Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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 $0.0001 per share | |
Trading Symbol | RMO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 151,231,501 | |
Central Index Key | 0001757932 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | 2022 | |
Document Fiscal Year Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 41,330 | $ 22,638 |
Investments | 25,548 | 97,309 |
Accounts receivable, net of allowance for expected credit loss of $3 and $0 at March 31, 2022 and December 31, 2021, respectively | 9,201 | 8,378 |
Inventories, net | 34,129 | 37,125 |
Insurance receivable | 250 | 1,250 |
Prepaid inventories | 7,438 | 3,002 |
Prepaid expenses and other current assets | 8,795 | 5,579 |
Total current assets | 126,691 | 175,281 |
Restricted cash | 3,000 | 3,000 |
Property, plant and equipment, net | 17,555 | 15,158 |
Equity method investments | 35,000 | 36,329 |
Operating lease right-of-use assets | 22,707 | 23,115 |
Finance lease right-of-use assets | 4,051 | 4,070 |
Deferred assets | 5,018 | 5,018 |
Prepayment - long-term supply agreement | 64,703 | 64,703 |
Insurance receivable | 6,000 | 6,000 |
Other noncurrent assets | 2,028 | 2,772 |
Total assets | 286,753 | 335,446 |
Current liabilities | ||
Accounts payable | 17,292 | 11,724 |
Accrued expenses | 11,053 | 8,156 |
Contract liabilities | 331 | 384 |
Operating lease liabilities, current | 838 | 416 |
Finance lease liabilities, current | 1,134 | 927 |
Other current liabilities | 1,233 | 1,509 |
Total current liabilities | 31,881 | 23,116 |
Private placement warrants | 254 | 1,526 |
Operating lease liabilities, net of current portion | 22,743 | 23,058 |
Finance lease liabilities, net of current portion | 2,342 | 2,595 |
Legal settlement payable | 6,000 | 6,000 |
Total liabilities | 63,220 | 56,295 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock ($0.0001 par value, 250,000,000 shares authorized, 151,221,283 and 134,458,439 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively) | 15 | 13 |
Additional paid-in capital | 476,907 | 451,040 |
Accumulated other comprehensive loss | (740) | (366) |
Accumulated deficit | (252,649) | (171,536) |
Total stockholders’ equity | 223,533 | 279,151 |
Total liabilities and stockholders’ equity | $ 286,753 | $ 335,446 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable-allowance for doubtful accounts | $ 3 | $ 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) | 151,221,283 | 134,458,439 |
Common stock, shares outstanding (in shares) | 151,221,283 | 134,458,439 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Revenues: | |||
Revenue | [1] | $ 11,571 | $ 1,054 |
Cost of revenues: | |||
Cost of revenues | 29,253 | 4,827 | |
Gross loss | (17,682) | (3,773) | |
Operating expenses: | |||
Research and development | 6,705 | 3,771 | |
Selling, general and administrative | 22,248 | 15,902 | |
Acquisition of in-process research and development | 35,402 | 0 | |
Total operating expenses | 64,355 | 19,673 | |
Operating loss | (82,037) | (23,446) | |
Interest expense | (39) | (7) | |
Change in fair value of public and private placement warrants | 1,271 | 116,125 | |
Investment (loss) gain, net | (37) | 90 | |
(Loss) income before income taxes and loss in equity method investments | (80,842) | 92,762 | |
Loss in equity method investments | (271) | (643) | |
Benefit from income taxes | 0 | (10) | |
Net (loss) income | (81,113) | 92,109 | |
Available-for-sale debt investments: | |||
Change in net unrealized losses, net of income taxes | (716) | (342) | |
Net losses reclassified to earnings, net of income taxes | 342 | 38 | |
Total other comprehensive loss, net of income taxes | (374) | (304) | |
Comprehensive (loss) income | $ (81,487) | $ 91,805 | |
Net (loss) income per share | |||
Basic (USD per share) | $ (0.60) | $ 0.72 | |
Diluted (USD per share) | $ (0.60) | $ 0.68 | |
Weighted average number of shares outstanding | |||
Basic (in shares) | 135,260,665 | 128,788,715 | |
Diluted (in shares) | 135,260,665 | 135,890,719 | |
Product | |||
Revenues: | |||
Revenue | $ 11,402 | $ 612 | |
Cost of revenues: | |||
Cost of revenues | 29,116 | 4,438 | |
Service | |||
Revenues: | |||
Revenue | 169 | 442 | |
Cost of revenues: | |||
Cost of revenues | $ 137 | $ 389 | |
[1] | Total revenues included related party revenues of $162 and $713 fo r the three months ended March 31, 2022 and 2021, respectively. See Note 14 - Transactions with Related Parties. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Total related party revenues | $ 162 | $ 713 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | APIC | Accumulated Other Comprehensive Loss | Accumulated Deficit |
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 | $ (181,567) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 3,617,286 | ||||
Issuance of common stock | 36,627 | $ 1 | 36,626 | ||
Stock based compensation | 4,456 | 4,456 | |||
Other comprehensive loss | (304) | (304) | |||
Net (loss) income | 92,109 | 92,109 | |||
Common stock ending balance (in shares) at Mar. 31, 2021 | 130,529,147 | ||||
Stockholders' equity ending balance at Mar. 31, 2021 | 328,586 | $ 13 | 418,335 | (304) | (89,458) |
Common stock beginning balance (in shares) at Dec. 31, 2021 | 134,458,439 | ||||
Stockholders' equity beginning balance at Dec. 31, 2021 | 279,151 | $ 13 | 451,040 | (366) | (171,536) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 79,536 | ||||
Issuance of common stock | 7 | $ 0 | 7 | ||
Issuance of common stock under SEPA agreement, net of stock purchase discount (in shares) | 16,683,308 | ||||
Issuance of common stock under SEPA agreement, net of stock purchase discount | 25,000 | $ 2 | 24,998 | ||
Settlement on restricted stock tax withholding | (1) | (1) | |||
Stock based compensation | 863 | 863 | |||
Other comprehensive loss | (374) | (374) | |||
Net (loss) income | (81,113) | (81,113) | |||
Common stock ending balance (in shares) at Mar. 31, 2022 | 151,221,283 | ||||
Stockholders' equity ending balance at Mar. 31, 2022 | $ 223,533 | $ 15 | $ 476,907 | $ (740) | $ (252,649) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net (loss) Income | $ (81,113) | $ 92,109 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation and amortization | 1,098 | 505 |
Amortization of investment premium paid | 148 | 420 |
Allowance for expected credit loss | 3 | 0 |
Stock-based compensation | 863 | 4,456 |
Inventory provision | 3,300 | 392 |
Change in fair value of public and private placement warrants | (1,271) | (116,125) |
Acquisition of in-process research and development | 35,402 | 0 |
Loss in equity method investments | 271 | 643 |
Non-cash lease expense - operating leases | 692 | 58 |
Non-cash lease expense - finance leases | 169 | 71 |
Other | 342 | (533) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,135) | (603) |
Inventories | (304) | (1,144) |
Prepaid inventories | (4,436) | (58) |
Prepaid and other current assets | (3,713) | (7,963) |
Accounts payable | 6,470 | 2,630 |
Accrued expenses | 1,876 | 250 |
Contract liabilities | (53) | 857 |
Operating lease liabilities | (177) | (60) |
Other, net | 1,529 | (77) |
Net cash used in operating activities | (40,039) | (24,172) |
Cash flows from investing activities: | ||
Purchase of investments | 0 | (281,124) |
Proceeds from maturities of investments | 1,483 | 32,318 |
Proceeds from sales of investments | 69,413 | 1,300 |
Equity method investment | 0 | (4,000) |
Assets acquisition, net of cash acquired | (34,035) | 0 |
Capital expenditures | (2,940) | (1,617) |
Net cash provided by (used in) investing activities | 33,921 | (253,123) |
Cash flows from financing activities: | ||
Issuance of common stock under the SEPA, net of stock purchase discount | 25,000 | 0 |
Exercise of stock options | 7 | 4,681 |
Exercise of stock warrants | 0 | 21,526 |
Settlement on restricted stock withholding | (1) | 0 |
Principal portion of finance lease liabilities | (196) | (76) |
Net cash provided by financing activities | 24,810 | 26,131 |
Net change in cash, cash equivalents and restricted cash | 18,692 | (251,164) |
Cash, cash equivalents and restricted cash, beginning of period | 25,638 | 293,942 |
Cash, cash equivalents and restricted cash, end of period | 44,330 | 42,778 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets: | ||
Cash and cash equivalents | 41,330 | 41,278 |
Restricted cash | 3,000 | 1,500 |
Total cash, cash equivalents and restricted cash | 44,330 | 42,778 |
Supplemental cash flow information: | ||
Cash paid for interest | 3 | 0 |
Cash paid for income taxes | 0 | 10 |
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 | 2,625 | 86 |
Finance lease right-of-use assets obtained in exchange of finance lease liabilities | 150 | 0 |
Write off of equity method investment in the BorgWarner JV | $ 1,058 | $ 0 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2022 | |
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. designs, engineers, and manufactures lithium-ion cylindrical battery packs for EVs 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. Acquisition of BorgWarner’s Ownership in the BorgWarner Romeo Power LLC In May 2019, Legacy Romeo and BorgWarner formed BorgWarner Romeo Power LLC (“the JV” or “BorgWarner JV”). On October 25, 2021, BorgWarner exercised its rights under the JV Agreement to put its ownership interest in the JV to Romeo. Following agreed upon steps related to the put process, Romeo acquired BorgWarner’s 60% ownership interest in the JV pursuant to a Membership Interest Purchase Agreement (the “Purchase Agreement”) on February 4, 2022 (the “Purchase Agreement Closing Date”). Upon acquiring the additional 60% of the JV, Romeo owned 100% interest of the JV. Romeo subsequently dissolved the JV, effective February 11, 2022, and distributed all of the JV’s assets, including its rights under Romeo’s intellectual property, to Romeo. As a result, Romeo has recaptured all of the rights under its intellectual property that it had previously been licensed to the JV under the Intellectual Property License Agreement (the “IP License”). Consequently, we now have the right to exploit all of our intellectual property in all fields of use and all geographic markets. Further, by dissolving the JV and terminating the IP License, we also assumed full, unilateral control of our R&D budget and related activities. The Company accounted for the Purchase Agreement as an asset acquisition, as it was determined that the acquired JV did not meet the definition of a business under ASC 805, Business Combinations . The total consideration transferred has been allocated to the non-monetary assets acquired and liabilities assumed based on their relative fair value. As of December 31, 2021, the carrying value of the non-marketable equity investment was $1.3 million, representing the Company’s contributions to the JV offset by the Company’s share of equity method investee losses, and is presented as equity method investments on the consolidated balance sheet. For the quarter ended March 31, 2022, the JV had no revenue and recorded a net loss of $0.7 million up to the time of the acquisition which was February 4, 2022. The Company reflected its 40% share of the JV’s losses as loss in equity method investments in the consolidated statements of operations through the Purchase Agreement Closing Date. Prior to the Purchase Agreement Closing Date, the unconsolidated balance sheet of the JV had total assets of $3.0 million, total liabilities of $0.3 million and total equity of $2.7 million. The following table presents the components of the consideration transferred at the Purchase Agreement Closing Date (in thousands): Description Purchase Consideration Cash transferred $ 28,614 Carrying amount of the Company’s equity method investment in the JV 1,057 Transaction costs 8,446 Total $ 38,117 The primary asset acquired in the Purchase Agreement constitutes an in-process research and development asset (“IPR&D”). Due to the nature of the other assets acquired and liabilities assumed, the difference between the fair value of the consideration transferred and the fair value of the tangible net assets acquired, the remaining cost was allocated solely to the IPR&D. The Company recorded a charge of $35.4 million to acquired in-process research and development expense in the condensed consolidated statements of operations at the Purchase Agreement Closing Date because the Company determined that the IPR&D asset had no alternative future use that is distinct and different from the Company’s existing research and development. The following table presents the components of the purchase allocation (in thousands): Description Amount Total consideration transferred $ 38,117 Cash received (3,025) Liabilities assumed 310 Acquired IPR&D $ 35,402 The Company has elected the accounting policy to present the cash payments for IPR&D assets acquired in an asset acquisition that have no alternative use as investing activities in our condensed consolidated statements of cash flows for the three months ended March 31, 2022. Basis of Presentation The accompanying 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. As of March 31, 2022, we had cash and cash equivalents, and investments of $41.3 million and $25.5 million, respectively. We have recurring losses, which have resulted in an accumulated deficit of $252.6 million as of March 31, 2022. On February 15, 2022, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), which is an affiliate of Yorkville Advisors. Under terms of the SEPA, we have the right, but not the obligation, to sell up to $350.0 million of common equity to an affiliate of Yorkville Advisors, subject to certain limitations, at the time of our choosing during the two-year term of the agreement. During the three months ended March 31, 2022, we issued 16.7 million shares of Common Stock to Yorkville for cash proceeds of $25.0 million with a portion of the shares issued as non-cash stock purchase discount under the SEPA. Despite the access to liquidity resulting from sales of common stock under the SEPA, as a result of continuing anticipated operating cash outflows, capital expenditures, amounts paid to BorgWarner in February 2022, and costs to support future growth, we believe that substantial doubt exists regarding our ability to continue as a going concern for 12 months from the date of the issuance of our financial statements. Although management continues to explore a range of options to further address the Company’s capitalization and liquidity, management cannot conclude as of the date of this filing that it is probable that additional options will become available to fund our longer range investment plans and our operating losses. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 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, 2021, as filed with the SEC on March 1, 2022 (the “2021 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 Balance Sheets, Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income and Note 3 to Our Condensed Consolidated Financial Statements Revenues of comparative prior period in our 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 have combined related party revenues with product revenues and service revenues and disclosed the amount of related party revenues in a captioned note. Revenues of comparative prior period presented in Note 3 are reclassified to conform with our current revenue presentation. We present disaggregated revenue by product and service instead of further disaggregating product by battery packs and modules. Immaterial Correction of Previously Issued Condensed 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 Accounting Standards Codification (“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. The following tables provide the impact of the correction on our previously issued condensed consolidated financial statements for the three months ended March 31, 2021. Condensed Consolidated Balance Sheets As of March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital $ 416,308 $ 2,027 $ 418,335 Accumulated deficit (87,431) (2,027) (89,458) Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands except share and per share data) Selling, general and administrative expenses $ 17,999 $ (2,097) $ 15,902 Total operating expenses 21,770 (2,097) 19,673 Operating loss (25,543) 2,097 (23,446) Income before income taxes and loss in equity method investments 90,665 2,097 92,762 Net Income 90,012 2,097 92,109 Net income per share Basic $ 0.70 $ 0.02 $ 0.72 Diluted 0.66 0.02 0.68 Weighted average number of shares outstanding Diluted 135,812,697 78,022 135,890,719 Condensed Consolidated Statement of Stockholders’ Equity For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital - December 31, 2020 $ 373,129 $ 4,124 $ 377,253 Stock-based compensation 6,553 (2,097) 4,456 Additional paid-in capital, Balance - March 31, 2021 416,308 2,027 418,335 Accumulated deficit - December 31, 2020 (177,443) (4,124) (181,567) Net income 90,012 2,097 92,109 Accumulated deficit, Balance - March 31, 2021 (87,431) (2,027) (89,458) Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Cash flows from operating activities: Net income $ 90,012 $ 2,097 $ 92,109 Adjustments to reconcile net income to net cash used for operating activities: Stock-based compensation 6,553 (2,097) 4,456 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In addition to the significant accounting policies disclosed in Note 2 of the notes to consolidated financial statements in Part II, Item 8 of the 2021 Form 10-K, the Company has the following significant accounting policies. Impairment of Long-Lived Assets —We review the carrying value of our long-lived assets, including property, plant and equipment and lease ROU assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We measure recoverability by comparing the carrying amount to the future undiscounted cash flows that the asset or asset group is expected to generate, and consider other factors regarding the Company’s future performance including revenue growth, sales backlog, commercial market size and market share, production capabilities and historical equity market capitalization of the Company. If the asset or asset group is not recoverable, its carrying amount would be adjusted down to its fair value. As of March 31, 2022, the Company identified an indicator of impairment of the long-lived assets, but determined based on future undiscounted cash flow estimates and other factors noted above that the asset group is recoverable. Potential impairment charges may be required in the future if the Company’s current forecasts are significantly reduced or not realized. Derivative Accounting for the SEPA —We issued 16.7 million shares of Common Stock to Yorkville for cash proceeds of $25.0 million with a portion of the shares issued as non-cash stock purchase discount under the SEPA during the three months ended March 31, 2022. The Company has the right, but not the obligation, to sell up to $350 million of Common Stock to Yorkville, subject to certain limitations, at the time of our choosing during the two-year term of the agreement. The Company determined that SEPA represents a derivative financial instrument under ASC 815, Derivatives and Hedging , which should be recorded at fair value at inception and each reporting date thereafter. The financial instrument was classified as a derivative asset with a fair value of zero at the inception of the SEPA and as of March 31, 2022. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. We early adopted ASU 2021-08 on a prospective basis effective January 1, 2022 and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options ( Subtopic 470-20 ) and Derivatives and Hedging - Contracts in an Entity’s Own Equity ( Subtopic 815-40 ): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendment also simplifies the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity's Own Equity , by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendment revises the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity's ability to rebut the presumption. ASU 2020-06 may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. We adopted ASC 2020-06 effective January 1, 2022 and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements and related disclosures. 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 months ended March 31, 2022, changes in contract liabilities were as follows (in thousands): Three Months Ended Beginning balance $ 384 Revenues recognized (72) Increase due to billings 19 Ending balance $ 331 Contract liabilities are earned as services and prototypes are transferred to the customer. The remaining contract liability balance as of March 31, 2022 is expected to be earned and recognized as revenue within the next 12 months. Backlog As of March 31, 2022, 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 March 31, 2022 (in thousands): Contractual Minimum Purchase Commitments Purchase contracts with make-whole provisions (1) $ 316,629 Purchase contracts with provisions of customary remedies for breach of contract (2) 95,379 Total $ 412,008 (1) For approximately $316.6 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 $297.4 million under certain make-whole provisions included in these contracts. (2) For the remaining $95.4 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 March 31, 2022 (in thousands): Revenues Expected April 1, 2022 through December 31, 2022 $ 33,429 January 1, 2023 through December 31, 2024 278,273 Thereafter 100,306 Total $ 412,008 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 table disaggregates revenues by when control is transferred for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Point in time $ 11,402 $ 612 Over time 169 442 Total $ 11,571 $ 1,054 |
INVENTORIES, NET
INVENTORIES, NET | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET As of March 31, 2022 and December 31, 2021, inventory consisted of the following (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 30,442 $ 35,327 Work-in-process 2,983 1,364 Finished goods 704 434 Total inventories $ 34,129 $ 37,125 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. The Company then evaluates the carrying value of the remaining raw materials inventories based on the market resale value assumption using recent purchase information, supplier quotes or reputable third-party sources for market price. Work in progress is valued at an estimate of cost, including attributable overheads, based on stage of completion. During the three months ended March 31, 2022 and 2021, we recorded $3.3 million and $0.4 million inventory provision, respectively, in cost of revenues. |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | EQUITY METHOD INVESTMENTS BorgWarner Romeo Power LLC Legacy Romeo and BorgWarner formed the JV on June 28, 2019. Legacy Romeo and BorgWarner received a 40% interest and 60% interest in the JV, 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 JV, which represented our pro rata share of the agreed upon funding. During the three months ended March 31, 2022 and 2021, 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. 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. For further information on our acquisition of the BorgWarner’s ownership share in the JV, see Note 1. 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021, we had 3,178,202 Private Placement Warrants and no Public Warrants outstanding. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 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 award recipients and stockholders. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock unit awards (“RSU”s), stock appreciation rights, dividend equivalent rights, and performance-based stock unit awards (“PSU”s) (collectively, “stock awards”) and cash awards. Incentive stock options may be granted only to our employees, including officers, and the employees of our subsidiaries. All other stock awards and cash awards may be granted to our employees, officers, non-employee directors, and consultants and the employees and consultants of our subsidiaries and affiliates. The aggregate number of shares of our Common Stock that may be issued pursuant to stock awards under the 2020 Plan will not exceed the sum of (x) 15,000,000 shares, plus (y) 11,290,900, the number of shares subject to outstanding awards under the 2016 Plan on the date of the Business Combination. During three months ended March 31, 2022, we issued RSUs and PSUs under the 2020 Plan, as described further in the section titled “Restricted Stock Units and Performance-related Stock Units” below. As of March 31, 2022, there were 9,862,090 shares remaining available for issuance under the 2020 Stock Plan. Time-based Option awards During the three months ended March 31, 2022, we did not grant any stock options to employees and our employees exercised stock options totaling 4,396 shares for total proceeds of $7 thousand. The following table summarizes our time-based stock option activity (dollars in thousands, except weighted average exercise prices): Number of Weighted- Weighted- Aggregate Outstanding Options, December 31, 2021 3,410,387 $ 4.13 4.7 $ 2,496 Exercised (4,396) 1.56 8 Forfeited (147,824) 4.77 — Expired (45,744) 6.04 — Outstanding Options, March 31, 2022 3,212,423 $ 4.07 3.9 $ — Exercisable and vested, March 31, 2022 3,124,911 $ 4.12 3.8 $ — Restricted Stock Units and Performance-related Stock Units During three months ended March 31, 2022, we granted 6,414,028 RSUs and PSUs to our employees. 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. Primarily, one third of these shares vest on the one-year anniversary of the vesting commencement date and the remaining shares vest equally over eight quarters thereafter. The PSUs vest after three years from the commencement date based on the achievement of the either certain predetermined performance goals or market goals, and are payable in cash or shares of our Common Stock, at our election. The market based goal is measured by the 100-trading-day average stock closing price at the end of the 2021 to 2023 performance period, and total stockholder’ return (“TSR”) of the Company relative to the TSRs of a selected public company peer group at the end of the 2022 to 2024 performance period. The performance-based goal is measured by the achievement of certain internal operations results for the first fiscal year of the respective three-year performance period commencing when the PSUs are granted. The performance-based measurements for the 2021 to 2023 performance period include backlog targets and percentage reductions in bill-of-material costs per Kilowatt-Hour for the fiscal year ended December 31, 2021. The performance-based measurements for the 2022 to 2024 performance period include revenue targets and percentage of first-pass manufacturing yield of certain battery modules we manufacture for the fiscal year ending December 31, 2022. 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. For the period ended on December 31, 2021, the market-based valuation exceeded the performance based results. 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. For the performance goals measured by revenue targets and percentage of first-pass manufacturing yield of certain battery modules, management will review and assess the achievement of the performance-based goals quarterly through the performance assessment period ending December 31, 2022. The grant date fair value of the PSUs granted on February 18, 2022 derived from the Monte Carlo simulation, was based, in part, on the following assumptions: Fair Value Assumptions: Grant date stock price $2.05 Risk-free interest rate 1.67% Simulation term (in years) 3.0 Expected volatility 63.1% Dividend yield 0% Grant date fair value per share $3.27 The following table summarizes our RSU and PSU activity during the three months ended March 31, 2022 (dollars in thousands, except weighted average fair values): Shares Weighted Average Fair Value Outstanding at December 31, 2021 3,824,397 $ 6.64 Granted 6,414,028 $ 2.51 Vested (75,633) $ 9.23 Forfeited (1,285,687) $ 7.57 Outstanding at March 31, 2022 8,877,105 $ 3.50 The fair value of all RSUs and PSUs granted during the three months ended March 31, 2022 was $16.1 million. Stock-based compensation expense During the three months ended March 31, 2022 and 2021, we recognized a total of $0.9 million and $4.5 million, respectively, of stock-based compensation (“SBC”) expense related to the vesting of stock options, RSUs and PSUs. The SBC expense for the three months ended March 31, 2022 reflects a $2.7 million reversal of previously recognized SBC expense for unvested PSUs and RSUs forfeited due to terminations of employment. The following table summarizes our SBC expense by line item in the condensed consolidated statements of operations and comprehensive (loss) income (in thousands): Three Months Ended March 31, 2022 2021 Cost of revenues $ 220 $ 121 Research and development 765 61 Selling, general, and administrative (122) (1) 4,274 Total $ 863 (1) $ 4,456 (1) Amount includes $2.7 million of PSU and RSU forfeitures primarily related to two terminated executive officers. The following table summarizes our SBC expense by award type for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Options $ 82 $ 4,456 Restricted awards (RSUs and PSUs) 781 (1) — Total $ 863 (1) $ 4,456 (1) Amount includes $2.7 million of PSU and RSU forfeitures primarily related to two terminated executive officers. As of March 31, 2022, the unrecognized SBC expense and the weighted average period over which this SBC expense is expected to be recognized is summarized as follows (dollar in thousands): March 31, 2022 Weighted Average Recognition Period Options $ 123 0.46 Restricted awards (RSUs and PSUs) 27,419 2.48 Total $ 27,542 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESOur income tax provision consists of federal and state income taxes. The tax provisions for the three months ended March 31, 2022 and 2021 were computed by applying the Company’s estimated annual effective tax rates to the year-to-date pre-tax income for the three months ended March 31, 2022 and 2021 and adjusting for discrete tax items recorded in each period. 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 March 31, 2022, the Company continued to record a full valuation allowance against the deferred tax asset balance as realization was uncertain. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value Municipal securities $ 15,921 $ — $ (411) $ 15,510 Corporate debt securities 10,367 — (329) 10,038 Total (1) $ 26,288 $ — $ (740) $ 25,548 (1) There were no unsettled sales of available-for-sale debt investments at March 31, 2022. The following table summarizes our available-for-sale debt investment holdings at December 31, 2021 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value U.S. government securities $ 28,008 $ — $ (37) $ 27,971 Municipal securities 37,370 47 (194) 37,223 Corporate debt securities 21,706 — (122) 21,584 Asset-backed securities 5,890 — (9) 5,881 U.S. agency mortgage-backed securities 4,700 — (50) 4,650 Total (1) $ 97,674 $ 47 $ (412) $ 97,309 (1) There were no unsettled sales of available-for-sale debt investments at December 31, 2021. The following table presents the gross realized gains and gross realized losses related to available-for-sale debt investments for the three months ended March 31, 2022 (in thousands): Three Months Ended March 31, 2022 2021 Gross realized gains $ 108 $ 34 Gross realized losses (450) (72) Gross realized loss, net $ (342) $ (38) 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 March 31, 2022 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross Municipal securities $ — $ — $ 15,510 $ (411) $ 15,510 $ (411) Corporate debt securities 720 (31) 9,318 (298) 10,038 (329) Total $ 720 $ (31) $ 24,828 $ (709) $ 25,548 $ (740) 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 December 31, 2021 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross U.S. government securities $ 27,971 $ (37) $ — $ — $ 27,971 $ (37) Municipal securities 30,823 (194) — — 30,823 (194) Corporate debt securities 21,584 (122) — — 21,584 (122) Asset-backed securities 5,598 (9) — — 5,598 (9) U.S. agency mortgage-backed securities 4,650 (50) — — 4,650 (50) Total $ 90,626 $ (412) $ — $ — $ 90,626 $ (412) The following table summarizes the maturities of our available-for-sale debt investments at March 31, 2022 (in thousands): Amortized Cost Fair Value 1 year through 5 years $ 26,288 $ 25,548 Actual maturities may differ from the contractual maturities because borrowers may have the right to call or prepay certain obligations. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Mar. 31, 2022 | |
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, which represents a Level 2 fair value measurement. 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 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 3.75 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 March 31, 2022 and December 31, 2021, assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2022 Total (Level 1) (Level 2) (Level 3) Assets: Available-for-sale debt investments: Municipal securities 15,510 — 15,510 — Corporate debt securities 10,038 — 10,038 — Total $ 25,548 $ — $ 25,548 $ — Financial Liabilities: Private Placement Warrants $ 254 $ — $ 254 $ — Total $ 254 $ — $ 254 $ — December 31, 2021 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: U.S. Treasury Bills $ 263 $ 263 $ — $ — Subtotal $ 263 $ 263 $ — $ — Available-for-sale debt investments: U.S. government securities 27,971 — 27,971 — Municipal securities 37,223 — 37,223 — Corporate debt securities 21,584 — 21,584 — Asset-backed securities 5,881 — 5,881 — U.S. agency mortgage-backed securities 4,650 — 4,650 — Subtotal 97,309 — 97,309 — Total $ 97,572 $ 263 $ 97,309 $ — Financial liabilities: Private Placement Warrants 1,526 — 1,526 — Total $ 1,526 $ — $ 1,526 $ — The key assumptions used to determine the fair value of the Private Placement Warrants as of March 31, 2022 and December 31, 2021 using the Black-Scholes model were as follows: Fair Value Assumptions March 31, 2022 December 31, 2021 Risk-free interest rate 2.42% 1.11% Expected term (in years) 3.75 4 Expected volatility 60% 53% Dividend yield — — Fair value of common stock $1.49 $3.65 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES As of March 31, 2022 and December 31, 2021, accrued expenses consisted of the following (in thousands): March 31, 2022 December 31, 2021 Accrued professional service fees $ 4,989 $ 2,225 Accrued payroll expenses 1,289 1,896 Accrued construction in progress 1,679 658 Accrued inventory 1,249 1,422 Accrued warranty expenses 880 560 Other accrued expenses 967 1,395 Total accrued expenses $ 11,053 $ 8,156 |
NET (LOSS) INCOME PER SHARE
NET (LOSS) INCOME PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
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 months ended March 31, 2022 and 2021 is presented below (in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Net (loss) income $ (81,113) $ 92,109 Weighted average common shares outstanding – basic 135,260,665 128,788,715 Dilutive effect of potentially issuable shares — 7,102,004 Weighted average common shares outstanding – diluted 135,260,665 135,890,719 Basic net (loss) income per share $ (0.60) $ 0.72 Diluted net (loss) income per share $ (0.60) $ 0.68 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 12,708,540 and 11,277,997, respectively, for the three months ended March 31, 2022 and 2021. 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 March 31, 2022, diluted net loss per share was the same as basic net loss per share. |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 3 Months Ended |
Mar. 31, 2022 | |
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: Revenues from each major customer (including engineering services revenue from the JV) as % of total revenue are summarized in the following table for the three months ended March 31, 2022: Three Months Ended March 31, 2022 2021 Major Customer 1 77 % 26 % Major Customer 2 5 % 22 % Total Major Customers 82 % 48 % Joint Venture 1 % 42 % Total Major Customers 83 % 90 % Accounts receivable from each major customer (including the JV) as % of total accounts receivable as of March 31, 2022 and December 31, 2021 are summarized in the following table: March 31, 2022 December 31, 2021 Major Customer 1 73 % 48 % Major Customer 2 11 % 16 % Joint Venture — % 1 % Total Major Customers 84 % 65 % 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, which process may be hampered depending on travel restrictions or facility closures due to the ongoing Covid-19 pandemic. During the three months ended March 31, 2022, seven third-party suppliers of key single-sourced components and materials used in our battery modules and packs represented 23% of our total purchases during the period. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Related party revenues - product revenues $ — $ 271 Related party revenues - service revenues 162 442 Total related party revenues 162 713 Costs associated with related party revenues - product revenues — 200 Costs associated with related party revenues - service revenues 138 389 Total costs associated with related party revenues 138 589 Gross profit associated with related party revenues $ 24 $ 124 Transactions with BorgWarner and the JV In connection with Legacy Romeo’s investment in the JV formed on June 28, 2019 (Note 5), Legacy Romeo entered into a services agreement to provide various professional services to the JV. We have also sold certain products directly to a subsidiary of BorgWarner. On February 4, 2022, we acquired BorgWarner’s ownership share in the JV, which was subsequently dissolved on February 11, 2022. For further information on our acquisition of BorgWarner’s ownership share in the JV, see Note 1. Revenues earned for services rendered to the JV and products sold to BorgWarner were presented in the table above. Accounts receivable from BorgWarner JV was zero and $0.5 million at March 31, 2022 and December 31, 2021, 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 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 have entered into agreements to support the pilot program. Development of batteries for the program is underway, and the pilot program is expected to start in the fourth quarter of 2022. During the three months ended March 31, 2022 and 2021, we recorded $0.3 million and no selling, general and administrative expenses incurred for the pilot program, respectively. Transactions with Michael Patterson and related parties |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
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 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 March 31, 2022 and December 31, 2021. 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. A trial date for the contract-related claims has been set for October 2022, and trial for the personal injury claims has been set for June 2023 . 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, more than the $6.0 million settlement payable we agreed upon. The $6.0 million of legal settlement payable and the related $6.0 million of insurance receivable were reported in the noncurrent liability section and noncurrent asset section, respectively, of our balance sheet as of March 31, 2022. 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 mediated on October 7, 2021 and reached a settlement shortly thereafter. The parties are preparing to submit the settlement to the Court for approval. The proposed settlement amount is not material to the Company's consolidated financial statements . 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 currently engaged in 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 on November 5, 2021 we filed a motion to dismiss all claims. Briefing on the motion to dismiss is now complete and 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. Supply Agreement We have 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 paid Supplier a deposit of $1.5 million in 2021 (the “Deposit”). As of March 31, 2022, the balance of the Deposit was $0.3 million. The decrease in the Deposit reflects credits received as cells were purchased in the first quarter of 2022 and an updated view of the number of cells to be purchased for the remainder of 2022 relative to the minimum volume commitment. In addition, we paid a prepayment of $64.7 million (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. Unconditional Contractual Obligations An unconditional contractual obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding (non-cancelable, or cancellable only in certain circumstances). As of March 31, 2022, we estimate our total unconditional contractual commitments, including inventory purchases, lease minimum payments and other contractual commitments, are $9.8 million for the nine months ending December 31 2022, $37.7 million for the year ending December 31 2023, $197.1 million for the year ending December 31 2024, $195.6 million for the year ending December 31 2025, $193.2 million for the year ending December 31 2026 and $354.9 million thereafter. However, the amount of our purchase commitments subsequent to March 31, 2022 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. Amounts exclude a $6.0 million legal settlement payable related to an employee liability matter, for which our business and umbrella insurance carriers have agreed to cover the cost of damages owed, and we have recorded a $6.0 million insurance receivable to reflect that commitment. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Company has elected the accounting policy to present the cash payments for IPR&D assets acquired in an asset acquisition that have no alternative use as investing activities in our condensed consolidated statements of cash flows for the three months ended March 31, 2022. Basis of Presentation The accompanying 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. As of March 31, 2022, we had cash and cash equivalents, and investments of $41.3 million and $25.5 million, respectively. We have recurring losses, which have resulted in an accumulated deficit of $252.6 million as of March 31, 2022. On February 15, 2022, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), which is an affiliate of Yorkville Advisors. Under terms of the SEPA, we have the right, but not the obligation, to sell up to $350.0 million of common equity to an affiliate of Yorkville Advisors, subject to certain limitations, at the time of our choosing during the two-year term of the agreement. During the three months ended March 31, 2022, we issued 16.7 million shares of Common Stock to Yorkville for cash proceeds of $25.0 million with a portion of the shares issued as non-cash stock purchase discount under the SEPA. Despite the access to liquidity resulting from sales of common stock under the SEPA, as a result of continuing anticipated operating cash outflows, capital expenditures, amounts paid to BorgWarner in February 2022, and costs to support future growth, we believe that substantial doubt exists regarding our ability to continue as a going concern for 12 months from the date of the issuance of our financial statements. Although management continues to explore a range of options to further address the Company’s capitalization and liquidity, management cannot conclude as of the date of this filing that it is probable that additional options will become available to fund our longer range investment plans and our operating losses. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 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, 2021, as filed with the SEC on March 1, 2022 (the “2021 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 |
Reclassification of Presentation in Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income | Reclassification of Presentation in Our Condensed Consolidated Balance Sheets, Our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income and Note 3 to Our Condensed Consolidated Financial Statements Revenues of comparative prior period in our 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 have combined related party revenues with product revenues and service revenues and disclosed the amount of related party revenues in a captioned note. Revenues of comparative prior period presented in Note 3 are reclassified to conform with our current revenue presentation. We present disaggregated revenue by product and service instead of further disaggregating product by battery packs and modules. Immaterial Correction of Previously Issued Condensed 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 Accounting Standards Codification (“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. The following tables provide the impact of the correction on our previously issued condensed consolidated financial statements for the three months ended March 31, 2021. Condensed Consolidated Balance Sheets As of March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital $ 416,308 $ 2,027 $ 418,335 Accumulated deficit (87,431) (2,027) (89,458) Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands except share and per share data) Selling, general and administrative expenses $ 17,999 $ (2,097) $ 15,902 Total operating expenses 21,770 (2,097) 19,673 Operating loss (25,543) 2,097 (23,446) Income before income taxes and loss in equity method investments 90,665 2,097 92,762 Net Income 90,012 2,097 92,109 Net income per share Basic $ 0.70 $ 0.02 $ 0.72 Diluted 0.66 0.02 0.68 Weighted average number of shares outstanding Diluted 135,812,697 78,022 135,890,719 Condensed Consolidated Statement of Stockholders’ Equity For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital - December 31, 2020 $ 373,129 $ 4,124 $ 377,253 Stock-based compensation 6,553 (2,097) 4,456 Additional paid-in capital, Balance - March 31, 2021 416,308 2,027 418,335 Accumulated deficit - December 31, 2020 (177,443) (4,124) (181,567) Net income 90,012 2,097 92,109 Accumulated deficit, Balance - March 31, 2021 (87,431) (2,027) (89,458) Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Cash flows from operating activities: Net income $ 90,012 $ 2,097 $ 92,109 Adjustments to reconcile net income to net cash used for operating activities: Stock-based compensation 6,553 (2,097) 4,456 |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets—We review the carrying value of our long-lived assets, including property, plant and equipment and lease ROU assets, whenever events or changes in circumstances indicate that the carrying value may not be recoverable. We measure recoverability by comparing the carrying amount to the future undiscounted cash flows that the asset or asset group is expected to generate, and consider other factors regarding the Company’s future performance including revenue growth, sales backlog, commercial market size and market share, production capabilities and historical equity market capitalization of the Company. If the asset or asset group is not recoverable, its carrying amount would be adjusted down to its fair value. As of March 31, 2022, the Company identified an indicator of impairment of the long-lived assets, but determined based on future undiscounted cash flow estimates and other factors noted above that the asset group is recoverable. Potential impairment charges may be required in the future if the Company’s current forecasts are significantly reduced or not realized. |
Derivatives Accounting for the SEPA | The Company determined that SEPA represents a derivative financial instrument under ASC 815, Derivatives and Hedging, which should be recorded at fair value at inception and each reporting date thereafter. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. We early adopted ASU 2021-08 on a prospective basis effective January 1, 2022 and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06 , Debt - Debt with Conversion and Other Options ( Subtopic 470-20 ) and Derivatives and Hedging - Contracts in an Entity’s Own Equity ( Subtopic 815-40 ): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendment also simplifies the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity's Own Equity , by removing certain criteria that must be satisfied in order to classify a contract as equity, which is expected to decrease the number of freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the amendment revises the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity's ability to rebut the presumption. ASU 2020-06 may be adopted through either a modified retrospective method of transition or a fully retrospective method of transition. We adopted ASC 2020-06 effective January 1, 2022 and the adoption of the new guidance did not have a material impact on our condensed consolidated financial statements and related disclosures. Other recently issued accounting updates are either not expected to have a material impact or are not relevant to our condensed consolidated financial statements. |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Asset Acquisition | The following table presents the components of the consideration transferred at the Purchase Agreement Closing Date (in thousands): Description Purchase Consideration Cash transferred $ 28,614 Carrying amount of the Company’s equity method investment in the JV 1,057 Transaction costs 8,446 Total $ 38,117 The following table presents the components of the purchase allocation (in thousands): Description Amount Total consideration transferred $ 38,117 Cash received (3,025) Liabilities assumed 310 Acquired IPR&D $ 35,402 |
Schedule of Accounting Standards Update and Change in Accounting Principle | The following tables provide the impact of the correction on our previously issued condensed consolidated financial statements for the three months ended March 31, 2021. Condensed Consolidated Balance Sheets As of March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital $ 416,308 $ 2,027 $ 418,335 Accumulated deficit (87,431) (2,027) (89,458) Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands except share and per share data) Selling, general and administrative expenses $ 17,999 $ (2,097) $ 15,902 Total operating expenses 21,770 (2,097) 19,673 Operating loss (25,543) 2,097 (23,446) Income before income taxes and loss in equity method investments 90,665 2,097 92,762 Net Income 90,012 2,097 92,109 Net income per share Basic $ 0.70 $ 0.02 $ 0.72 Diluted 0.66 0.02 0.68 Weighted average number of shares outstanding Diluted 135,812,697 78,022 135,890,719 Condensed Consolidated Statement of Stockholders’ Equity For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Additional paid-in capital - December 31, 2020 $ 373,129 $ 4,124 $ 377,253 Stock-based compensation 6,553 (2,097) 4,456 Additional paid-in capital, Balance - March 31, 2021 416,308 2,027 418,335 Accumulated deficit - December 31, 2020 (177,443) (4,124) (181,567) Net income 90,012 2,097 92,109 Accumulated deficit, Balance - March 31, 2021 (87,431) (2,027) (89,458) Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2021 As Previously Reported Stock-based As Corrected (In thousands) Cash flows from operating activities: Net income $ 90,012 $ 2,097 $ 92,109 Adjustments to reconcile net income to net cash used for operating activities: Stock-based compensation 6,553 (2,097) 4,456 |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Changes in Contract Liabilities | During the three months ended March 31, 2022, changes in contract liabilities were as follows (in thousands): Three Months Ended Beginning balance $ 384 Revenues recognized (72) Increase due to billings 19 Ending balance $ 331 |
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 March 31, 2022 (in thousands): Contractual Minimum Purchase Commitments Purchase contracts with make-whole provisions (1) $ 316,629 Purchase contracts with provisions of customary remedies for breach of contract (2) 95,379 Total $ 412,008 (1) For approximately $316.6 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 $297.4 million under certain make-whole provisions included in these contracts. (2) For the remaining $95.4 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 March 31, 2022 (in thousands): Revenues Expected April 1, 2022 through December 31, 2022 $ 33,429 January 1, 2023 through December 31, 2024 278,273 Thereafter 100,306 Total $ 412,008 |
Schedule of Disaggregation of Revenue | The following table disaggregates revenues by when control is transferred for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Point in time $ 11,402 $ 612 Over time 169 442 Total $ 11,571 $ 1,054 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of March 31, 2022 and December 31, 2021, inventory consisted of the following (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 30,442 $ 35,327 Work-in-process 2,983 1,364 Finished goods 704 434 Total inventories $ 34,129 $ 37,125 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Arrangement Option Activity | The following table summarizes our time-based stock option activity (dollars in thousands, except weighted average exercise prices): Number of Weighted- Weighted- Aggregate Outstanding Options, December 31, 2021 3,410,387 $ 4.13 4.7 $ 2,496 Exercised (4,396) 1.56 8 Forfeited (147,824) 4.77 — Expired (45,744) 6.04 — Outstanding Options, March 31, 2022 3,212,423 $ 4.07 3.9 $ — Exercisable and vested, March 31, 2022 3,124,911 $ 4.12 3.8 $ — |
Schedule of Assumptions Used in Estimating the Fair Value of Stock Options | The grant date fair value of the PSUs granted on February 18, 2022 derived from the Monte Carlo simulation, was based, in part, on the following assumptions: Fair Value Assumptions: Grant date stock price $2.05 Risk-free interest rate 1.67% Simulation term (in years) 3.0 Expected volatility 63.1% Dividend yield 0% Grant date fair value per share $3.27 |
Schedule of RSU and PSU Activity | Shares Weighted Average Fair Value Outstanding at December 31, 2021 3,824,397 $ 6.64 Granted 6,414,028 $ 2.51 Vested (75,633) $ 9.23 Forfeited (1,285,687) $ 7.57 Outstanding at March 31, 2022 8,877,105 $ 3.50 |
Schedule of Company's Stock-based Compensation Expense by Line Item | The following table summarizes our SBC expense by line item in the condensed consolidated statements of operations and comprehensive (loss) income (in thousands): Three Months Ended March 31, 2022 2021 Cost of revenues $ 220 $ 121 Research and development 765 61 Selling, general, and administrative (122) (1) 4,274 Total $ 863 (1) $ 4,456 (1) Amount includes $2.7 million of PSU and RSU forfeitures primarily related to two terminated executive officers. The following table summarizes our SBC expense by award type for the three months ended March 31, 2022 and 2021 (in thousands): Three Months Ended March 31, 2022 2021 Options $ 82 $ 4,456 Restricted awards (RSUs and PSUs) 781 (1) — Total $ 863 (1) $ 4,456 (1) Amount includes $2.7 million of PSU and RSU forfeitures primarily related to two terminated executive officers. As of March 31, 2022, the unrecognized SBC expense and the weighted average period over which this SBC expense is expected to be recognized is summarized as follows (dollar in thousands): March 31, 2022 Weighted Average Recognition Period Options $ 123 0.46 Restricted awards (RSUs and PSUs) 27,419 2.48 Total $ 27,542 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value Municipal securities $ 15,921 $ — $ (411) $ 15,510 Corporate debt securities 10,367 — (329) 10,038 Total (1) $ 26,288 $ — $ (740) $ 25,548 (1) There were no unsettled sales of available-for-sale debt investments at March 31, 2022. The following table summarizes our available-for-sale debt investment holdings at December 31, 2021 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized and Credit Losses Fair Value U.S. government securities $ 28,008 $ — $ (37) $ 27,971 Municipal securities 37,370 47 (194) 37,223 Corporate debt securities 21,706 — (122) 21,584 Asset-backed securities 5,890 — (9) 5,881 U.S. agency mortgage-backed securities 4,700 — (50) 4,650 Total (1) $ 97,674 $ 47 $ (412) $ 97,309 (1) There were no unsettled sales of available-for-sale debt investments at December 31, 2021. The following table summarizes the maturities of our available-for-sale debt investments at March 31, 2022 (in thousands): Amortized Cost Fair Value 1 year through 5 years $ 26,288 $ 25,548 |
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 months ended March 31, 2022 (in thousands): Three Months Ended March 31, 2022 2021 Gross realized gains $ 108 $ 34 Gross realized losses (450) (72) Gross realized loss, net $ (342) $ (38) |
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 March 31, 2022 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross Municipal securities $ — $ — $ 15,510 $ (411) $ 15,510 $ (411) Corporate debt securities 720 (31) 9,318 (298) 10,038 (329) Total $ 720 $ (31) $ 24,828 $ (709) $ 25,548 $ (740) 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 December 31, 2021 (in thousands): Unrealized Losses Unrealized Losses Total Fair Value Gross Fair Value Gross Fair Value Gross U.S. government securities $ 27,971 $ (37) $ — $ — $ 27,971 $ (37) Municipal securities 30,823 (194) — — 30,823 (194) Corporate debt securities 21,584 (122) — — 21,584 (122) Asset-backed securities 5,598 (9) — — 5,598 (9) U.S. agency mortgage-backed securities 4,650 (50) — — 4,650 (50) Total $ 90,626 $ (412) $ — $ — $ 90,626 $ (412) |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of March 31, 2022 and December 31, 2021, assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2022 Total (Level 1) (Level 2) (Level 3) Assets: Available-for-sale debt investments: Municipal securities 15,510 — 15,510 — Corporate debt securities 10,038 — 10,038 — Total $ 25,548 $ — $ 25,548 $ — Financial Liabilities: Private Placement Warrants $ 254 $ — $ 254 $ — Total $ 254 $ — $ 254 $ — December 31, 2021 Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: U.S. Treasury Bills $ 263 $ 263 $ — $ — Subtotal $ 263 $ 263 $ — $ — Available-for-sale debt investments: U.S. government securities 27,971 — 27,971 — Municipal securities 37,223 — 37,223 — Corporate debt securities 21,584 — 21,584 — Asset-backed securities 5,881 — 5,881 — U.S. agency mortgage-backed securities 4,650 — 4,650 — Subtotal 97,309 — 97,309 — Total $ 97,572 $ 263 $ 97,309 $ — Financial liabilities: Private Placement Warrants 1,526 — 1,526 — Total $ 1,526 $ — $ 1,526 $ — |
Fair Value Measurement Inputs and Valuation Techniques | The key assumptions used to determine the fair value of the Private Placement Warrants as of March 31, 2022 and December 31, 2021 using the Black-Scholes model were as follows: Fair Value Assumptions March 31, 2022 December 31, 2021 Risk-free interest rate 2.42% 1.11% Expected term (in years) 3.75 4 Expected volatility 60% 53% Dividend yield — — Fair value of common stock $1.49 $3.65 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | As of March 31, 2022 and December 31, 2021, accrued expenses consisted of the following (in thousands): March 31, 2022 December 31, 2021 Accrued professional service fees $ 4,989 $ 2,225 Accrued payroll expenses 1,289 1,896 Accrued construction in progress 1,679 658 Accrued inventory 1,249 1,422 Accrued warranty expenses 880 560 Other accrued expenses 967 1,395 Total accrued expenses $ 11,053 $ 8,156 |
NET (LOSS) INCOME PER SHARE (Ta
NET (LOSS) INCOME PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic and Diluted Net (Loss) Income per Share | The calculation of basic and diluted net (loss) income per share for the three months ended March 31, 2022 and 2021 is presented below (in thousands, except share and per share data): Three Months Ended March 31, 2022 2021 Net (loss) income $ (81,113) $ 92,109 Weighted average common shares outstanding – basic 135,260,665 128,788,715 Dilutive effect of potentially issuable shares — 7,102,004 Weighted average common shares outstanding – diluted 135,260,665 135,890,719 Basic net (loss) income per share $ (0.60) $ 0.72 Diluted net (loss) income per share $ (0.60) $ 0.68 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
CONCENTRATION OF RISK | |
Schedules of Concentration of Risk | Revenues from each major customer (including engineering services revenue from the JV) as % of total revenue are summarized in the following table for the three months ended March 31, 2022: Three Months Ended March 31, 2022 2021 Major Customer 1 77 % 26 % Major Customer 2 5 % 22 % Total Major Customers 82 % 48 % Joint Venture 1 % 42 % Total Major Customers 83 % 90 % Accounts receivable from each major customer (including the JV) as % of total accounts receivable as of March 31, 2022 and December 31, 2021 are summarized in the following table: March 31, 2022 December 31, 2021 Major Customer 1 73 % 48 % Major Customer 2 11 % 16 % Joint Venture — % 1 % Total Major Customers 84 % 65 % |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Related party revenues - product revenues $ — $ 271 Related party revenues - service revenues 162 442 Total related party revenues 162 713 Costs associated with related party revenues - product revenues — 200 Costs associated with related party revenues - service revenues 138 389 Total costs associated with related party revenues 138 589 Gross profit associated with related party revenues $ 24 $ 124 |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 15, 2022 | Feb. 04, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Oct. 25, 2021 | Jun. 28, 2019 |
Loss in equity method investments | $ (271) | $ (643) | |||||||
Assets | 286,753 | $ 335,446 | |||||||
Liabilities | 63,220 | 56,295 | |||||||
Stockholders' equity attributable to parent | 223,533 | 328,586 | $ 195,698 | 279,151 | |||||
Cash and cash equivalents | 41,330 | 41,278 | 22,638 | ||||||
Investments | 25,500 | ||||||||
Accumulated deficit | (252,649) | (89,458) | $ (181,567) | (171,536) | |||||
Cash proceeds | 25,000 | ||||||||
Selling, general and administrative | 22,248 | 15,902 | |||||||
BorgWarner Romeo Power LLC | |||||||||
Research and development | $ 35,400 | ||||||||
BorgWarner Romeo Power LLC | Corporate Joint Venture | |||||||||
Percentage of right to receive the profit | 100.00% | ||||||||
Joint Venture | |||||||||
Percentage of right to receive the profit | 40.00% | ||||||||
Marketable securities | $ 1,300 | ||||||||
Loss in equity method investments | $ 700 | ||||||||
Assets | $ 3,000 | ||||||||
Liabilities | 300 | ||||||||
Stockholders' equity attributable to parent | $ 2,700 | ||||||||
Affiliate Of Yorkville Advisors | |||||||||
Right to sell common equity, amount | $ 350,000 | ||||||||
Agreement term | 2 years | ||||||||
Number of shares issued in transaction (in shares) | 16,700,000 | ||||||||
Cash proceeds | $ 25,000 | ||||||||
Revision of Prior Period, Error Correction, Adjustment | |||||||||
Selling, general and administrative | $ 4,100 | $ 4,100 | |||||||
Board Of Directors Chairmen And CEO | Stock Options Awarded To Former Chairman and Chief Executive Officer | |||||||||
Stock options awarded (in shares) | 4,633,978 | ||||||||
Exercise price (USD per share) | $ 6.69 | ||||||||
BorgWarner | BorgWarner Romeo Power LLC | |||||||||
Percentage of right to receive the profit | 60.00% | ||||||||
BorgWarner | BorgWarner Romeo Power LLC | BorgWarner | |||||||||
Increase in joint venture ownership | 60.00% | 60.00% |
DESCRIPTION OF BUSINESS AND B_4
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Consideration Transferred (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash transferred | $ 2,940 | $ 1,617 |
BorgWarner Romeo Power LLC | ||
Cash transferred | 28,614 | |
Carrying amount of the Company’s equity method investment in the JV | 1,057 | |
Transaction costs | 8,446 | |
Total | 38,117 | |
BorgWarner Romeo Power LLC | In Process Research and Development | ||
Cash transferred | 38,117 | |
Cash received | (3,025) | |
Liabilities assumed | 310 | |
Total | $ 35,402 |
DESCRIPTION OF BUSINESS AND B_5
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Additional paid-in capital | $ 476,907 | $ 451,040 | $ 418,335 | |
Accumulated deficit | $ (252,649) | $ (171,536) | (89,458) | $ (181,567) |
Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Additional paid-in capital | 416,308 | |||
Accumulated deficit | (87,431) | (177,443) | ||
Revision of Prior Period, Error Correction, Adjustment | Stock Based Compensation | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Additional paid-in capital | 2,027 | |||
Accumulated deficit | $ (2,027) | $ (4,124) |
DESCRIPTION OF BUSINESS AND B_6
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Condensed Consolidated Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative | $ 22,248 | $ 15,902 | |
Total operating expenses | 64,355 | 19,673 | |
Operating loss | (82,037) | (23,446) | |
Income before income taxes and loss in equity method investments | (80,842) | 92,762 | |
Net (loss) income | $ (81,113) | $ 92,109 | |
Basic (USD per share) | $ (0.60) | $ 0.72 | |
Diluted (USD per share) | $ (0.60) | $ 0.68 | |
Diluted (in shares) | 135,260,665 | 135,890,719 | |
Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative | $ 17,999 | ||
Total operating expenses | 21,770 | ||
Operating loss | (25,543) | ||
Income before income taxes and loss in equity method investments | 90,665 | ||
Net (loss) income | $ 90,012 | ||
Basic (USD per share) | $ 0.70 | ||
Diluted (USD per share) | $ 0.66 | ||
Diluted (in shares) | 135,812,697 | ||
Revision of Prior Period, Error Correction, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative | $ 4,100 | $ 4,100 | |
Revision of Prior Period, Error Correction, Adjustment | Stock Based Compensation | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative | (2,097) | ||
Total operating expenses | (2,097) | ||
Operating loss | 2,097 | ||
Income before income taxes and loss in equity method investments | 2,097 | ||
Net (loss) income | $ 2,097 | ||
Basic (USD per share) | $ 0.02 | ||
Diluted (USD per share) | $ 0.02 | ||
Diluted (in shares) | 78,022 |
DESCRIPTION OF BUSINESS AND B_7
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Condensed Consolidated Statement of Stockholders' Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | $ 223,533 | $ 328,586 | $ 279,151 | $ 195,698 |
Stock based compensation | 863 | 4,456 | ||
Accumulated deficit | (252,649) | (89,458) | (171,536) | (181,567) |
Net income | (81,113) | 92,109 | ||
APIC | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | 476,907 | 418,335 | 451,040 | 377,253 |
Stock based compensation | 863 | 4,456 | ||
Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | (252,649) | (89,458) | $ (171,536) | (181,567) |
Net income | $ (81,113) | 92,109 | ||
Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stock based compensation | 6,553 | |||
Accumulated deficit | (87,431) | (177,443) | ||
Net income | 90,012 | |||
Previously Reported | APIC | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | 416,308 | 373,129 | ||
Previously Reported | Accumulated Deficit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | (87,431) | |||
Revision of Prior Period, Error Correction, Adjustment | Stock Based Compensation | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stock based compensation | (2,097) | |||
Accumulated deficit | (2,027) | (4,124) | ||
Net income | 2,097 | |||
Revision of Prior Period, Error Correction, Adjustment | APIC | Stock Based Compensation | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | 2,027 | $ 4,124 | ||
Revision of Prior Period, Error Correction, Adjustment | Accumulated Deficit | Stock Based Compensation | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stockholders' equity attributable to parent | $ (2,027) |
DESCRIPTION OF BUSINESS AND B_8
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ (81,113) | $ 92,109 |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Stock-based compensation | $ 863 | 4,456 |
Previously Reported | ||
Cash flows from operating activities: | ||
Net income | 90,012 | |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Stock-based compensation | 6,553 | |
Revision of Prior Period, Error Correction, Adjustment | Stock Based Compensation | ||
Cash flows from operating activities: | ||
Net income | 2,097 | |
Adjustments to reconcile net income to net cash used for operating activities: | ||
Stock-based compensation | $ (2,097) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) shares in Millions | Feb. 15, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Subsidiary, Sale of Stock [Line Items] | |||
Cash proceeds | $ 25,000,000 | ||
Affiliate Of Yorkville Advisors | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued in transaction (in shares) | 16.7 | ||
Cash proceeds | $ 25,000,000 | ||
Right to sell common equity, amount | $ 350,000,000 | ||
Agreement term | 2 years | ||
Derivative asset fair value | $ 0 | $ 0 |
REVENUES - Changes in Contract
REVENUES - Changes in Contract Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Changes in contract liabilities | |
Beginning balance | $ 384 |
Revenues recognized | (72) |
Increase due to billings | 19 |
Ending balance | $ 331 |
REVENUES - Contract Liabilities
REVENUES - Contract Liabilities Performance Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 412,008 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 33,429 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 278,273 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 24 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 100,306 |
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 | $ 316,629 |
Maximum amount receivable if customers do not follow minimum purchase commitments | 297,400 |
Unsatisfied Performance Obligations with Customary Remedies | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Unsatisfied performance obligations, expected to be earned | $ 95,379 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue | [1] | $ 11,571 | $ 1,054 |
Point in time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 11,402 | 612 | |
Over time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 169 | $ 442 | |
[1] | Total revenues included related party revenues of $162 and $713 fo r the three months ended March 31, 2022 and 2021, respectively. See Note 14 - Transactions with Related Parties. |
INVENTORIES, NET - Schedule of
INVENTORIES, NET - Schedule of Inventory (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 30,442 | $ 35,327 | |
Work-in-process | 2,983 | 1,364 | |
Finished goods | 704 | 434 | |
Total inventories | 34,129 | $ 37,125 | |
Write-down in cost of sales | $ 3,300 | $ 400 |
EQUITY METHOD INVESTMENTS - Bor
EQUITY METHOD INVESTMENTS - Borg Warner Romeo Power LLC (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 28, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Payments to to fund joint venture | $ 0 | $ 4,000 | ||
BorgWarner Romeo Power LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to to fund joint venture | $ 4,000 | $ 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) - USD ($) | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 29, 2020 | Oct. 02, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||||
Loss in equity method investments | $ (271,000) | $ (643,000) | ||
HBR | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Amount agreed to fund a pilot | $ 10,000,000 | |||
Loss in equity method investments | $ 0 | |||
HBR | PIPE Investors | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | $ 25,000,000 | |||
HBR | Legacy Romeo | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments | $ 35,000,000 |
PUBLIC AND PRIVATE PLACEMENT _2
PUBLIC AND PRIVATE PLACEMENT WARRANTS - Narrative (Details) - USD ($) | Apr. 05, 2021 | Feb. 28, 2019 | Mar. 31, 2022 | Dec. 31, 2021 |
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 | 0 | ||
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 | 3,178,202 |
STOCK-BASED COMPENSATION - Time
STOCK-BASED COMPENSATION - Time-based Awards Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise of stock options | $ 7 | $ 4,681 |
Two Thousand Twenty Stock Plan, Excluding Two Thousand Sixteen Stock Plan Outstanding Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 15,000,000 | |
Two Thousand Twenty Stock Plan, Outstanding Awards From Two Thousand Sixteen Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized (in shares) | 11,290,900 | |
Two Thousand Twenty Stock Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 9,862,090 | |
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) | 4,396 | |
Exercise of stock options | $ 7 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of Options | ||
Forfeited (in shares) | (147,824) | |
Expired (in shares) | (45,744) | |
Weighted- Average Exercise Price | ||
Expired (USD per share) | $ 6.04 | |
Class A common stock | ||
Number of Options | ||
Outstanding options, beginning balance (in shares) | 3,410,387 | |
Exercised (in shares) | (4,396) | |
Outstanding options, ending balance (in shares) | 3,212,423 | 3,410,387 |
Exercisable and vested, ending balance (in shares) | 3,124,911 | |
Weighted- Average Exercise Price | ||
Outstanding options, beginning balance (USD per share) | $ 4.13 | |
Exercised (USD per share) | 1.56 | |
Forfeited (USD per share) | 4.77 | |
Outstanding options, ending balance (USD per share) | 4.07 | $ 4.13 |
Exercisable and vested, ending balance (USD per share) | $ 4.12 | |
Weighted- Average Remaining Contractual Life (Years) | ||
Outstanding options, weighted average remaining contractual life (years) | 3 years 10 months 24 days | 4 years 8 months 12 days |
Exercisable and vested, weighted average remaining contractual life (years) | 3 years 9 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding, aggregate intrinsic value, beginning balance | $ 2,496 | |
Exercised, aggregate intrinsic value | 8 | |
Outstanding, aggregate intrinsic value, ending balance | 0 | $ 2,496 |
Exercisable, aggregate intrinsic value | $ 0 |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units and Performance-related Stock Units Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($)shares | |
Restricted awards (RSUs and PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 6,414,028 |
Fair value of RSUs and PSUs granted | $ | $ 16.1 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
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% |
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 | 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-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions Used in Estimating the Fair Value of PSUs (Details) - PSUs | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant date stock price (USD per share) | $ 2.05 |
Risk-free interest rate | 167.00% |
Simulation term (in years) | 3 years |
Expected volatility | 63.10% |
Dividend yield | 0.00% |
Grant date fair value per share (USD per share) | $ 3.27 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of RSU and PSU Activity (Details) - Restricted awards (RSUs and PSUs) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 3,824,397 |
Granted (in shares) | shares | 6,414,028 |
Vested (in shares) | shares | (75,633) |
Forfeited (in shares) | shares | (1,285,687) |
Outstanding, ending balance (in shares) | shares | 8,877,105 |
Weighted Average Fair Value | |
Weighted average fair value, beginning balance (USD per share) | $ / shares | $ 6.64 |
Granted (USD per share) | $ / shares | 2.51 |
Vested (USD per share) | $ / shares | 9.23 |
Forfeited (USD per share) | $ / shares | 7.57 |
Weighted average fair value, ending balance (USD per share) | $ / shares | $ 3.50 |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock- based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 863 | $ 4,456 |
Cost of revenues | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 220 | 121 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 765 | 61 |
Selling, general, and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | (122) | 4,274 |
Stock Options, Restricted Stock Units And Performance-Related Restricted Stock Units | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 900 | 4,500 |
Restricted awards (RSUs and PSUs) | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 781 | $ 0 |
Stock-based compensation expense reversal | $ 2,700 |
STOCK-BASED COMPENSATION - SBC
STOCK-BASED COMPENSATION - SBC Expense by Award Type (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)officers$ / shares | Mar. 31, 2021USD ($)officers | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 863 | $ 4,456 |
Unrecognized stock-based compensation expense | $ 27,542 | |
Weighted average recognition period (USD per share) | $ / shares | ||
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 82 | 4,456 |
Unrecognized stock-based compensation expense | $ 123 | |
Weighted average recognition period (USD per share) | $ / shares | $ 0.46 | |
Restricted awards (RSUs and PSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 781 | $ 0 |
Unrecognized stock-based compensation expense | $ 27,419 | |
Weighted average recognition period (USD per share) | $ / shares | $ 2.48 | |
Forfeitures | $ 2,700 | |
Number of terminated executive officers | officers | 2 | 2 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, percent | 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 ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 26,288,000 | $ 97,674,000 |
Gross Unrealized Gains | 0 | 47,000 |
Gross Unrealized and Credit Losses | (740,000) | (412,000) |
Available-for-sale debt investments: | 25,548,000 | 97,309,000 |
Debt securities, available-for-sale, unsettled sales | 0 | 0 |
U.S. Treasury Bills | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28,008,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized and Credit Losses | (37,000) | |
Available-for-sale debt investments: | 27,971,000 | |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 15,921,000 | 37,370,000 |
Gross Unrealized Gains | 0 | 47,000 |
Gross Unrealized and Credit Losses | (411,000) | (194,000) |
Available-for-sale debt investments: | 15,510,000 | 37,223,000 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,367,000 | 21,706,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized and Credit Losses | (329,000) | (122,000) |
Available-for-sale debt investments: | $ 10,038,000 | 21,584,000 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 5,890,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized and Credit Losses | (9,000) | |
Available-for-sale debt investments: | 5,881,000 | |
U.S. agency mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,700,000 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized and Credit Losses | (50,000) | |
Available-for-sale debt investments: | $ 4,650,000 |
INVESTMENTS - Realized Gains (L
INVESTMENTS - Realized Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized gains | $ 108 | $ 34 |
Gross realized losses | (450) | (72) |
Gross realized loss, net | $ (342) | $ (38) |
INVESTMENTS - Schedule of Accum
INVESTMENTS - Schedule of Accumulated Unrealized Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | $ 720 | $ 90,626 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (31) | (412) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 24,828 | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | (709) | 0 |
Debt securities, available-for-sale, unrealized loss position | 25,548 | 90,626 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (740) | (412) |
U.S. Treasury Bills | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months | 27,971 | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (37) | |
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 | 27,971 | |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (37) | |
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 | 0 | 30,823 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | 0 | (194) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 15,510 | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | (411) | 0 |
Debt securities, available-for-sale, unrealized loss position | 15,510 | 30,823 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (411) | (194) |
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 | 720 | 21,584 |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (31) | (122) |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer | 9,318 | 0 |
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, accumulated loss | (298) | 0 |
Debt securities, available-for-sale, unrealized loss position | 10,038 | 21,584 |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | $ (329) | (122) |
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 | 5,598 | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (9) | |
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 | 5,598 | |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | (9) | |
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 | 4,650 | |
Debt securities, available-for-sale, continuous unrealized loss position, less than 12 months, accumulated loss | (50) | |
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 | 4,650 | |
Debt securities, available-for-sale, unrealized loss position, accumulated loss | $ (50) |
INVESTMENTS - Schedule of Ava_2
INVESTMENTS - Schedule of Available-for-sale Debt Securities Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Amortized Cost | |
1 year through 5 years | $ 26,288 |
Fair Value | |
1 year through 5 years | $ 25,548 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Expected term (in years) | 3 years 9 months | 4 years |
FAIR VALUE - Schedule of Assets
FAIR VALUE - Schedule of Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Available-for-sale debt investments: | $ 25,548 | $ 97,309 |
Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 15,510 | 37,223 |
Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 10,038 | 21,584 |
Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 5,881 | |
U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 4,650 | |
Recurring | ||
Assets: | ||
Cash equivalents: | 263 | |
Available-for-sale debt investments: | 97,309 | |
Total | 25,548 | 97,572 |
Financial Liabilities: | ||
Total | 254 | 1,526 |
Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 27,971 | |
Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 15,510 | 37,223 |
Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 10,038 | 21,584 |
Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 5,881 | |
Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 4,650 | |
Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Private Placement Warrants | 254 | 1,526 |
Recurring | U.S. Treasury Bills | ||
Assets: | ||
Cash equivalents: | 263 | |
Level 1 | Recurring | ||
Assets: | ||
Cash equivalents: | 263 | |
Available-for-sale debt investments: | 0 | |
Total | 0 | 263 |
Financial Liabilities: | ||
Total | 0 | 0 |
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 | 0 |
Level 1 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | 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 | Private Placement Warrants | ||
Financial Liabilities: | ||
Private Placement Warrants | 0 | 0 |
Level 1 | Recurring | U.S. Treasury Bills | ||
Assets: | ||
Cash equivalents: | 263 | |
Level 2 | Recurring | ||
Assets: | ||
Cash equivalents: | 0 | |
Available-for-sale debt investments: | 97,309 | |
Total | 25,548 | 97,309 |
Financial Liabilities: | ||
Total | 254 | 1,526 |
Level 2 | Recurring | U.S. government securities | ||
Assets: | ||
Available-for-sale debt investments: | 27,971 | |
Level 2 | Recurring | Municipal securities | ||
Assets: | ||
Available-for-sale debt investments: | 15,510 | 37,223 |
Level 2 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 10,038 | 21,584 |
Level 2 | Recurring | Asset-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 5,881 | |
Level 2 | Recurring | U.S. agency mortgage-backed securities | ||
Assets: | ||
Available-for-sale debt investments: | 4,650 | |
Level 2 | Recurring | Private Placement Warrants | ||
Financial Liabilities: | ||
Private Placement Warrants | 254 | 1,526 |
Level 2 | Recurring | U.S. Treasury Bills | ||
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 | 0 |
Level 3 | Recurring | Corporate debt securities | ||
Assets: | ||
Available-for-sale debt investments: | 0 | 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 | Private Placement Warrants | ||
Financial Liabilities: | ||
Private Placement Warrants | $ 0 | 0 |
Level 3 | Recurring | U.S. Treasury Bills | ||
Assets: | ||
Cash equivalents: | $ 0 |
FAIR VALUE - Private Placement
FAIR VALUE - Private Placement Warrants Valuation Assumptions (Details) | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected term (in years) | 3 years 9 months | 4 years |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 0.0242 | 0.0111 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Private Placement Warrants, measurement input | 0.60 | 0.53 |
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 | 1.49 | 3.65 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued professional service fees | $ 4,989 | $ 2,225 |
Accrued payroll expenses | 1,289 | 1,896 |
Accrued construction in progress | 1,679 | 658 |
Accrued inventory | 1,249 | 1,422 |
Accrued warranty expenses | 880 | 560 |
Other accrued expenses | 967 | 1,395 |
Total accrued expenses | $ 11,053 | $ 8,156 |
NET (LOSS) INCOME PER SHARE - (
NET (LOSS) INCOME PER SHARE - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (81,113) | $ 92,109 |
Weighted average common shares outstanding - basic (in shares) | 135,260,665 | 128,788,715 |
Dilutive effect of potentially issuable shares (in shares) | 0 | 7,102,004 |
Weighted average common shares outstanding - diluted (in shares) | 135,260,665 | 135,890,719 |
Basic net (loss) income per share (USD per share) | $ (0.60) | $ 0.72 |
Diluted net (loss) income per share (USD per share) | $ (0.60) | $ 0.68 |
Antidilutive shares (in shares) | 12,708,540 | 11,277,997 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Total Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 83.00% | 90.00% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Total Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 82.00% | 48.00% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Major Customer 1 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 77.00% | 26.00% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Major Customer 2 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 5.00% | 22.00% | |
Customer Concentration Risk | Revenue from Contract with Customer Benchmark | Joint Venture | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 1.00% | 42.00% | |
Customer Concentration Risk | Accounts receivable | Total Major Customers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 84.00% | 65.00% | |
Customer Concentration Risk | Accounts receivable | Major Customer 1 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 73.00% | 48.00% | |
Customer Concentration Risk | Accounts receivable | Major Customer 2 | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 16.00% | |
Customer Concentration Risk | Accounts receivable | Joint Venture | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 0.00% | 1.00% | |
Supplier Concentration Risk | Cost of Goods and Service Benchmark | Seven Third-Party Suppliers | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 23.00% | ||
Supplies Concentration Risk | Cost of Goods and Service Benchmark | Battery Cells | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 38.00% | ||
Supplies Concentration Risk | Cost of Goods and Service Benchmark | Two Battery Cell Suppliers | Battery Cells | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 90.00% |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES - Schedule of Related Party Net Revenues and Cost of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Total related party revenues | ||
Total related party revenues | $ 162 | $ 713 |
Total costs associated with related party revenues | 138 | 589 |
Gross profit associated with related party revenues | 24 | 124 |
Product | ||
Total related party revenues | ||
Total related party revenues | 0 | 271 |
Total costs associated with related party revenues | 0 | 200 |
Service | ||
Total related party revenues | ||
Total related party revenues | 162 | 442 |
Total costs associated with related party revenues | $ 138 | $ 389 |
TRANSACTIONS WITH RELATED PAR_4
TRANSACTIONS WITH RELATED PARTIES - Narrative (Details) | Dec. 29, 2020USD ($)batteryElectricVehicle | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Oct. 02, 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 | ||||
Number of battery electric vehicles (BEV) to purchase | batteryElectricVehicle | 500 | ||||
Related party transaction expenses | $ 300,000 | $ 0 | |||
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 | $ 0 | $ 500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | |||
Jul. 31, 2020USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Jul. 15, 2021litigationCase | Mar. 31, 2021USD ($) | Feb. 26, 2021shares | |
Loss Contingencies [Line Items] | ||||||
Legal settlement payable | $ 6,000 | $ 6,000 | ||||
Insurance receivable | 6,000 | 6,000 | ||||
Loss contingency, pending cases combined | litigationCase | 2 | |||||
Deposits | 300 | $ 1,500 | ||||
Prepayment | 64,700 | |||||
Purchase obligation remainder of fiscal year | 9,800 | |||||
Purchase obligation year one | 37,700 | |||||
Purchase obligation year two | 197,100 | |||||
Purchase obligation year three | 195,600 | |||||
Purchase obligation year four | 193,200 | |||||
Purchase obligation year five | 354,900 | |||||
Payments for legal settlements | 6,000 | |||||
Insurance receivable | 6,000 | |||||
Chelico et al. v. Romeo Systems, Inc., et al. | ||||||
Loss Contingencies [Line Items] | ||||||
Settlement agreement amount | $ 6,000 | |||||
Legal settlement payable | 6,000 | 6,000 | ||||
Insurance receivable | $ 6,000 | $ 6,000 | ||||
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% |