Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity Registrant Name | Microvast Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-38826 | |
Entity Tax Identification Number | 83-2530757 | |
Entity Address, Address Line One | 12603 Southwest Freeway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Stafford | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77477 | |
City Area Code | (281) | |
Local Phone Number | 491-9505 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 316,534,825 | |
Entity Central Index Key | 0001760689 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | MVST | |
Security Exchange Name | NASDAQ | |
Warrants | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants, exercisable for shares of common stock | |
Trading Symbol | MVSTW | |
Security Exchange Name | NASDAQ |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 67,398 | $ 231,420 |
Restricted cash, current | 21,803 | 70,732 |
Short-term investments | 25,496 | 25,070 |
Accounts receivable (net of allowance for credit losses of $4,407 and $3,242 as of December 31, 2022 and September 30, 2023, respectively) | 116,300 | 119,304 |
Notes receivable | 20,161 | 2,196 |
Inventories, net | 126,913 | 84,252 |
Prepaid expenses and other current assets | 25,840 | 12,093 |
Total Current Assets | 403,911 | 545,067 |
Restricted cash, non-current | 11 | 465 |
Property, plant and equipment, net | 549,544 | 335,140 |
Land use rights, net | 11,734 | 12,639 |
Acquired intangible assets, net | 3,210 | 1,636 |
Operating lease right-of-use assets | 19,612 | 16,368 |
Other non-current assets | 28,540 | 73,642 |
Total Assets | 1,016,562 | 984,957 |
Current liabilities: | ||
Accounts payable | 95,294 | 44,985 |
Notes payable | 39,329 | 68,441 |
Accrued expenses and other current liabilities | 121,816 | 66,720 |
Advance from customers | 54,482 | 54,207 |
Short-term bank borrowings | 24,818 | 17,398 |
Income tax payables | 652 | 658 |
Total Current Liabilities | 336,391 | 252,409 |
Long-term bonds payable | 43,888 | 43,888 |
Long-term bank borrowings | 30,839 | 28,997 |
Warrant liability | 151 | 126 |
Share-based compensation liability | 187 | 131 |
Operating lease liabilities | 16,951 | 14,347 |
Other non-current liabilities | 20,817 | 32,082 |
Total Liabilities | 449,224 | 371,980 |
Commitments and contingencies (Note 16) | ||
Shareholders’ Equity | ||
Common Stock (par value of US$0.0001 per share, 750,000,000 and 750,000,000 shares authorized as of December 31, 2022 and September 30, 2023; 309,316,011 and 316,534,825 shares issued, and 307,628,511 and 314,847,325 shares outstanding as of December 31, 2022 and September 30, 2023) | 32 | 31 |
Additional paid-in capital | 1,468,173 | 1,416,160 |
Statutory reserves | 6,032 | 6,032 |
Accumulated deficit | (872,965) | (791,165) |
Accumulated other comprehensive loss | (35,925) | (18,081) |
Total Microvast Holding, Inc. shareholders’ equity | 565,347 | 612,977 |
Noncontrolling interests | 1,991 | 0 |
Total Equity | 567,338 | 612,977 |
Total Liabilities and Equity | $ 1,016,562 | $ 984,957 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 3,242 | $ 4,407 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 316,534,825 | 309,316,011 |
Common stock, shares outstanding (in shares) | 314,847,325 | 307,628,511 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 80,116 | $ 38,616 | $ 202,042 | $ 139,698 |
Cost of revenues | (62,232) | (36,623) | (167,839) | (132,851) |
Gross profit | 17,884 | 1,993 | 34,203 | 6,847 |
Operating expenses: | ||||
General and administrative expenses | (25,402) | (22,585) | (69,347) | (83,021) |
Research and development expenses | (13,241) | (11,457) | (33,609) | (33,010) |
Selling and marketing expenses | (6,031) | (5,561) | (16,916) | (17,369) |
Total operating expenses | (44,674) | (39,603) | (119,872) | (133,400) |
Subsidy income | 442 | 520 | 1,156 | 1,233 |
Loss from operations | (26,348) | (37,090) | (84,513) | (125,320) |
Other income and expenses: | ||||
Interest income | 582 | 870 | 3,481 | 1,604 |
Interest expense | (491) | (774) | (1,437) | (2,465) |
Changes in fair value of warrant liability | (42) | 101 | (25) | 921 |
Other income, net | 127 | 349 | 673 | 758 |
Loss before provision for income taxes | (26,172) | (36,544) | (81,821) | (124,502) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (26,172) | (36,544) | (81,821) | (124,502) |
Less: net loss attributable to noncontrolling interests | (42) | 0 | (21) | 0 |
Net loss attributable to Microvast Holdings, Inc.'s shareholders | $ (26,130) | $ (36,544) | $ (81,800) | $ (124,502) |
Net loss per common share | ||||
Basic net loss per share (in dollars per share) | $ (0.08) | $ (0.12) | $ (0.26) | $ (0.41) |
Diluted net loss per share (in dollars per share) | $ (0.08) | $ (0.12) | $ (0.26) | $ (0.41) |
Weighted average shares used in calculating net loss per share of common stock | ||||
Weighted average shares used in calculating net loss per share of common stock, basic (in shares) | 313,108,457 | 305,977,372 | 309,541,499 | 301,821,464 |
Weighted average shares used in calculating net loss per share of common stock, diluted (in shares) | 313,108,457 | 305,977,372 | 309,541,499 | 301,821,464 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (26,172) | $ (36,544) | $ (81,821) | $ (124,502) |
Foreign currency translation adjustment | (2,192) | (21,002) | (18,006) | (37,612) |
Comprehensive loss | (28,364) | (57,546) | (99,827) | (162,114) |
Comprehensive loss attributable to non-controlling interests | (54) | 0 | (183) | 0 |
Total comprehensive loss attributable to Microvast Holding, Inc.'s shareholders | $ (28,310) | $ (57,546) | $ (99,644) | $ (162,114) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT)/EQUITY - USD ($) $ in Thousands | Total | Total Microvast Holdings, Inc. Shareholders’ Equity | Total Microvast Holdings, Inc. Shareholders’ Equity Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated other Comprehensive Income (loss) | Statutory reserves | Non- controlling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 298,843,016 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 686,698 | $ (866) | $ 30 | $ 1,306,034 | $ (632,099) | $ (866) | $ 6,701 | $ 6,032 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | $ (124,502) | (124,502) | (124,502) | |||||||
Issuance of common stock in connection with vesting of share-based awards (in shares) | 8,761,551 | |||||||||
Issuance of common stock in connection with vesting of share-based awards | 0 | $ 1 | (1) | |||||||
Share-based compensation | 92,138 | 92,138 | ||||||||
Foreign currency translation adjustments | (37,612) | (37,612) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 307,604,567 | |||||||||
Ending balance at Sep. 30, 2022 | 615,856 | $ 31 | 1,398,171 | (757,467) | (30,911) | 6,032 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting standards update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 298,843,016 | |||||||||
Beginning balance at Dec. 31, 2021 | 686,698 | $ (866) | $ 30 | 1,306,034 | (632,099) | $ (866) | 6,701 | 6,032 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | $ (158,200) | |||||||||
Ending balance (in shares) at Dec. 31, 2022 | 307,628,511 | |||||||||
Ending balance at Dec. 31, 2022 | 612,977 | 612,977 | $ 31 | 1,416,160 | (791,165) | (18,081) | 6,032 | $ 0 | ||
Beginning balance (in shares) at Jun. 30, 2022 | 300,859,266 | |||||||||
Beginning balance at Jun. 30, 2022 | 654,004 | $ 30 | 1,378,774 | (720,923) | (9,909) | 6,032 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (36,544) | (36,544) | (36,544) | |||||||
Issuance of common stock in connection with vesting of share-based awards (in shares) | 6,745,301 | |||||||||
Issuance of common stock in connection with vesting of share-based awards | 0 | $ 1 | (1) | |||||||
Share-based compensation | 19,398 | 19,398 | ||||||||
Foreign currency translation adjustments | (21,002) | (21,002) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 307,604,567 | |||||||||
Ending balance at Sep. 30, 2022 | 615,856 | $ 31 | 1,398,171 | (757,467) | (30,911) | 6,032 | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 307,628,511 | |||||||||
Beginning balance at Dec. 31, 2022 | 612,977 | 612,977 | $ 31 | 1,416,160 | (791,165) | (18,081) | 6,032 | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (81,821) | (81,800) | (81,800) | (21) | ||||||
Capital contribution from non-controlling interests | 2,174 | 2,174 | ||||||||
Issuance of common stock in connection with vesting of share-based awards (in shares) | 7,218,814 | |||||||||
Issuance of common stock in connection with vesting of share-based awards | 0 | $ 1 | (1) | |||||||
Share-based compensation | 52,014 | 52,014 | 52,014 | |||||||
Foreign currency translation adjustments | (18,006) | (17,844) | (17,844) | (162) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 314,847,325 | |||||||||
Ending balance at Sep. 30, 2023 | 567,338 | 565,347 | $ 32 | 1,468,173 | (872,965) | (35,925) | 6,032 | 1,991 | ||
Beginning balance (in shares) at Jun. 30, 2023 | 307,938,943 | |||||||||
Beginning balance at Jun. 30, 2023 | 579,717 | 577,672 | $ 31 | 1,452,189 | (846,835) | (33,745) | 6,032 | 2,045 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (26,172) | (26,130) | (26,130) | (42) | ||||||
Issuance of common stock in connection with vesting of share-based awards (in shares) | 6,908,382 | |||||||||
Issuance of common stock in connection with vesting of share-based awards | 0 | $ 1 | (1) | |||||||
Share-based compensation | 15,985 | 15,985 | 15,985 | |||||||
Foreign currency translation adjustments | (2,192) | (2,180) | (2,180) | (12) | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 314,847,325 | |||||||||
Ending balance at Sep. 30, 2023 | $ 567,338 | $ 565,347 | $ 32 | $ 1,468,173 | $ (872,965) | $ (35,925) | $ 6,032 | $ 1,991 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities | |||||
Net loss | $ (26,172) | $ (36,544) | $ (81,821) | $ (124,502) | $ (158,200) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Loss on disposal of property, plant and equipment | 832 | 11 | |||
Depreciation of property, plant and equipment | 14,643 | 15,161 | |||
Amortization of land use right and intangible assets | 593 | 420 | |||
Noncash lease expenses | 2,108 | 1,662 | |||
Share-based compensation | 51,641 | 72,925 | |||
Changes in fair value of warrant liability | 25 | (921) | |||
Allowance/(reversal) of credit losses | (206) | (43) | (1,038) | 337 | |
Provision for obsolete inventories | 928 | 3,148 | |||
Impairment loss from property, plant and equipment | 473 | 1,546 | |||
Product warranty | 9,017 | 8,263 | |||
Changes in operating assets and liabilities: | |||||
Notes receivable | (22,372) | 1,386 | |||
Accounts receivable | (911) | (5,024) | |||
Inventories | (54,473) | (39,517) | |||
Prepaid expenses and other current assets | (12,666) | (3,764) | |||
Amounts due from/to related parties | 0 | 85 | |||
Operating lease right-of-use assets | (5,588) | (19,284) | |||
Other non-current assets | (653) | 216 | |||
Notes payable | (26,070) | 19,942 | |||
Accounts payable | 53,400 | (529) | |||
Advance from customers | 515 | 5,608 | |||
Accrued expenses and other liabilities | (1,374) | (12,203) | |||
Operating lease liabilities | 2,760 | 15,389 | |||
Other non-current liabilities | (319) | 1,050 | |||
Net cash used in operating activities | (70,350) | (58,595) | (53,928) | ||
Cash flows from investing activities | |||||
Purchases of property, plant and equipment | (153,574) | (84,722) | |||
Purchase of short-term investments | (425) | 0 | |||
Proceeds on disposal of property, plant and equipment | 879 | 3 | |||
Net cash used in investing activities | (153,120) | (84,719) | |||
Cash flows from financing activities | |||||
Proceeds from borrowings | 18,439 | 58,708 | |||
Repayment of bank borrowings | (6,286) | (24,482) | |||
Net cash generated from financing activities | 12,153 | 34,226 | |||
Effect of exchange rate changes | (2,088) | (11,322) | |||
Decrease in cash, cash equivalents and restricted cash | (213,405) | (120,410) | |||
Cash, cash equivalents and restricted cash at beginning of the period | 302,617 | 536,109 | 536,109 | ||
Cash, cash equivalents and restricted cash at end of the period | 89,212 | 415,699 | 89,212 | 415,699 | 302,617 |
Cash and cash equivalents | 67,398 | 295,816 | 67,398 | 295,816 | $ 231,420 |
Restricted cash | 21,814 | 119,883 | 21,814 | 119,883 | |
Total cash, cash equivalents and restricted cash | 89,212 | 415,699 | 89,212 | 415,699 | |
Non-cash investing and financing activities | |||||
Payable for purchase of property, plant and equipment | $ 75,781 | $ 38,044 | $ 75,781 | $ 38,044 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Microvast, Inc. was incorporated under the laws of the State of Texas in the United States of America on October 12, 2006 and re-domiciled to the State of Delaware on December 31, 2015. On July 23, 2021 (the “Closing Date”), Microvast, Inc. and Tuscan Holdings Corp.(“Tuscan”) consummated the previously announced merger (the “Merger” or the "Business Combination"), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated February 1, 2021, between Tuscan, Microvast, Inc. and TSCN Merger Sub Inc., a Delaware corporation (“Merger Sub”). Pursuant to the Merger Agreement, the Merger Sub merged with and into Microvast, Inc., with Microvast, Inc. surviving the Merger. As a result of the Merger, Tuscan was renamed “Microvast Holdings, Inc.” (the “Company”). The Merger was accounted for as a reverse recapitalization as Microvast, Inc. was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The Company and its subsidiaries (collectively, the “Group”) are primarily engaged in developing, manufacturing, and selling electronic power products for electric vehicles and energy storage across the globe. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and use of estimates The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Security and Exchange Commission (the "SEC") and U.S. generally accepted accounting standards (“U.S. GAAP”) for interim financial reporting. Accordingly, certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the period ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2023, which provides a more complete discussion of the Company’s accounting policies and certain other information. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2023. The financial information as of December 31, 2022 included on the condensed consolidated balance sheets is derived from the Group’s audited consolidated financial statements for the year ended December 31, 2022. As of September 30, 2023, the Company had working capital of $67,520, a shareholders’ equity of $567,338, including an accumulated deficit of $872,965. For the nine months ended September 30, 2023, the Company incurred losses amounting to $81,821 and generated negative cash flows from operating activities amounting to $70,350. For the year ended December 31, 2022, the Company incurred losses amounting to $158,200 and generated negative cash flows from operating activities amounting to $53,928. The Company believes that it will have adequate sources of liquidity and capital resources to fund our operating and investing activities at least for the next twelve months as a result of among others, the below factors: • As of September 30, 2023, the Company had a backlog of approximately $678,681 and with the completion of its Huzhou Phase 3.1 2GWh cell, module and pack production line, the Company has the capacity to meet growing demand, especially for its 53.5Ah cell technology; • The Company has approximately $70,364 (RMB500 million) available to drawdown under its $111,483 (RMB800 million) project finance loan that it entered into on September 27, 2022, and with the extension of the availability period under this loan to June 9, 2024, the Company has funding in place to support further expansions in capacity at the Huzhou facility. • The Company has $240,655 property, plant and equipment in the United States and no borrowing has been incurred, so far, for its operations in the United States. With this growing asset base, the Company is considering new debt financing to support its expansion plans in the United States and is currently in negotiations with lenders. There have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements for the years ended December 31, 2022. Significant accounting estimates reflected in the Group’s financial statements include allowance for credit losses, provision for obsolete inventories, impairment of long-lived assets, valuation allowance for deferred tax assets, product warranty, fair value measurement of warrant liability and share based compensation. All intercompany transactions and balances have been eliminated upon consolidation. Emerging Growth Company Pursuant to the JOBS Act, an emerging growth company (the “EGC”) may adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-EGCs or (ii) within the same time periods as private companies. The Company intends to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information provided by other public companies. The Company also intends to take advantage of some of the reduced regulatory and reporting requirements of EGCs pursuant to the JOBS Act so long as the Company qualifies as an EGC, including, but not limited to, an exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments. Revenue recognition Nature of Goods and Services The Group’s revenue consists primarily of sales of lithium-ion batteries. The obligation of the Group is to provide the battery products. Revenue is recognized at the point of time when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Group expects to be entitled to in exchange for the goods or services. Revenue recognition - continued Disaggregation of revenue For the three and nine months ended September 30, 2022 and 2023, the Group derived revenues from geographic regions as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 People’s Republic of China ("PRC") $ 26,542 $ 36,289 $ 80,326 $ 115,023 Other Asia & Pacific countries 7,394 24,611 45,420 46,280 Asia & Pacific 33,936 60,900 125,746 161,303 Europe 3,432 19,034 11,062 38,556 U.S. 1,248 182 2,890 2,183 Total $ 38,616 $ 80,116 $ 139,698 $ 202,042 Contract balances Contract balances include accounts receivable and advances from customers. Accounts receivable represent cash not received from customers and are recorded when the rights to consideration are unconditional. The allowance for credit losses reflects the best estimate of probable losses inherent to the accounts receivable balance. Contract liabilities, recorded in advance from customers in the consolidated balance sheets, represent payment received in advance or payment received related to a material right provided to a customer to acquire additional goods or services at a discount in a future period. During the three months ended September 30, 2022 and 2023, the Group recognized $722 and $1,191 of revenue previously included in advance from customers as of July 1, 2022 and July 1, 2023, respectively. During the nine months ended September 30, 2022 and 2023, the Group recognized $550 and $2,485 of revenue previously included in advance from customers as of January 1, 2022 and January 1, 2023, respectively. Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument and recognized as compensation expense on a straight-line basis over the requisite service period, with a corresponding impact reflected in additional paid-in capital. For share-based awards granted with a performance condition, the compensation cost is recognized when it is probable that the performance condition will be achieved. The Company reassesses the probability of achieving the performance condition at the end of each reporting date and records a cumulative catch-up adjustment for any changes to its assessment. For performance-based awards with a market condition, such as awards using total shareholder return (“TSR”) as a performance metric, compensation expense is recognized on a straight-line basis over the estimated service period of the award, regardless of whether the market condition is satisfied. Liability-classified awards are remeasured at their fair-value-based measurement as of each reporting date until settlement. Forfeitures are recognized as they occur. Operating leases As of September 30, 2023, the Company recorded operating lease right-of-use (ROU) assets of $19,612 and operating lease liabilities of $19,366, including current portion in the amount of $2,415, which was recorded under accrued expenses and other current liabilities on the balance sheet. The Company determines if an arrangement is a lease or contains a lease at lease inception. Operating leases are required to record in the statement of financial position as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. The Company also elected the practical expedient not to separate lease and non-lease components of contracts. Lastly, for lease assets other than real estate, such as printing machines and electronic appliances, the Company elected the short-term lease exemption as their lease terms are 12 months or less. As the rate implicit in the lease is not readily determinable, the Company estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated in a portfolio approach to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment. Lease expense is recorded on a straight-line basis over the lease term. Warrant Liability The Company accounts for warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. As the Private Warrants (as defined in Note 11 – Warrants) meet the definition of a derivative as contemplated in ASC 815, the Company classifies the Private Warrants as liabilities. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the condensed statements of operations. The Private Warrants are valued using a Monte Carlo simulation model on the basis of the quoted market price of Public Warrants (as defined in Note 11 – Warrants). Recent accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2020-06 may have on the condensed consolidated financial statements and related disclosures. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: December 31, September 30, Accounts receivable $ 123,711 $ 119,542 Allowance for credit losses (4,407) (3,242) Accounts receivable, net $ 119,304 $ 116,300 Movement of allowance for credit losses was as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 5,828 $ 3,468 $ 5,005 $ 4,407 Cumulative-effect adjustment upon adoption of ASU2016-13 , Financial instruments- Credit losses (Topic 326) — — 866 — Charges (Reversal) of expenses (43) (206) 337 (1,038) Write off (12) — (165) (66) Recoveries of credit losses — — — 121 Exchange difference (337) (20) (607) (182) Balance at end of the period $ 5,436 $ 3,242 $ 5,436 $ 3,242 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: December 31, September 30, Work in process $ 48,747 $ 78,215 Raw materials 29,331 32,969 Finished goods 6,174 15,729 Total $ 84,252 $ 126,913 Provision for obsolete inventories at $1,229 and $0 were recognized for the three months ended September 30, 2022 and 2023, respectively. Provision for obsolete inventories at $3,148 and $928 were recognized for the nine months ended September 30, 2022 and 2023, respectively. |
ACQUIRED INTANGIBLE ASSETS, NET
ACQUIRED INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS, NET | ACQUIRED INTANGIBLE ASSETS, NET December 31, 2022 September 30, Cost of acquired intangible assets $ 3,493 $ 5,405 Less: accumulated amortization (1,857) (2,195) Acquired intangible assets, net $ 1,636 $ 3,210 In December, 2022, Microvast Inc. set up a new subsidiary named Microvast Precision Works Co., Ltd ("MPW") together with a third party (the "NCI"). In the first quarter of 2023, the Company invested cash of $5,072 in MPW to hold a 70% shareholding, and the NCI injected patents with a total value of $2,174 for the remaining 30% shareholding. Such patents received are recorded as intangible assets. The Group recorded amortization expense of $61 and $122 for the three months ended September 30, 2022 and 2023, respectively, and $183 and $371 for the nine months ended September 30, 2022 and 2023, respectively. No impairment losses were recognized for the three and nine months ended September 30, 2022 and 2023. The annual amortization expense for each of the five succeeding fiscal years and thereafter are as follows: Three months period ending December 31, 2023 $ 121 2024 481 2025 477 2026 476 2027 469 2028 381 Thereafter 805 Total $ 3,210 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, September 30, Product warranty, current $ 13,044 $ 15,176 Payables for purchase of property, plant and equipment 29,183 75,781 Other current liabilities 8,608 13,934 Accrued payroll and welfare 4,716 4,315 Accrued expenses 2,641 2,363 Interest payable 298 1,129 Other tax payable 6,296 6,703 Operating lease liabilities, current 1,934 2,415 Total $ 66,720 $ 121,816 |
PRODUCT WARRANTY
PRODUCT WARRANTY | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
PRODUCT WARRANTY | PRODUCT WARRANTY Movement of product warranty was as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 43,703 $ 37,108 $ 58,458 $ 42,060 Provided during the period 2,028 3,567 8,263 9,017 Utilized during the period (4,357) (7,125) (22,957) (15,635) Exchange difference (2,467) (202) (4,857) (2,094) Balance at end of the period $ 38,907 $ 33,348 $ 38,907 $ 33,348 December 31, September 30, Product warranty – current $ 13,044 $ 15,176 Product warranty – non-current 29,016 18,172 Total $ 42,060 $ 33,348 |
BANK BORROWINGS
BANK BORROWINGS | 9 Months Ended |
Sep. 30, 2023 | |
Bank Borrowings [Abstract] | |
BANK BORROWINGS | BANK BORROWINGS On September 27, 2022, the Group entered into a $111,483 (RMB800 million) loan facilities agreement with a group of lenders led by a PRC Bank (the "2022 Facility Agreement"). The 2022 Facility Agreement had an effective drawdown period until June 9, 2023, which was extended to June 9, 2024 by a supplemental agreement signed in October 2023. Under the supplemental agreement, the Company has access to RMB500 million undrawn amount under the 2022 Facility Agreement. The interest rate is prime plus 115 basis points where prime is based on Loan Prime Rate published by the National Inter-bank Funding Center of the PRC and is payable on a quarterly basis. The loan facilities can only be used for the manufacturing capacity expansion at the Group’s facility located in Huzhou, China. The 2022 Facility Agreement contains certain customary restrictive covenants, including but not limited to disposal of assets and dividend distribution without the consent of the lender, and certain customary events of default. As of September 30, 2023, the Group had outstanding borrowings of $38,703 under the 2022 Facility Agreement. Repayment Date Repayment Amount December 10, 2023 $2,723 (RMB19.9 million) June 10, 2024 $5,140 (RMB37.5 million) December 10, 2024 $5,140 (RMB37.5 million) June 10, 2025 $5,140 (RMB37.5 million) December 10, 2025 $5,140 (RMB37.5 million) June 10, 2026 $7,710 (RMB56.3 million) December 10, 2026 $7,710 (RMB56.3 million) The amount of capitalized interest expenses, which was recorded in construction in progress and property, plant and equipment, was $0 and $475 for the three months ended September 30, 2022 and 2023, respectively, and $0 and $1,503 for the nine months ended September 30, 2022 and 2023, respectively. The Group has also entered into short-term loan agreements and bank facilities with certain Chinese banks. The original terms of these loans are with a maximum maturity of 12 months and the interest rates range from 3.40% to 4.55% per annum . Changes in bank borrowings are as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Beginning balance $ 8,807 $ 49,146 $ 13,301 $ 46,395 Proceeds from bank borrowings 45,242 9,207 58,708 18,439 Repayments of principal (7,150) (2,347) (24,482) (6,286) Exchange difference (1,914) (349) (2,542) (2,891) Ending balance $ 44,985 $ 55,657 $ 44,985 $ 55,657 Balance of bank borrowings includes: December 31, September 30, Current $ 17,398 $ 24,818 Non-current 28,997 30,839 Total $ 46,395 $ 55,657 Certain assets of the Group have been pledged to secure the above bank facilities granted to the Group. The aggregate carrying amount of the assets pledged by the Group as of December 31, 2022 and September 30, 2023 are as follows: December 31, September 30, Buildings $ 27,245 $ 24,523 Land use rights 12,639 11,734 Total $ 39,884 $ 36,257 |
OTHER NON-CURRENT LIABILITIES
OTHER NON-CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities, Noncurrent [Abstract] | |
OTHER NON-CURRENT LIABILITIES | OTHER NON-CURRENT LIABILITIES December 31, September 30, Product warranty - non-current $ 29,016 $ 18,172 Deferred subsidy income- non-current 3,066 2,645 Total $ 32,082 $ 20,817 |
BONDS PAYABLE
BONDS PAYABLE | 9 Months Ended |
Sep. 30, 2023 | |
Bonds Payable [Abstract] | |
BONDS PAYABLE | BONDS PAYABLE December 31, September 30, Long–term bonds payable Huzhou Saiyuan $ 43,888 $ 43,888 Total $ 43,888 $ 43,888 On December 29, 2018, Microvast Power Systems Co., Ltd.('MPS'), one of the Company's subsidiaries, signed an agreement with Huzhou Saiyuan, an entity established by the local government, to issue convertible bonds to Huzhou Saiyuan for a total consideration of $87,776 (RMB600 million). The Company pledged its 12.39% equity holding over MPS to Huzhou Saiyuan to facilitate the issuance of these convertible bonds. If the subscribed bonds are not repaid by the maturity date, Huzhou Saiyuan has the right to dispose of the equity interests pledged by the Company in proportion to the amount of matured bonds, or convert the bonds into equity interests of MPS within 60 days after the maturity date. If Huzhou Saiyuan decides to convert the bonds into equity interests of MPS, the equity interests pledged would be released and the convertible bonds would be converted into equity interest of MPS based on an entity value of MPS of $950,000. In September 2020 and 2022, MPS entered into two supplement agreements with Huzhou Saiyuan, respectively, to change the repayment schedule as follows: (i) $14,629 (RMB100 million) was repaid, together with interest accrued, on or before November 10, 2022, (ii) $14,630 (RMB100 million) was repaid, together with interest accrued, on or before December 31, 2022, and (iii) the remaining $43,888 (RMB300 million) will be repaid, together with interest accrued, on or before January 31, 2027. The applicable interest rate will be increased to 12% if the Group is in default on the repayment of the bonds at the due date. The remaining terms and conditions of the convertible bonds were unchanged. The Company has complied in full with the amended repayment schedule and accordingly, as of September 30, 2023, the subscription and outstanding balance of the convertible bonds was $43,888 (RMB300 million). |
WARRANTS
WARRANTS | 9 Months Ended |
Sep. 30, 2023 | |
Warrants [Abstract] | |
WARRANTS | WARRANTS The Company assumed 27,600,000 publicly-traded warrants (“Public Warrants”) and 837,000 private placement warrants issued to Tuscan Holdings Acquisition LLC (the “Sponsor”) and EarlyBirdCapital, Inc. (“EarlyBirdCapital”) (“Private Warrants” and together with the Public Warrants, the “Warrants”) upon the Business Combination, all of which were issued in connection with Tuscan’s initial public offering (other than 150,000 Private Warrants that were issued in connection with the closing of the Business Combination) and entitle the holder to purchase one share of the Company’s Common Stock at an exercise price of $11.50 per share. During the three and nine months ended September 30, 2023, none of the Public Warrants or the Private Warrants were exercised. The Public Warrants became exercisable 30 days after the completion of the Business Combination. The Public Warrants are only exercisable for cash, however, if the Company were to not maintain the effectiveness of the registration statement covering the shares of Common Stock issuable upon exercise of the Public Warrants, the Public Warrants would be exercisable on a net-share settlement basis. The Public Warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: • in whole and not in part; • at a price of $0.01 per warrant; • upon not less than 30 days’ prior written notice of redemption; • if, and only if, the reported last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and • if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying the warrants. The Company classified the Public Warrants as equity. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a net-share settlement basis. The Private Warrants are identical to the Public Warrants, except that the Private Warrants will be exercisable for cash or on a net-share settlement basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. In addition, so long as the Private Warrants are held by EarlyBirdCapital and its designee, the Private Warrants will expire five years from the effective date of the Business Combination. The exercise price and number of shares of Common Stock issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuance of Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Warrants. The private warrant liability was remeasured at fair value as of September 30, 2023, resulting in a loss of $42 and $25 for the three and nine months ended September 30, 2023, classified within changes in fair value of warrant liability in the unaudited condensed consolidated statements of operations, respectively. The Private Warrants were valued using the following assumptions under the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date: September 30, Market price of public stock $ 1.89 Exercise price $ 11.50 Expected term (years) 2.82 Volatility 72.71 % Risk-free interest rate 4.71 % Dividend rate 0.00 % The market price of public stock is the quoted market price of the Company’s Common Stock as of the valuation date. The exercise price is extracted from the warrant agreements. The expected term is derived from the exercisable years based on the warrant agreements. The expected volatility is a blend of implied volatility from the Company’s own public warrant pricing, the average volatility of peer companies and the Company's historical volatility. The risk-free interest rate was estimated based on the market yield of US Government Bond with maturity close to the expected term of the warrants. The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the warrants. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT Measured or disclosed at fair value on a recurring basis The Group measured its financial assets and liabilities, including cash and cash equivalents, restricted cash and warrant liability at fair value on a recurring basis as of December 31, 2022 and September 30, 2023. Cash and cash equivalents and restricted cash are classified within Level 1 of the fair value hierarchy because they are valued based on the quoted market price in an active market. The fair value of the warrant liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. In determining the fair value of the warrant liability, the Company used the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date. See Note 11 – Warrants. As of December 31, 2022 and September 30, 2023, information about inputs for the fair value measurements of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair Value Measurement as of December 31, 2022 (In thousands) Quoted Prices in Active Market Significant Other Significant Unobservable Inputs Total Cash and cash equivalents $ 231,420 — — $ 231,420 Restricted cash 71,197 — — 71,197 Total financial asset $ 302,617 — — $ 302,617 Warrant liability $ — — 126 $ 126 Total financial liability $ — — 126 $ 126 Measured or disclosed at fair value on a recurring basis-continued Fair Value Measurement as of September 30, 2023 (In thousands) Quoted Prices in Active Market Significant Other Significant Unobservable Inputs Total Cash and cash equivalents $ 67,398 — — $ 67,398 Restricted cash $ 21,814 — — $ 21,814 Total financial asset $ 89,212 — — $ 89,212 Warrant liability $ — — 151 $ 151 Total financial liability $ — — 151 $ 151 The following is a reconciliation of the beginning and ending balances for Level 3 warrant liability during the nine months ended September 30, 2022 and 2023: (In thousands) Nine Months Ended September 30, 2022 2023 Balance at the beginning of the period 1,105 $ 126 Changes in fair value (921) 25 Balance at end of the period $ 184 $ 151 Measured or disclosed at fair value on a nonrecurring basis The Group measured the long-lived assets using the income approach—discounted cash flow method, when events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
LEASES | LEASES The Group has operating leases for office spaces and warehouses. Certain leases include renewal options and/or termination options, which are factored into the Group's determination of lease payments when appropriate. Operating lease cost for the three and nine months ended September 30, 2023 was $861 and $2,810, which excluded cost of short-term contracts. Short-term lease cost for the three and nine months ended September 30, 2023 was $90 and $269. As of September 30, 2023, the weighted average remaining lease term was 10.2 years and weighted average discount rate was 5.2% for the Group's operating leases. Supplemental cash flow information of the leases were as follows: Nine months ended September 30, 2023 Cash payments for operating leases $ 2,822 Right-of-use assets obtained in exchange for new operating lease liabilities $ 5,726 The following is a maturity analysis of the annual undiscounted cash flows for lease liabilities as of September 30, 2023: As of September 30, 2023 Three months period ending December 31, 2023 $ 828 2024 $ 3,220 2025 $ 2,744 2026 $ 2,495 2027 $ 2,365 2028 $ 1,788 Thereafter $ 11,308 Total future lease payments $ 24,748 Less: Imputed interest $ (5,382) Present value of operating lease liabilities $ 19,366 |
SHARE-BASED PAYMENT
SHARE-BASED PAYMENT | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENT | SHARE-BASED PAYMENTOn July 21, 2021, the Company adopted the Microvast Holdings, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), effective upon the Closing Date. The 2021 Plan provides for the grant of incentive and non-qualified stock option, restricted stock units, restricted share awards, stock appreciation awards, and cash-based awards to employees, directors, and consultants of the Company. Options awarded under the 2021 Plan expire no more than 10 years from the date of grant. Concurrently with the closing of the Business Combination, the share awards granted under 2012 Share Incentive Plan of Microvast, Inc. (the “2012 Plan”) were rolled over by removing original performance conditions and converting into options and capped non-vested share units with modified vesting schedules, using the Common Exchange Ratio of 160.3. The 2021 Plan reserved 5% of the fully-diluted shares of Common Stock outstanding immediately following the Closing Date plus the shares underlying awards rolled over from the 2012 Plan for issuance in accordance with the 2021 Plan’s terms. Stock options The grant and modification date fair value of the stock options was determined using the Black Scholes model with the following assumptions: Nine months ended September 30, 2023 Exercise price $ 1.21 ~ $ 6.28 Expected terms (years) 0.25 ~ 6.00 Volatility 55.59 % ~ 86.83 % Risk-free interest rate 3.48 % ~ 5.38 % Expected dividend yields 0.00% Fair value of options granted $ 0.005 ~ $ 1.48 The exercise prices for each award were extracted from the option agreements. The expected terms for each award were derived using the simplified method, and is estimated to occur at the midpoint of the vesting date and the expiration date. The volatility of the underlying common stock during the lives of the options was a blend of implied volatility from the average volatility of peer companies, implied volatility and the Company's historical volatility. Risk-free interest rate was estimated based on the market yield of US Government Bonds with maturity close to the expected term of the options. The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. Stock options-continued Stock options activity for the nine months ended September 30, 2022 and 2023 was as follows: Stock options life Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Weighted Average Remaining Outstanding as of December 31, 2021 33,503,657 6.19 4.95 7.9 Grant 2,900,000 4.81 2.69 Forfeited (227,092) 6.28 4.86 Outstanding as of September 30, 2022 36,176,565 6.08 4.80 7.1 Expected to vest and exercisable as of September 30, 2022 36,176,565 6.08 4.80 7.1 Exercisable as of September 30, 2022 11,875,830 6.20 5.00 7.2 Outstanding as of December 31, 2022 36,091,071 6.08 4.80 6.8 Grant 640,000 1.77 1.18 Forfeited (895,706) 5.02 3.64 Outstanding as of September 30, 2023 35,835,365 6.03 4.76 5.6 Expected to vest and exercisable as of September 30, 2023 35,835,365 6.03 4.76 5.6 Exercisable as of September 30, 2023 23,916,879 6.14 4.90 5.5 During the three months ended September 30, 2022 and 2023, the Company recorded share-based compensation expense of $14,081 and $12,713 related to the option awards, respectively. During the nine months ended September 30, 2022 and 2023, the Company recorded share-based compensation expense of $46,043 and $39,768 related to the option awards, respectively. The total unrecognized equity-based compensation costs as of September 30, 2023 related to the stock options was $43,349, which is expected to be recognized over a weighted-average period of 0.9 years. The aggregate intrinsic value of the stock options as of September 30, 2023 was $59. Capped Non-vested share units The capped non-vested share units (“CRSUs”) represent rights for the holder to receive cash determined by the number of shares granted multiplied by the lower of the fair market value and the capped price, which will be settled in the form of cash payments. The CRSUs were accounted for as liability classified awards. On June 27, 2022, the Board of Directors and Compensation Committee approved a modification of the settlement terms of 20,023,699 CRSUs under the 2021 Plan from cash settlement to share settlement (the “Modification”). Pursuant to the Modification, on each vesting date, if the stock price is higher than the capped price, the number of shares to be issued will be calculated based on the following formula: Number of shares to be issued = Capped price* Number of shares vested /Vesting date stock price Capped Non-vested share units-continued If the stock price is equal to or less than the capped price, the Company will grant a fixed number of shares on each vesting date based on the vesting schedule. All other terms of the CRSUs remain unchanged. The Modification resulted in a change of the CRSUs’ classification from liability to equity, as the predominant feature of the modified CRSUs was the granting of a fixed number of shares on each vesting date instead of a fixed monetary amount. The determination of the predominant feature was based on the estimated probability of how the awards will be settled using the Monte Carlo model. At the Modification date, the Company reclassified the amounts previously recorded as a share-based compensation liability to additional paid-in capital. The modified CRSUs were accounted for as an equity award going forward from the date of the Modification with compensation expenses recognized for each tranche at the fair value measured on the modification date. At the Modification date, the Company used the Monte Carlo valuation model in determining the fair value of the CRSUs with assumptions as follows: Modification Date Expected term (years) 0.07 ~ 2.07 Volatility 50.93 % ~ 73.89 % Risk-free interest rate 1.15 % ~ 3.05 % Expected dividend yields 0.00% Expected term was the time left (in years) from the Modification date to the vesting date based on the terms of the applicable award agreements. The volatility of the underlying common stock was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the expected term of the awards. Risk-free interest rate was estimated based on the market yield of US Government Bonds with maturity close to the expected term of the awards. The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the awards. During the three months ended September 30, 2022 and 2023, the Company recorded share-based compensation expense of $4,367 and $1,832, related to these CRSUs awards, respectively. During the nine months ended September 30, 2022 and 2023, the Company recorded share-based compensation expense of $29,481 and $8,378, related to these CRSUs awards, respectively. Activity on the CRSUs for the nine months ended September 30, 2022 and 2023 was as follows: Number on Weighted Average Grant Outstanding as of December 31, 2021 23,027,399 8.74 1 Vested (9,582,930) 4.37 Outstanding as of September 30, 2022 13,444,469 2.38 Outstanding as of December 31, 2022 13,444,469 2.38 Vested (6,722,228) 2.47 Outstanding as of September 30, 2023 6,722,241 2.29 The total unrecognized equity-based compensation costs as of September 30, 2023 related to the CRSUs was $4,132. Restricted Stock Units Following the Business Combination, the Company granted 2,641,715 restricted stock units (“RSUs”) and 2,680,372 performance-based restricted stock unit (“PSU”) awards subject to service, performance and/or market conditions. The service condition requires the participant’s continued services or employment with the Company through the applicable vesting date, and the performance condition requires the achievement of the performance criteria defined in the award agreement. The market condition is based on the Company’s TSR relative to a comparator group during a specified performance period. The fair value of RSUs is determined by the market closing price of Common Stock at the grant date and is amortized over the vesting period on a straight-line basis. The fair value of PSUs that include vesting based on market conditions are estimated using the Monte Carlo valuation method. For PSU awards with performance conditions, share-based compensation expense is only recognized if the performance conditions become probable to be satisfied. Compensation cost for these awards is amortized on a straight-line basis over the vesting period based on the grant date fair value, regardless of whether the market condition is satisfied. Accordingly, the Company recorded share-based compensation expense of $577 and $1,536 related to these RSUs and $880 and $2,388 related to these PSUs during the three and nine months ended September 30, 2023, respectively. During the three and nine months ended September 30, 2022, the Company recorded share-based compensation expense of $345 and $1,048 related to these RSUs and $621 and $1,653 related to these PSUs, respectively. The following assumptions were used for the respective period to calculate the fair value of common stock to be issued under TSR awards on the date of grant using the Monte Carlo model: Nine months ended September 30, 2023 Expected term (years) 2.92 Volatility 61.89 % Risk-free interest rate 3.83 % Expected dividend yields 0.00 % The expected term was derived based on the remaining time from the grant date through the end of the performance period. The volatility of the underlying common stock during the lives of the awards was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the expected term of the awards. Risk-free interest rate was estimated based on the market yield of US Government Bond with maturity close to the expected term of the awards. The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the awards. Restricted Stock Units-continued The non-vested shares activity for the nine months ended September 30, 2022 and 2023 was as follows: Number of Weighted Outstanding as of December 31, 2021 671,441 9.08 Grant 1,239,854 4.93 Vested (86,996) 6.96 Forfeited (58,126) 7.47 Outstanding as of September 30, 2022 1,766,173 6.33 Outstanding as of December 31, 2022 1,222,837 6.92 Grant 3,354,633 1.88 Vested (496,586) 3.39 Forfeited (103,424) 4.59 Outstanding as of September 30, 2023 3,977,460 3.17 The total unrecognized equity-based compensation costs as of September 30, 2023 related to the non-vested shares was $7,039. The following summarizes the classification of share-based compensation: Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Cost of revenues $ 1,964 $ 1,530 $ 5,780 $ 4,559 General and administrative expenses 12,834 10,444 55,528 35,031 Research and development expenses 3,193 2,953 10,981 8,660 Selling and marketing expenses 1,284 935 5,533 3,391 Construction in process 139 140 403 429 Total $ 19,414 $ 16,002 $ 78,225 $ 52,070 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: Three Months Ended September 30, Nine Months Ended 2022 2023 2022 2023 Numerator: Net loss attributable to common stock shareholders $ (36,544) $ (26,130) $ (124,502) $ (81,800) Denominator: Weighted average common stock used in computing basic and diluted net loss per share 305,977,372 313,108,457 301,821,464 309,541,499 Basic and diluted net loss per share $ (0.12) $ (0.08) $ (0.41) $ (0.26) For the three and nine months ended September 30, 2022 and 2023, the following Common Stock outstanding were excluded from the calculation of diluted net loss per share, as their inclusion would have been anti-dilutive for the periods prescribed. Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Shares issuable upon exercise of stock options 27,032,668 35,830,564 31,529,919 36,001,774 Shares issuable upon vesting of non-vested shares 1,815,043 3,898,963 1,282,482 3,652,642 Shares issuable upon vesting of Capped non-vested shares 15,017,783 8,343,220 5,280,978 11,662,166 Shares issuable upon exercise of warrants 28,437,000 28,437,000 28,437,000 28,437,000 Shares issuable upon vesting of Earn-out shares 19,999,988 19,999,988 19,999,988 19,999,988 Shares issuable that may be subject to cancellation 1,687,500 1,687,500 1,687,500 1,687,500 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The directors of Company predecessor, Tuscan, have been named as defendants in a litigation filed in the Delaware Court of Chancery captioned Matt Jacob v. Stephen A. Vogel, et al. , No. 2022-0600-PAF (Del. Ch.) (filed July 7, 2022). The plaintiff is seeking to certify the litigation as a stockholder class action. The complaint alleges that defendants breached their fiduciary duties in connection with Tuscan’s acquisition of Microvast, Inc., including by making inadequate disclosures concerning the projected earnings of Microvast, Inc. The plaintiff further alleges that once the earnings of the combined company became public, the Company’s stock dropped, causing losses to investors. Pursuant to the Company's governing documents and indemnification agreements entered into by the Company with each of the named defendants, the Company has indemnified the defendants for all expenses and losses related to the litigation subject to the terms of those indemnification agreements. While the lawsuit is being vigorously defended, other reported lawsuits of this type have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. Litigation of this kind can lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. The outcome of any litigation is inherently uncertain, and there is always the possibility that a court rules in a manner that is adverse to the interests of the Company and the individual defendants. However, the amount of any such loss in that scenario, which could be material, cannot be reasonably estimated at this time. Litigation - continued The Group is also involved in other litigation, claims, and proceedings. The Group evaluates the status of each legal matter and assesses the potential financial exposure. If the potential loss from any legal proceedings or litigation is considered probable and the amount can be reasonably estimated, the Group accrues a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimated. As of December 31, 2022 and September 30, 2023, based on the information currently available, the Group believes that the loss contingencies that may arise as a result of currently pending ordinary course legal proceedings are not reasonably likely to have a material adverse effect on the Group’s business, results of operations, financial condition, and cash flows. Capital commitments Capital commitments for construction of property and purchase of property, plant and equipment were $95,905 as of September 30, 2023, which is mainly for the construction of lithium battery production lines. Purchase Commitments Purchase commitments for non-cancelable contractual obligations primarily related to purchases of inventory were $65,691 as of September 30, 2023. Letters of credit The Company may be required to provide a letter of credit to customers upon contract signing. The letter of credit generally has an expiration date within one year. As of September 30, 2023, the Company had an outstanding standby letter of credit from a bank with $25,496 of short-term investment as collateral. Pledged assets The Group may pledge certain assets to banks to secure the issuance of bank acceptance notes for the Group. As of September 30, 2023, notes receivable from customers in the amount of $13,061, together with certain of our machinery and equipment with a carrying value of $28,453 has been pledged to secure the issuance of such notes. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation and use of estimates | Basis of presentation and use of estimates The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Security and Exchange Commission (the "SEC") and U.S. generally accepted accounting standards (“U.S. GAAP”) for interim financial reporting. Accordingly, certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the period ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 16, 2023, which provides a more complete discussion of the Company’s accounting policies and certain other information. In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (which include normal recurring adjustments) necessary for a fair statement of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2023. The financial information as of December 31, 2022 included on the condensed consolidated balance sheets is derived from the Group’s audited consolidated financial statements for the year ended December 31, 2022. As of September 30, 2023, the Company had working capital of $67,520, a shareholders’ equity of $567,338, including an accumulated deficit of $872,965. For the nine months ended September 30, 2023, the Company incurred losses amounting to $81,821 and generated negative cash flows from operating activities amounting to $70,350. For the year ended December 31, 2022, the Company incurred losses amounting to $158,200 and generated negative cash flows from operating activities amounting to $53,928. The Company believes that it will have adequate sources of liquidity and capital resources to fund our operating and investing activities at least for the next twelve months as a result of among others, the below factors: • As of September 30, 2023, the Company had a backlog of approximately $678,681 and with the completion of its Huzhou Phase 3.1 2GWh cell, module and pack production line, the Company has the capacity to meet growing demand, especially for its 53.5Ah cell technology; • The Company has approximately $70,364 (RMB500 million) available to drawdown under its $111,483 (RMB800 million) project finance loan that it entered into on September 27, 2022, and with the extension of the availability period under this loan to June 9, 2024, the Company has funding in place to support further expansions in capacity at the Huzhou facility. • The Company has $240,655 property, plant and equipment in the United States and no borrowing has been incurred, so far, for its operations in the United States. With this growing asset base, the Company is considering new debt financing to support its expansion plans in the United States and is currently in negotiations with lenders. There have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements for the years ended December 31, 2022. Significant accounting estimates reflected in the Group’s financial statements include allowance for credit losses, provision for obsolete inventories, impairment of long-lived assets, valuation allowance for deferred tax assets, product warranty, fair value measurement of warrant liability and share based compensation. All intercompany transactions and balances have been eliminated upon consolidation. |
Emerging Growth Company | Emerging Growth Company Pursuant to the JOBS Act, an emerging growth company (the “EGC”) may adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-EGCs or (ii) within the same time periods as private companies. The Company intends to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. Accordingly, the information contained herein may be different than the information provided by other public companies. The Company also intends to take advantage of some of the reduced regulatory and reporting requirements of EGCs pursuant to the JOBS Act so long as the Company qualifies as an EGC, including, but not limited to, an exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments. |
Revenue recognition | Revenue recognition Nature of Goods and Services The Group’s revenue consists primarily of sales of lithium-ion batteries. The obligation of the Group is to provide the battery products. Revenue is recognized at the point of time when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration the Group expects to be entitled to in exchange for the goods or services. |
Share-based compensation | Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument and recognized as compensation expense on a straight-line basis over the requisite service period, with a corresponding impact reflected in additional paid-in capital. |
Operating leases | Operating leases As of September 30, 2023, the Company recorded operating lease right-of-use (ROU) assets of $19,612 and operating lease liabilities of $19,366, including current portion in the amount of $2,415, which was recorded under accrued expenses and other current liabilities on the balance sheet. The Company determines if an arrangement is a lease or contains a lease at lease inception. Operating leases are required to record in the statement of financial position as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. The Company also elected the practical expedient not to separate lease and non-lease components of contracts. Lastly, for lease assets other than real estate, such as printing machines and electronic appliances, the Company elected the short-term lease exemption as their lease terms are 12 months or less. As the rate implicit in the lease is not readily determinable, the Company estimates its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated in a portfolio approach to approximate the interest rate on a collateralized basis with similar terms and payments in a similar economic environment. Lease expense is recorded on a straight-line basis over the lease term. |
Warrant Liability | Warrant Liability The Company accounts for warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. As the Private Warrants (as defined in Note 11 – Warrants) meet the definition of a derivative as contemplated in ASC 815, the Company classifies the Private Warrants as liabilities. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the condensed statements of operations. The Private Warrants are valued using a Monte Carlo simulation model on the basis of the quoted market price of Public Warrants (as defined in Note 11 – Warrants). |
Recent accounting pronouncements adopted and not yet adopted | Recent accounting pronouncements not yet adopted In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2020-06 may have on the condensed consolidated financial statements and related disclosures. |
Debt instrument term, description | The original terms of these loans are with a maximum maturity of 12 months and the interest rates range from 3.40% to 4.55% per annum |
Public Warrants | The Company may redeem the Public Warrants: • in whole and not in part; • at a price of $0.01 per warrant; • upon not less than 30 days’ prior written notice of redemption; • if, and only if, the reported last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20-trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the warrant holders; and • if, and only if, there is a current registration statement in effect with respect to the shares of Common Stock underlying the warrants. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | For the three and nine months ended September 30, 2022 and 2023, the Group derived revenues from geographic regions as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 People’s Republic of China ("PRC") $ 26,542 $ 36,289 $ 80,326 $ 115,023 Other Asia & Pacific countries 7,394 24,611 45,420 46,280 Asia & Pacific 33,936 60,900 125,746 161,303 Europe 3,432 19,034 11,062 38,556 U.S. 1,248 182 2,890 2,183 Total $ 38,616 $ 80,116 $ 139,698 $ 202,042 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: December 31, September 30, Accounts receivable $ 123,711 $ 119,542 Allowance for credit losses (4,407) (3,242) Accounts receivable, net $ 119,304 $ 116,300 |
Schedule of Allowance for Credit Losses | Movement of allowance for credit losses was as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 5,828 $ 3,468 $ 5,005 $ 4,407 Cumulative-effect adjustment upon adoption of ASU2016-13 , Financial instruments- Credit losses (Topic 326) — — 866 — Charges (Reversal) of expenses (43) (206) 337 (1,038) Write off (12) — (165) (66) Recoveries of credit losses — — — 121 Exchange difference (337) (20) (607) (182) Balance at end of the period $ 5,436 $ 3,242 $ 5,436 $ 3,242 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: December 31, September 30, Work in process $ 48,747 $ 78,215 Raw materials 29,331 32,969 Finished goods 6,174 15,729 Total $ 84,252 $ 126,913 |
ACQUIRED INTANGIBLE ASSETS, N_2
ACQUIRED INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | December 31, 2022 September 30, Cost of acquired intangible assets $ 3,493 $ 5,405 Less: accumulated amortization (1,857) (2,195) Acquired intangible assets, net $ 1,636 $ 3,210 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The annual amortization expense for each of the five succeeding fiscal years and thereafter are as follows: Three months period ending December 31, 2023 $ 121 2024 481 2025 477 2026 476 2027 469 2028 381 Thereafter 805 Total $ 3,210 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, September 30, Product warranty, current $ 13,044 $ 15,176 Payables for purchase of property, plant and equipment 29,183 75,781 Other current liabilities 8,608 13,934 Accrued payroll and welfare 4,716 4,315 Accrued expenses 2,641 2,363 Interest payable 298 1,129 Other tax payable 6,296 6,703 Operating lease liabilities, current 1,934 2,415 Total $ 66,720 $ 121,816 |
PRODUCT WARRANTY (Tables)
PRODUCT WARRANTY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Movement of Product Warranty | Movement of product warranty was as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Balance at beginning of the period $ 43,703 $ 37,108 $ 58,458 $ 42,060 Provided during the period 2,028 3,567 8,263 9,017 Utilized during the period (4,357) (7,125) (22,957) (15,635) Exchange difference (2,467) (202) (4,857) (2,094) Balance at end of the period $ 38,907 $ 33,348 $ 38,907 $ 33,348 |
Schedule of Warranty Cost | December 31, September 30, Product warranty – current $ 13,044 $ 15,176 Product warranty – non-current 29,016 18,172 Total $ 42,060 $ 33,348 |
BANK BORROWINGS (Tables)
BANK BORROWINGS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Bank Borrowings [Abstract] | |
Schedule of Bank Borrowings Repayment | Repayment Date Repayment Amount December 10, 2023 $2,723 (RMB19.9 million) June 10, 2024 $5,140 (RMB37.5 million) December 10, 2024 $5,140 (RMB37.5 million) June 10, 2025 $5,140 (RMB37.5 million) December 10, 2025 $5,140 (RMB37.5 million) June 10, 2026 $7,710 (RMB56.3 million) December 10, 2026 $7,710 (RMB56.3 million) |
Schedule of Bank Borrowings | Changes in bank borrowings are as follows: Three Months Ended Nine Months Ended 2022 2023 2022 2023 Beginning balance $ 8,807 $ 49,146 $ 13,301 $ 46,395 Proceeds from bank borrowings 45,242 9,207 58,708 18,439 Repayments of principal (7,150) (2,347) (24,482) (6,286) Exchange difference (1,914) (349) (2,542) (2,891) Ending balance $ 44,985 $ 55,657 $ 44,985 $ 55,657 Balance of bank borrowings includes: December 31, September 30, Current $ 17,398 $ 24,818 Non-current 28,997 30,839 Total $ 46,395 $ 55,657 |
Schedule of Banking Facilities and Aggregate Carrying Amount | The aggregate carrying amount of the assets pledged by the Group as of December 31, 2022 and September 30, 2023 are as follows: December 31, September 30, Buildings $ 27,245 $ 24,523 Land use rights 12,639 11,734 Total $ 39,884 $ 36,257 |
OTHER NON-CURRENT LIABILITIES (
OTHER NON-CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Non-Current Liabilities | December 31, September 30, Product warranty - non-current $ 29,016 $ 18,172 Deferred subsidy income- non-current 3,066 2,645 Total $ 32,082 $ 20,817 |
BONDS PAYABLE (Tables)
BONDS PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Bonds Payable [Abstract] | |
Schedule of Bonds Payable | December 31, September 30, Long–term bonds payable Huzhou Saiyuan $ 43,888 $ 43,888 Total $ 43,888 $ 43,888 |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Warrants [Abstract] | |
Schedule of Under the Binomial-Lattice Model (“BLM”) that Assumes Optimal Exercise of the Company’s Redemption Option | The Private Warrants were valued using the following assumptions under the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date: September 30, Market price of public stock $ 1.89 Exercise price $ 11.50 Expected term (years) 2.82 Volatility 72.71 % Risk-free interest rate 4.71 % Dividend rate 0.00 % |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | As of December 31, 2022 and September 30, 2023, information about inputs for the fair value measurements of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair Value Measurement as of December 31, 2022 (In thousands) Quoted Prices in Active Market Significant Other Significant Unobservable Inputs Total Cash and cash equivalents $ 231,420 — — $ 231,420 Restricted cash 71,197 — — 71,197 Total financial asset $ 302,617 — — $ 302,617 Warrant liability $ — — 126 $ 126 Total financial liability $ — — 126 $ 126 Measured or disclosed at fair value on a recurring basis-continued Fair Value Measurement as of September 30, 2023 (In thousands) Quoted Prices in Active Market Significant Other Significant Unobservable Inputs Total Cash and cash equivalents $ 67,398 — — $ 67,398 Restricted cash $ 21,814 — — $ 21,814 Total financial asset $ 89,212 — — $ 89,212 Warrant liability $ — — 151 $ 151 Total financial liability $ — — 151 $ 151 |
Schedule of Reconciliation of the Beginning and Ending Balances for Level 3 Warrant Liability | The following is a reconciliation of the beginning and ending balances for Level 3 warrant liability during the nine months ended September 30, 2022 and 2023: (In thousands) Nine Months Ended September 30, 2022 2023 Balance at the beginning of the period 1,105 $ 126 Changes in fair value (921) 25 Balance at end of the period $ 184 $ 151 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information of the leases were as follows: Nine months ended September 30, 2023 Cash payments for operating leases $ 2,822 Right-of-use assets obtained in exchange for new operating lease liabilities $ 5,726 |
Summary of the Annual Undiscounted Cash Flows for Lease Liabilities Maturity Analysis | The following is a maturity analysis of the annual undiscounted cash flows for lease liabilities as of September 30, 2023: As of September 30, 2023 Three months period ending December 31, 2023 $ 828 2024 $ 3,220 2025 $ 2,744 2026 $ 2,495 2027 $ 2,365 2028 $ 1,788 Thereafter $ 11,308 Total future lease payments $ 24,748 Less: Imputed interest $ (5,382) Present value of operating lease liabilities $ 19,366 |
SHARE-BASED PAYMENT (Tables)
SHARE-BASED PAYMENT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity Plan | The grant and modification date fair value of the stock options was determined using the Black Scholes model with the following assumptions: Nine months ended September 30, 2023 Exercise price $ 1.21 ~ $ 6.28 Expected terms (years) 0.25 ~ 6.00 Volatility 55.59 % ~ 86.83 % Risk-free interest rate 3.48 % ~ 5.38 % Expected dividend yields 0.00% Fair value of options granted $ 0.005 ~ $ 1.48 At the Modification date, the Company used the Monte Carlo valuation model in determining the fair value of the CRSUs with assumptions as follows: Modification Date Expected term (years) 0.07 ~ 2.07 Volatility 50.93 % ~ 73.89 % Risk-free interest rate 1.15 % ~ 3.05 % Expected dividend yields 0.00% The following assumptions were used for the respective period to calculate the fair value of common stock to be issued under TSR awards on the date of grant using the Monte Carlo model: Nine months ended September 30, 2023 Expected term (years) 2.92 Volatility 61.89 % Risk-free interest rate 3.83 % Expected dividend yields 0.00 % |
Schedule of Effective Time Fair Value of the Stock Options was Determined Using the BLM | Stock options activity for the nine months ended September 30, 2022 and 2023 was as follows: Stock options life Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Weighted Average Remaining Outstanding as of December 31, 2021 33,503,657 6.19 4.95 7.9 Grant 2,900,000 4.81 2.69 Forfeited (227,092) 6.28 4.86 Outstanding as of September 30, 2022 36,176,565 6.08 4.80 7.1 Expected to vest and exercisable as of September 30, 2022 36,176,565 6.08 4.80 7.1 Exercisable as of September 30, 2022 11,875,830 6.20 5.00 7.2 Outstanding as of December 31, 2022 36,091,071 6.08 4.80 6.8 Grant 640,000 1.77 1.18 Forfeited (895,706) 5.02 3.64 Outstanding as of September 30, 2023 35,835,365 6.03 4.76 5.6 Expected to vest and exercisable as of September 30, 2023 35,835,365 6.03 4.76 5.6 Exercisable as of September 30, 2023 23,916,879 6.14 4.90 5.5 |
Schedule Non-vested Shares Activity | Activity on the CRSUs for the nine months ended September 30, 2022 and 2023 was as follows: Number on Weighted Average Grant Outstanding as of December 31, 2021 23,027,399 8.74 1 Vested (9,582,930) 4.37 Outstanding as of September 30, 2022 13,444,469 2.38 Outstanding as of December 31, 2022 13,444,469 2.38 Vested (6,722,228) 2.47 Outstanding as of September 30, 2023 6,722,241 2.29 The non-vested shares activity for the nine months ended September 30, 2022 and 2023 was as follows: Number of Weighted Outstanding as of December 31, 2021 671,441 9.08 Grant 1,239,854 4.93 Vested (86,996) 6.96 Forfeited (58,126) 7.47 Outstanding as of September 30, 2022 1,766,173 6.33 Outstanding as of December 31, 2022 1,222,837 6.92 Grant 3,354,633 1.88 Vested (496,586) 3.39 Forfeited (103,424) 4.59 Outstanding as of September 30, 2023 3,977,460 3.17 |
Schedule of Classification of Stock-based Compensation | The following summarizes the classification of share-based compensation: Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Cost of revenues $ 1,964 $ 1,530 $ 5,780 $ 4,559 General and administrative expenses 12,834 10,444 55,528 35,031 Research and development expenses 3,193 2,953 10,981 8,660 Selling and marketing expenses 1,284 935 5,533 3,391 Construction in process 139 140 403 429 Total $ 19,414 $ 16,002 $ 78,225 $ 52,070 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: Three Months Ended September 30, Nine Months Ended 2022 2023 2022 2023 Numerator: Net loss attributable to common stock shareholders $ (36,544) $ (26,130) $ (124,502) $ (81,800) Denominator: Weighted average common stock used in computing basic and diluted net loss per share 305,977,372 313,108,457 301,821,464 309,541,499 Basic and diluted net loss per share $ (0.12) $ (0.08) $ (0.41) $ (0.26) |
Schedule of Shares Outstanding Were Excluded from the Calculation of Diluted Net Loss Per Ordinary Share | For the three and nine months ended September 30, 2022 and 2023, the following Common Stock outstanding were excluded from the calculation of diluted net loss per share, as their inclusion would have been anti-dilutive for the periods prescribed. Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Shares issuable upon exercise of stock options 27,032,668 35,830,564 31,529,919 36,001,774 Shares issuable upon vesting of non-vested shares 1,815,043 3,898,963 1,282,482 3,652,642 Shares issuable upon vesting of Capped non-vested shares 15,017,783 8,343,220 5,280,978 11,662,166 Shares issuable upon exercise of warrants 28,437,000 28,437,000 28,437,000 28,437,000 Shares issuable upon vesting of Earn-out shares 19,999,988 19,999,988 19,999,988 19,999,988 Shares issuable that may be subject to cancellation 1,687,500 1,687,500 1,687,500 1,687,500 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Significant Accounting Policies [Line Items] | ||||
Revenue | $ 80,116 | $ 38,616 | $ 202,042 | $ 139,698 |
People’s Republic of China ("PRC") | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | 36,289 | 26,542 | 115,023 | 80,326 |
Other Asia & Pacific countries | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | 24,611 | 7,394 | 46,280 | 45,420 |
Asia & Pacific | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | 60,900 | 33,936 | 161,303 | 125,746 |
Europe | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | 19,034 | 3,432 | 38,556 | 11,062 |
U.S. | ||||
Significant Accounting Policies [Line Items] | ||||
Revenue | $ 182 | $ 1,248 | $ 2,183 | $ 2,890 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands, ¥ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 CNY (¥) | Jun. 30, 2023 USD ($) | Sep. 27, 2022 USD ($) | Sep. 27, 2022 CNY (¥) | |
Significant Accounting Policies [Line Items] | |||||||||
Working capital | $ 67,520 | $ 67,520 | |||||||
Stockholders' equity, including portion attributable to noncontrolling interest | 567,338 | 567,338 | $ 612,977 | $ 579,717 | |||||
Accumulated deficit | (872,965) | (872,965) | (791,165) | ||||||
Net loss | (26,172) | $ (36,544) | (81,821) | $ (124,502) | (158,200) | ||||
Net cash used in operating activities | (70,350) | (58,595) | (53,928) | ||||||
Product, backlog amount | 678,681 | 678,681 | |||||||
Property, plant and equipment, net | 549,544 | 549,544 | 335,140 | ||||||
Revenue recognized | 1,191 | $ 722 | 2,485 | $ 550 | |||||
Operating lease right-of-use assets | 19,612 | 19,612 | 16,368 | ||||||
Present value of operating lease liabilities | 19,366 | 19,366 | |||||||
Operating lease liabilities, current | 2,415 | 2,415 | $ 1,934 | ||||||
U.S. | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Property, plant and equipment, net | 240,655 | 240,655 | |||||||
2022 Facility Agreement | |||||||||
Significant Accounting Policies [Line Items] | |||||||||
Line of credit facility, remaining borrowing capacity | $ 70,364 | $ 70,364 | ¥ 500 | ||||||
Line of credit facility, maximum borrowing capacity | $ 111,483 | ¥ 800 |
ACCOUNTS RECEIVABLE- Schedule o
ACCOUNTS RECEIVABLE- Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 119,542 | $ 123,711 |
Allowance for credit losses | (3,242) | (4,407) |
Accounts receivable, net | $ 116,300 | $ 119,304 |
ACCOUNTS RECEIVABLE - Schedule
ACCOUNTS RECEIVABLE - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of the period | $ 3,468 | $ 5,828 | $ 4,407 | $ 5,005 |
Charges (Reversal) of expenses | (206) | (43) | (1,038) | 337 |
Write off | 0 | (12) | (66) | (165) |
Recoveries of credit losses | 0 | 0 | 121 | 0 |
Exchange difference | (20) | (337) | (182) | (607) |
Balance at end of the period | $ 3,242 | $ 5,436 | $ 3,242 | 5,436 |
Cumulative-effect adjustment upon adoption of ASU2016-13, Financial instruments- Credit losses (Topic 326) | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Balance at beginning of the period | $ 866 |
INVENTORIES - Schedule of Inven
INVENTORIES - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Work in process | $ 78,215 | $ 48,747 |
Raw materials | 32,969 | 29,331 |
Finished goods | 15,729 | 6,174 |
Total | $ 126,913 | $ 84,252 |
INVENTORIES - Narrative (Detail
INVENTORIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | ||||
Provision for obsolete inventories | $ 0 | $ 1,229 | $ 928 | $ 3,148 |
ACQUIRED INTANGIBLE ASSETS, N_3
ACQUIRED INTANGIBLE ASSETS, NET - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Cost of acquired intangible assets | $ 5,405 | $ 3,493 |
Less: accumulated amortization | (2,195) | (1,857) |
Total | $ 3,210 | $ 1,636 |
ACQUIRED INTANGIBLE ASSETS, N_4
ACQUIRED INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 122 | $ 61 | $ 371 | $ 183 | |
Impairment of intangible assets (excluding goodwill) | $ 0 | $ 0 | $ 0 | $ 0 | |
Microvast Precision Works Co | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 70% | ||||
Third Party Investor | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 30% | ||||
Microvast Precision Works Co | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Payments to acquire interest in subsidiaries and affiliates | $ 5,072 | ||||
MPW | Patents | Third Party Investor | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived patents, gross | $ 2,174 |
ACQUIRED INTANGIBLE ASSETS, N_5
ACQUIRED INTANGIBLE ASSETS, NET - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Three months period ending December 31, 2023 | $ 121 | |
2024 | 481 | |
2025 | 477 | |
2026 | 476 | |
2027 | 469 | |
2028 | 381 | |
Thereafter | 805 | |
Total | $ 3,210 | $ 1,636 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Product warranty, current | $ 15,176 | $ 13,044 |
Payables for purchase of property, plant and equipment | 75,781 | 29,183 |
Other current liabilities | 13,934 | 8,608 |
Accrued payroll and welfare | 4,315 | 4,716 |
Accrued expenses | 2,363 | 2,641 |
Interest payable | 1,129 | 298 |
Other tax payable | 6,703 | 6,296 |
Operating lease liabilities, current | 2,415 | 1,934 |
Total | $ 121,816 | $ 66,720 |
PRODUCT WARRANTY - Schedule of
PRODUCT WARRANTY - Schedule of Movement of Product Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||||||
Balance at beginning of the period | $ 37,108 | $ 42,060 | $ 43,703 | $ 58,458 | ||||
Provided during the period | $ 3,567 | $ 2,028 | $ 9,017 | $ 8,263 | ||||
Utilized during the period | (7,125) | (4,357) | (15,635) | (22,957) | ||||
Exchange difference | (202) | (2,467) | (2,094) | (4,857) | ||||
Balance at end of the period | $ 33,348 | $ 38,907 | $ 33,348 | $ 38,907 |
PRODUCT WARRANTY - Schedule o_2
PRODUCT WARRANTY - Schedule of Warranty Cost (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Product Warranties Disclosures [Abstract] | ||
Product warranty – current | $ 15,176 | $ 13,044 |
Product warranty – non-current | 18,172 | 29,016 |
Total | $ 33,348 | $ 42,060 |
BANK BORROWINGS - Narrative (De
BANK BORROWINGS - Narrative (Details) $ in Thousands, ¥ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 27, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 CNY (¥) | Sep. 27, 2022 CNY (¥) | |
Debt Instrument [Line Items] | |||||||
Interest costs capitalized | $ 475 | $ 0 | $ 1,503 | $ 0 | |||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, term | 12 months | 12 months | 12 months | ||||
Long-term debt, percentage bearing variable interest, percentage rate | 4.55% | 4.55% | 4.55% | ||||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, percentage bearing variable interest, percentage rate | 3.40% | 3.40% | 3.40% | ||||
2022 Facility Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 111,483 | ¥ 800 | |||||
Line of credit facility, remaining borrowing capacity | $ 70,364 | $ 70,364 | ¥ 500 | ||||
Long-term line of credit | $ 38,703 | $ 38,703 | |||||
2022 Facility Agreement | National Interbank Funding Center Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.15% |
BANK BORROWINGS - Schedule of B
BANK BORROWINGS - Schedule of Bank Borrowings Repayment (Details) - Forecast $ in Thousands, ¥ in Millions | Dec. 10, 2026 USD ($) | Dec. 10, 2026 CNY (¥) | Jun. 10, 2026 USD ($) | Jun. 10, 2026 CNY (¥) | Dec. 10, 2025 USD ($) | Dec. 10, 2025 CNY (¥) | Jun. 10, 2025 USD ($) | Jun. 10, 2025 CNY (¥) | Dec. 10, 2024 USD ($) | Dec. 10, 2024 CNY (¥) | Jun. 10, 2024 USD ($) | Jun. 10, 2024 CNY (¥) | Dec. 10, 2023 USD ($) | Dec. 10, 2023 CNY (¥) |
December 10, 2023 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 2,723 | ¥ 19.9 | ||||||||||||
June 10, 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 5,140 | ¥ 37.5 | ||||||||||||
December 10, 2024 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 5,140 | ¥ 37.5 | ||||||||||||
June 10, 2025 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 5,140 | ¥ 37.5 | ||||||||||||
December 10, 2025 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 5,140 | ¥ 37.5 | ||||||||||||
June 10, 2026 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 7,710 | ¥ 56.3 | ||||||||||||
December 10, 2026 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayment amount (in dollars and yuan renminbi) | $ 7,710 | ¥ 56.3 |
BANK BORROWINGS - Schedule of_2
BANK BORROWINGS - Schedule of Bank Borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Bank Borrowing [Roll Forward] | ||||||||
Beginning balance | $ 49,146 | $ 46,395 | $ 8,807 | $ 13,301 | ||||
Proceeds from bank borrowings | $ 9,207 | $ 45,242 | $ 18,439 | $ 58,708 | ||||
Repayments of principal | (2,347) | (7,150) | (6,286) | (24,482) | ||||
Exchange difference | (349) | (1,914) | (2,891) | (2,542) | ||||
Ending balance | 55,657 | $ 44,985 | 55,657 | $ 44,985 | ||||
Current | 24,818 | 24,818 | 17,398 | |||||
Non-current | 30,839 | 30,839 | 28,997 | |||||
Total | $ 55,657 | $ 55,657 | $ 46,395 |
BANK BORROWINGS - Schedule of_3
BANK BORROWINGS - Schedule of Banking Facilities and Aggregate Carrying Amount (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Bank Borrowings [Abstract] | ||
Buildings | $ 24,523 | $ 27,245 |
Land use rights | 11,734 | 12,639 |
Total | $ 36,257 | $ 39,884 |
OTHER NON-CURRENT LIABILITIES -
OTHER NON-CURRENT LIABILITIES - Schedule of Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Liabilities, Noncurrent [Abstract] | ||
Product warranty - non-current | $ 18,172 | $ 29,016 |
Deferred subsidy income- non-current | 2,645 | 3,066 |
Total | $ 20,817 | $ 32,082 |
BONDS PAYABLE - Schedule of Bon
BONDS PAYABLE - Schedule of Bonds Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Bonds Payable [Line Items] | ||
Long-term bonds payable, Total | $ 43,888 | $ 43,888 |
Huzhou Saiyuan | ||
Schedule of Bonds Payable [Line Items] | ||
Long-term bonds payable, Total | $ 43,888 | $ 43,888 |
BONDS PAYABLE - Narrative (Deta
BONDS PAYABLE - Narrative (Details) $ in Thousands, ¥ in Millions | 9 Months Ended | |||||||||
Jan. 31, 2027 USD ($) | Jan. 31, 2027 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Nov. 10, 2022 USD ($) | Nov. 10, 2022 CNY (¥) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 CNY (¥) | Dec. 29, 2018 USD ($) | Dec. 29, 2018 CNY (¥) | |
Schedule of Bonds Payable [Line Items] | ||||||||||
Bond loan | $ 87,776 | ¥ 600 | ||||||||
Equity holding pledged percentage | 12.39% | 12.39% | ||||||||
Debt instrument, convertible amount, subsidiary value threshold | $ 950,000 | |||||||||
Repayments of convertible debt (in dollars and yuan renminbi) | $ 14,630 | ¥ 100 | $ 14,629 | ¥ 100 | ||||||
Debt instrument, interest rate, stated percentage | 12% | 12% | ||||||||
Subscribed amount (in dollars and yuan renminbi) | $ 43,888 | ¥ 300 | ||||||||
Forecast | ||||||||||
Schedule of Bonds Payable [Line Items] | ||||||||||
Repayments of convertible debt (in dollars and yuan renminbi) | $ 43,888 | ¥ 300 |
WARRANTS - Narrative (Details)
WARRANTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 23, 2021 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Warrants (Details) [Line Items] | ||||
Shares issued (in shares) | 27,600,000 | |||
Class of warrant or right, exercisable period | 30 days | |||
Warrant term | 5 years | |||
Changes in fair value of warrant liability | $ 25 | $ (921) | ||
Public Warrants | ||||
Warrants (Details) [Line Items] | ||||
Warrant redemption price (in dollars per share) | $ 0.01 | |||
Class of warrant or right, notice of redemption, minimum period | 30 days | |||
Stock price minimum to redeem warrants (in dollars per share) | $ 18 | |||
Warrant redemption, consecutive trading days | 20 days | |||
Warrant redemption, trading days | 30 days | |||
Tuscan Holdings Corp and EarlyBirdCapital, Inc. | ||||
Warrants (Details) [Line Items] | ||||
Shares issued (in shares) | 837,000 | |||
Warrants | ||||
Warrants (Details) [Line Items] | ||||
Warrant issued (in shares) | 150,000 | |||
Class of warrant or right, number of securities called by each warrant or right (in shares) | 1 | |||
Exercise price (in dollars per share) | $ 11.50 | |||
Warrant term | 5 years | |||
Changes in fair value of warrant liability | $ (42) | $ (25) |
WARRANTS - Schedule of Under th
WARRANTS - Schedule of Under the Binomial-Lattice Model (“BLM”) that Assumes Optimal Exercise of the Company’s Redemption Option (Details) - Warrants | Sep. 30, 2023 $ / shares |
Warrants [Line Items] | |
Market price of public stock (in dollars per share) | $ 1.89 |
Exercise price (in dollars per share) | $ 11.50 |
Expected term (years) | 2 years 9 months 25 days |
Volatility | 72.71% |
Risk-free interest rate | 4.71% |
Dividend rate | 0% |
FAIR VALUE MEASUREMENT - Schedu
FAIR VALUE MEASUREMENT - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Measurement (Details) - Schedule of fair value measurements of group’s assets and liabilities of recurring basis [Line Items] | ||
Cash and cash equivalents | $ 67,398 | $ 231,420 |
Restricted cash | 21,814 | 71,197 |
Total financial asset | 89,212 | 302,617 |
Warrant liability | 151 | 126 |
Total financial liability | 151 | 126 |
Quoted Prices in Active Market for Identical Assets (Level 1) | ||
Fair Value Measurement (Details) - Schedule of fair value measurements of group’s assets and liabilities of recurring basis [Line Items] | ||
Cash and cash equivalents | 67,398 | 231,420 |
Restricted cash | 21,814 | 71,197 |
Total financial asset | 89,212 | 302,617 |
Warrant liability | 0 | 0 |
Total financial liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Measurement (Details) - Schedule of fair value measurements of group’s assets and liabilities of recurring basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Total financial asset | 0 | 0 |
Warrant liability | 0 | 0 |
Total financial liability | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Measurement (Details) - Schedule of fair value measurements of group’s assets and liabilities of recurring basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Total financial asset | 0 | 0 |
Warrant liability | 151 | 126 |
Total financial liability | $ 151 | $ 126 |
FAIR VALUE MEASUREMENT - Sche_2
FAIR VALUE MEASUREMENT - Schedule of Reconciliation of the Beginning and Ending Balances for Level 3 Warrant Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Level 3 Warrant Liability [Roll Forward] | ||
Balance at the beginning of the period | $ 126 | $ 1,105 |
Changes in fair value | 25 | (921) |
Balance at end of the period | $ 151 | $ 184 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Leases [Abstract] | ||
Operating lease, cost | $ 861 | $ 2,810 |
Short-term lease, cost | $ 90 | $ 269 |
Operating lease, weighted average remaining lease term | 10 years 2 months 12 days | 10 years 2 months 12 days |
Operating lease, weighted average discount rate, percent | 5.20% | 5.20% |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Leases [Abstract] | |
Cash payments for operating leases | $ 2,822 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 5,726 |
LEASES - Summary of the Annual
LEASES - Summary of the Annual Undiscounted Cash Flows for Lease Liabilities Maturity Analysis (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Three months period ending December 31, 2023 | $ 828 |
2024 | 3,220 |
2025 | 2,744 |
2026 | 2,495 |
2027 | 2,365 |
2028 | 1,788 |
Thereafter | 11,308 |
Total future lease payments | 24,748 |
Less: Imputed interest | (5,382) |
Present value of operating lease liabilities | $ 19,366 |
SHARE-BASED PAYMENT - Narrative
SHARE-BASED PAYMENT - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 26 Months Ended | ||||
Jun. 27, 2022 shares | Jul. 21, 2021 | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2023 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Plan expire date | 10 years | ||||||
Exchange ratio | 160.3 | ||||||
Reserves percentage | 5% | ||||||
Stock option | $ 43,349 | ||||||
Weighted-average period | 10 months 24 days | ||||||
Aggregate intrinsic value | $ 59 | $ 59 | $ 59 | ||||
Equity-based compensation costs | 4,132 | ||||||
Compensation cost | 7,039 | ||||||
Share Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation expense | 12,713 | $ 14,081 | $ 39,768 | $ 46,043 | |||
Capped Non-vested Shares Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period (in shares) | shares | 20,023,699 | 6,722,228 | 9,582,930 | ||||
Stock-based compensation expense | 1,832 | 4,367 | $ 8,378 | $ 29,481 | |||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested in period (in shares) | shares | 496,586 | 86,996 | |||||
Compensation expense | 577 | 345 | $ 1,536 | $ 1,048 | |||
Granted (in shares) | shares | 2,641,715 | ||||||
Performance Based Restricted Stock Unit (PSU | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Compensation expense | $ 880 | $ 621 | $ 2,388 | $ 1,653 | |||
Granted (in shares) | shares | 2,680,372 |
SHARE-BASED PAYMENT - Schedule
SHARE-BASED PAYMENT - Schedule of Stock Option Activity Plan (Details) - $ / shares | 9 Months Ended | |
Jun. 27, 2022 | Sep. 30, 2023 | |
Share Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility rate, minimum | 55.59% | |
Volatility rate, maximum | 86.83% | |
Risk-free interest rate, minimum | 3.48% | |
Risk-free interest rate, maximum | 5.38% | |
Expected dividend yields | 0% | |
Capped Non-vested Shares Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility rate, minimum | 50.93% | |
Volatility rate, maximum | 73.89% | |
Risk-free interest rate, minimum | 1.15% | |
Risk-free interest rate, maximum | 3.05% | |
Expected dividend yields | 0% | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 2 years 11 months 1 day | |
Volatility | 61.89% | |
Risk-free interest rate | 3.83% | |
Expected dividend yields | 0% | |
Minimum | Share Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price (in dollars per share) | $ 1.21 | |
Expected term (years) | 3 months | |
Weighted average fair value of options modified (in dollars per share) | $ 0.005 | |
Minimum | Capped Non-vested Shares Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 25 days | |
Maximum | Share Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price (in dollars per share) | $ 6.28 | |
Expected term (years) | 6 years | |
Weighted average fair value of options modified (in dollars per share) | $ 1.48 | |
Maximum | Capped Non-vested Shares Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (years) | 2 years 25 days |
SHARE-BASED PAYMENT - Schedul_2
SHARE-BASED PAYMENT - Schedule of Effective Time Fair Value of the Stock Options was Determined Using the BLM (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||||
Number of shares, outstanding at beginning (in shares) | 36,091,071 | 33,503,657 | 33,503,657 | |
Number of shares, grant (in shares) | 640,000 | 2,900,000 | ||
Number of shares, forfeited (in shares) | (895,706) | (227,092) | ||
Number of shares, outstanding at ending (in shares) | 35,835,365 | 36,176,565 | 36,091,071 | 33,503,657 |
Number of shares, expected to vest and exercisable (in shares) | 35,835,365 | 36,176,565 | ||
Number of shares, exercisable (in shares) | 23,916,879 | 11,875,830 | ||
Weighted Average Exercise Price (US$) | ||||
Weighted average exercise price, outstanding at beginning (in dollars per share) | $ 6.08 | $ 6.19 | $ 6.19 | |
Weighted average exercise price, granted (in dollars per share) | 1.77 | 4.81 | ||
Weighted average exercise price, forfeited (in dollars per share) | 5.02 | 6.28 | ||
Weighted average exercise price, outstanding at ending (in dollars per share) | 6.03 | 6.08 | 6.08 | $ 6.19 |
Weighted average exercise price, expected to vest and exercisable (in dollars per share) | 6.03 | 6.08 | ||
Weighted average exercise price, exercisable (in dollars per share) | 6.14 | 6.20 | ||
Weighted Average Grant Date Fair Value (US$) | ||||
Weighted average grant date fair value, outstanding at beginning (in dollars per share) | 4.80 | 4.95 | 4.95 | |
Weighted average grant date fair value, granted (in dollars per share) | 1.18 | 2.69 | ||
Weighted average grant date fair value per share, non-vested shares, forfeited (in dollars per share) | 3.64 | 4.86 | ||
Weighted average grant date fair value, outstanding at ending (in dollars per share) | 4.76 | 4.80 | $ 4.80 | $ 4.95 |
Weighted average grant date fair value, expected to vest and exercisable (in dollars per share) | 4.76 | 4.80 | ||
Weighted average grant date fair value, exercisable (in dollars per share) | $ 4.90 | $ 5 | ||
Weighted Average Remaining Contractual Life | ||||
Weighted average remaining contractual, outstanding | 5 years 7 months 6 days | 7 years 1 month 6 days | 6 years 9 months 18 days | 7 years 10 months 24 days |
Weighted average remaining contractual life, expected to vest and exercisable | 5 years 7 months 6 days | 7 years 1 month 6 days | ||
Weighted average remaining contractual life, exercisable | 5 years 6 months | 7 years 2 months 12 days |
SHARE-BASED PAYMENT - Schedul_3
SHARE-BASED PAYMENT - Schedule Non-vested Shares Activity (Details) - $ / shares | 9 Months Ended | ||
Jun. 27, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Capped Non-vested Shares Units | |||
Number of Non-Vested Shares | |||
Number of non-vested shares, outstanding (in shares) | 13,444,469 | 23,027,399 | |
Number of non-vested shares, vested (in shares) | (20,023,699) | (6,722,228) | (9,582,930) |
Number of non-vested shares, outstanding at ending balance (in shares) | 6,722,241 | 13,444,469 | |
Weighted Average Grant Date Fair Value Per Share (US$) | |||
Weighted average grant date fair value per share, non-vested shares, outstanding at beginning (in dollars per share) | $ 2.38 | $ 8.74 | |
Weighted average grant date fair value per share, non-vested shares, vested (in dollars per share) | 2.47 | 4.37 | |
Weighted average grant date fair value per share, non-vested shares, outstanding at ending (in dollars per share) | $ 2.29 | $ 2.38 | |
Restricted Stock Units (RSUs) | |||
Number of Non-Vested Shares | |||
Number of non-vested shares, outstanding (in shares) | 1,222,837 | 671,441 | |
Number of non-vested shares, grant (in shares) | 3,354,633 | 1,239,854 | |
Number of non-vested shares, vested (in shares) | (496,586) | (86,996) | |
Number of non-vested shares, forfeited (in shares) | (103,424) | (58,126) | |
Number of non-vested shares, outstanding at ending balance (in shares) | 3,977,460 | 1,766,173 | |
Weighted Average Grant Date Fair Value Per Share (US$) | |||
Weighted average grant date fair value per share, non-vested shares, outstanding at beginning (in dollars per share) | $ 6.92 | $ 9.08 | |
Weighted average grant date fair value per share, non-vested shares, grant (in dollars per share) | 1.88 | 4.93 | |
Weighted average grant date fair value per share, non-vested shares, vested (in dollars per share) | 3.39 | 6.96 | |
Weighted average grant date fair value per share, non-vested shares, forfeited (in dollars per share) | 4.59 | 7.47 | |
Weighted average grant date fair value per share, non-vested shares, outstanding at ending (in dollars per share) | $ 3.17 | $ 6.33 |
SHARE-BASED PAYMENT - Schedul_4
SHARE-BASED PAYMENT - Schedule of Classification of Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Cost of revenues | $ 1,530 | $ 1,964 | $ 4,559 | $ 5,780 |
General and administrative expenses | 10,444 | 12,834 | 35,031 | 55,528 |
Research and development expenses | 2,953 | 3,193 | 8,660 | 10,981 |
Selling and marketing expenses | 935 | 1,284 | 3,391 | 5,533 |
Construction in process | 140 | 139 | 429 | 403 |
Total | $ 16,002 | $ 19,414 | $ 52,070 | $ 78,225 |
NET LOSS PER SHARE - Schedule o
NET LOSS PER SHARE - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Net loss attributable to common stock shareholders | $ (26,130) | $ (36,544) | $ (81,800) | $ (124,502) |
Denominator: | ||||
Weighted average shares used in calculating net loss per share of common stock, basic (in shares) | 313,108,457 | 305,977,372 | 309,541,499 | 301,821,464 |
Weighted average shares used in calculating net loss per share of common stock, diluted (in shares) | 313,108,457 | 305,977,372 | 309,541,499 | 301,821,464 |
Basic net loss per share (in dollars per share) | $ (0.08) | $ (0.12) | $ (0.26) | $ (0.41) |
Diluted net loss per share (in dollars per share) | $ (0.08) | $ (0.12) | $ (0.26) | $ (0.41) |
NET LOSS PER SHARE- Schedule of
NET LOSS PER SHARE- Schedule of Shares Outstanding Were Excluded from the Calculation of Diluted Net Loss Per Ordinary Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Shares issuable upon exercise of stock options (in shares) | 35,830,564 | 27,032,668 | 36,001,774 | 31,529,919 |
Shares issuable upon vesting of non-vested shares (in shares) | 3,898,963 | 1,815,043 | 3,652,642 | 1,282,482 |
Shares issuable upon vesting of Capped non-vested shares (in shares) | 8,343,220 | 15,017,783 | 11,662,166 | 5,280,978 |
Shares issuable upon exercise of warrants (in shares) | 28,437,000 | 28,437,000 | 28,437,000 | 28,437,000 |
Shares issuable upon vesting of Earn-out shares (in shares) | 19,999,988 | 19,999,988 | 19,999,988 | 19,999,988 |
Shares issuable that may be subject to cancellation (in shares) | 1,687,500 | 1,687,500 | 1,687,500 | 1,687,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies (Details) [Line Items] | ||
Short-term investments | $ 25,496 | $ 25,070 |
Property, plant and equipment, net | 549,544 | $ 335,140 |
Bank Acceptance Note | ||
Commitments and Contingencies (Details) [Line Items] | ||
Receivables from customers | 13,061 | |
Property, plant and equipment, net | 28,453 | |
Inventories | ||
Commitments and Contingencies (Details) [Line Items] | ||
Purchase obligation | 65,691 | |
Capital Commitments | ||
Commitments and Contingencies (Details) [Line Items] | ||
Capital commitments | $ 95,905 |