Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | FTC SOLAR, INC. | |
Entity Central Index Key | 0001828161 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FTCI | |
Amendment Flag | false | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-40350 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-4816270 | |
Entity Address, Address Line One | 9020 N Capital of Texas Hwy | |
Entity Address, Address Line Two | Suite I-260 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78759 | |
City Area Code | 737 | |
Local Phone Number | 787-7906 | |
Entity Common Stock, Shares Outstanding | 125,005,820 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 31,520 | $ 44,385 |
Accounts receivable, net | 71,375 | 49,052 |
Inventories | 4,655 | 14,949 |
Prepaid and other current assets | 13,468 | 10,304 |
Total current assets | 121,018 | 118,690 |
Operating lease right-of-use assets | 2,006 | 1,154 |
Property and equipment, net | 1,685 | 1,702 |
Intangible assets, net | 657 | 1,113 |
Goodwill | 7,143 | 7,538 |
Equity method investment | 564 | 0 |
Other assets | 3,186 | 4,201 |
Total assets | 136,259 | 134,398 |
Current liabilities | ||
Accounts payable | 9,782 | 15,801 |
Accrued expenses | 25,778 | 23,896 |
Income taxes payable | 262 | 443 |
Deferred revenue | 11,178 | 11,316 |
Other current liabilities | 8,589 | 8,884 |
Total current liabilities | 55,589 | 60,340 |
Operating lease liability, net of current portion | 1,310 | 786 |
Other non-current liabilities | 5,286 | 6,822 |
Total liabilities | 62,185 | 67,948 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity | ||
Preferred stock par value of $0.0001 per share, 10,000,000 shares authorized; none issued as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock par value of $0.0001 per share, 850,000,000 shares authorized; 124,954,451 and 105,032,588 shares issued and outstanding as of September 30, 2023 and December 31, 2022 | 12 | 11 |
Treasury stock, at cost; 10,762,566 shares as of September 30, 2023 and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 362,532 | 315,345 |
Accumulated other comprehensive loss | (512) | (61) |
Accumulated deficit | (287,958) | (248,845) |
Total stockholders' equity | 74,074 | 66,450 |
Total liabilities and stockholders' equity | $ 136,259 | $ 134,398 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 850,000,000 | 850,000,000 |
Common stock, shares issued | 124,954,451 | 105,032,588 |
Common stock, shares outstanding | 124,954,451 | 105,032,588 |
Treasury Stock, Shares | 10,762,566 | 10,762,566 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Total revenue | $ 30,548 | $ 16,572 | $ 103,801 | $ 96,846 |
Cost of revenue: | ||||
Total cost of revenue | 27,169 | 26,087 | 96,186 | 122,160 |
Gross profit (loss) | 3,379 | (9,515) | 7,615 | (25,314) |
Operating expenses | ||||
Research and development | 1,921 | 2,126 | 5,716 | 7,538 |
Selling and marketing | 6,324 | 1,994 | 9,887 | 6,893 |
General and administrative | 11,411 | 13,059 | 31,053 | 39,966 |
Total Operating expenses | 19,656 | 17,179 | 46,656 | 54,397 |
Loss from operations | (16,277) | (26,694) | (39,041) | (79,711) |
Interest expense, net | (108) | (160) | (194) | (882) |
Gain from disposal of investment in unconsolidated subsidiary | 0 | 1,408 | 898 | 1,745 |
Other expense, net | (50) | (341) | (265) | (249) |
Loss from unconsolidated subsidiary | (336) | 0 | (336) | 0 |
Loss before income taxes | (16,771) | (25,787) | (38,938) | (79,097) |
(Provision for) benefit from income taxes | (166) | 151 | (175) | (15) |
Net loss | (16,937) | (25,636) | (39,113) | (79,112) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (38) | (474) | (451) | (357) |
Comprehensive loss | $ (16,975) | $ (26,110) | $ (39,564) | $ (79,469) |
Net loss per share | ||||
Basic | $ (0.14) | $ (0.25) | $ (0.35) | $ (0.79) |
Diluted | $ (0.14) | $ (0.25) | $ (0.35) | $ (0.79) |
Weighted-average common shares outstanding: | ||||
Basic | 119,793,821 | 102,164,455 | 112,794,562 | 100,642,126 |
Diluted | 119,793,821 | 102,164,455 | 112,794,562 | 100,642,126 |
Product | ||||
Revenue: | ||||
Total revenue | $ 27,274 | $ 3,543 | $ 80,927 | $ 43,677 |
Cost of revenue: | ||||
Total cost of revenue | 22,775 | 11,411 | 73,694 | 62,800 |
Service | ||||
Revenue: | ||||
Total revenue | 3,274 | 13,029 | 22,874 | 53,169 |
Cost of revenue: | ||||
Total cost of revenue | $ 4,394 | $ 14,676 | $ 22,492 | $ 59,360 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2021 | $ 142,866 | $ 0 | $ 9 | $ 0 | $ 292,082 | $ 7 | $ (149,232) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 92,619,641 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards | $ 1 | (1) | |||||
Shares issued during the period for vested restricted stock awards, shares | 5,311,326 | ||||||
Issuance of common stock upon exercise of stock options | 428 | 428 | |||||
Issuance of common stock upon exercise of stock options, shares | 1,793,876 | ||||||
Stock-based compensation | 4,610 | 4,610 | |||||
Net loss | (27,793) | (27,793) | |||||
Other comprehensive gain (loss) | 57 | 57 | |||||
Ending balance at Mar. 31, 2022 | 120,168 | $ 0 | $ 10 | $ 0 | 297,119 | 64 | (177,025) |
Ending balance (in shares) at Mar. 31, 2022 | 0 | 99,724,843 | 10,762,566 | ||||
Beginning balance at Dec. 31, 2021 | 142,866 | $ 0 | $ 9 | $ 0 | 292,082 | 7 | (149,232) |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 92,619,641 | 10,762,566 | ||||
Net loss | (79,112) | ||||||
Ending balance at Sep. 30, 2022 | 81,528 | $ 0 | $ 10 | $ 0 | 310,212 | (350) | (228,344) |
Ending balance (in shares) at Sep. 30, 2022 | 0 | 103,044,324 | 10,762,566 | ||||
Beginning balance at Mar. 31, 2022 | 120,168 | $ 0 | $ 10 | $ 0 | 297,119 | 64 | (177,025) |
Beginning balance (in shares) at Mar. 31, 2022 | 0 | 99,724,843 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards, shares | 729,106 | ||||||
Issuance of common stock upon exercise of stock options | 86 | 86 | |||||
Issuance of common stock upon exercise of stock options, shares | 266,225 | ||||||
Shares issued for HX Tracker acquisition, Shares | 1,000,000 | ||||||
Shares issued for HX Tracker acquisition, Amount | 4,370 | 4,370 | |||||
Stock-based compensation | 998 | 998 | |||||
Net loss | (25,683) | (25,683) | |||||
Other comprehensive gain (loss) | 60 | 60 | |||||
Ending balance at Jun. 30, 2022 | 99,999 | $ 0 | $ 10 | $ 0 | 302,573 | 124 | (202,708) |
Ending balance (in shares) at Jun. 30, 2022 | 0 | 101,720,174 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards | 1,826 | 1,826 | |||||
Shares issued during the period for vested restricted stock awards, shares | 645,896 | ||||||
Issuance of common stock upon exercise of stock options | 274 | 274 | |||||
Issuance of common stock upon exercise of stock options, shares | 678,254 | ||||||
Stock-based compensation | 5,539 | 5,539 | |||||
Net loss | (25,636) | (25,636) | |||||
Other comprehensive gain (loss) | (474) | (474) | |||||
Ending balance at Sep. 30, 2022 | 81,528 | $ 0 | $ 10 | $ 0 | 310,212 | (350) | (228,344) |
Ending balance (in shares) at Sep. 30, 2022 | 0 | 103,044,324 | 10,762,566 | ||||
Beginning balance at Dec. 31, 2022 | 66,450 | $ 0 | $ 11 | $ 0 | 315,345 | (61) | (248,845) |
Beginning balance (in shares) at Dec. 31, 2022 | 0 | 105,032,588 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards | 2,775 | 2,775 | |||||
Shares issued during the period for vested restricted stock awards, shares | 1,498,987 | ||||||
Issuance of common stock upon exercise of stock options | 51 | 51 | |||||
Issuance of common stock upon exercise of stock options, shares | 265,125 | ||||||
Shares issued for legal settlement | 2,000 | 2,000 | |||||
Shares issued for legal settlement, shares | 797,396 | ||||||
Sale of shares | 6,292 | 6,292 | |||||
Sale of shares, shares | 2,683,000 | ||||||
Stock issuance costs | (32) | (32) | |||||
Stock-based compensation | 2,472 | 2,472 | |||||
Net loss | (11,762) | (11,762) | |||||
Other comprehensive gain (loss) | (5) | (5) | |||||
Ending balance at Mar. 31, 2023 | 68,241 | $ 0 | $ 11 | $ 0 | 328,903 | (66) | (260,607) |
Ending balance (in shares) at Mar. 31, 2023 | 0 | 110,277,096 | 10,762,566 | ||||
Beginning balance at Dec. 31, 2022 | 66,450 | $ 0 | $ 11 | $ 0 | 315,345 | (61) | (248,845) |
Beginning balance (in shares) at Dec. 31, 2022 | 0 | 105,032,588 | 10,762,566 | ||||
Net loss | (39,113) | ||||||
Ending balance at Sep. 30, 2023 | 74,074 | $ 0 | $ 12 | $ 0 | 362,532 | (512) | (287,958) |
Ending balance (in shares) at Sep. 30, 2023 | 0 | 124,954,451 | 10,762,566 | ||||
Beginning balance at Mar. 31, 2023 | 68,241 | $ 0 | $ 11 | $ 0 | 328,903 | (66) | (260,607) |
Beginning balance (in shares) at Mar. 31, 2023 | 0 | 110,277,096 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards | 2,085 | 2,085 | |||||
Shares issued during the period for vested restricted stock awards, shares | 1,213,037 | ||||||
Issuance of common stock upon exercise of stock options, shares | 39,087 | ||||||
Sale of shares | 17,348 | $ 1 | 17,347 | ||||
Sale of shares, shares | 6,589,000 | ||||||
Stock issuance costs | (127) | (127) | |||||
Stock-based compensation | 2,669 | 2,669 | |||||
Net loss | (10,414) | (10,414) | |||||
Other comprehensive gain (loss) | (408) | (408) | |||||
Ending balance at Jun. 30, 2023 | 79,394 | $ 0 | $ 12 | $ 0 | 350,877 | (474) | (271,021) |
Ending balance (in shares) at Jun. 30, 2023 | 0 | 118,118,220 | 10,762,566 | ||||
Shares issued during the period for vested restricted stock awards, shares | 595,097 | ||||||
Issuance of common stock upon exercise of stock options | 170 | 170 | |||||
Issuance of common stock upon exercise of stock options, shares | 403,749 | ||||||
Sale of shares | 10,367 | 10,367 | |||||
Sale of shares, shares | 6,149,885 | ||||||
Stock issuance costs | (74) | (74) | |||||
Share repurchase and retirement (shares) | (312,500) | ||||||
Stock-based compensation | 1,192 | 1,192 | |||||
Net loss | (16,937) | (16,937) | |||||
Other comprehensive gain (loss) | (38) | (38) | |||||
Ending balance at Sep. 30, 2023 | $ 74,074 | $ 0 | $ 12 | $ 0 | $ 362,532 | $ (512) | $ (287,958) |
Ending balance (in shares) at Sep. 30, 2023 | 0 | 124,954,451 | 10,762,566 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | ||||||||
Net loss | $ (16,937) | $ (11,762) | $ (25,636) | $ (27,793) | $ (39,113) | $ (79,112) | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Stock-based compensation | 9,044 | 11,147 | ||||||
Depreciation and amortization | 1,004 | 582 | ||||||
(Gain) loss from sale of property and equipment | (2) | 183 | ||||||
Amortization of debt issuance cost | 532 | 526 | ||||||
Provision for obsolete and slow-moving inventory | 1,261 | 129 | ||||||
Loss from unconsolidated subsidiary | 336 | 0 | ||||||
Gain from disposal of investment in unconsolidated subsidiary | 0 | (1,408) | (898) | (1,745) | ||||
Warranty provision | 3,938 | 7,374 | ||||||
Warranty recoverable from manufacturer | 45 | (299) | ||||||
Credit losses and bad debt expense | 4,302 | 1,138 | ||||||
Deferred income taxes | 221 | (331) | ||||||
Lease expense and other | 748 | 550 | ||||||
Impact on cash from changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (26,625) | 53,481 | ||||||
Inventories | 9,033 | (8,574) | ||||||
Prepaid and other current assets | (3,122) | 4,948 | ||||||
Other assets | 67 | (661) | ||||||
Accounts payable | (6,160) | (11,867) | ||||||
Accruals and other current liabilities | 5,491 | (25,507) | ||||||
Deferred revenue | (138) | 3,489 | ||||||
Other non-current liabilities | (5,740) | (4,188) | ||||||
Lease payments and other, net | (607) | (348) | ||||||
Net cash used in operating activities | (46,383) | (49,085) | $ 54,500 | $ 132,900 | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (460) | (814) | ||||||
Proceeds from sale of property and equipment | 0 | 86 | ||||||
Equity method investment in Alpha Steel | (900) | 0 | ||||||
Acquisitions, net of cash acquired | 0 | (5,093) | ||||||
Proceeds from disposal of investment in unconsolidated subsidiary | 898 | 1,745 | ||||||
Net cash used in investing activities | (462) | (4,076) | ||||||
Cash flows from financing activities: | ||||||||
Sale of common stock | 34,007 | 0 | ||||||
Stock offering costs paid | (95) | 0 | ||||||
Proceeds from stock option exercises | 221 | 788 | ||||||
Net cash provided by financing activities | 34,133 | 788 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (153) | 8 | ||||||
Net decrease in cash and cash equivalents | (12,865) | (52,365) | ||||||
Cash and cash equivalents at beginning of period | $ 44,385 | $ 102,185 | 44,385 | 102,185 | 102,185 | |||
Cash and cash equivalents at end of period | $ 31,520 | $ 49,820 | 31,520 | 49,820 | $ 44,385 | $ 102,185 | ||
Supplemental disclosures of cash flow information: | ||||||||
Purchases of property and equipment included in ending accounts payable and accruals | 146 | 27 | ||||||
Stock issued for accrued legal settlement | 2,000 | 0 | ||||||
Right-of-use asset and lease liability recognition for new leases | 1,417 | 0 | ||||||
Cash paid during the period for third party interest | 436 | 657 | ||||||
Cash paid during the period for taxes, net of refunds | $ 331 | $ 119 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net Income (Loss) | $ (16,937) | $ (10,414) | $ (11,762) | $ (25,636) | $ (25,683) | $ (27,793) | $ (39,113) | $ (79,112) |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | ITEM 5. OTHER INF ORMATION (a) Information required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q, but not reported. None (b) Furnish the information required by Item 407(c)(3) of Regulation S-K (§229.407 of this chapter) None (c) Furnish the information required by Item 408(a) of Regulation S-K (17 CFR 229.408(a)). During the three months ended September 30, 2023 , none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K. |
Description of business
Description of business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of business | 1. Description of business FTC Solar, Inc. (the “Company”, “we”, “our”, or “us”) was founded in 2017 and is incorporated in the state of Delaware. In April 2021, we completed an initial public offering ("IPO"), and our common stock began trading on the Nasdaq Global Market under the symbol “FTCI”. We are a global provider of solar tracker systems, supported by proprietary software and value-added engineering services. Solar tracker systems move solar panels throughout the day to maintain an optimal orientation relative to the sun, thereby increasing the amount of solar energy produced at a solar installation. Our original tracker system is currently marketed under the Voyager brand name (“Voyager”), which is our two-panel in-portrait ("2P") single-axis tracker solution. In September 2022, we announced the introduction of Pioneer, our new one module-in-portrait ("1P") solar tracker solution. We have also launched a new mounting solution to support the installation and use of U.S.-manufactured thin-film modules by project owners and, in August 2023, we introduced SUNOPS, a cloud-based, tracker-agnostic solar asset monitoring solution allowing asset owners and managers to evaluate the operation and performance of their solar deployments. In addition, we have a team of renewable energy professionals available to assist our U.S. and worldwide clients in site layout, structural design, pile testing and other needs across the solar project development and construction cycle. The Company is headquartered in Austin, Texas, and has international subsidiaries in Australia, China, India and South Africa. We are an emerging growth company, as defined in the Jumpstart Our Business Startups (JOBS) Act. Under the JOBS Act, we elected to use the allowed extended transition period to delay adopting new or revised accounting standards until such time as those standards apply to private companies. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements include the results of the Company and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature have been made that are considered necessary for a fair statement of our financial position as of September 30, 2023, and December 31, 2022, our results of operations for the three and nine months ended September 30, 2023 and 2022, and our cash flows for the nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the Company’s audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Intercompany balances and transactions have been eliminated in consolidation. Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (our "2022 Annual Report"). We currently operate in one business segment, the manufacturing and servicing of solar tracker systems . Liquidity We have incurred cumulative losses since inception, resulting in an accumulated deficit of $ 288.0 million as of September 30, 2023, and have a history of cash outflows from operations. During the years ended December 31, 2021 and 2022, and the nine months ended September 30, 2023 , we had $ 132.9 million, $ 54.5 million and $ 46.4 million , respectively, of cash outflows from operations. As of September 30, 2023, we had $ 31.5 million of cash on hand, $ 65.4 million of working capital, approximately $ 64.9 million of remaining capacity available for future sales of our common stock under our ATM program as described further in Note 5 below, and approximately $ 98.0 million of unused borrowing capacity under our existing Senior Secured Revolving Credit Facility (the "Credit Facility") until termination on April 30, 2024. The Credit Facility includes a financial condition covenant stating we are required to have a minimum liquidity, consisting of cash on hand and unused borrowing capacity, of $ 125.0 million as of each quarter end. Additionally, as of September 30, 2023, we had a material contractual obligation that could require us to make additional equity investment capital contributions to Alpha Steel, as described further in "Note 3, Equity method investment". The Uyghur Forced Labor Prevention Act ("UFLPA") was passed by the U.S. Congress and signed into law by President Biden on December 23, 2021. The UFLPA establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People's Republic of China ("Xinjiang"), or that are produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States. U.S. Customs and Border Protection ("CBP") began implementing the presumption set out in the UFLPA on June 21, 2022, resulting in new rules for solar module importers and reviews by CBP. There continues to be uncertainty in the market around achieving full compliance with the UFLPA for the importation of solar modules, whether related to sufficient traceability of materials or other factors. On April 1, 2022, the U.S. Department of Commerce, in response to a petition by Auxin Solar, Inc., published a notice initiating an investigation ("the Solar Circumvention Investigation") of claims related to alleged circumvention of U.S. antidumping and countervailing duties ("AD/CVD") by solar manufacturers in certain Southeast Asian countries, in an effort to determine whether or not solar cells and/or modules made in those Southeast Asian nations use parts originating from China in order to circumvent the AD/CVD tariffs. On June 6, 2022, President Biden issued a proclamation allowing U.S. solar deployers the ability to import solar modules and cells from Cambodia, Malaysia, Thailand and Vietnam free from certain duties for 24 months, along with other incentives designed to accelerate U.S. domestic production of clean energy technologies. Since 2016, CBP has issued a number of withhold release orders ("WRO") directed at forced labor in China, including WROs directed specifically at activity in Xinjiang. To date, CBP has used the WROs to detain solar panels, which has disrupted the U.S. solar installation market and caused additional uncertainty on future projects. These policies and actions have resulted in some developers deferring projects due to the uncertainty of panel supply and costs, which negatively impacted our 2022 revenue and cash flows and are continuing to negatively impact our revenue and our cash flows to date in 2023. The most notable incentive program impacting our U.S. business has been the investment tax credit ("ITC") for solar energy projects, which allows taxpayers to offset their U.S. federal income tax liability by a certain percentage of their cost basis in solar energy systems placed in service for commercial use. The Inflation Reduction Act of 2022, passed by the U.S. Congress and signed into law by President Biden on August 16, 2022, expanded and extended the tax credits and other tax benefits available to solar energy projects and the solar energy supply chain. ITCs have been extended for such projects through at least 2032 and, depending on the location of a particular project and its ability to satisfy certain labor and domestic content requirements, the ITC percentage can range between 30 % and 50 %. U.S. manufacturers of specific solar components are now eligible to claim production tax credits as an alternative to the ITC. Implementing regulations for this law are still being finalized. Our costs are affected by the costs of certain components and materials, such as steel, motors and micro-chips, as well as transportation costs. Current market conditions and international conflicts that constrain the supply of materials and disrupt the flow of materials from international vendors impact the cost of our products and services, along with overall rates of inflation in the global economy, which have been higher than pre-COVID 19 pandemic historical rates. Transportation costs, including ocean freight and U.S. domestic haul rates, increased at the beginning of the COVID-19 pandemic but have since returned to pre-pandemic rates. Domestic fuel prices, however, continue to be elevated compared to pre-pandemic rates. Additionally, COVID-19 shutdowns in China during 2022 created a backlog of exports and increased demand for container shipments from China, but such shutdowns have since been eased by the Chinese government. These cost increases and decreases impact our operating margins. We have taken steps to expand and diversify our manufacturing partnerships and have adjusted our modes of transportation to mitigate the impact of headwinds that arise in the global supply chain and logistics markets. As an example, we have modified our ocean freight from previously using charter shipments to now using containerized shipments as costs in the container market began to decrease in 2022. We continue to monitor the logistics markets and will continue to evaluate our use of various modes of transportation when warranted to optimize our transportation costs. Additionally, from February 2022 to September 2023, we utilized a related-party consulting firm to support us in making improvements to our processes and performance in various areas, including design, sourcing, logistics, pricing, software and our distributed generation business. For further information regarding this consulting firm, see "Note 17. Related party transactions". In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, which raise substantial doubt about our ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. While the UFLPA continues to create uncertainty in the market, we believe that passage of the Inflation Reduction Act of 2022, as described above, has reduced the level of uncertainty among solar project owners and developers with regard to new project development in the United States. We note that implementing regulations for the Inflation Reduction Act are still being finalized, which creates uncertainty about the extent of its impact on our Company and the solar energy industry. We also took significant steps in 2022, and are continuing to take further steps in 2023, to address the recent market challenges and our historical use of cash through the following actions: • certain members of our senior management team elected to forego certain cash compensation during the second half of 2022 in exchange for equity compensation; • the members of our board of directors agreed to take equity compensation in lieu of cash compensation during 2023; • we began making certain incentive compensation payments to all employees in stock rather than cash beginning at the end of the second quarter of 2022; • we reduced our workforce by approximately 8 % in December of 2022, and another 9 % in the third quarter of 2023; • we initially froze non-essential hiring in 2022, placed restrictions on certain travel, decreased the future use of consultants and continue to defer non-critical initiatives; • we have initiated frequent, consistent communication with our customers, which in certain cases has allowed us to resolve issues preventing timely collection of certain past due outstanding receivables; • we have emphasized cash collections from customers, and continue to negotiate improved payment terms with both our customers and vendors and have switched vendors when needed to obtain cost savings; • we launched Pioneer, a 1P solar tracker solution, and introduced a new mounting solution to support the installation and use of U.S.-manufactured thin-film modules not subject to UFLPA; • we reached a settlement agreement with FCX Solar, LLC in December 2022, regarding a lawsuit filed against us relating to claims of patent infringement in order to eliminate future time and expense involved in defending ourselves in this action; under the settlement agreement, we were able to utilize our common stock to satisfy a portion of the settlement payment; • we made an investment to acquire a 45 % ownership interest in Alpha Steel, a manufacturing partnership with a leading steel fabricator, which will enhance our domestic supply chain to reduce our exposure to import duties and import restrictions, as described further in "Note 3, Equity method investment" below; • in 2023, we began selling newly issued shares of our common stock under our ATM program (as defined and described further in "Note 5, ATM program" below); and • we continue to actively explore options to obtain additional sources of capital through either the issuance of new debt or equity. A number of the steps above, as well as improvements in the logistics markets and easing of supply chain constraints, contributed to us having positive gross profit in the nine months ended September 30, 2023, which also reduced our use of cash required to fund our operations during the current year-to-date period. Management believes that our existing cash on hand, as well as the continuing impact of certain of the actions described above and our expectations of improved market conditions and positive results from our efforts to continue to increase gross margins, will allow us to grow profitably and generate positive cash flow from operations during the next twelve months in amounts that will be sufficient, along with our other available resources, to fund our operations for at least one year from the date of issuance of the condensed consolidated financial statements. We have achieved success in executing certain of the initiatives above and we continue to work to further reduce our use of cash to fund our operations. We have begun and expect to continue seeing the benefits from production of our Pioneer solution in our financial results during 2024 and we believe passage of the Inflation Reduction Act of 2022 and our investment in Alpha Steel will also ultimately benefit demand for our products in the United States. At the same time, however, new rules for module importers and reviews by CBP pursuant to achieving full compliance with the UFLPA are expected to continue creating uncertainty in the market. However, once there is additional clarity around compliance with the UFLPA and customers get line-of-sight to module deliveries, we believe the market will see a recovery. While there are already many underlying drivers of growth in the solar industry, the expected positive impact on demand for our products could take longer than expected to occur. In addition, market conditions could deteriorate significantly from what we currently expect, and regulatory and international trade policies could become more stringent as a result of (i) findings from the Solar Circumvention Investigation, (ii) CBP's enforcement of the UFLPA, and (iii) other factors, which may result in a need for us to issue additional debt or obtain new equity financing, which could result in additional shareholder dilution, to continue to adequately fund our existing operations beyond the next twelve months. We may be unable to obtain any desired additional financing on terms favorable to us, or at all, depending on market and other conditions, which could result in curtailment of our current operations and our ability to further invest in our products and new technology. The ability to raise additional financing depends on numerous factors that are outside of our control, including macroeconomic factors such as the impact of inflation, the ongoing conflict in the Ukraine, market conditions, the health of financial institutions (including the recent bankruptcy of certain regional banks and related impacts that have occurred and continue to occur in the banking industry), investors' and lenders' assessments of our prospects and the prospects of the solar industry in general. Use of estimates Preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the period. Estimates are used for calculating the measure of progress of our solar tracker projects and deriving the standalone selling prices of the individual performance obligations when determining amounts to recognize for revenue, estimating allowances for credit losses and slow-moving and obsolete inventory, determining useful lives of long-lived assets and the estimated fair value of those assets for impairment assessments, and estimating the fair value of investments, stock compensation awards, warranty liabilities and federal and state taxes, including tax valuation allowances, as well as other contingencies. We base our estimates on historical experience and anticipated results, trends, and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates due to risks and uncertainties. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. We regularly maintain cash balances with various financial institutions that exceed federally insured amounts, but we have experienced no losses associated with these amounts to date. We also took action in early 2023 to reallocate cash balances between different financial institutions based on our assessment as to the financial health of certain institutions. We extend credit to customers in the normal course of business, often without requiring collateral. We also perform credit analyses and monitor the financial health of our customers to reduce credit risk. The Company’s accounts receivables are derived from revenue earned from customers primarily located in the U.S. and Australia. No countries other than the U.S. and Australia accou nt for 10 % or more of our revenue. Most of our customers are project developers, solar asset owners and engineering, procurement and construction (“EPC”) contractors that design and build solar energy projects. We typically rely on a small number of customers that account for a large portion of our revenue each period and our outstanding receivables at each period end. Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Certain of our cash equivalents include deposits in money market funds that invest primarily in short-term securities issued or guaranteed by the U.S. government or its agencies or instrumentalities and contain no restrictions on immediate redemption. The carrying value for money market fund deposits approximates fair value based on quoted prices in active markets for units held (Level 1 classification) and totaled $ 18.1 million at September 30, 2023 and $ 25.4 million at December 31, 2022 . Interest earned on cash equivalents is included in interest income, which is reported net of interest expense in our condensed consolidated statements of comprehensive loss. Accounts receivable, net Trade receivables are recorded at invoiced amounts, net of allowances for credit losses, and do not bear interest. We generally do not require collateral from our customers; however, in certain circumstances, we may require letters of credit, other collateral, additional guarantees or advance payments. The allowance for credit losses is based on the lifetime expected credit loss of our customer accounts. To assess the lifetime expected credit loss, we utilize a loss rate method that takes into consideration historical experience and certain other factors, as appropriate, such as credit quality and current economic or other conditions that may affect a customer's ability to pay. Provisions for credit losses are included as a component of our selling and marketing costs. Receivables arising from revenue recognized in excess of billings represents our unconditional right to consideration before customers are invoiced due to the level of progress obtained as of period end on our contracts to procure and deliver tracker systems and related equipment. Further information may be found below in our revenue recognition policy. Inventories, net Inventories are stated at the lower of cost or net realizable value, with costs computed on a first-in, first-out basis. The Company periodically reviews its inventories for excess and obsolete items and adjusts carrying costs to estimated net realizable values when they are determined to be less than cost. Impairment We review our long-lived assets that are held for use for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable or that its useful life may be shorter than previously expected. If such impairment indicators are present or other factors exist that indicate the carrying amount of the asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset, which in most cases is estimated based upon Level 3 unobservable inputs. If the asset is determined to have a remaining useful life shorter than previously expected an adjustment for the shorter remaining life will be made for purposes of recognizing future depreciation expense. Assets are classified as held for sale when we have a plan, approved by the appropriate levels of management, for disposal of such assets, as well as other considerations, and those assets are stated at the lower of carrying value or estimated fair value less estimated costs to sell. Intangible assets, net Intangible assets consist of developed technology in the form of software tools, licenses and intellectual property, which are amortized over the period of their estimated useful lives, generally 2.5 to 3.0 years, using the straight-line method. We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of our intangible assets may not be recoverable or that their useful lives may be shorter than previously expected. Goodwill We recognize goodwill as the excess of the purchase price over the estimated fair value of the identified assets and liabilities acquired in a business combination accounted for using the acquisition method. Goodwill is not amortized but is subject to a periodic assessment for impairment at least annually, or whenever events and circumstances indicate an impairment may exist. Equity method investment We use the equity method of accounting for investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies of the investee. Our proportionate share of the net income or loss of these investees is included in our condensed consolidated statements of comprehensive loss. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, legal form of the investee, representation on the board of directors or managers, participation in policy-making decisions and material intra-entity transactions. We account for distributions received from equity method investees under the "nature of the distribution" approach based on the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as cash inflows from operating activities) or a return of investment (classified as cash inflows from investing activities). We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. Warranty Typically, the sale of solar tracker projects includes parts warranties to customers as part of the overall price of the product. We provide standard assurance type warranties for our products for periods generally ranging from two to ten years . We record a provision for estimated warranty expenses in cost of sales, net of amounts recoverable from manufacturers under their warranty obligations to us. We do not maintain general or unspecified reserves; all warranty reserves are related to specific projects. All actual or estimated material costs incurred for warranty services in subsequent periods are charged to those established reserves. While we periodically monitor our warranty activities and claims, if actual costs incurred were to be different from our estimates, we would recognize adjustments to our warranty reserves in the period in which those differences arise or are identified. Stock-based compensation We recognize compensation expense for all share-based payment awards made, including stock options and RSUs, based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes option pricing model for awards with service-based vesting or through use of a lattice model or a Monte Carlo simulation for awards with market conditions. The fair value of RSUs is based on the estimated fair value of the Company's common stock on the date of grant. We consider the closing price of our stock, as reported on the Nasdaq Global Market, to be the fair value of our stock on the grant date. Forfeitures are accounted for as they occur. For service-based awards, stock-based compensation is recognized using the straight-line attribution approach over the requisite service period. For performance-based awards, stock-based compensation is recognized based on graded vesting over the requisite service period when the performance condition is probable of being achieved. Stock compensation expense for market-based awards is recognized over the derived service period determined in the valuation model, inclusive of any vesting conditions. Revenue recognition Product revenue is derived from the sale of solar tracker systems and customized components for those systems, individual part sales for certain specific transactions and the sale of term-based software licenses. Term-based licensed software is deployed on the customers’ own servers and has significant standalone functionality. Service revenue includes revenue from shipping and handling services, engineering consulting and pile testing services, our subscription-based enterprise licensing model and maintenance and support services in connection with the term-based software licenses. Our subscription-based enterprise licensing model typically has contract terms ranging from one to two years and consists of subscription fees from the licensing of subscription services. Our hosted on-demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Support services include ongoing security updates, upgrades, bug fixes, and maintenance. We recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below. Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. In assessing the recognition of revenue, we also evaluate whether two or more contracts should be combined and accounted for as one contract and if the combined or single contract should be accounted for as multiple performance obligations which could change the amount of revenue and profit (loss) recorded in a period. Change orders may include changes in specifications or design, manner of performance, equipment, materials, scope of work, and/or the period of completion of the project. We analyze change orders to determine if they should be accounted for as a modification to an existing contract or a new stand-alone contract. Contracts we enter into with our customers for sale of solar tracker systems are generally under two different types of arrangements: (1) purchase agreements and equipment supply contracts (“Purchase Agreements”), and (2) sale of individual parts for those systems. Change orders from our customers are generally modifications to existing contracts and are included in the total estimated contract revenue when it is probable that the change order will result in additional value that can be reliably estimated and realized. Identify the performance obligations in the contract: We enter into contracts that can include various combinations of products and services, which are either capable of being distinct and accounted for as separate performance obligations or as one performance obligation since the majority of tasks and services are part of a single project or capability. However, determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment. Our Purchase Agreements typically include two performance obligations: 1) our solar tracker systems or customized components of those systems, and 2) shipping and handling services. The deliverables included as part of our solar tracker systems are predominantly accounted for as one performance obligation, as these deliverables are part of a combined promise to deliver a project. The revenue for shipping and handling services will be recognized over time based on progress in meeting shipping terms of the arrangements, as this faithfully depicts the Company’s performance in transferring control. Revenue for stand-alone engineering consulting and pile testing services is recognized at a point in time upon completion of the services performed. Sales of individual parts of our solar tracker systems for certain specific transactions include multiple performance obligations consisting of individual parts of those systems. Revenue is recognized for parts sales at a point in time when the obligations under the terms of the contract with our customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is in line with shipping terms. Determine the transaction price: The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring services to the customer. Such amounts are typically stated in the customer contract, and to the extent that we identify variable consideration, we will estimate the variable consideration at the onset of the arrangement as long as it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The majority of our contracts do not contain variable consideration provisions as a continuation of the original contract. None of our contracts contain a significant financing component. Taxes collected from customers and remitted to governmental authorities are not included in revenue . Allocate the transaction price to performance obligations in the contract: Once we have determined the transaction price, we allocate the total transaction price to each performance obligation in a manner depicting the amount of consideration to which we expect to be entitled in exchange for transferring the good(s) or service(s) to the customer. We allocate the transaction price to each performance obligation identified in the contract on a relative standalone selling price basis. We use the expected cost-plus margin approach based on hardware, labor, and related overhead cost to estimate the standalone selling price of our solar tracker systems, customized components of those systems, and individual parts for certain specific transactions. We also use the expected cost-plus margin approach based on expected third-party shipping and transportation costs to estimate the standalone selling price of our shipping, handling and logistics performance obligations. We use the adjusted market assessment approach for all other performance obligations. Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation id |
Equity method investment
Equity method investment | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investment | 3. Equity method investment On February 9, 2023, we entered into a limited liability company agreement (the "LLC Agreement") with Taihua New Energy (Thailand) Co., LTD ("Taihua"), a leading steel fabricator and an existing vendor, and DAYV LLC, for the creation of Alpha Steel LLC ("Alpha Steel"), a Delaware limited liability company dedicated to producing steel components, including torque tubes, for utility-scale solar projects. The Alpha Steel facility, which is located outside of Houston in Sealy, Texas, is expected to begin commercial production in the fourth quarter of 2023. We entered into amendment no. 1 to the Alpha Steel LLC Agreement with Taihua and DAYV LLC on July 28, 2023, to allow for members at their option, and with the approval of the Board of Managers, to make payments in respect of Alpha Steel’s contractual obligations in the event that Alpha Steel does not or is not able to make such payments from its own resources (“Credit Support Payments”). Any such Credit Support Payments will be treated as capital contributions by the members to Alpha Steel, with any member funding more than its ratable share of Credit Support Payments being deemed to have loaned such excess to each underfunding member at the U.S. prime rate plus 2 %. Alpha Steel is intended to enhance our domestic supply chain, our ability to support our customers and the growth of the U.S. solar market, with domestic manufacturing utilizing U.S. steel. We have a 45 % interest in Alpha Steel, which is accounted for under the equity method of accounting. Taihua has a 51 % interest in Alpha Steel and DAYV LLC, an entity owned by members of the Board of Managers of Alpha Steel and a related party with the parent company of Taihua, has a 4 % interest in Alpha Steel. The Chief Executive Officer of Taihua is the General Manager of Alpha Steel. We have equal voting representation with Taihua and DAYV LLC, combined, on Alpha Steel's Board of Managers which will be responsible, through majority vote, for making certain "major decisions" involving Alpha Steel, as specified in the LLC Agreement, including, among other things, approval of an annual business plan. As of September 30, 2023, we made a required initial capital contribution to Alpha Steel of $ 0.9 million . Pursuant to the LLC Agreement, we could be required to make u p to $ 2.6 million in additional capital contributions as Alpha Steel expands production. Alpha Steel had no operating revenue during the three and nine months ended September 30, 2023. We did, however, recognize a loss of $ 0.3 million from this unconsolidated subsidiary during the three and nine months ended September 30, 2023, reflecting our share of certain administrative and other expenses incurred to date. In connection with the creation of Alpha Steel, we also entered into a three-year equipment supply agreement (the "Supply Agreement") with Alpha Steel, the terms of which will apply to our equipment purchase orders, including specified minimum purchase amounts for each twelve-month period during the term of the Supply Agreement, following commencement of production. The Supply Agreement may be terminated early in accordance with its provisions or may be extended beyond the initial term if mutually agreed to by the parties. |
Reduction in force
Reduction in force | 9 Months Ended |
Sep. 30, 2023 | |
Workforce Activity [Abstract] | |
Reduction in force | 4. Reduction in force In August 2023, we restructured and combined selected indirect and administrative functions in order to better control and manage our overhead costs in relation to current market conditions, including the impact of start-up delays for certain customer projects. This effort resulted in a reduction of 21 employees, including certain members of our executive leadership team, or approximately 9 % of our existing headcount at that time. In connection with this effort, we recognized severance and termination-related costs as follows: (in thousands) For the three and nine months ended September 30, 2023 Cost of revenue $ 252 Research and development 154 Selling and marketing 169 General and administrative 1,513 Total $ 2,088 At September 30, 2023, we had an accrual totaling approximately $ 1.2 million relating to costs still to be paid to our former employees. |
ATM Program
ATM Program | 9 Months Ended |
Sep. 30, 2023 | |
Program Rights Obligations [Abstract] | |
ATM Program | 5. ATM program On September 14, 2022, we filed a prospectus supplement and entered into an equity distribution agreement (as amended from time to time, the "EDA") under which we may from time to time, in one or more transactions, offer and sell newly issued shares of our common stock having an aggregate offering price of up to $ 100 million in "at the money" offerings (the "ATM program"). We have and intend to continue to use the net proceeds from this offering for general corporate purposes, including working capital and operating expenses. We may also use a portion of such proceeds to acquire or invest in businesses, products, services or technologies. Credit Suisse Securities (USA) LLC served as our initial sales agent under the EDA until August 9, 2023, when that role was assumed by Barclays Capital Inc. ("Barclays") pursuant to an amendment to the EDA. The offering of our common stock under the EDA will terminate upon the earlier of (1) the sale of all common stock subject to the EDA or (2) the termination of the EDA by us or by Barclays as permitted therein. The EDA contains customary representations, covenants and indemnification provisions. Under the ATM program, we sold 6,149,885 and 15,421,885 shares of newly issued common stock valued at $ 10.7 million and $ 35.1 million , respectively (for proceeds, net of commissions and fees, of approximately $ 10.4 million and $ 34.0 million , respectively), during the three and nine months ended September 30, 2023. As of September 30, 2023, approximately $ 64.9 million of capacity remained for future sales of our common stock under the ATM program. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 3. Equity method investment On February 9, 2023, we entered into a limited liability company agreement (the "LLC Agreement") with Taihua New Energy (Thailand) Co., LTD ("Taihua"), a leading steel fabricator and an existing vendor, and DAYV LLC, for the creation of Alpha Steel LLC ("Alpha Steel"), a Delaware limited liability company dedicated to producing steel components, including torque tubes, for utility-scale solar projects. The Alpha Steel facility, which is located outside of Houston in Sealy, Texas, is expected to begin commercial production in the fourth quarter of 2023. We entered into amendment no. 1 to the Alpha Steel LLC Agreement with Taihua and DAYV LLC on July 28, 2023, to allow for members at their option, and with the approval of the Board of Managers, to make payments in respect of Alpha Steel’s contractual obligations in the event that Alpha Steel does not or is not able to make such payments from its own resources (“Credit Support Payments”). Any such Credit Support Payments will be treated as capital contributions by the members to Alpha Steel, with any member funding more than its ratable share of Credit Support Payments being deemed to have loaned such excess to each underfunding member at the U.S. prime rate plus 2 %. Alpha Steel is intended to enhance our domestic supply chain, our ability to support our customers and the growth of the U.S. solar market, with domestic manufacturing utilizing U.S. steel. We have a 45 % interest in Alpha Steel, which is accounted for under the equity method of accounting. Taihua has a 51 % interest in Alpha Steel and DAYV LLC, an entity owned by members of the Board of Managers of Alpha Steel and a related party with the parent company of Taihua, has a 4 % interest in Alpha Steel. The Chief Executive Officer of Taihua is the General Manager of Alpha Steel. We have equal voting representation with Taihua and DAYV LLC, combined, on Alpha Steel's Board of Managers which will be responsible, through majority vote, for making certain "major decisions" involving Alpha Steel, as specified in the LLC Agreement, including, among other things, approval of an annual business plan. As of September 30, 2023, we made a required initial capital contribution to Alpha Steel of $ 0.9 million . Pursuant to the LLC Agreement, we could be required to make u p to $ 2.6 million in additional capital contributions as Alpha Steel expands production. Alpha Steel had no operating revenue during the three and nine months ended September 30, 2023. We did, however, recognize a loss of $ 0.3 million from this unconsolidated subsidiary during the three and nine months ended September 30, 2023, reflecting our share of certain administrative and other expenses incurred to date. In connection with the creation of Alpha Steel, we also entered into a three-year equipment supply agreement (the "Supply Agreement") with Alpha Steel, the terms of which will apply to our equipment purchase orders, including specified minimum purchase amounts for each twelve-month period during the term of the Supply Agreement, following commencement of production. The Supply Agreement may be terminated early in accordance with its provisions or may be extended beyond the initial term if mutually agreed to by the parties. |
Accounts receivable, net
Accounts receivable, net | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts receivable, net | 6. Accounts receivable, net Accounts receivable consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Trade receivables $ 49,963 $ 35,367 Related party receivables 777 — Revenue recognized in excess of billings 26,115 14,844 Other receivables 6 25 Total 76,861 50,236 Allowance for credit losses ( 5,486 ) ( 1,184 ) Accounts receivable, net $ 71,375 $ 49,052 Information relating to related party receivables at September 30, 2023, may be found below in Note 17, "Related party transactions". Included in total receivables above are amounts billed under retainage provisions totaling $ 0.9 million and $ 3.7 million as of September 30, 2023 and December 31, 2022, respectively, which are due within the next twelve months. Activity in the allowance for credit losses during the nine months ended September 30, 2023 was as follows: (in thousands) For the nine months ended September 30, 2023 Balance at beginning of period $ 1,184 Impact of adoption of ASU 2016-13 at beginning of year — Additions charged to earnings during the period 4,302 Balance at end of period $ 5,486 During the three months ended September 30, 2023, we recognized provisions for credit losses totaling $ 4.1 million . |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | 7. Inventories, net Inventories consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Finished goods $ 5,444 $ 16,269 Allowance for slow-moving and obsolete inventory ( 789 ) ( 1,320 ) Total $ 4,655 $ 14,949 |
Prepaid and other current asset
Prepaid and other current assets | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid and other current assets | . Prepaid and other current assets Prepaid and other current assets consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Vendor deposits $ 5,370 $ 5,085 Prepaid expenses 2,171 3,544 Prepaid taxes 250 163 Deferred cost of revenue 997 — Surety collateral 1 107 Other current assets 4,679 1,405 Total $ 13,468 $ 10,304 At September 30, 2023, other current assets included $ 3.5 million of (i) a short-term, interest-bearing loan to a customer, as well as (ii) a non-interest-bearing customer advance, both of which are for pre-project construction financing activities. These amounts are secured by customer assets and, additionally in one case by a financial guarantee. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 9. Leases We lease office and warehouse space in various locations, including our corporate headquarters in Austin, Texas. Additionally, we lease space for an applications laboratory in Austin, Texas and have a membership in a collaborative research facility in Colorado. During the nine months ended September 30, 2023, we also leased space (i) in Seguin, Texas for a research and development facility that we began using in the third quarter of 2023 as a replacement for the collaborative research facility in Colorado, (ii) for new offices in India and South Africa and (iii) for employee housing in Australia. All of our manufacturing is outsourced to contract manufacturing partners, and we currently do not own or lease any manufacturing facilities. Our lease expense consisted of the following: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Operating lease cost $ 251 $ 166 $ 748 $ 550 Short-term lease cost 132 122 334 332 Total lease cost $ 383 $ 288 $ 1,082 $ 882 Reported in: Cost of revenue $ 245 $ 164 $ 710 $ 522 Research and development 14 11 40 33 Selling and marketing 24 12 62 25 General and administrative 100 101 270 302 Total lease cost $ 383 $ 288 $ 1,082 $ 882 Future remaining operating lease payment obligations were as follows: (in thousands) September 30, Remainder of 2023 $ 219 2024 818 2025 755 2026 219 2027 192 Thereafter 16 Total lease payments 2,219 Less: imputed interest ( 167 ) Present value of operating lease liabilities $ 2,052 Current portion of operating lease liability $ 742 Operating lease liability, net of current portion 1,310 Present value of operating lease liabilities $ 2,052 |
Property and equipment, net
Property and equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | . Property and equipment, net Property and equipment consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Leasehold improvements $ 157 $ 22 Field equipment 1,012 1,078 Information technology equipment 440 355 Tooling 953 824 Capitalized software 495 250 Total 3,057 2,529 Accumulated depreciation ( 1,372 ) ( 827 ) Property and equipment, net $ 1,685 $ 1,702 Depreciation expense recognized for the three and nine months ended September 30, 2023, totaled $ 0.2 million and $ 0.6 million , respectively. Depreciation expense recognized for the three and nine months ended September 30, 2022 , totaled $ 0.2 million and $ 0.4 million, respectively. |
Sales of Equity Method Investme
Sales of Equity Method Investments | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investment | 3. Equity method investment On February 9, 2023, we entered into a limited liability company agreement (the "LLC Agreement") with Taihua New Energy (Thailand) Co., LTD ("Taihua"), a leading steel fabricator and an existing vendor, and DAYV LLC, for the creation of Alpha Steel LLC ("Alpha Steel"), a Delaware limited liability company dedicated to producing steel components, including torque tubes, for utility-scale solar projects. The Alpha Steel facility, which is located outside of Houston in Sealy, Texas, is expected to begin commercial production in the fourth quarter of 2023. We entered into amendment no. 1 to the Alpha Steel LLC Agreement with Taihua and DAYV LLC on July 28, 2023, to allow for members at their option, and with the approval of the Board of Managers, to make payments in respect of Alpha Steel’s contractual obligations in the event that Alpha Steel does not or is not able to make such payments from its own resources (“Credit Support Payments”). Any such Credit Support Payments will be treated as capital contributions by the members to Alpha Steel, with any member funding more than its ratable share of Credit Support Payments being deemed to have loaned such excess to each underfunding member at the U.S. prime rate plus 2 %. Alpha Steel is intended to enhance our domestic supply chain, our ability to support our customers and the growth of the U.S. solar market, with domestic manufacturing utilizing U.S. steel. We have a 45 % interest in Alpha Steel, which is accounted for under the equity method of accounting. Taihua has a 51 % interest in Alpha Steel and DAYV LLC, an entity owned by members of the Board of Managers of Alpha Steel and a related party with the parent company of Taihua, has a 4 % interest in Alpha Steel. The Chief Executive Officer of Taihua is the General Manager of Alpha Steel. We have equal voting representation with Taihua and DAYV LLC, combined, on Alpha Steel's Board of Managers which will be responsible, through majority vote, for making certain "major decisions" involving Alpha Steel, as specified in the LLC Agreement, including, among other things, approval of an annual business plan. As of September 30, 2023, we made a required initial capital contribution to Alpha Steel of $ 0.9 million . Pursuant to the LLC Agreement, we could be required to make u p to $ 2.6 million in additional capital contributions as Alpha Steel expands production. Alpha Steel had no operating revenue during the three and nine months ended September 30, 2023. We did, however, recognize a loss of $ 0.3 million from this unconsolidated subsidiary during the three and nine months ended September 30, 2023, reflecting our share of certain administrative and other expenses incurred to date. In connection with the creation of Alpha Steel, we also entered into a three-year equipment supply agreement (the "Supply Agreement") with Alpha Steel, the terms of which will apply to our equipment purchase orders, including specified minimum purchase amounts for each twelve-month period during the term of the Supply Agreement, following commencement of production. The Supply Agreement may be terminated early in accordance with its provisions or may be extended beyond the initial term if mutually agreed to by the parties. |
Intangible assets, net and good
Intangible assets, net and goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net and goodwill | 11. Intangible assets, net and goodwill Intangible assets consisted of the following: (in thousands) Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Developed technology 2.5 – 3.0 $ 2,515 $ 2,591 Total 2,515 2,591 Accumulated amortization ( 1,858 ) ( 1,478 ) Intangible assets, net $ 657 $ 1,113 Amortization expense recognized for the three and nine months ended September 30, 2023, totaled $ 0.1 million and $ 0.4 million , respectively. Amortization expense recognized for the three and nine months ended September 30, 2022 , totaled $ 0.1 million. During the nine months ended September 30, 2023, activity in our goodwill balance was as follows: (in thousands) Nine months ended September 30, 2023 Balance at December 31, 2022 $ 7,538 Translation ( 395 ) Balance at September 30, 2023 $ 7,143 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Expenses and Other Current Liabilities Abstract | |
Accrued Expenses and Other Current Liabilities | 13. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Accrued cost of revenue $ 19,923 $ 13,198 Related party accrued cost of revenue 1,304 — Accrued compensation 1,666 4,688 Other accrued expenses 2,885 6,010 Total accrued expenses $ 25,778 $ 23,896 Warranty reserves $ 7,738 $ 8,004 Current portion of operating lease liability 742 417 Non-federal tax obligations 109 463 Total other current liabilities $ 8,589 $ 8,884 Information relating to related party accruals at September 30, 2023, may be found below in Note 17, "Related party transactions ". Other accrued expenses primarily include amounts due for (i) legal and other costs associated with outstanding legal matters and (ii) other professional services. We provide standard warranties on our hardware products to customers. The liability amount is based on actual historical warranty spending activity by type of product, customer and geographic region, modified by any known differences such as the impact of expected remediation activities or reliability improvements. Activity by period in the Company's warranty accruals was as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Balance at beginning of period $ 12,081 $ 11,444 $ 12,426 $ 9,346 Warranties issued during the period (a) 1,086 3,190 3,938 7,374 Settlements made during the period ( 847 ) ( 1,759 ) ( 3,184 ) ( 3,139 ) Changes in liability for pre-existing warranties ( 363 ) ( 92 ) ( 1,223 ) ( 798 ) Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 Warranty accruals are reported in: Other current liabilities $ 7,738 $ 8,304 $ 7,738 $ 8,304 Other non-current liabilities 4,219 4,479 4,219 4,479 Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 (a) – Inclusive of accruals for expected remediation activities |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Other Borrowings | 12. Debt On April 30, 2021, we entered into an agreement for our Credit Facility with various lenders, including Barclays Bank PLC, as issuing lender, the swingline lender and as administrative agent (the "Credit Facility Agreement") providing aggregate commitments of up to $ 100.0 million. We have not made any draws on our Credit Facility as of September 30, 2023. However, as of September 30, 2023, we had $ 2.0 million in letters of credit outstanding that reduced our available borrowing capacity to approximately $ 98.0 million . On June 7, 2023, we entered into Amendment No. 3 to our Credit Facility Agreement with Barclays Bank PLC, pursuant to the occurrence of an Early Opt-in Election, to replace USD LIBOR with the secured overnight financing rate (SOFR) as the benchmark rate for future term loans (“Term SOFR”) under the Credit Facility Agreement. No other material changes were made to the Credit Facility Agreement as part of this amendment. We are required to maintain a liquidity level (defined as unrestricted cash and cash equivalents plus the available borrowing capacity under the Credit Facility) of no less than $ 125.0 million at each quarter end in order to utilize the Credit Facility. As of September 30, 2023, we were over the required minimum liquidity level thus allowing us to continue to access our Credit Facility up to the available borrowing capacity, pending the measurement of our liquidity level again at the end of the next fiscal quarter. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and contingencies We may become involved in various claims, lawsuits, investigations, and other proceedings, arising in the normal course of business. We accrue a liability when information available prior to the issuance of our financial statements indicates it is probable a loss has been incurred as of the date of the financial statements and the amount of loss can be reasonably estimated. If the reasonable estimate of the probable loss is a range, we record an accrual for the most likely estimate of the loss, or the low end of the range if there is no one best estimate. We adjust our accruals to reflect the impact of negotiation, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Legal costs are expensed as incurred. In March of 2023, CBP issued notices of tariff assessment that indicated an action taken at the Import Specialist (i.e., the port) level with respect to merchandise imported from Thailand under entry number 004-1058562-5 (the “625 Assessment”) and entry number 004-1063793-9 (the “Original 939 Assessment”, and collectively with the 625 Assessment, the “Original CBP Assessments”). The Original CBP Assessments related to certain torque beams that are used in our Voyager+ product that were imported in 2022. In the Original CBP Assessments, CPB asserted that Section 301 China tariffs, Section 232 steel & aluminum tariffs, and antidumping and countervailing duties applied to the merchandise. Based on correspondence received to date from CBP and our calculations based on applicable duty and tariff rates, the 625 Assessment is currently for approximately $ 2.16 million. In September of 2023, CBP informed us (the "Revised 939 Assessment", and together with the 625 Assessment, the "Revised CBP Assessments") that the amount owed under the Original 939 Assessment was being revised downward to approximately $ 2.01 million. In particular, CBP accepted our position that the Section 301 tariffs of 25% or 7.5% of the value of the merchandise, depending on tariff classification, as well as the antidumping and countervailing duties, previously assessed under the Original 939 Assessment are not applicable as they are only applicable to articles that originate in China and that, in this case, the finished goods are products of Thailand. Upon review of the facts involved, and in consultation with outside legal counsel, we believe that the remaining amounts claimed in the Revised CBP Assessments are incorrect. In particular, the Section 301 tariffs of 25% or 7.5% of the value of the merchandise, depending on tariff classification, as well as the antidumping and countervailing duties, are not applicable under the 625 Assessment for the same reason stated above with respect to the Revised 939 Assessment, which has been accepted by CBP. Moreover, with respect to both Revised CBP Assessments, we believe that the goods in question were properly classified as parts of structures at the time of importation and that when properly classified, the beams and other materials are not subject to Section 232 duties applicable to more basic steel products. CBP has legally finalized both Revised CBP Assessments. We filed a formal protest for the 625 Assessment in September of 2023 and plan to do the same for the Revised 939 Assessment. Based on the above, and under the relevant accounting guidance related to loss contingencies, we have made no accrual for the amounts claimed by CBP as of September 30, 2023, as we do not consider these amounts to be a probable obligation, as such term is defined and interpreted under the relevant accounting guidance, for us at this time. However, because matters of this nature are subject to inherent uncertainties, and unfavorable rulings or developments, including future assessments of additional duties or tariffs owed in respect of other shipments or other materials beyond what is presently included in the Revised CBP Assessments, could occur despite our belief that the tariffs and duties asserted are incorrect, there can be no certainty that the Company may not ultimately incur charges that are not currently recorded as liabilities. Since the outcome of these matters cannot be predicted with certainty, the costs associated with them could have a material adverse effect on our consolidated results of operations, financial position, or liquidity. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 16. Stock-based compensation Stock compensation expense for each period was as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Cost of revenue $ 181 $ 1,153 $ 1,313 $ 2,521 Research and development 85 487 449 1,134 Selling and marketing 166 598 821 1,630 General and administrative 760 5,269 6,461 9,970 Total stock compensation expense $ 1,192 $ 7,507 $ 9,044 $ 15,255 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 18 . Net loss per share Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Net loss (in thousands) $ ( 16,937 ) $ ( 25,636 ) $ ( 39,113 ) $ ( 79,112 ) Weighted average shares outstanding for calculating basic and diluted loss per share 119,793,821 102,164,455 112,794,562 100,642,126 Basic and diluted loss per share $ ( 0.14 ) $ ( 0.25 ) $ ( 0.35 ) $ ( 0.79 ) For purposes of computing diluted loss per share, weighted average common shares outstanding do not include potentially dilutive securities that are anti-dilutive, as shown below. For the three and nine months ended September 30, 2023 2022 Anti-dilutive securities excluded from calculating dilutive loss per share: Shares of common stock issuable under stock option plans outstanding 3,048,139 7,407,333 Shares of common stock issuable upon vesting of RSUs 7,982,821 7,603,064 Potential common shares excluded from diluted net loss per share calculation 11,030,960 15,010,397 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income taxes For the three months ended September 30, 2023 and 2022 we recorded income tax expense of $ 0.17 million and an income tax benefit of $ 0.15 million respectively. For the nine months ended September 30, 2023 and 2022, we recorded income tax expense of $ 0.18 million and $ 0.02 million , respectively. These amounts for each period were lower than the statutory rate of 21 %, primarily due to a valuation allowance established against the U.S. deferred tax assets. We have had no material change in our unrecognized tax benefits since December 31, 2022. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of September 30, 2023 and December 31, 2022 , we had no accrued interest or penalties related to unrecognized tax benefits. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related party transactions Transaction with Ayna.AI LLC In February 2022, we engaged Ayna.AI LLC (as successor in interest to Fernweh Engaged Operator Company LLC) (“Ayna”) to support us with improvements to our processes and performance in various areas including design, sourcing, logistics, pricing, software and standard configuration. The consideration for this engagement was a combination of cash and stock options, including options that vested over time, as well as options with vesting tied to certain performance metrics. The foregoing engagement constituted a related party transaction as South Lake One LLC, an entity affiliated with Isidoro Quiroga Cortés, a member of our board of directors, and a holder of more than 5 % of our outstanding capital stock, is an investor in Ayna. In addition, Discrimen LLC is an investor in Ayna, and Isidoro Quiroga Cortés is affiliated with that entity. Isidoro Quiroga Cortés is also on the board of directors of Ayna. On September 13, 2023, we executed a termination of the master services agreement and statement of work (collectively, the "Service Agreement") with Ayna and Fernweh Group LLC, the parent company of Fernweh Engaged Operator Company LLC, which resulted in a forfeiture of 2,000,000 unvested stock options that were part of the initial consideration for the engagement. Due to the accelerated timing of the payments required for the cash portion of the initial consideration and the expected service period over which the engagement was estimated to last, we had unamortized prepaid balances remaining at the termination date totaling approximate ly $ 3.2 million . These prepaid balances were fully amortized during the three months ended September 30, 2023 as a charge to general and administrative expense. In addition, approximately $ 1.1 million of stock-based compensation expense previously recognized on the unvested stock options was reversed during the three months ended September 30, 2023 in connection with their forfeiture. An additional 1,000,000 options to purchase shares of common stock at an exercise price of $ 3.86 per share were fully vested and exercisable as of the termination date. For the three and nine months ended September 30, 2023, we incurred $ 2.1 million and $ 3.5 million , respectively, of general and administrative expense associated with our engagement of Ayna, inclusive of the amounts described above. Cash payments to Ayna in 2023 prior to the termination of the Service Agreement totaled $ 2.5 million . During the three and nine months ended September 30, 2022 , we incurred $ 0.9 million and $ 3.0 million, respectively, of general and administrative expenses and made cash payments totaling $ 1.7 million during the nine months ended September 30, 2022. Repurchase of common stock and issuance of RSUs Effective July 5, 2023, we agreed to acquire 312,500 shares of our outstanding common stock held by ARC Family Trust, a related party and greater than 10 % shareholder, for no monetary consideration. The acquired shares were then retired. The ARC Family Trust was established by Mr. Ahmad Chatila, a member of our Board of Directors, for the benefit of certain members of his family. Mr. Shaker Sadasivam, the Chairman of our Board of Directors, is the trustee of the ARC Family Trust. Concurrent with the transaction described above and with the approval of our Board of Directors, we issued 250,000 RSUs to Mr. Tony Alvarez, who was appointed as our Board Observer, effective July 5, 2023, and 62,500 RSUs to Mr. William Aldeen "Dean" Priddy, Jr., a member of our Board of Directors and Chairman of the Audit Committee of the Board. These RSU grants will vest upon the one-year anniversary of the date of grant. Related party receivables and payables We have related party receivables at September 30, 2023 , totaling $ 0.8 million for future material costs discounts contractually owed to us by Alpha Steel in connection with the expected receipt of manufacturing incentives available to Alpha Steel under the Inflation Reduction Act as costs are incurred by Alpha Steel to purchase raw materials and manufacture torque tubes and other products that will be used to fulfill purchase orders we issue to Alpha Steel. We also have related party payables to Alpha Steel at September 30, 2023 , totaling $ 1.3 million for the accrued cost of revenue recognized on certain of our customer projects associated with the cost of products that are being manufactured for us by Alpha Steel. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements include the results of the Company and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements and pursuant to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments of a normal recurring nature have been made that are considered necessary for a fair statement of our financial position as of September 30, 2023, and December 31, 2022, our results of operations for the three and nine months ended September 30, 2023 and 2022, and our cash flows for the nine months ended September 30, 2023 and 2022. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the Company’s audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Intercompany balances and transactions have been eliminated in consolidation. Certain information and disclosures normally included in the notes to annual financial statements prepared in accordance with U.S. GAAP have been omitted from these interim financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (our "2022 Annual Report"). We currently operate in one business segment, the manufacturing and servicing of solar tracker systems |
Liquidity | Liquidity We have incurred cumulative losses since inception, resulting in an accumulated deficit of $ 288.0 million as of September 30, 2023, and have a history of cash outflows from operations. During the years ended December 31, 2021 and 2022, and the nine months ended September 30, 2023 , we had $ 132.9 million, $ 54.5 million and $ 46.4 million , respectively, of cash outflows from operations. As of September 30, 2023, we had $ 31.5 million of cash on hand, $ 65.4 million of working capital, approximately $ 64.9 million of remaining capacity available for future sales of our common stock under our ATM program as described further in Note 5 below, and approximately $ 98.0 million of unused borrowing capacity under our existing Senior Secured Revolving Credit Facility (the "Credit Facility") until termination on April 30, 2024. The Credit Facility includes a financial condition covenant stating we are required to have a minimum liquidity, consisting of cash on hand and unused borrowing capacity, of $ 125.0 million as of each quarter end. Additionally, as of September 30, 2023, we had a material contractual obligation that could require us to make additional equity investment capital contributions to Alpha Steel, as described further in "Note 3, Equity method investment". The Uyghur Forced Labor Prevention Act ("UFLPA") was passed by the U.S. Congress and signed into law by President Biden on December 23, 2021. The UFLPA establishes a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People's Republic of China ("Xinjiang"), or that are produced by certain entities, is prohibited by Section 307 of the Tariff Act of 1930 and that such goods, wares, articles, and merchandise are not entitled to entry to the United States. U.S. Customs and Border Protection ("CBP") began implementing the presumption set out in the UFLPA on June 21, 2022, resulting in new rules for solar module importers and reviews by CBP. There continues to be uncertainty in the market around achieving full compliance with the UFLPA for the importation of solar modules, whether related to sufficient traceability of materials or other factors. On April 1, 2022, the U.S. Department of Commerce, in response to a petition by Auxin Solar, Inc., published a notice initiating an investigation ("the Solar Circumvention Investigation") of claims related to alleged circumvention of U.S. antidumping and countervailing duties ("AD/CVD") by solar manufacturers in certain Southeast Asian countries, in an effort to determine whether or not solar cells and/or modules made in those Southeast Asian nations use parts originating from China in order to circumvent the AD/CVD tariffs. On June 6, 2022, President Biden issued a proclamation allowing U.S. solar deployers the ability to import solar modules and cells from Cambodia, Malaysia, Thailand and Vietnam free from certain duties for 24 months, along with other incentives designed to accelerate U.S. domestic production of clean energy technologies. Since 2016, CBP has issued a number of withhold release orders ("WRO") directed at forced labor in China, including WROs directed specifically at activity in Xinjiang. To date, CBP has used the WROs to detain solar panels, which has disrupted the U.S. solar installation market and caused additional uncertainty on future projects. These policies and actions have resulted in some developers deferring projects due to the uncertainty of panel supply and costs, which negatively impacted our 2022 revenue and cash flows and are continuing to negatively impact our revenue and our cash flows to date in 2023. The most notable incentive program impacting our U.S. business has been the investment tax credit ("ITC") for solar energy projects, which allows taxpayers to offset their U.S. federal income tax liability by a certain percentage of their cost basis in solar energy systems placed in service for commercial use. The Inflation Reduction Act of 2022, passed by the U.S. Congress and signed into law by President Biden on August 16, 2022, expanded and extended the tax credits and other tax benefits available to solar energy projects and the solar energy supply chain. ITCs have been extended for such projects through at least 2032 and, depending on the location of a particular project and its ability to satisfy certain labor and domestic content requirements, the ITC percentage can range between 30 % and 50 %. U.S. manufacturers of specific solar components are now eligible to claim production tax credits as an alternative to the ITC. Implementing regulations for this law are still being finalized. Our costs are affected by the costs of certain components and materials, such as steel, motors and micro-chips, as well as transportation costs. Current market conditions and international conflicts that constrain the supply of materials and disrupt the flow of materials from international vendors impact the cost of our products and services, along with overall rates of inflation in the global economy, which have been higher than pre-COVID 19 pandemic historical rates. Transportation costs, including ocean freight and U.S. domestic haul rates, increased at the beginning of the COVID-19 pandemic but have since returned to pre-pandemic rates. Domestic fuel prices, however, continue to be elevated compared to pre-pandemic rates. Additionally, COVID-19 shutdowns in China during 2022 created a backlog of exports and increased demand for container shipments from China, but such shutdowns have since been eased by the Chinese government. These cost increases and decreases impact our operating margins. We have taken steps to expand and diversify our manufacturing partnerships and have adjusted our modes of transportation to mitigate the impact of headwinds that arise in the global supply chain and logistics markets. As an example, we have modified our ocean freight from previously using charter shipments to now using containerized shipments as costs in the container market began to decrease in 2022. We continue to monitor the logistics markets and will continue to evaluate our use of various modes of transportation when warranted to optimize our transportation costs. Additionally, from February 2022 to September 2023, we utilized a related-party consulting firm to support us in making improvements to our processes and performance in various areas, including design, sourcing, logistics, pricing, software and our distributed generation business. For further information regarding this consulting firm, see "Note 17. Related party transactions". In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, we have evaluated whether there are conditions and events, considered in the aggregate, which raise substantial doubt about our ability to continue as a going concern within one year after the date these condensed consolidated financial statements are issued. While the UFLPA continues to create uncertainty in the market, we believe that passage of the Inflation Reduction Act of 2022, as described above, has reduced the level of uncertainty among solar project owners and developers with regard to new project development in the United States. We note that implementing regulations for the Inflation Reduction Act are still being finalized, which creates uncertainty about the extent of its impact on our Company and the solar energy industry. We also took significant steps in 2022, and are continuing to take further steps in 2023, to address the recent market challenges and our historical use of cash through the following actions: • certain members of our senior management team elected to forego certain cash compensation during the second half of 2022 in exchange for equity compensation; • the members of our board of directors agreed to take equity compensation in lieu of cash compensation during 2023; • we began making certain incentive compensation payments to all employees in stock rather than cash beginning at the end of the second quarter of 2022; • we reduced our workforce by approximately 8 % in December of 2022, and another 9 % in the third quarter of 2023; • we initially froze non-essential hiring in 2022, placed restrictions on certain travel, decreased the future use of consultants and continue to defer non-critical initiatives; • we have initiated frequent, consistent communication with our customers, which in certain cases has allowed us to resolve issues preventing timely collection of certain past due outstanding receivables; • we have emphasized cash collections from customers, and continue to negotiate improved payment terms with both our customers and vendors and have switched vendors when needed to obtain cost savings; • we launched Pioneer, a 1P solar tracker solution, and introduced a new mounting solution to support the installation and use of U.S.-manufactured thin-film modules not subject to UFLPA; • we reached a settlement agreement with FCX Solar, LLC in December 2022, regarding a lawsuit filed against us relating to claims of patent infringement in order to eliminate future time and expense involved in defending ourselves in this action; under the settlement agreement, we were able to utilize our common stock to satisfy a portion of the settlement payment; • we made an investment to acquire a 45 % ownership interest in Alpha Steel, a manufacturing partnership with a leading steel fabricator, which will enhance our domestic supply chain to reduce our exposure to import duties and import restrictions, as described further in "Note 3, Equity method investment" below; • in 2023, we began selling newly issued shares of our common stock under our ATM program (as defined and described further in "Note 5, ATM program" below); and • we continue to actively explore options to obtain additional sources of capital through either the issuance of new debt or equity. A number of the steps above, as well as improvements in the logistics markets and easing of supply chain constraints, contributed to us having positive gross profit in the nine months ended September 30, 2023, which also reduced our use of cash required to fund our operations during the current year-to-date period. Management believes that our existing cash on hand, as well as the continuing impact of certain of the actions described above and our expectations of improved market conditions and positive results from our efforts to continue to increase gross margins, will allow us to grow profitably and generate positive cash flow from operations during the next twelve months in amounts that will be sufficient, along with our other available resources, to fund our operations for at least one year from the date of issuance of the condensed consolidated financial statements. We have achieved success in executing certain of the initiatives above and we continue to work to further reduce our use of cash to fund our operations. We have begun and expect to continue seeing the benefits from production of our Pioneer solution in our financial results during 2024 and we believe passage of the Inflation Reduction Act of 2022 and our investment in Alpha Steel will also ultimately benefit demand for our products in the United States. At the same time, however, new rules for module importers and reviews by CBP pursuant to achieving full compliance with the UFLPA are expected to continue creating uncertainty in the market. However, once there is additional clarity around compliance with the UFLPA and customers get line-of-sight to module deliveries, we believe the market will see a recovery. While there are already many underlying drivers of growth in the solar industry, the expected positive impact on demand for our products could take longer than expected to occur. In addition, market conditions could deteriorate significantly from what we currently expect, and regulatory and international trade policies could become more stringent as a result of (i) findings from the Solar Circumvention Investigation, (ii) CBP's enforcement of the UFLPA, and (iii) other factors, which may result in a need for us to issue additional debt or obtain new equity financing, which could result in additional shareholder dilution, to continue to adequately fund our existing operations beyond the next twelve months. We may be unable to obtain any desired additional financing on terms favorable to us, or at all, depending on market and other conditions, which could result in curtailment of our current operations and our ability to further invest in our products and new technology. The ability to raise additional financing depends on numerous factors that are outside of our control, including macroeconomic factors such as the impact of inflation, the ongoing conflict in the Ukraine, market conditions, the health of financial institutions (including the recent bankruptcy of certain regional banks and related impacts that have occurred and continue to occur in the banking industry), investors' and lenders' assessments of our prospects and the prospects of the solar industry in general. |
Use of estimates | Use of estimates Preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenue and expenses during the period. Estimates are used for calculating the measure of progress of our solar tracker projects and deriving the standalone selling prices of the individual performance obligations when determining amounts to recognize for revenue, estimating allowances for credit losses and slow-moving and obsolete inventory, determining useful lives of long-lived assets and the estimated fair value of those assets for impairment assessments, and estimating the fair value of investments, stock compensation awards, warranty liabilities and federal and state taxes, including tax valuation allowances, as well as other contingencies. We base our estimates on historical experience and anticipated results, trends, and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates due to risks and uncertainties. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. We regularly maintain cash balances with various financial institutions that exceed federally insured amounts, but we have experienced no losses associated with these amounts to date. We also took action in early 2023 to reallocate cash balances between different financial institutions based on our assessment as to the financial health of certain institutions. We extend credit to customers in the normal course of business, often without requiring collateral. We also perform credit analyses and monitor the financial health of our customers to reduce credit risk. The Company’s accounts receivables are derived from revenue earned from customers primarily located in the U.S. and Australia. No countries other than the U.S. and Australia accou nt for 10 % or more of our revenue. Most of our customers are project developers, solar asset owners and engineering, procurement and construction (“EPC”) contractors that design and build solar energy projects. We typically rely on a small number of customers that account for a large portion of our revenue each period and our outstanding receivables at each period end. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Certain of our cash equivalents include deposits in money market funds that invest primarily in short-term securities issued or guaranteed by the U.S. government or its agencies or instrumentalities and contain no restrictions on immediate redemption. The carrying value for money market fund deposits approximates fair value based on quoted prices in active markets for units held (Level 1 classification) and totaled $ 18.1 million at September 30, 2023 and $ 25.4 million at December 31, 2022 . Interest earned on cash equivalents is included in interest income, which is reported net of interest expense in our condensed consolidated statements of comprehensive loss. |
Accounts receivable, net | Accounts receivable, net Trade receivables are recorded at invoiced amounts, net of allowances for credit losses, and do not bear interest. We generally do not require collateral from our customers; however, in certain circumstances, we may require letters of credit, other collateral, additional guarantees or advance payments. The allowance for credit losses is based on the lifetime expected credit loss of our customer accounts. To assess the lifetime expected credit loss, we utilize a loss rate method that takes into consideration historical experience and certain other factors, as appropriate, such as credit quality and current economic or other conditions that may affect a customer's ability to pay. Provisions for credit losses are included as a component of our selling and marketing costs. Receivables arising from revenue recognized in excess of billings represents our unconditional right to consideration before customers are invoiced due to the level of progress obtained as of period end on our contracts to procure and deliver tracker systems and related equipment. Further information may be found below in our revenue recognition policy. |
Inventories, net | Inventories, net Inventories are stated at the lower of cost or net realizable value, with costs computed on a first-in, first-out basis. The Company periodically reviews its inventories for excess and obsolete items and adjusts carrying costs to estimated net realizable values when they are determined to be less than cost. |
Impairment | Impairment We review our long-lived assets that are held for use for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable or that its useful life may be shorter than previously expected. If such impairment indicators are present or other factors exist that indicate the carrying amount of the asset may not be recoverable, we determine whether an impairment has occurred through the use of an undiscounted cash flow analysis of the asset at the lowest level for which identifiable cash flows exist. If an impairment has occurred, we recognize a loss for the difference between the carrying amount and the fair value of the asset, which in most cases is estimated based upon Level 3 unobservable inputs. If the asset is determined to have a remaining useful life shorter than previously expected an adjustment for the shorter remaining life will be made for purposes of recognizing future depreciation expense. Assets are classified as held for sale when we have a plan, approved by the appropriate levels of management, for disposal of such assets, as well as other considerations, and those assets are stated at the lower of carrying value or estimated fair value less estimated costs to sell. |
Intangible assets, net | Intangible assets, net Intangible assets consist of developed technology in the form of software tools, licenses and intellectual property, which are amortized over the period of their estimated useful lives, generally 2.5 to 3.0 years, using the straight-line method. We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of our intangible assets may not be recoverable or that their useful lives may be shorter than previously expected. |
Goodwill | Goodwill We recognize goodwill as the excess of the purchase price over the estimated fair value of the identified assets and liabilities acquired in a business combination accounted for using the acquisition method. Goodwill is not amortized but is subject to a periodic assessment for impairment at least annually, or whenever events and circumstances indicate an impairment may exist. |
Equity method investments | Equity method investment We use the equity method of accounting for investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies of the investee. Our proportionate share of the net income or loss of these investees is included in our condensed consolidated statements of comprehensive loss. Judgment regarding the level of influence over each equity method investment includes considering key factors such as our ownership interest, legal form of the investee, representation on the board of directors or managers, participation in policy-making decisions and material intra-entity transactions. We account for distributions received from equity method investees under the "nature of the distribution" approach based on the nature of the activity or activities of the investee that generated the distribution as either a return on investment (classified as cash inflows from operating activities) or a return of investment (classified as cash inflows from investing activities). We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment might not be recoverable. |
Warranty | Warranty Typically, the sale of solar tracker projects includes parts warranties to customers as part of the overall price of the product. We provide standard assurance type warranties for our products for periods generally ranging from two to ten years . We record a provision for estimated warranty expenses in cost of sales, net of amounts recoverable from manufacturers under their warranty obligations to us. We do not maintain general or unspecified reserves; all warranty reserves are related to specific projects. All actual or estimated material costs incurred for warranty services in subsequent periods are charged to those established reserves. While we periodically monitor our warranty activities and claims, if actual costs incurred were to be different from our estimates, we would recognize adjustments to our warranty reserves in the period in which those differences arise or are identified. |
Stock-based compensation | Stock-based compensation We recognize compensation expense for all share-based payment awards made, including stock options and RSUs, based on the estimated fair value of the award on the grant date. We calculate the fair value of stock options using the Black-Scholes option pricing model for awards with service-based vesting or through use of a lattice model or a Monte Carlo simulation for awards with market conditions. The fair value of RSUs is based on the estimated fair value of the Company's common stock on the date of grant. We consider the closing price of our stock, as reported on the Nasdaq Global Market, to be the fair value of our stock on the grant date. Forfeitures are accounted for as they occur. For service-based awards, stock-based compensation is recognized using the straight-line attribution approach over the requisite service period. For performance-based awards, stock-based compensation is recognized based on graded vesting over the requisite service period when the performance condition is probable of being achieved. Stock compensation expense for market-based awards is recognized over the derived service period determined in the valuation model, inclusive of any vesting conditions. |
Revenue recognition | Revenue recognition Product revenue is derived from the sale of solar tracker systems and customized components for those systems, individual part sales for certain specific transactions and the sale of term-based software licenses. Term-based licensed software is deployed on the customers’ own servers and has significant standalone functionality. Service revenue includes revenue from shipping and handling services, engineering consulting and pile testing services, our subscription-based enterprise licensing model and maintenance and support services in connection with the term-based software licenses. Our subscription-based enterprise licensing model typically has contract terms ranging from one to two years and consists of subscription fees from the licensing of subscription services. Our hosted on-demand service arrangements do not provide customers with the right to take possession of the software supporting the hosted services. Support services include ongoing security updates, upgrades, bug fixes, and maintenance. We recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below. Identify the contract with a customer: A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the products and services to be transferred and identifies the payment terms related to these products and services, (ii) the contract has commercial substance, and (iii) the Company determines that collection of substantially all consideration for products and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. In assessing the recognition of revenue, we also evaluate whether two or more contracts should be combined and accounted for as one contract and if the combined or single contract should be accounted for as multiple performance obligations which could change the amount of revenue and profit (loss) recorded in a period. Change orders may include changes in specifications or design, manner of performance, equipment, materials, scope of work, and/or the period of completion of the project. We analyze change orders to determine if they should be accounted for as a modification to an existing contract or a new stand-alone contract. Contracts we enter into with our customers for sale of solar tracker systems are generally under two different types of arrangements: (1) purchase agreements and equipment supply contracts (“Purchase Agreements”), and (2) sale of individual parts for those systems. Change orders from our customers are generally modifications to existing contracts and are included in the total estimated contract revenue when it is probable that the change order will result in additional value that can be reliably estimated and realized. Identify the performance obligations in the contract: We enter into contracts that can include various combinations of products and services, which are either capable of being distinct and accounted for as separate performance obligations or as one performance obligation since the majority of tasks and services are part of a single project or capability. However, determining whether products or services are considered distinct performance obligations that should be accounted for separately versus together may sometimes require significant judgment. Our Purchase Agreements typically include two performance obligations: 1) our solar tracker systems or customized components of those systems, and 2) shipping and handling services. The deliverables included as part of our solar tracker systems are predominantly accounted for as one performance obligation, as these deliverables are part of a combined promise to deliver a project. The revenue for shipping and handling services will be recognized over time based on progress in meeting shipping terms of the arrangements, as this faithfully depicts the Company’s performance in transferring control. Revenue for stand-alone engineering consulting and pile testing services is recognized at a point in time upon completion of the services performed. Sales of individual parts of our solar tracker systems for certain specific transactions include multiple performance obligations consisting of individual parts of those systems. Revenue is recognized for parts sales at a point in time when the obligations under the terms of the contract with our customer are satisfied. Generally, this occurs with the transfer of control of the asset, which is in line with shipping terms. Determine the transaction price: The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring services to the customer. Such amounts are typically stated in the customer contract, and to the extent that we identify variable consideration, we will estimate the variable consideration at the onset of the arrangement as long as it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The majority of our contracts do not contain variable consideration provisions as a continuation of the original contract. None of our contracts contain a significant financing component. Taxes collected from customers and remitted to governmental authorities are not included in revenue . Allocate the transaction price to performance obligations in the contract: Once we have determined the transaction price, we allocate the total transaction price to each performance obligation in a manner depicting the amount of consideration to which we expect to be entitled in exchange for transferring the good(s) or service(s) to the customer. We allocate the transaction price to each performance obligation identified in the contract on a relative standalone selling price basis. We use the expected cost-plus margin approach based on hardware, labor, and related overhead cost to estimate the standalone selling price of our solar tracker systems, customized components of those systems, and individual parts for certain specific transactions. We also use the expected cost-plus margin approach based on expected third-party shipping and transportation costs to estimate the standalone selling price of our shipping, handling and logistics performance obligations. We use the adjusted market assessment approach for all other performance obligations. Recognize revenue when or as the Company satisfies a performance obligation: For each performance obligation identified, we determine at contract inception whether we satisfy the performance obligation over time or at a point in time. The performance obligations in the contracts for our solar tracker systems and customized components of those systems are satisfied over time as work progresses, utilizing an input measure of progress determined by cost-to-cost measures on these projects as this faithfully depicts our performance in transferring control. Additionally, our performance does not create an asset with an alternative use, due to the highly customized nature of the product, and we have an enforceable right to payment for performance completed to date. Our performance obligations for individual part sales for certain specific transactions are recognized at a point in time as and when control transfers based on the Incoterms for the contract. Our performance obligations for engineering consulting and pile testing services are recognized at a point in time upon completion of the services. Our performance obligations for term-based software licenses are recognized at a point in time as and when control transfers, either upon delivery to the customer or the software license start date, whichever is later. Our performance obligations for shipping and handling services are satisfied over time as the services are delivered over the term of the contract. We recognize revenue for subscription and other services on a straight-line basis over the contract period. With regard to support revenue, a time-elapsed method is used to measure progress because we transfer control evenly over the contractual period. Accordingly, the fixed consideration related to support revenue is generally recognized on a straight-line basis over the contract term. Contract assets and liabilities: The timing of revenue recognition, billing, and cash collection results in the recognition of accounts receivable, unbilled receivables for revenue recognized in excess of billings, and deferred revenue in the condensed consolidated balance sheets. We may receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities, which are reflected as “deferred revenue” in our condensed consolidated balance sheets. Revenue recognized during the three and nine months ended September 30, 2023 from amounts included in deferred revenue at December 31, 2022 totaled $ 1.6 million and $ 10.9 million , respectively. Cost of revenue consists primarily of costs related to raw materials, equipment manufacturing activities, freight and delivery, product warranty, remediation and personnel costs (salaries, bonuses, benefits, and stock-based compensation). Personnel costs in cost of revenue include both direct labor costs, as well as costs attributable to any individuals whose activities relate to the procurement, installment and delivery of the finished product and services. Cost of revenue owed but not yet paid is recorded as accrued cost of revenue in the accompanying condensed consolidated financial statements. Deferred cost of revenue results from the timing differences between the costs incurred in advance of the satisfaction of all revenue recognition criteria consistent with our revenue recognition policy. |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted We adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), as amended, effective January 1, 2023. ASU 2016-13 changed the impairment model for most financial assets and requires the use of an expected loss model in place of the previously used incurred loss method. Under this model, we now estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. We did not have a material impact on our condensed consolidated financial statements upon adoption of ASU 2016-13. |
Reduction in force (Tables)
Reduction in force (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Workforce Activity [Abstract] | |
Schedule Of severance and termination-related costs | we recognized severance and termination-related costs as follows: (in thousands) For the three and nine months ended September 30, 2023 Cost of revenue $ 252 Research and development 154 Selling and marketing 169 General and administrative 1,513 Total $ 2,088 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Schedule of accounts receivable, net | Accounts receivable consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Trade receivables $ 49,963 $ 35,367 Related party receivables 777 — Revenue recognized in excess of billings 26,115 14,844 Other receivables 6 25 Total 76,861 50,236 Allowance for credit losses ( 5,486 ) ( 1,184 ) Accounts receivable, net $ 71,375 $ 49,052 |
Schedule of Accounts Receivable Allowance for Credit Loss | Activity in the allowance for credit losses during the nine months ended September 30, 2023 was as follows: (in thousands) For the nine months ended September 30, 2023 Balance at beginning of period $ 1,184 Impact of adoption of ASU 2016-13 at beginning of year — Additions charged to earnings during the period 4,302 Balance at end of period $ 5,486 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Finished goods $ 5,444 $ 16,269 Allowance for slow-moving and obsolete inventory ( 789 ) ( 1,320 ) Total $ 4,655 $ 14,949 |
Prepaid and other current ass_2
Prepaid and other current assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Schedule of prepaid and other current assets | Prepaid and other current assets consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Vendor deposits $ 5,370 $ 5,085 Prepaid expenses 2,171 3,544 Prepaid taxes 250 163 Deferred cost of revenue 997 — Surety collateral 1 107 Other current assets 4,679 1,405 Total $ 13,468 $ 10,304 At September 30, 2023, other current assets included $ 3.5 million of (i) a short-term, interest-bearing loan to a customer, as well as (ii) a non-interest-bearing customer advance, both of which are for pre-project construction financing activities. These amounts are secured by customer assets and, additionally in one case by a financial guarantee. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Summary of Lease Expense | Our lease expense consisted of the following: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Operating lease cost $ 251 $ 166 $ 748 $ 550 Short-term lease cost 132 122 334 332 Total lease cost $ 383 $ 288 $ 1,082 $ 882 Reported in: Cost of revenue $ 245 $ 164 $ 710 $ 522 Research and development 14 11 40 33 Selling and marketing 24 12 62 25 General and administrative 100 101 270 302 Total lease cost $ 383 $ 288 $ 1,082 $ 882 |
Summary of Future Remaining Lease Payments Obligations | Future remaining operating lease payment obligations were as follows: (in thousands) September 30, Remainder of 2023 $ 219 2024 818 2025 755 2026 219 2027 192 Thereafter 16 Total lease payments 2,219 Less: imputed interest ( 167 ) Present value of operating lease liabilities $ 2,052 Current portion of operating lease liability $ 742 Operating lease liability, net of current portion 1,310 Present value of operating lease liabilities $ 2,052 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Leasehold improvements $ 157 $ 22 Field equipment 1,012 1,078 Information technology equipment 440 355 Tooling 953 824 Capitalized software 495 250 Total 3,057 2,529 Accumulated depreciation ( 1,372 ) ( 827 ) Property and equipment, net $ 1,685 $ 1,702 |
Intangible assets, net and go_2
Intangible assets, net and goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of intangible assets | Intangible assets consisted of the following: (in thousands) Estimated Useful Lives (Years) September 30, 2023 December 31, 2022 Developed technology 2.5 – 3.0 $ 2,515 $ 2,591 Total 2,515 2,591 Accumulated amortization ( 1,858 ) ( 1,478 ) Intangible assets, net $ 657 $ 1,113 |
Schedule of goodwill activity | During the nine months ended September 30, 2023, activity in our goodwill balance was as follows: (in thousands) Nine months ended September 30, 2023 Balance at December 31, 2022 $ 7,538 Translation ( 395 ) Balance at September 30, 2023 $ 7,143 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Expenses and Other Current Liabilities Abstract | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: (in thousands) September 30, 2023 December 31, 2022 Accrued cost of revenue $ 19,923 $ 13,198 Related party accrued cost of revenue 1,304 — Accrued compensation 1,666 4,688 Other accrued expenses 2,885 6,010 Total accrued expenses $ 25,778 $ 23,896 Warranty reserves $ 7,738 $ 8,004 Current portion of operating lease liability 742 417 Non-federal tax obligations 109 463 Total other current liabilities $ 8,589 $ 8,884 Information relating to related party accruals at September 30, 2023, may be found below in Note 17, "Related party transactions ". |
Schedule of warranty accruals | Activity by period in the Company's warranty accruals was as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Balance at beginning of period $ 12,081 $ 11,444 $ 12,426 $ 9,346 Warranties issued during the period (a) 1,086 3,190 3,938 7,374 Settlements made during the period ( 847 ) ( 1,759 ) ( 3,184 ) ( 3,139 ) Changes in liability for pre-existing warranties ( 363 ) ( 92 ) ( 1,223 ) ( 798 ) Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 Warranty accruals are reported in: Other current liabilities $ 7,738 $ 8,304 $ 7,738 $ 8,304 Other non-current liabilities 4,219 4,479 4,219 4,479 Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 (a) – Inclusive of accruals for expected remediation activities |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Changes in Product Warranty Reserves | Activity by period in the Company's warranty accruals was as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Balance at beginning of period $ 12,081 $ 11,444 $ 12,426 $ 9,346 Warranties issued during the period (a) 1,086 3,190 3,938 7,374 Settlements made during the period ( 847 ) ( 1,759 ) ( 3,184 ) ( 3,139 ) Changes in liability for pre-existing warranties ( 363 ) ( 92 ) ( 1,223 ) ( 798 ) Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 Warranty accruals are reported in: Other current liabilities $ 7,738 $ 8,304 $ 7,738 $ 8,304 Other non-current liabilities 4,219 4,479 4,219 4,479 Balance at end of period $ 11,957 $ 12,783 $ 11,957 $ 12,783 (a) – Inclusive of accruals for expected remediation activities |
Stock-based compensation (Table
Stock-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock compensation expense | Stock compensation expense for each period was as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2023 2022 2023 2022 Cost of revenue $ 181 $ 1,153 $ 1,313 $ 2,521 Research and development 85 487 449 1,134 Selling and marketing 166 598 821 1,630 General and administrative 760 5,269 6,461 9,970 Total stock compensation expense $ 1,192 $ 7,507 $ 9,044 $ 15,255 |
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 Income (Loss) Per Share | Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Net loss (in thousands) $ ( 16,937 ) $ ( 25,636 ) $ ( 39,113 ) $ ( 79,112 ) Weighted average shares outstanding for calculating basic and diluted loss per share 119,793,821 102,164,455 112,794,562 100,642,126 Basic and diluted loss per share $ ( 0.14 ) $ ( 0.25 ) $ ( 0.35 ) $ ( 0.79 ) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income Per Share | For purposes of computing diluted loss per share, weighted average common shares outstanding do not include potentially dilutive securities that are anti-dilutive, as shown below. For the three and nine months ended September 30, 2023 2022 Anti-dilutive securities excluded from calculating dilutive loss per share: Shares of common stock issuable under stock option plans outstanding 3,048,139 7,407,333 Shares of common stock issuable upon vesting of RSUs 7,982,821 7,603,064 Potential common shares excluded from diluted net loss per share calculation 11,030,960 15,010,397 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Mar. 25, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2023 | Sep. 14, 2022 | |
Accumulated deficit | $ (287,958) | $ (287,958) | $ (248,845) | ||||||
Net cash used in operating activities | 46,383 | $ 49,085 | $ (54,500) | $ (132,900) | |||||
Cash | 31,500 | 31,500 | |||||||
Working capital | 65,400 | 65,400 | |||||||
Unused borrowing capacity | $ 98,000 | 98,000 | |||||||
Requirement to maintain minimum liquidity limit each quarter | $ 125,000 | ||||||||
Reduction in workforce | 9% | 9% | 8% | 9% | |||||
Concentrations of credit risk, percentage | 10% | 10% | |||||||
Warranty description | We provide standard assurance type warranties for our products for periods generally ranging from two to ten years | ||||||||
Revenue recognized included in deferred revenue | $ 1,600 | $ 10,900 | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Money Market Funds, at Carrying Value | $ 18,100 | $ 18,100 | $ 25,400 | ||||||
Stock based compensation expense | 1,192 | $ 7,507 | 9,044 | 15,255 | |||||
General and administrative | $ 11,411 | $ 13,059 | $ 31,053 | $ 39,966 | |||||
Investment to acquire ownership interest | 45% | 45% | |||||||
ATM Program [Member] | |||||||||
Common Stock Value Authorized | $ 100,000 | ||||||||
Minimum [Member] | |||||||||
Investment tax credit, percentage | 30% | ||||||||
Intangible assets, estimated useful life | 2 years 6 months | 2 years 6 months | |||||||
Product warranty life | 2 years | ||||||||
Subscription revenue contract terms | 1 year | ||||||||
Maximum [Member] | |||||||||
Investment tax credit, percentage | 50% | ||||||||
Intangible assets, estimated useful life | 3 years | 3 years | |||||||
Product warranty life | 10 years | ||||||||
Subscription revenue contract terms | 2 years |
Equity method investment - Addi
Equity method investment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Feb. 09, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment to acquire ownership interest | 45% | 45% | |
Taihua New Energy [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 51% | ||
DAYV LLC [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 4% | ||
Alpha Steel [Member] | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 45% | ||
Capital contributions | $ 0.9 | $ 0.9 | |
Additional capital contributions | 2.6 | ||
Loss from unconsolidated subsidiary | $ 0.3 | $ 0.3 | |
Investment to acquire ownership interest | 2% |
Reduction in force - Summary of
Reduction in force - Summary of severance and termination-related costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Workforce Activity [Line Items] | ||
Severance Costs | $ 2,088 | $ 2,088 |
Cost of revenue [Member] | ||
Workforce Activity [Line Items] | ||
Severance Costs | 252 | 252 |
Research and development [Member] | ||
Workforce Activity [Line Items] | ||
Severance Costs | 154 | 154 |
Selling and marketing [Member] | ||
Workforce Activity [Line Items] | ||
Severance Costs | 169 | 169 |
General and administrative [Member] | ||
Workforce Activity [Line Items] | ||
Severance Costs | $ 1,513 | $ 1,513 |
Reduction in force (Additional
Reduction in force (Additional Information) (Details) $ in Millions | 1 Months Ended | ||
Aug. 31, 2023 Employees | Sep. 30, 2023 USD ($) | Dec. 31, 2022 | |
Workforce Activity [Abstract] | |||
Reduction in number Of employee | Employees | 21 | ||
Reduction in workforce | 9% | 9% | 8% |
Employee related liabilities | $ | $ 1.2 |
ATM Program - Additional Inform
ATM Program - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 14, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Issuance of common stock, value | $ 10,367 | $ 17,348 | $ 6,292 | |||
Proceeds from common stock | $ 34,007 | $ 0 | ||||
ATM Program [Member] | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock, value authorized | $ 100,000 | |||||
Issuance of common stock (in shares) | 6,149,885 | 15,421,885 | ||||
Issuance of common stock, value | $ 10,700 | $ 35,100 | ||||
Proceeds from common stock | 10,400 | 34,000 | ||||
Common stock, reserved for future issuance, value | $ 64,900 | $ 64,900 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) | Sep. 30, 2023 |
Minimum [Member] | |
Business Acquisition [Line Items] | |
Intangible assets, estimated useful life | 2 years 6 months |
Maximum [Member] | |
Business Acquisition [Line Items] | |
Intangible assets, estimated useful life | 3 years |
Acquisition - Schedule of Goodw
Acquisition - Schedule of Goodwill Activity (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Goodwill, Beginning Balance | $ 7,538 |
Goodwill, Ending Balance | $ 7,143 |
Accounts receivable, net - Sche
Accounts receivable, net - Schedule of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Trade receivables | $ 49,963 | $ 35,367 |
Related party receivables | 777 | 0 |
Revenue recognized in excess of billings | 26,115 | 14,844 |
Other receivables | 6 | 25 |
Total | 76,861 | 50,236 |
Allowance for credit losses | (5,486) | (1,184) |
Accounts receivable, net | $ 71,375 | $ 49,052 |
Accounts receivable, net - Addi
Accounts receivable, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Retainage provisions included in receivables | $ 0.9 | $ 3.7 |
Provision For Credit Losses | $ 4.1 |
Accounts receivable, net - Sc_2
Accounts receivable, net - Schedule of Accounts Receivable Allowance for Credit Loss (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
Accounts Receivable, Allowance for Credit Loss, Beginning Balance | $ 1,184 |
Additions charged to earnings during the period | 4,302 |
Accounts Receivable, Allowance for Credit Loss, Ending Balance | $ 5,486 |
Inventories, net - Schedule of
Inventories, net - Schedule of inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 5,444 | $ 16,269 |
Allowance for slow-moving and obsolete inventory | (789) | (1,320) |
Total | $ 4,655 | $ 14,949 |
Revenue - Additional Informatio
Revenue - Additional Information - (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Disaggregation of Revenue [Line Items] | ||
Deferred revenue | $ 11,178 | $ 11,316 |
Prepaid and other current ass_3
Prepaid and other current assets - Schedule of Prepaid and other current assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Vendor deposits | $ 5,370 | $ 5,085 |
Prepaid expense | 2,171 | 3,544 |
Prepaid taxes | 250 | 163 |
Deferred cost of revenue | 997 | 0 |
Surety collateral | 1 | 107 |
Other current assets | 4,679 | 1,405 |
Total | $ 13,468 | $ 10,304 |
Prepaid and other current ass_4
Prepaid and other current assets (Additional Information) (Details) $ in Millions | Sep. 30, 2023 USD ($) | |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Short-term Interest Bearing Loan & Customer dvance | $ 3.5 | [1],[2] |
[1] (i) a short-term, interest-bearing loan to a customer, as well as (ii) a non-interest-bearing customer advance, both of which are for pre-project construction financing activities. These amounts are secured by customer assets and, additionally in one case by a financial guarantee. |
Leases - Summary of Lease Expen
Leases - Summary of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | $ 251 | $ 166 | $ 748 | $ 550 |
Short-term lease cost | 132 | 122 | 334 | 332 |
Total lease cost | 383 | 288 | 1,082 | 882 |
Cost of revenue [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 245 | 164 | 710 | 522 |
Research and development [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 14 | 11 | 40 | 33 |
Selling and marketing [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | 24 | 12 | 62 | 25 |
General and administrative [Member] | ||||
Lessee, Lease, Description [Line Items] | ||||
Total lease cost | $ 100 | $ 101 | $ 270 | $ 302 |
Leases - Summary of Future Rema
Leases - Summary of Future Remaining Lease Payments Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | |||
Remainder of 2023 | $ 219 | ||
2024 | 818 | ||
2025 | 755 | ||
2026 | 219 | ||
2027 | 192 | ||
Thereafter | 16 | ||
Total lease payments | 2,219 | ||
Less imputed interest | (167) | ||
Current portion of operating lease liability | 742 | $ 417 | |
Operating lease liability, net of current portion | 1,310 | $ 786 | |
Present value of operating lease liabilities | $ 2,052 | $ 2,052 |
Property and equipment, net - S
Property and equipment, net - Schedule of property and equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,057 | $ 2,529 |
Accumulated depreciation | (1,372) | (827) |
Property and equipment, net | 1,685 | 1,702 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 157 | 22 |
Field Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,012 | 1,078 |
Information Technology Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 440 | 355 |
Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 953 | 824 |
Capitalized Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 495 | $ 250 |
Property and equipment, net - A
Property and equipment, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.2 | $ 0.2 | $ 0.6 | $ 0.4 |
Intangible assets, net and go_3
Intangible assets, net and goodwill - Summary of intangible assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,515 | $ 2,591 |
Accumulated amortization | (1,858) | (1,478) |
Intangible assets, net | $ 657 | 1,113 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated useful life | 2 years 6 months | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated useful life | 3 years | |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,515 | $ 2,591 |
Developed Technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated useful life | 2 years 6 months | |
Developed Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, estimated useful life | 3 years |
Intangible assets, net and go_4
Intangible assets, net and goodwill - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Indefinite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 0.1 | $ 0.1 | $ 0.4 | $ 0.1 |
Intangible assets, net and go_5
Intangible assets, net and goodwill - Summary of goodwill activity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Beginning Balance | $ 7,538 |
Translation | (395) |
Goodwill, Ending Balance | $ 7,143 |
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 | Sep. 30, 2022 |
Accrued Expenses and Other Current Liabilities Abstract | |||
Accrued cost of revenue | $ 19,923 | $ 13,198 | |
Related party accrued cost of revenue | 1,304 | 0 | |
Accrued compensation | 1,666 | 4,688 | |
Other accrued expenses | 2,885 | 6,010 | |
Total accrued expenses | 25,778 | 23,896 | |
Warranty reserves | 7,738 | 8,004 | $ 8,304 |
Current portion of operating lease liability | $ 742 | $ 417 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other current liabilities | Total other current liabilities | |
Non-federal tax obligations | $ 109 | $ 463 | |
Total other current liabilities | $ 8,589 | $ 8,884 |
Accrued expenses and other cu_4
Accrued expenses and other current liabilities - Schedule of warranty accruals (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities Abstract | |||||
Balance at beginning of period | $ 12,081 | $ 11,444 | $ 12,426 | $ 9,346 | |
Warranties issued during the period | 1,086 | 3,190 | 3,938 | 7,374 | |
Settlements made during the period | (847) | (1,759) | (3,184) | (3,139) | |
Changes in liability for pre-existing warranties | (363) | (92) | (1,223) | (798) | |
Balance at end 's period | 11,957 | 12,783 | 11,957 | 12,783 | |
Accrued warranty balance reported in: | |||||
Other current liabilities | 7,738 | 8,304 | 7,738 | 8,304 | $ 8,004 |
Other non-current liabilities | 4,219 | 4,479 | 4,219 | 4,479 | |
Balance at end of period | $ 11,957 | $ 12,783 | $ 11,957 | $ 12,783 | $ 12,426 |
Sales of Equity Method Invest_2
Sales of Equity Method Investments - Summarized Financial Information For Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of operations | ||||||||
Gross loss | $ 3,379 | $ (9,515) | $ 7,615 | $ (25,314) | ||||
Net loss | (16,937) | $ (10,414) | $ (11,762) | (25,636) | $ (25,683) | $ (27,793) | (39,113) | (79,112) |
Loss from unconsolidated subsidiary | $ (336) | $ 0 | $ (336) | $ 0 |
Debt - Additional Information (
Debt - Additional Information (Details) - Credit Facility Agreement [Member] - USD ($) $ in Millions | Sep. 30, 2023 | Apr. 30, 2021 |
Debt Instrument [Line Items] | ||
Available borrowing capacity under the Credit Facility | $ 125 | |
Barclays Bank PLC [Member] | Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Letters of credit outstanding | 98 | |
Credit Facility amount | $ 2 | |
Aggregate commitments | $ 100 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Product Warranty Liability [Line Items] | |
Description of Tariffs classification | In particular, CBP accepted our position that the Section 301 tariffs of 25% or 7.5% of the value of the merchandise, depending on tariff classification, as well as the antidumping and countervailing duties, previously assessed under the Original 939 Assessment are not applicable as they are only applicable to articles that originate in China |
Description of Revised Tariffs classification | In particular, the Section 301 tariffs of 25% or 7.5% of the value of the merchandise, depending on tariff classification, as well as the antidumping and countervailing duties, are not applicable under the 625 Assessment for the same reason stated above with respect to the Revised 939 Assessment, which has been accepted by CBP. |
939 Assessment [Member] | |
Product Warranty Liability [Line Items] | |
Cost of Assessment | $ 2,010 |
CBP Assessments [Member] | |
Product Warranty Liability [Line Items] | |
Cost of Assessment | $ 2,160 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock compensation expense (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, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | $ 1,192 | $ 7,507 | $ 9,044 | $ 15,255 |
Cost of revenue [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | 181 | 1,153 | 1,313 | 2,521 |
Research and development [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | 85 | 487 | 449 | 1,134 |
Selling and marketing [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | 166 | 598 | 821 | 1,630 |
General and administrative [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock based compensation expense | $ 760 | $ 5,269 | $ 6,461 | $ 9,970 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (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 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred Stock, Shares Issued | 0 | 0 | 0 | ||
Common stock, shares authorized | 850,000,000 | 850,000,000 | 850,000,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, shares issued | 124,954,451 | 124,954,451 | 105,032,588 | ||
Common stock, value, issued | $ 12 | $ 12 | $ 11 | ||
Operating Expenses | 19,656 | $ 17,179 | 46,656 | $ 54,397 | |
Treasury stock, value | $ 0 | $ 0 | $ 0 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net Income (Loss) | $ (16,937) | $ (10,414) | $ (11,762) | $ (25,636) | $ (25,683) | $ (27,793) | $ (39,113) | $ (79,112) |
Basic weighted-average number of common shares outstanding | 119,793,821 | 102,164,455 | 112,794,562 | 100,642,126 | ||||
Diluted weighted-average number of common shares outstanding | 119,793,821 | 102,164,455 | 112,794,562 | 100,642,126 | ||||
Basic loss per share | $ (0.14) | $ (0.25) | $ (0.35) | $ (0.79) | ||||
Diluted loss per share | $ (0.14) | $ (0.25) | $ (0.35) | $ (0.79) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 11,030,960 | 15,010,397 | 11,030,960 | 15,010,397 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 3,048,139 | 7,407,333 | 3,048,139 | 7,407,333 |
Restricted Stock Awards [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potential common shares excluded from diluted net loss per share | 7,982,821 | 7,603,064 | 7,982,821 | 7,603,064 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) | $ (166) | $ 151 | $ (175) | $ (15) | |
Change in deferred tax assets valuation allowance, percentage | 21% | ||||
Income Tax Interest and Penalties Accrued | $ 0 | $ 0 | $ 0 |
Segment Information - Schedule
Segment Information - Schedule of Company's Total Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | $ 30,548 | $ 16,572 | $ 103,801 | $ 96,846 |
Related party transactions - Ad
Related party transactions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 13, 2023 | Feb. 28, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jul. 05, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||||||
Cash payments | $ 1.7 | |||||||
Stock-based compensation expense reversed | $ 1.1 | |||||||
Purchase shares of common stock | 1,000,000 | |||||||
Exercise price per share | $ 3.86 | $ 3.86 | ||||||
Common stock, shares outstanding | 124,954,451 | 124,954,451 | 312,500 | 105,032,588 | ||||
Common stock, shares issued | 124,954,451 | 124,954,451 | 105,032,588 | |||||
Percentage of shareholders | 10% | |||||||
Alpha Steel [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party receivable | $ 0.8 | |||||||
Related party payble | 1.3 | |||||||
Fernweh Engaged Operator Company LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Forfeiture of unvested stock | 2,000,000 | |||||||
Unamortized Prepaid Balance | $ 3.2 | |||||||
South Lake One LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Outstanding capital stock held | 5% | |||||||
Ayna [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cash payments | 2.5 | |||||||
Restricted Stock Units (RSUs) [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock, shares issued | 250,000 | |||||||
Restricted Stock Units (RSUs) [Member] | Board of Directors Chairman [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Common stock, shares issued | 62,500 | |||||||
Related Party [Member] | Fernweh Engaged Operator Company LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expense | $ 2.1 | $ 3.5 | ||||||
Related Party [Member] | Ayna [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
General and administrative expense | $ 0.9 | $ 3 |
Subsequent events (Additional I
Subsequent events (Additional Information) (Details) | Jul. 05, 2023 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
percentage of shareholders | 10% |