which are included in our condensed consolidated statement of operations and comprehensive (loss) income (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Related party revenues - product revenues $ 38 $ — $ 407 $ — Related party revenues - service revenues 411 558 1,328 2,027 Total related party revenues 449 558 1,735 2,027 Costs associated with related party revenues - product revenues 38 — 309 — Costs associated with related party revenues - service revenues 357 505 1,154 1,750 Total costs associated with related party revenues 395 505 1,463 1,750 Gross profit associated with related party revenues $ 54 $ 53 $ 272 $ 277 Transactions with BorgWarner and the Joint Venture — In connection with Legacy Romeo’s investment in the Joint Venture formed on June 28, 2019 (Note 5), Legacy Romeo entered into a services agreement to provide various professional services to the Joint Venture. We have also sold certain products directly to a subsidiary of BorgWarner. Revenues earned for services rendered to the Joint Venture and products sold to BorgWarner were presented in the table above. Accounts receivable from BorgWarner was $0.3 million and zero at September 30, 2021 and December 31, 2020, respectively. Transactions with Heritage Environmental Services and its related parties — On October 2, 2020, we entered into the Battery Recycling Arrangement with HBR, an affiliate of HES, a related party to an investor in Legacy Romeo and an investor of $25.0 million in the PIPE Shares. Immediately following the Business Combination on December 29, 2020, we contributed $35.0 million to HBR. See Note 5 - Equity Method Investments for additional information relating to our contribution to HBR. In connection with the Battery Recycling Arrangement, we also agreed to fund up to $10.0 million to purchase ten battery electric vehicle (“BEV”) trucks and the charging infrastructure for a one-year pilot program to determine the feasibility of transitioning HES’s or its affiliates’ fleet of trucks from diesel powered vehicles to BEVs. If such pilot program is successful, the parties would enter into an agreement for the procurement through us of at least 500 BEVs on terms acceptable to HBR, HES and us. The participants in the pilot program have been selected, and the parties are beginning to work towards an agreement to fund and support the pilot program. During the three months ended September 30, 2021, we accrued a $0.9 million payment to HES for the pilot program. Transactions with Michael Patterson and related parties — On April 15, 2021, Michael Patterson ended his employment with Romeo, resigned from all positions he used to hold in the Company, the Board of Directors and the BorgWarner JV board of directors, and we entered into a consulting agreement with him for services to be provided through the end of 2021. On May 5, 2021, we signed a non-binding Memorandum of Understanding with Crane Carrier Company (“CCC”) to explore the terms of a potential commercial relationship in which we would supply batteries to CCC for its electric refuse trucks. CCC was recently acquired by Battle Motors, a company founded by Michael Patterson, and Mr. Patterson is the Chief Executive Officer of both CCC and Battle Motors. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation We are subject to certain claims and legal matters that arise in the normal course of business. Management does not expect any such claims and legal actions to have a material adverse effect on our financial position, results of operations or liquidity, except the following: Chelico Litigation A police officer was injured in connection with of an automobile accident resulting from an allegedly intoxicated Legacy Romeo employee driving following his departure from a 2017 company holiday party that occurred after hours and not on our premises. We terminated the employee’s employment shortly after the incident occurred. This matter resulted in a personal injury lawsuit ( Chelico et al. v. Romeo Systems, Inc., et al. , Case # 18STCV04589, Los Angeles County), for which we are a named defendant. In July 2020, we settled this matter in principle and agreed to pay a settlement of $6.0 million. Correspondence that we believe constituted a legally enforceable agreement was exchanged on July 22, 2020. Our business and umbrella insurance carriers agreed to cover the cost of damages owed. As a result, we accrued $6.0 million as a legal settlement payable with a corresponding insurance receivable for $6.0 million as of September 30, 2021 and December 31, 2020. Because the plaintiff had not proceeded to finalize the settlement transaction due to a dispute with the City of Los Angeles related to the allocation of the global settlement payment between the plaintiff and the LAPD (unrelated to Romeo), we filed a claim for breach of contract against the plaintiff in Romeo Systems et al. v. Chelico, Case # 21STCV20701. The cases have been deemed related and are now both pending before Hon. Mark Epstein. Further proceedings are set for late November 2021. Wage and Hour Litigation In October 2020, a wage-and-hour class action was filed in Los Angeles Superior Court on behalf of all current and former non-exempt employees in California from October 2016 to present. The allegations include meal and rest period violations and various related claims. The parties met and mediated on October 7, 2021. The parties were unable to come to agreement to settle the case; however, negotiations are ongoing. The case is currently stayed until the initial status conference, which is scheduled for November 22, 2021. If a settlement cannot be reached, we intend to defend ourselves against these claims and the possible range of loss, if any, cannot currently be estimated. Cannon Complaint On February 26, 2021, plaintiff Lady Benjamin PD Cannon f/k/a Ben Cannon filed a complaint (the “Cannon Complaint”) against Romeo and Michael Patterson (“Patterson”) in the Court of Chancery for the State of Delaware. The Cannon Complaint includes claims for declaratory relief (against Romeo and Patterson), non-compliance with Article 9 of the Delaware UCC (against Patterson), conversion (against Romeo and Patterson), and breach of contract (against Romeo). Generally, plaintiff alleges that the transfer to Patterson of a warrant for 1,000,000 shares of Romeo’s Common Stock, which plaintiff pledged as security for a loan, is invalid, that Patterson improperly accepted that warrant in satisfaction of the loan, and that she, not Patterson, holds the right to exercise that warrant and to purchase the equivalent of 1% of Romeo’s Common Stock. The relief sought by plaintiff includes declaratory relief, return of the warrant, specific performance on the warrant, money damages, cost of suit, and attorneys’ fees. On May 4, 2021, Romeo filed a motion to dismiss all claims against it under Delaware Chancery Rule 12(b)(6); on May 17, 2021, plaintiff filed a motion for partial summary judgment; and on June 16, 2021, Romeo and Patterson filed a joint Rule 56(f) motion for discovery. On September 24, 2021, the Court granted Romeo’s motion to dismiss plaintiff’s claim for conversion against the Company, but otherwise denied Romeo’s motion. The Court also deferred a ruling on plaintiffs’ motion for partial summary judgment and Romeo and Patterson’s Rule 56(f) motion for discovery. On October 8, 2021, the Court granted the parties’ stipulation pursuant to which plaintiff withdrew her motion for partial summary judgment without prejudice, the parties agreed that plaintiff would file a first amended complaint, and the parties agreed to a schedule for Romeo and Patterson to file Answers to that first amended complaint and a date by when the parties would complete certain discovery. Plaintiff filed her first amended complaint on October 18, 2021, removing her claim for conversion against Romeo and adding a claim against Romeo for alleged violation of 6 Del. C. § 8-404(a) on account of the same allegedly improper transfer of a warrant from plaintiff to Patterson. Romeo and Patterson filed Answers to that amended complaint on October 28, 2021 denying plaintiff’s claims. The parties are entering the discovery phase of litigation, and we intend to defend ourselves vigorously against plaintiff’s claims. The outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties. Given the early stage of the litigation and based upon information presently known to management, we are not currently able to estimate the outcome of this proceeding or a possible range of loss, if any. Nichols and Toner Complaints On April 16, 2021, plaintiff Travis Nichols filed a class action complaint (the “Nichols Complaint”) against Romeo, in the U.S. District Court for the Southern District of New York. The Nichols Complaint alleges that defendants made false and misleading statements regarding the supply of battery cells, which are components of Romeo’s products, and the Company’s ability to meet customer demand and achieve its revenue forecast for 2021. On May 6, 2021, plaintiff Victor J. Toner filed a second class action complaint (the “Toner Complaint”) against Romeo, in the U.S. District Court for the Southern District of New York. The allegations in the Toner Complaint are substantially similar to the allegations in the Nichols Complaint. The relief sought by both plaintiffs includes money damages, reimbursement of expenses, and equitable relief. On July 15, 2021, the Court consolidated the two pending cases and appointed a lead plaintiff. The lead plaintiff filed his consolidated amended complaint on September 15, 2021. We intend to defend ourselves vigorously against these claims, and we have filed a motion to dismiss all claims. All other proceedings in the case are stayed pending resolution of our motion to dismiss. This litigation is at preliminary stages and the outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties. Based upon information presently known to management, we are not currently able to estimate the outcome of this proceeding or a possible range of loss, if any. Unconditional Purchase Obligations An unconditional purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancelable only in certain circumstances). As of September 30, 2021, we have met all of the Company’s minimum 2021 annual purchase commitments. We estimate our total unconditional purchase commitments (for those contracts with terms in excess of one year) are $512.9 million through the end of 2025 and $472.4 million thereafter. However, the amount of our purchase commitments subsequent to September 30, 2021 is not fully fixed and is subject to change based on changes in certain raw materials indexes as well the quantities of purchases we actually make. These commitments relate to our inventory purchases. Supply Agreement Effective August 10, 2021, we entered into a long-term supply agreement (the “Supply Agreement”) for the purchase of lithium-ion battery cells with a Tier 1 battery cell and materials manufacturer (“Supplier”). Under the Supply Agreement, Supplier is committed to supplying cells to us, at escalating annual minimums, through June 30, 2028. Supplier's minimum total supply commitment to us, and our minimum purchase obligation, is for 8 GWh, and Supplier has agreed to use its best effort to allocate additional cells to us through 2023. To facilitate Supplier’s supply of cells, we agreed to pay Supplier by December 31, 2021 a deposit of $1.5 million, which will be applied as an advance for cells purchased in 2021 and 2022 (the “Deposit”), and a prepayment of approximately $64.7 million by September 10, 2021 (the “Prepayment”), which will be applied as an advance for the cells to be purchased from July 1, 2023 through June 30, 2028. If the Company breaches its minimum volume commitment during any applicable year or portion thereof, Supplier is entitled to retain, as liquidated damages, the remaining balance of the Deposit or Prepayment for that year, as applicable. If Supplier materially breaches its minimum volume commitment during any applicable year or portion thereof, or in the event of a force majeure, Supplier will be required to return the remaining balance of the Deposit or Prepayment for that year, as applicable. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 9 Months Ended |
Sep. 30, 2021 | |
CONCENTRATION OF RISK | |
CONCENTRATION OF RISK | CONCENTRATION OF RISK Customer Concentration and Accounts Receivable We had certain customers whose revenue individually represented 10% or more of our total revenue, or whose accounts receivable balances individually represented 10% or more of our total accounts receivable, as follows: For the three months ended September 30, 2021, total revenue recognized included 68% from one major customer and 10% from a second major customer, together representing 78% of our total revenue. For the three months ended September 30, 2020, total revenue recognized included 83% from the Joint Venture engineering services. For the nine months ended September 30, 2021, total revenue recognized included 51% from one major customer, 11% from a second major customer and 17% from the Joint Venture engineering services, together representing 79% of our total revenue. For the nine months ended September 30, 2020, total revenue recognized included 47% from one major customer, and 47% from the Joint Venture engineering services, together representing 94% of our total revenue. As of September 30, 2021, our total reported accounts receivable balance included 41% from one major customer, 24% from a second major customer and 12% from the Joint Venture engineering services account, together representing 77% of our total accounts receivable. As of December 31, 2020, our total reported accounts receivable balance included 13% from one major customer, 13% from another major customer and 44% from the Joint Venture engineering services account, together representing 70% of our total accounts receivable. Supplier Concentration We rely on third-party suppliers for the provision and development of many of the key components and materials used in our battery modules and packs, such as battery cells, electrical components, electromechanical components, mechanical components and enclosure materials. Some of the components used in our battery modules and packs are purchased by us from single sources. While we believe that we may be able to establish alternative supply relationships and can obtain or engineer replacement components for our single-sourced components, we may be unable to do so in the short term (or at all) at prices or quality levels that are favorable to us, which could have a material adverse effect on our business, financial condition, operating results, and future prospects. Furthermore, in certain cases, the establishment of an alternative supply relationship could require us to visit a new supplier’s facilities in order to qualify the supplier and perform supplier quality audits, and, over the past twelve months, our ability to travel and qualify new suppliers has been directly impacted by COVID-19. During the three and nine months ended September 30, 2021, respectively, three third-party suppliers of key single-sourced components and materials used in our battery modules and packs represented 12% and 17% of our total purchases during the period. We are dependent on the continued supply of battery cells for our products, and we will require substantially more cells to grow our business according to our plans. Currently, the overall supply of battery cells that we utilize in our manufacturing process has been constrained by high market demand. We currently purchase our cylindrical battery cells from two Tier 1 cylindrical battery cell suppliers, whose cells are qualified for use in electric vehicle (“EV”) applications. To date, we have only fully qualified a very limited number of additional suppliers and have limited flexibility in changing battery cell suppliers, though we are actively engaged in activities to qualify additional battery cell suppliers for use in EV applications. During the three and nine months ended September 30, 2021, respectively, 73% and 58% of our total purchases for components of our products were for battery cells, of which 79% and 85% of the battery cell purchases were concentrated with two Tier 1 suppliers. We may purchase our battery cells either directly from the cell supplier or through a distributor. Effective August 10, 2021, we entered into a Supply Agreement for the purchase of lithium-ion battery cells with a Tier 1 battery cell and materials manufacturer. As a result of the Supply Agreement, our concentration of battery cell purchases will shift more predominantly to a single supplier. See Note 15 – Commitments and Contingencies for additional information about the Supply Agreement. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT As of September 30, 2021 and December 31, 2020, our debt is comprised of the following (in thousands): September 30, 2021 December 31, 2020 Paycheck Protection Program (“PPP”) issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 6 months after issuance through maturity in June 2022 $ — $ 3,300 PPP loan issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 16 months after issuance through maturity in June 2025 42 42 Total debt 42 3,342 Less: debt, current portion (10) (2,260) Debt, non-current portion $ 32 $ 1,082 PPP Loans In March 2020, the World Health Organization declared the novel strain of coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. As a result of COVID-19, we faced risks to raising necessary capital which could significantly disrupt our business. To help mitigate those risks and support our ongoing operations, in June 2020, we received proceeds totaling $3.34 million for two loans granted under the U.S. Small Business Administration’s (“SBA”) PPP. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses. The loans and accrued interest are forgivable after 24 weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries during the forgiveness period. For the $3.30 million PPP loan, any unforgiven portion would be payable over two years, at an interest rate of 1%, with a deferral of payments for the first six months. For the $0.04 million PPP loan, any unforgiven portion would be payable over five years, at an interest rate of 1%, with a deferral of payments for the first sixteen months. We currently believe that our use of the loan proceeds through the forgiveness period has been in compliance with the conditions for forgiveness of the loan. Per the terms of the PPP loans, payments are deferred for borrowers who apply for loan forgiveness until the SBA makes a determination on the loan amount to be forgiven. We applied for forgiveness of the loans following the covered period of the loans. In August 2021, we received a notice from the SBA that our $3.3 million PPP loan was fully forgiven. As of September 30, 2021, we had not made any payments against our remaining PPP loan. At September 30, 2021, the $0.04 million PPP loan remained outstanding. The expected maturities associated with the outstanding PPP loan as of September 30, 2021 were as follows (in thousands): October 2021 through September 2022 $ 10 October 2022 through September 2023 11 October 2023 through September 2024 12 October 2024 through June 2025 9 Total $ 42 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS New Corporate Headquarter Lease Effective as of October 1, 2021, the Company entered into a Single-Tenant Commercial Lease (the “Lease”), with Warland Investments Company (the “Landlord”) relating to approximately 215,000 square feet of office, assembly, storage, warehouse and distribution space located at 5560 Katella Avenue, Cypress, California 90630 (the “Premises”). The Company intends to use the Premises for its corporate headquarters. The Lease will commence on the earliest of (i) twelve (12) weeks after the Landlord tenders possession of the Premises, (ii) the date on which the Company commences any business use at the Premises, and (iii) the date of substantial completion pursuant to the work letter agreement between the Company and the Landlord. Under the terms of the Lease, the Company is obligated to pay the Landlord an initial base monthly rent of $210,700, or $0.98 per square foot. The monthly base rent will increase annually by approximately three percent of the then-current base rent. The Company will also be responsible for its proportional share of operating expenses, real estate tax expenses, insurance charges and maintenance costs, each as defined in the Lease, associated with the ownership, operation, maintenance, and repair of the Premises, subject to certain exclusions provided in the Lease. The term of the Lease is 97 calendar months. The Company may, at its option, extend the term of the Lease for five (5) additional years on the same terms and conditions, except that the base monthly rent shall be adjusted to the “fair rental value” of the Premises. The Lease contains customary default provisions allowing the Landlord to terminate the Lease if the Company fails to remedy a breach of any of its obligations under the Lease within specified time periods, or upon bankruptcy or insolvency of the Company. The Lease also contains other customary provisions for real property leases of this type. BorgWarner’s Election to Sell Its Ownership in the JV to The Company On October 25, 2021, BorgWarner elected to exercise a right under the Joint Venture Operating Agreement, dated May 6, 2019 (the “Operating Agreement”), to put its 60% ownership stake in the JV to the Company. Pursuant to the terms of the Operating Agreement, upon exercise of a party’s put right, the Company and BorgWarner are required to select a nationally recognized valuation firm to determine the market value of the JV as of the date the put is exercised using comparable company, discounted cash flow and other standard valuation methodologies used in such valuations (the “Joint Venture Valuation”). We will be required to pay BorgWarner 95% of the market value of its stake based upon the Joint Venture Valuation. The parties will be obligated to consummate Romeo’s purchase of BorgWarner’s ownership stake in the Joint Venture within 30 days of the Joint Venture Valuation being determined. As a result of our purchase of BorgWarner’s ownership stake in the JV, we believe that the Company will (1) own 100% and fully consolidate the JV, (2) reacquire control of all of our intellectual property, and (3) be relieved of various contractual geographic, product and manufacturing limitations on our business and limitations on our research and development activities. We currently are unable to estimate the range of our obligation to purchase BorgWarner’s ownership stake in the JV. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Business Combination was accounted for as a reverse recapitalization (the “Recapitalization Transaction”) in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations . For accounting and financial reporting purposes, Legacy Romeo was considered the acquirer based on facts and circumstances, including the following: • Legacy Romeo’s former stockholders hold a majority ownership interest in the combined company; • Legacy Romeo’s senior management team became the senior management of the combined company; • Legacy Romeo was the larger of the companies based on historical operating activity and employee base; and • Legacy Romeo’s operations comprise the ongoing operations of the combined company. Accordingly, all historical financial information presented in these condensed consolidated financial statements represents the accounts of Legacy Romeo and its wholly owned subsidiaries “as if” Legacy Romeo is the predecessor and legal successor. The historical operations of Legacy Romeo are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Legacy Romeo prior to the Business Combination; (ii) the combined results of RMG and Legacy Romeo following the Business Combination on December 29, 2020; and (iii) RMG’s equity structure for all periods presented. No step-up basis of RMG’s assets and liabilities and no intangible assets or goodwill were recorded in connection with the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization. In connection with the Business Combination each share of Legacy Romeo common stock and preferred stock issued and outstanding immediately prior to the Business Combination (with each share of Legacy Romeo preferred stock being treated as if it were converted into Legacy Romeo common stock immediately prior to the Business Combination) converted into the right to receive 0.121730 shares (the “Exchange Ratio”) of common stock, par value $0.0001 (the “Common Stock”). The recapitalization of the number of shares of Common Stock attributable to Legacy Romeo is reflected retroactively to the earliest period presented based upon the Exchange Ratio and is utilized for calculating earnings per share in all prior periods presented. The accompanying condensed consolidated financial statements include the results of Romeo Power, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated and the effect of variable interest entities have been considered in the consolidation. Unaudited Interim Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information, the instructions to Form 10-Q, and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements presented herein have not been audited by an independent registered public accounting firm, but include all material adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of our financial position, results of operations and cash flows for the period. These results are not necessarily indicative of results for any other interim period or for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules of the SEC. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on April 15, 2021 (the “2020 Form 10-K”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent liabilities. Actual amounts could differ from these estimates. The condensed consolidated financial statements have been prepared under the assumption that Romeo will continue as a going concern. |
Reclassification of Presentation in Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income | Reclassification of Presentation in Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income Revenues of comparative prior periods in our condensed consolidated statements of operations and comprehensive (loss) income are reclassified to conform with our current revenue presentation. In the condensed consolidated statements of operations, we’ve combined related party revenues with product revenues and service revenues and disclosed the amount of related party revenues in a captioned note. Reclassification of Presentation in Note 3 of our Condensed Consolidated Financial Statements Revenues of comparative prior periods presented in Note 3 of our condensed consolidated financial statements are reclassified to conform with our current revenue presentation. Since April 1, 2021, we have presented disaggregated revenue by product and service instead of further disaggregating product by battery packs and modules. Immaterial Correction of Previously Issued Consolidated Financial Statement s During the quarter ended September 30, 2021, we identified a misstatement in our accounting for performance and market-based options granted in 2020 to our former Chairman and Chief Executive Officer (“CEO”), who was awarded 4,633,978 stock options at an exercise price of $6.69 per share. All shares covered by such award were subject to time based, performance and market condition vesting requirements. As of December 29, 2020, the date of the Business Combination, the performance condition was satisfied (the “Performance Condition Date”), and we began recognizing stock-based compensation expense, based on the fair value of the award at August 12, 2020 which was the stock option grant date (the “Grant Date”). We recognized expense prospectively, over the remaining requisite service period, which was six months from the date of the Business Combination and included the period of December 29, 2020 through June 27, 2021. However, in accordance with ASC 718, Compensation—Stock Compensation, we should have recognized a cumulative catch-up adjustment upon the performance condition being satisfied on December 29, 2020 for the services rendered from the Grant Date through the Performance Condition Date. This resulted in an understatement of $4.1 million in stock-based compensation expense, included within selling, general and administrative expense and additional paid-in capital as of December 31, 2020 and a subsequent overstatement of stock-based compensation expense, included within selling, general and administrative expense, during the interim periods ended March 31, 2021 and June 30, 2021. The Company evaluated the materiality of the error both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, and determined the effect of the correction was not material to the previously issued financial statements. |
Change in Segments | Change in Segments — During the third quarter of 2021, we hired a new CEO who became our Chief Operating Decision Maker (“CODM”), in place of the previous senior leadership team which consisted of two individuals. Our new CODM changed how we manage our business and allocate resources, which resulted in modifications to our organizational and segment structure. As a result, we reorganized from two segments (Romeo Power North America and Joint Venture Support) to a single operating segment for the consolidated business. Our operations are now comprised of a single reportable segment. As a result, the note on segment information is not presented in this Quarterly Report on Form 10-Q. The CODM evaluates and monitors performance primarily through consolidated sales and gross profit. Asset information is not regularly reported to the CODM for purposes of the allocation of resources or assessing segment performance. All of our revenues (based on location of customer) and long-lived assets were within North America for the three and nine months ended September 30, 2021 and 2020. |
Available-for-Sale Debt Investments | Available-for-Sale Debt Investments — We classify our investments in fixed income debt securities as available-for-sale debt investments. Our available-for-sale debt investments primarily consist of U.S. government securities, municipal securities, corporate debt, commercial paper, and U.S. agency mortgage-backed securities. These available-for-sale debt investments are primarily held in the custody of a major financial institution. These investments are reported on the condensed consolidated balance sheets at fair value. Unrealized gains and losses on these investments, to the extent the investments are unhedged, are included as a separate component of accumulated other comprehensive loss, net of tax. A specific identification method is used to determine the cost basis of available-for-sale debt investments and any realized gains or losses when sold. We classify our investments as current based on the nature of the investments and their availability for use in current operations. |
Deferred Assets | Deferred Assets — Deferred assets represent upfront payments of the Company’s common stock issued to a customer and will be amortized as a reduction of revenue as the related products or services are provided to the customer . |
Prepayment For Long Term Supply Agreement | Prepayment for Long-Term Supply Agreement — Prepayment for long-term supply agreement represents an upfront cash payment to a major supplier, which will be applied as an advance for the cells to be purchased from July 1, 2023 through June 30, 2028. See Note 15 - Commitments and Contingencies for further information. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, ASC subtopic 825-10, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which revised an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. This accounting guidance also amended certain disclosure requirements associated with the fair value of financial instruments. Under ASU No. 2016-01, entities must measure certain equity investments at fair value and recognize any changes in fair value in net income, unless the investments qualify for a new practicality exception. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. We adopted the standard on January 1, 2021, when we began making significant investments in available-for-sale debt securities and formulating a company investment policy to support the use and management of the proceeds from the Business Combination. In December 2019, the FASB issued ASU No. 2019-12, ASC 740, Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. The guidance is effective for all public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption is also permitted. We adopted the standard on January 1, 2021 and the adoption of the new guidance does not have a material impact on our financial position, operating results or cash flows. Other recently issued accounting updates are either not expected to have a material impact or are not relevant to our condensed consolidated financial statements. |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Contract Liabilities | During the three and nine months ended September 30, 2021, changes in contract liabilities were as follows (in thousands): Three Months Ended Nine Months Ended Beginning balance $ 3,123 $ 815 Revenues recognized (2,791) (3,610) Increase due to billings 377 3,504 Ending balance $ 709 $ 709 |
Schedule of Non-cancellable Minimum Purchase Commitments and Performance Obligations | The following table presents the non-cancellable minimum purchase commitments under such contracts as of September 30, 2021 (in thousands): Contractual Minimum Purchase Commitments Purchase contracts with make-whole provisions (1) $ 310,269 Purchase contracts with provisions of customary remedies for breach of contract (2) 236,686 Total $ 546,955 (1) For the $310.3 million of unsatisfied performance obligations related to minimum quantity purchase commitments, if the customers do not follow through on their minimum purchase commitments, we would receive a maximum of $290.8 million under certain make-whole provisions included in these contracts. (2) For the remaining $236.7 million of unsatisfied performance obligations related to minimum quantity purchase commitments included in these contracts, if the customers do not follow through on their minimum purchase commitments, we would seek damages through customary remedies for breach of contract. The following table presents the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2021 (in thousands): Revenues Expected October 1, 2021 through December 31, 2021 $ 9,825 January 1, 2022 through December 2023 447,852 Thereafter 89,278 Total $ 546,955 |
Schedule of Disaggregation of Revenue | The following tables disaggregate revenues by type of revenues for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Product revenues Total product revenues $ 2,740 $ 3,818 Service revenues Total service revenues 3,019 3,921 Total revenues $ 5,759 $ 7,739 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Product revenues Total product revenues $ 51 $ 2,097 Service revenues Total service revenues 624 2,229 Total revenues $ 675 $ 4,326 The following table disaggregates revenues by when control is transferred for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Point in time $ 5,328 $ 117 $ 6,406 $ 2,299 Over time 431 558 1,333 2,027 Total $ 5,759 $ 675 $ 7,739 $ 4,326 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of September 30, 2021 and December 31, 2020, inventory consisted of the following (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 13,400 $ 4,064 Work-in-process 1,280 531 Finished goods 576 342 Total inventories $ 15,256 $ 4,937 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Assumptions Used in Estimating the Fair Value of Stock Options | The fair value of the time-based stock options granted during the nine months ended September 30, 2020 was determined using the following assumptions: Assumption Range Fair Value Assumptions: Minimum Maximum Risk-free interest rate 0.28% ~ 0.92% Expected term (in years) 5.5 ~ 6.5 Expected volatility 60.0% ~ 77.0% Dividend yield 0% Grant date fair value per share $1.48 ~ $8.63 The grant date fair value of the PSUs granted on June 11, 2021, July 26, 2021 and August 16, 2021 derived from the Monte Carlo simulation, was based, in part, on the following assumptions: Assumption Range Fair Value Assumptions: Minimum Maximum Grant date stock price $5.82 ~ $9.23 Risk-free interest rate 0.24% ~ 0.29% Simulation term (in years) 2.4 ~ 2.6 Expected volatility 63.7% ~ 64.4% Dividend yield 0% Grant date fair value per share $2.60 ~ $9.23 |
Schedule of Number of Shares that may Become Exercisable Based on Share Price | According to the table of exercisable shares below and the average of the closing price per share of our Common Stock on each of the five Average Closing Share Price: Cumulative Number Of Shares $6.6869 - $8.9452 926,795 $8.9453 - $11.9272 1,853,591 $11.9273 - $14.9092 3,243,781 $14.9093 4,633,978 |
Schedule of RSU and PSU Activity | RSU and PSU activity during the nine months ended September 30, 2021 was as follows: Shares Weighted Average Fair Value Outstanding at December 31, 2020 — $ — Granted 4,393,468 $ 7.18 Vested (142,943) $ 9.23 Forfeited (152,342) $ 9.04 Outstanding at September 30, 2021 4,098,183 $ 7.04 |
Schedule of Company's Stock-based Compensation Expense by Line Item | The following table summarizes our stock-based compensation expense by line item in the condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of revenues $ 289 $ 47 $ 451 $ 277 Research and development 819 — 1,386 — Selling, general, and administrative 3,207 85 13,096 507 Total $ 4,315 $ 132 $ 14,933 $ 784 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Available-for-Sale Debt Investments and Maturities | The following table summarizes our available-for-sale debt investment holdings at September 30, 2021 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value U.S. government securities $ 38,009 $ 6 $ (4) $ 38,011 Municipal securities 44,039 56 (34) 44,061 Corporate debt securities 23,480 1 (38) 23,443 Asset-backed securities 9,295 — (7) 9,288 U.S. agency mortgage-backed securities 6,539 — (42) 6,497 Commercial paper 6,491 7 — 6,498 Total (1) $ 127,853 $ 70 $ (125) $ 127,798 (1) There were no unsettled sales of available-for-sale debt investments at September 30, 2021. The following table summarizes the maturities of our available-for-sale debt investments at September 30, 2021 (in thousands): Amortized Cost Fair Value Less than 1 year $ 55,850 $ 55,855 1 year through 5 years 65,464 65,446 Mortgage-backed securities with no single maturity 6,539 6,497 Total $ 127,853 $ 127,798 |
Schedule of Realized Gain (Loss) on Available-for-Sale Debt Investments | The following table presents the gross realized gains and gross realized losses related to available-for-sale debt investments for the three and nine months ended September 30, 2021(in thousands): Three Months Ended Nine Months Ended Gross realized gains $ 25 $ 62 Gross realized losses (186) (376) Gross realized loss, net $ (161) $ (314) |
Schedule of Unrealized Loss on Investments | The following tables present the breakdown of the available-for-sale debt investments with gross unrealized losses and the duration that those losses had been unrealized at September 30, 2021 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross U.S. government securities $ 14,000 $ (4) $ — $ — $ 14,000 $ (4) Municipal securities 31,702 (34) — — 31,702 (34) Corporate debt securities 21,041 (38) — — 21,041 (38) Asset-backed securities 7,988 (7) — — 7,988 (7) U.S. agency mortgage-backed securities 6,497 (42) — — 6,497 (42) Total $ 81,228 $ (125) $ — $ — $ 81,228 $ (125) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of September 30, 2021 and December 31, 2020, assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): September 30, 2021 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 263 $ 263 $ — $ — Subtotal 263 263 — — Available-for-sale debt investments: U.S. government securities 38,011 — 38,011 — Municipal securities 44,061 — 44,061 — Corporate debt securities 23,443 — 23,443 — Asset-backed securities 9,288 — 9,288 — U.S. agency mortgage-backed securities 6,497 — 6,497 — Commercial paper 6,498 — 6,498 — Subtotal 127,798 — 127,798 — Total $ 128,061 $ 263 $ 127,798 $ — Financial Liabilities: Private Placement Warrants $ 3,718 $ — $ 3,718 $ — Total $ 3,718 $ — $ 3,718 $ — December 31, 2020 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: U.S. Treasury Bills $ 16,000 $ 16,000 $ — $ — Total $ 16,000 $ 16,000 $ — $ — Financial liabilities: Public Warrants $ 71,453 $ 71,453 $ — $ — Private Placement Warrants 67,013 — 67,013 — Total $ 138,466 $ 71,453 $ 67,013 $ — |
Fair Value Measurement Inputs and Valuation Techniques | The key assumptions used to determine the fair value of the Private Placement Warrants as of September 30, 2021 and December 31, 2020 using the Black-Scholes model were as follows: Fair Value Assumptions September 30, 2021 December 31, 2020 Risk-free interest rate 0.81% 0.17% Expected term (in years) 4.25 5 Expected volatility 58% 57% Dividend yield — — Fair value of common stock $4.95 $22.49 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | As of September 30, 2021 and December 31, 2020, accrued expenses consisted of the following (in thousands): September 30, 2021 December 31, 2020 Accrued professional service fees $ 4,941 $ 1,130 Accrued payroll expenses 1,576 617 Accrued construction in progress 1,336 — Accrued tax liabilities 427 — Accrued warranty expenses 295 103 Other accrued expenses 1,020 994 Total accrued expenses $ 9,595 $ 2,844 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net Income (Loss) per Share | The calculation of basic and diluted net (loss) income per share for the three and nine months ended September 30, 2021 and 2020 is presented below (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net (loss) income $ (17,953) $ (8,916) $ 47,509 $ (22,710) Weighted average common shares outstanding – basic 134,017,528 78,639,037 131,307,617 76,900,247 Dilutive effect of potentially issuable shares — — 4,034,887 — Weighted average common shares outstanding – diluted 134,017,528 78,639,037 135,342,504 76,900,247 Basic net (loss) income per share $ (0.13) $ (0.11) $ 0.36 $ (0.30) Diluted net (loss) income per share $ (0.13) $ (0.11) $ 0.35 $ (0.30) |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Net Revenues and Cost of Revenues | The following table presents the net revenues and cost of revenues associated with our related parties, which are included in our condensed consolidated statement of operations and comprehensive (loss) income (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Related party revenues - product revenues $ 38 $ — $ 407 $ — Related party revenues - service revenues 411 558 1,328 2,027 Total related party revenues 449 558 1,735 2,027 Costs associated with related party revenues - product revenues 38 — 309 — Costs associated with related party revenues - service revenues 357 505 1,154 1,750 Total costs associated with related party revenues 395 505 1,463 1,750 Gross profit associated with related party revenues $ 54 $ 53 $ 272 $ 277 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Amount and Fair Value of Long-term Debt Instruments | As of September 30, 2021 and December 31, 2020, our debt is comprised of the following (in thousands): September 30, 2021 December 31, 2020 Paycheck Protection Program (“PPP”) issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 6 months after issuance through maturity in June 2022 $ — $ 3,300 PPP loan issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 16 months after issuance through maturity in June 2025 42 42 Total debt 42 3,342 Less: debt, current portion (10) (2,260) Debt, non-current portion $ 32 $ 1,082 |
Schedule of Maturities of Long-term Debt | The expected maturities associated with the outstanding PPP loan as of September 30, 2021 were as follows (in thousands): October 2021 through September 2022 $ 10 October 2022 through September 2023 11 October 2023 through September 2024 12 October 2024 through June 2025 9 Total $ 42 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Narrative (Details) $ / shares in Units, $ in Thousands | Dec. 29, 2020$ / shares | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)$ / sharesshares |
Exchange ratio | 0.121730 | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Selling, general and administrative | $ | $ 17,607 | $ 4,945 | $ 54,393 | $ 10,303 | ||
Adjustments | ||||||
Selling, general and administrative | $ | $ 4,100 | |||||
Board Of Directors Chairmen And CEO | Stock Options Awarded To Former Chairman and Chief Executive Officer | ||||||
Stock options awarded (in shares) | shares | 4,633,978 | |||||
Exercise price | $ / shares | $ 6.69 | |||||
BorgWarner Romeo Power LLC | ||||||
Percentage of right to receive the profit | 40.00% | 40.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2021individualbatteryElectricVehicle |
Accounting Policies [Abstract] | |
Number of individuals previously on the senior leadership team | individual | 2 |
Number of operating segments | batteryElectricVehicle | 2 |
REVENUES - Changes in Contract
REVENUES - Changes in Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Changes in contract liabilities | ||
Beginning balance | $ 3,123 | $ 815 |
Revenues recognized | (2,791) | (3,610) |
Increase due to billings | 377 | 3,504 |
Ending balance | $ 709 | $ 709 |
REVENUES - Contract Liabilities
REVENUES - Contract Liabilities Performance Obligations (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 546,955 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 9,825 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 447,852 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 89,278 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Unsatisfied Performance Obligations with Make-Whole Provisions | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 310,269 |
Maximum amount receivable if customers do not follow minimum purchase commitments | 290,800 |
Unsatisfied Performance Obligations with Customary Remedies | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 236,686 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | $ 5,759 | $ 675 | $ 7,739 | $ 4,326 |
Point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 5,328 | 117 | 6,406 | 2,299 | |
Over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 431 | 558 | 1,333 | 2,027 | |
Product revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 2,740 | 51 | 3,818 | 2,097 | |
Service revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 3,019 | $ 624 | $ 3,921 | $ 2,229 | |
[1] | Total revenues included related party revenues of $449 and $558 fo r the three months ended September 30, 2021 and 2020, respectively, and $1,735 and $2,027 for the nine months ended September 30, 2021 and 2020, respectively. See Note 14. |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventory (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |||||
Raw materials | $ 13,400,000 | $ 13,400,000 | $ 4,064,000 | ||
Work-in-process | 1,280,000 | 1,280,000 | 531,000 | ||
Finished goods | 576,000 | 576,000 | 342,000 | ||
Total inventories | 15,256,000 | 15,256,000 | $ 4,937,000 | ||
Write-down in cost of sales | $ 400,000 | $ 0 | $ 1,600,000 | $ 0 |
EQUITY METHOD INVESTMENTS - Bor
EQUITY METHOD INVESTMENTS - Borg Warner Romeo Power LLC (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Jun. 28, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Payments to to fund joint venture | $ 4,000 | $ 0 | |||
BorgWarner Romeo Power LLC | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to to fund joint venture | $ 4,000 | ||||
BorgWarner Romeo Power LLC | Forecast | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to to fund joint venture | $ 10,000 | ||||
BorgWarner Romeo Power LLC | BorgWarner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of interest in the joint venture | 60.00% | ||||
BorgWarner Romeo Power LLC | Legacy Romeo | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of interest in the joint venture | 40.00% |
EQUITY METHOD INVESTMENTS - Her
EQUITY METHOD INVESTMENTS - Heritage Battery Recycling LLC (Details) - HBR $ in Millions | Dec. 29, 2020USD ($) |
Schedule of Equity Method Investments [Line Items] | |
Amount agreed to fund a pilot | $ 10 |
PIPE Investors | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investments | 25 |
Legacy Romeo | |
Schedule of Equity Method Investments [Line Items] | |
Equity method investments | $ 35 |
PUBLIC AND PRIVATE PLACEMENT _2
PUBLIC AND PRIVATE PLACEMENT WARRANTS - Narrative (Details) - USD ($) | Apr. 05, 2021 | Feb. 28, 2019 | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Warrant or Right [Line Items] | ||||
Number of warrants redeemed (in shares) | 7,223,683 | |||
Cash outflow for redemption of warrants | $ 72,237 | |||
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants issued (in shares) | 7,666,648 | |||
Price per share (USD per share) | $ 11.50 | $ 11.50 | ||
Redemption price per public warrant (USD per share) | $ 0.01 | |||
Warrants outstanding (in shares) | 0 | 7,666,648 | ||
Private Placement Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Number of warrants issued (in shares) | 4,600,000 | |||
Price per share (USD per share) | $ 11.50 | |||
Warrants outstanding (in shares) | 3,178,202 | 4,600,000 |
STOCK-BASED COMPENSATION - Time
STOCK-BASED COMPENSATION - Time-based Awards Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise of stock options | $ 18,481 | $ 15 | |
Class A common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options awarded (in shares) | 0 | ||
Exercises in period (in shares) | 958,815 | 3,607,851 | |
Exercise of stock options | $ 6,300 | $ 18,500 |
STOCK-BASED COMPENSATION- Assum
STOCK-BASED COMPENSATION- Assumptions Used in Estimating the Fair Value of Stock Options (Details) - Class A common stock - Stock options | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 28.00% |
Expected term (in years) | 5 years 6 months |
Expected volatility | 60.00% |
Grant date fair value per share( USD per share) | $ 1.48 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 92.00% |
Expected term (in years) | 6 years 6 months |
Expected volatility | 77.00% |
Grant date fair value per share( USD per share) | $ 8.63 |
STOCK-BASED COMPENSATION - Perf
STOCK-BASED COMPENSATION - Performance and Market-based Award Narrative and Schedule of Average Closing Share Price (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 06, 2021 | Aug. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 27, 2021 |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Stock-based compensation expense | $ 4,315 | $ 132 | $ 14,933 | $ 784 | ||||
$6.6869 - $8.9452 | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (USD per share) | $ 6.6869 | |||||||
Exercise price range, upper range limit (USD per share) | 8.9452 | |||||||
$8.9453 - $11.9272 | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (USD per share) | 8.9453 | |||||||
Exercise price range, upper range limit (USD per share) | 11.9272 | |||||||
$11.9273 - $14.9092 | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (USD per share) | 11.9273 | |||||||
Exercise price range, upper range limit (USD per share) | 14.9092 | |||||||
$14.9093 | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Exercise price range, lower range limit (USD per share) | 14.9093 | |||||||
Exercise price range, upper range limit (USD per share) | $ 14.9093 | |||||||
Chairman and CEO | Performance and market-based award | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Stock options awarded (in shares) | 4,633,978 | |||||||
Exercise price (USD per share) | $ 6.69 | |||||||
Grant date fair value | $ 9,600 | |||||||
Stock-based compensation expense | $ 9,600 | $ 4,100 | ||||||
Number of trading days for calculation of average closing price per share | 5 days | |||||||
Stock options, outstanding (in shares) | 926,795 | |||||||
Exercisable lock-out period | 6 months | |||||||
Exercises in period (in shares) | 926,795 | |||||||
Chairman and CEO | $6.6869 - $8.9452 | Performance and market-based award | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Cumulative number of shares (in shares) | 926,795,000 | 926,795,000 | ||||||
Chairman and CEO | $8.9453 - $11.9272 | Performance and market-based award | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Cumulative number of shares (in shares) | 1,853,591,000 | 1,853,591,000 | ||||||
Chairman and CEO | $11.9273 - $14.9092 | Performance and market-based award | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Cumulative number of shares (in shares) | 3,243,781,000 | 3,243,781,000 | ||||||
Chairman and CEO | $14.9093 | Performance and market-based award | ||||||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||||||
Cumulative number of shares (in shares) | 4,633,978,000 | 4,633,978,000 |
STOCK-BASED COMPENSATION - 2020
STOCK-BASED COMPENSATION - 2020 Stock Plan Narrative (Details) - USD ($) $ in Thousands | Aug. 16, 2021 | Jul. 26, 2021 | Jun. 11, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 4,315 | $ 132 | $ 14,933 | $ 784 | |||
RSU's and PSU's | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | 3,300 | 5,100 | |||||
Unrecognized stock-based compensation expense | 25,100 | $ 25,100 | |||||
Unrecognized stock-based compensation expense, recognition period | 1 year 9 months 3 days | ||||||
Fair value of RSUs and PSUs granted | $ 31,500 | ||||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
RSUs | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grants in period (in shares) | 269,709 | ||||||
RSUs | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
RSUs | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
RSUs | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 33.33% | ||||||
RSUs | Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grants in period (in shares) | 308,067 | 1,411,961 | |||||
RSUs | Directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grants in period (in shares) | 133,492 | ||||||
PSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | ||||||
Number of consecutive trading day average of closing price, market based goal | 100 days | ||||||
PSUs | CEO | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grants in period (in shares) | 588,458 | ||||||
PSUs | Certain Executives | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Grants in period (in shares) | 327,468 | 1,354,313 | |||||
PSUs | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 0.00% | ||||||
PSUs | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting percentage | 200.00% | ||||||
Stock Options, Restricted Stock Units And Performance-Related Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 4,300 | $ 100 | $ 14,900 | $ 800 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions Used in Estimating the Fair Value of PSUs (Details) - PSUs | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date stock price (USD per share) | $ 5.82 |
Risk-free interest rate | 24.00% |
Simulation term (in years) | 2 years 4 months 24 days |
Expected volatility | 63.70% |
Grant date fair value per share (USD per share) | $ 2.60 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date stock price (USD per share) | $ 9.23 |
Risk-free interest rate | 29.00% |
Simulation term (in years) | 2 years 7 months 6 days |
Expected volatility | 64.40% |
Grant date fair value per share (USD per share) | $ 9.23 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of RSU and PSU Activity (Details) - RSU's and PSU's | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 4,393,468 |
Vested (in shares) | shares | (142,943) |
Forfeited (in shares) | shares | (152,342) |
Outstanding, ending balance (in shares) | shares | 4,098,183 |
Weighted Average Fair Value | |
Weighted average fair value, beginning balance (USD per share) | $ / shares | $ 0 |
Granted (USD per share) | $ / shares | 7.18 |
Vested (USD per share) | $ / shares | 9.23 |
Forfeited (USD per share) | $ / shares | 9.04 |
Weighted average fair value, ending balance (USD per share) | $ / shares | $ 7.04 |
STOCK-BASED COMPENSATION - Awar
STOCK-BASED COMPENSATION - Award Modification (Details) - USD ($) $ in Thousands | Aug. 06, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 4,315 | $ 132 | $ 14,933 | $ 784 | |
Award Modificaiton | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of unvested shares | 81,153 | ||||
Stock-based compensation expense | $ (300) |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock- based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 4,315 | $ 132 | $ 14,933 | $ 784 |
RSU's and PSU's | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 3,300 | 5,100 | ||
Cost of revenues | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 289 | 47 | 451 | 277 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 819 | 0 | 1,386 | 0 |
Selling, general, and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 3,207 | $ 85 | $ 13,096 | $ 507 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate, percent | 0.00% | 0.00% | 0.00% | 0.00% |
INVESTMENTS - Schedule of Avail
INVESTMENTS - Schedule of Available-for-Sale Debt Securities Amortized Cost, Unrealized Gains (Losses) and Fair Value (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 127,853,000 | |
Gross Unrealized Gains | 70,000 | |
Gross Unrealized and Credit Losses | (125,000) | |
Available-for-sale debt investments: | 127,798,000 | $ 0 |
Debt securities, available-for-sale, unsettled sales | 0 | |
U.S. government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 38,009,000 | |
Gross Unrealized Gains | 6,000 | |
Gross Unrealized and Credit Losses | (4,000) | |
Available-for-sale debt investments: | 38,011,000 | |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 44,039,000 | |
Gross Unrealized Gains | 56,000 | |
Gross Unrealized and Credit Losses | (34,000) | |
Available-for-sale debt investments: | 44,061,000 | |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23,480,000 | |
Gross Unrealized Gains | 1,000 | |
Gross Unrealized and Credit Losses | (38,000) | |
Available-for-sale debt investments: | 23,443,000 | |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,295,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized and Credit Losses | (7,000) | |
Available-for-sale debt investments: | 9,288,000 | |
U.S. agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,539,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized and Credit Losses | (42,000) | |
Available-for-sale debt investments: | 6,497,000 | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,491,000 | |
Gross Unrealized Gains | 7,000 | |
Gross Unrealized and Credit Losses | 0 | |
Available-for-sale debt investments: | $ 6,498,000 |
INVESTMENTS - Realized Gains (L
INVESTMENTS - Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized gains | $ 25 | $ 62 |
Gross realized losses | (186) | (376) |
Gross realized loss, net | $ (161) | $ (314) |
INVESTMENTS - Schedule of Accum
INVESTMENTS - Schedule of Accumulated Unrealized Losses (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | $ 81,228 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (125) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 81,228 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (125) |
U.S. government securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 14,000 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (4) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 14,000 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (4) |
Municipal securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 31,702 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (34) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 31,702 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (34) |
Corporate debt securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 21,041 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (38) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 21,041 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (38) |
Asset-backed securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 7,988 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (7) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 7,988 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (7) |
U.S. agency mortgage-backed securities | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 6,497 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (42) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | 0 |
Debt securities, available-for-sale, unrealized loss position | 6,497 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | $ (42) |
INVESTMENTS - Schedule of Ava_2
INVESTMENTS - Schedule of Available-for-sale Debt Securities Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Amortized Cost [Abstract] | ||
Less than 1 year | $ 55,850 | |
1 year through 5 years | 65,464 | |
Mortgage-backed securities with no single maturity | 6,539 | |
Amortized Cost | 127,853 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Fair Value [Abstract] | ||
Less than 1 year | 55,855 | |
1 year through 5 years | 65,446 | |
Mortgage-backed securities with no single maturity | 6,497 | |
Fair Value | $ 127,798 | $ 0 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Expected term (in years) | 4 years 3 months | 5 years |
FAIR VALUE - Schedule of Assets
FAIR VALUE - Schedule of Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets: | ||
Available-for-sale debt investments: | $ 127,798 | $ 0 |
U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 38,011 | |
Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 44,061 | |
Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 23,443 | |
Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 9,288 | |
U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 6,497 | |
Commercial paper | ||
Assets: | ||
Available-for-sale debt investments: | 6,498 | |
Recurring | ||
Assets: | ||
Cash equivalents: | 263 | |
Available-for-sale debt investments: | 127,798 | |
Total | 128,061 | 16,000 |
Financial Liabilities: | ||
Total | 3,718 | 138,466 |
Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 38,011 | |
Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 44,061 | |
Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 23,443 | |
Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 9,288 | |
Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 6,497 | |
Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale debt investments: | 6,498 | |
Recurring | Public Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 71,453 | |
Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 3,718 | 67,013 |
Recurring | Money Market Funds | ||
Assets: | ||
Cash equivalents: | 263 | |
Recurring | U.S. government securities | ||
Assets: | ||
Cash equivalents: | 16,000 | |
Level 1 | Recurring | ||
Assets: | ||
Cash equivalents: | 263 | |
Available-for-sale debt investments: | 0 | |
Total | 263 | 16,000 |
Financial Liabilities: | ||
Total | 0 | 71,453 |
Level 1 | Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 1 | Recurring | Public Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 71,453 | |
Level 1 | Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 0 | 0 |
Level 1 | Recurring | Money Market Funds | ||
Assets: | ||
Cash equivalents: | 263 | |
Level 1 | Recurring | U.S. government securities | ||
Assets: | ||
Cash equivalents: | 16,000 | |
Level 2 | Recurring | ||
Assets: | ||
Cash equivalents: | 0 | |
Available-for-sale debt investments: | 127,798 | |
Total | 127,798 | 0 |
Financial Liabilities: | ||
Total | 3,718 | 67,013 |
Level 2 | Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 38,011 | |
Level 2 | Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 44,061 | |
Level 2 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 23,443 | |
Level 2 | Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 9,288 | |
Level 2 | Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 6,497 | |
Level 2 | Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale debt investments: | 6,498 | |
Level 2 | Recurring | Public Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 0 | |
Level 2 | Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 3,718 | 67,013 |
Level 2 | Recurring | Money Market Funds | ||
Assets: | ||
Cash equivalents: | 0 | |
Level 2 | Recurring | U.S. government securities | ||
Assets: | ||
Cash equivalents: | 0 | |
Level 3 | Recurring | ||
Assets: | ||
Cash equivalents: | 0 | |
Available-for-sale debt investments: | 0 | |
Total | 0 | 0 |
Financial Liabilities: | ||
Total | 0 | 0 |
Level 3 | Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | Commercial paper | ||
Assets: | ||
Available-for-sale debt investments: | 0 | |
Level 3 | Recurring | Public Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 0 | |
Level 3 | Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Public warrants and private placement warrants | 0 | 0 |
Level 3 | Recurring | Money Market Funds | ||
Assets: | ||
Cash equivalents: | $ 0 | |
Level 3 | Recurring | U.S. government securities | ||
Assets: | ||
Cash equivalents: | $ 0 |
FAIR VALUE - Private Placement
FAIR VALUE - Private Placement Warrants Valuation Assumptions (Details) | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected term (in years) | 4 years 3 months | 5 years |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 0.0081 | 0.0017 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 0.58 | 0.57 |
Dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 0 | 0 |
Fair value of common stock | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 4.95 | 22.49 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued professional service fees | $ 4,941 | $ 1,130 |
Accrued payroll expenses | 1,576 | 617 |
Accrued construction in progress | 1,336 | 0 |
Accrued tax liabilities | 427 | 0 |
Accrued warranty expenses | 295 | 103 |
Other accrued expenses | 1,020 | 994 |
Total accrued expenses | $ 9,595 | $ 2,844 |
NET (LOSS) INCOME PER SHARE - (
NET (LOSS) INCOME PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income | $ (17,953) | $ (8,916) | $ 47,509 | $ (22,710) |
Weighted average common shares outstanding - basic (in shares) | 134,017,528 | 78,639,037 | 131,307,617 | 76,900,247 |
Dilutive effect of potentially issuable shares (in shares) | 0 | 0 | 4,034,887 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 134,017,528 | 78,639,037 | 135,342,504 | 76,900,247 |
Basic net (loss) income per share (USD per share) | $ (0.13) | $ (0.11) | $ 0.36 | $ (0.30) |
Diluted net (loss) income per share (USD per share) | $ (0.13) | $ (0.11) | $ 0.35 | $ (0.30) |
Antidilutive shares (in shares) | 10,763,171 | 25,167,451 | 7,200,464 | 23,125,325 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES - Schedule of Related Party Net Revenues and Cost of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total related party revenues | ||||
Total related party revenues | $ 449 | $ 558 | $ 1,735 | $ 2,027 |
Total costs associated with related party revenues | 395 | 505 | 1,463 | 1,750 |
Gross profit associated with related party revenues | 54 | 53 | 272 | 277 |
Product revenues | ||||
Total related party revenues | ||||
Total related party revenues | 38 | 0 | 407 | 0 |
Total costs associated with related party revenues | 38 | 0 | 309 | 0 |
Service revenues | ||||
Total related party revenues | ||||
Total related party revenues | 411 | 558 | 1,328 | 2,027 |
Total costs associated with related party revenues | $ 357 | $ 505 | $ 1,154 | $ 1,750 |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES - Narrative (Details) | Dec. 29, 2020USD ($)batteryElectricVehicle | Dec. 29, 2021batteryElectricVehicle | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
HBR | ||||
Total related party revenues | ||||
Amount agreed to fund a pilot | $ 10,000,000 | |||
Number of battery electric vehicles (BEV) to purchase | batteryElectricVehicle | 10 | |||
Length of pilot program | 1 year | |||
Due to related party | $ 900,000 | |||
HBR | Forecast | ||||
Total related party revenues | ||||
Number of battery electric vehicles (BEV) to purchase | batteryElectricVehicle | 500 | |||
HBR | Legacy Romeo | ||||
Total related party revenues | ||||
Equity method investments | $ 35,000,000 | |||
PIPE Investors | HBR | ||||
Total related party revenues | ||||
Equity method investments | $ 25,000,000 | |||
Corporate Joint Venture | BorgWarner | ||||
Total related party revenues | ||||
Accounts receivable, related parties | $ 300,000 | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 1 Months Ended | ||||||
Sep. 10, 2021USD ($) | Jul. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jul. 15, 2021litigationCase | Feb. 26, 2021shares | Dec. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |||||||
Settlement agreement amount | $ 6,000 | ||||||
Legal settlement payable | $ 6,000 | $ 6,000 | |||||
Insurance receivable | 6,000 | $ 6,000 | |||||
Loss contingency, pending cases combined | litigationCase | 2 | ||||||
Purchase commitment | 512,900 | ||||||
Purchase obligation after year four | $ 472,400 | ||||||
Prepayment | $ 64,700 | ||||||
Forecast | |||||||
Loss Contingencies [Line Items] | |||||||
Deposits | $ 1,500 | ||||||
Cannon Complaint | |||||||
Loss Contingencies [Line Items] | |||||||
Number of securities called by warrants (in shares) | shares | 1,000,000 | ||||||
Warrant, percent of common stock | 1.00% |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Customer One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 68.00% | 51.00% | 47.00% | ||
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Customer Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 11.00% | |||
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Joint Venture Engineering Services | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 83.00% | 17.00% | 47.00% | ||
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Major Customers And Joint Venture Engineering Services | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 78.00% | 79.00% | 94.00% | ||
Customer Concentration Risk | Accounts receivable | Customer One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 41.00% | 13.00% | |||
Customer Concentration Risk | Accounts receivable | Customer Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 24.00% | 13.00% | |||
Customer Concentration Risk | Accounts receivable | Joint Venture Engineering Services | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 44.00% | |||
Customer Concentration Risk | Accounts receivable | Major Customers And Joint Venture Engineering Services | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 77.00% | 70.00% | |||
Supplier Concentration Risk | Cost of Goods and Service Benchmark | Three Third-Party Suppliers | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | 17.00% | |||
Supplies Concentration Risk | Cost of Goods and Service Benchmark | Battery Cells | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 73.00% | 58.00% | |||
Supplies Concentration Risk | Cost of Goods and Service Benchmark | Two Battery Cell Suppliers | Battery Cells | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 79.00% | 85.00% |
DEBT - Schedule of Long Term De
DEBT - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument, Redemption [Line Items] | |||
Total debt | $ 42 | $ 3,342 | |
Current maturities of long-term debt | (10) | (2,260) | |
Long-term debt, net of current portion | $ 32 | 1,082 | |
Paycheck Protection Program (“PPP”) issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 6 months after issuance through maturity in June 2022 | |||
Debt Instrument, Redemption [Line Items] | |||
Interest rate | 1.00% | 1.00% | |
Payment deferral period | 6 months | 6 months | |
Total debt | $ 3,300 | $ 0 | 3,300 |
PPP loan issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 16 months after issuance through maturity in June 2025 | |||
Debt Instrument, Redemption [Line Items] | |||
Interest rate | 1.00% | 1.00% | |
Payment deferral period | 16 months | 16 months | |
Total debt | $ 40 | $ 42 | $ 42 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2021USD ($) | Jun. 30, 2020USD ($)loan | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument, Redemption [Line Items] | |||||
Number of PPP loans, CARES Act | loan | 2 | ||||
Debt | $ 42 | $ 3,342 | |||
Paycheck Protection Program Loan, CARES Act | |||||
Debt Instrument, Redemption [Line Items] | |||||
Proceeds in amount | $ 3,340 | ||||
Paycheck Protection Program (“PPP”) issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 6 months after issuance through maturity in June 2022 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt | $ 3,300 | $ 0 | 3,300 | ||
Debt instrument term | 2 years | ||||
Interest rate | 1.00% | 1.00% | |||
Payment deferral period | 6 months | 6 months | |||
Debt forgiveness | $ 3,300 | ||||
PPP loan issued June 2020, interest rate fixed at 1%. Principal and interest are due in installments starting 16 months after issuance through maturity in June 2025 | |||||
Debt Instrument, Redemption [Line Items] | |||||
Debt | $ 40 | $ 42 | $ 42 | ||
Debt instrument term | 5 years | ||||
Interest rate | 1.00% | 1.00% | |||
Payment deferral period | 16 months | 16 months |
DEBT - Schedule of Minimum Paym
DEBT - Schedule of Minimum Payments Maturities of Principal Obligations Under Term Facility (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
October 2021 through September 2022 | $ 10 |
October 2022 through September 2023 | 11 |
October 2023 through September 2024 | 12 |
October 2024 through June 2025 | 9 |
Total | $ 42 |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) | Oct. 01, 2021USD ($)squareFeet$ / ft² | Oct. 25, 2021 |
Subsequent Event [Line Items] | ||
Rent expense per square foot (USD per square foot) | $ / ft² | 0.98 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of square feet | squareFeet | 215,000 | |
Operating lease expense | $ | $ 210,700 | |
Lease term | 97 months | |
Renewal term | 5 years | |
Subsequent Event | BorgWarner | Corporate Joint Venture | ||
Subsequent Event [Line Items] | ||
Ownership stake | 60.00% | |
Subsequent Event | BorgWarner | Corporate Joint Venture | ||
Subsequent Event [Line Items] | ||
Market value stake | 95.00% | |
Period to consummate purchase | 30 days | |
Joint venture ownership percentage | 100.00% |