Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Tables)

v3.23.2
Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Concentrations of credit risk The net sales to the following customers comprised more than 10% of revenues for the periods presented.
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Net Sales % of Net Revenue Net Sales % of Net Revenue Net Sales % of Net Revenues Net Sales % of Net Revenues
Customer A $ 3,393  42  % $ —  —  % $ 4,181  36  % $ —  —  %
Customer B 1,014  12  % —  —  % —  —  % —  —  %
Customer C —  —  % 599  17  % —  —  % 2,564  29  %
Customer D —  —  % 572  16  % —  —  % —  —  %
Customer E —  —  % 340  10  % —  —  % —  —  %
Customer F —  —  % —  —  % —  —  % 1,725  19  %
Total of customers with sales greater than 10% $ 4,407  54  % $ 1,511  43  % $ 4,181  36  % $ 4,289  48  %
Total of customers with sales less than 10% 3,763  46  % 2,025  57  % 7,555  64  % 4,659  52  %
Gross Revenue $ 8,170  100  % $ 3,536  100  % $ 11,736  100  % $ 8,948  100  %
Customer refunds(1)
(254) —  (2,509) — 
Total Revenue, net of customer refunds $ 7,916  $ 3,536  $ 9,227  $ 8,948 

(1)    Customer refunds are related to the recall for certain 2021-2022 model year FE4-129 vehicles (“ZEV4”) that were manufactured with Romeo Power Systems, Inc (“Romeo”) battery packs. See section “Revenue Recognition” below for more detail concerning the accounting treatment and the section “Warranties and Recall Campaigns” for more detail on the recall.
Schedule of allowance for doubtful accounts activity The following table details the change in the allowance for credit losses for the periods indicated:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Balance at beginning of period $ 2,989 $ 3,397 $ 2,028 $ 3,349
Credit loss expense (1)
981 450 1,942 498
Deductions (1)
(1,929) — (1,929) —
Balance at end of period $ 2,041 $ 3,847 $ 2,041 $ 3,847

(1) The charges to expense and deductions in the allowance for doubtful accounts during the three and six months ended June 30, 2023 were primarily associated with two customers. The customers were unable to pay, and the Company repossessed the vehicles as collateral for the accounts receivable balance. The charges to expense represent further impairment of the receivable balance down to the net realizable value of the collateral. The deductions represent the write off of the remaining accounts receivable balance after applying the net realizable value of the collateral against the outstanding balance.
Schedule of estimated useful lives of our major classes of property and equipment The estimated useful lives of the Company’s major classes of property and equipment are as follows:
Major Class of Property and Equipment Estimated Useful Lives
Machinery and equipment 7 years
Vehicles 5 years
Leasehold improvements 5 years
Computer equipment 3 years
Software 3 years
Furniture and fixtures 7 years
Schedule of disaggregates revenue by major source
The following table disaggregates revenue by major source:

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
ZEVs $ 7,885 $ 3,220 $ 11,107 $ 8,399
Other 285 316 629 549
Gross Revenue $ 8,170 $ 3,536 $ 11,736 $ 8,948
Customer refunds(1)
(254) — (2,509) —
Total Revenue, net of customer refunds $ 7,916 $ 3,536 $ 9,227 $ 8,948
(1) Customer refunds are related to the recall for ZEV4 vehicles that were manufactured with Romeo battery packs.
Schedule of changes in contract balances Changes in contract liabilities are as follows:
Balance as of December 31, 2022
 $ 794 
Revenues recognized (1,653)
Increase due to billings 1,980 
Balance as of June 30, 2023
 $ 1,121 
The following table summarizes the Company’s contract balances:

June 30,
2023		 December 31,
2022		 January 1,
2022
Accounts receivable, net of allowance of $2,041, $2,028 and $3,349 as of June 30, 2023, December 31, 2022 and January 1, 2022, respectively
 $ 8,660 $ 9,899 $ 9,172
Contract Assets 321 — —
Contract Liabilities - Current 1,121 794 147
Schedule of fair value hierarchy
The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were measured at fair value on a recurring basis in the consolidated balance sheets.

Level 1 Level 2 Level 3
As of June 30, 2023
Financial assets
Cash equivalents $ 6,987  $ —  $ — 
Financial Liabilities    
Warrant liability $ —  $ —  $ 10 
Derivative liability —  —  2 
Earnout liability —  —  446 
As of December 31, 2022
Financial assets
Cash equivalents $ 51,351  $ —  $ — 
Financial Liabilities    
Warrant liability $ —  $ —  $ 60 
Derivative liability —  —  78 
Earnout liability —  —  2,265 
Schedule of earnout liability The following table provides a reconciliation of the beginning and ending balances for the earnout liability measured at fair value using significant unobservable inputs (Level 3):
June 30, 2023
Balance at beginning of period $ 2,265 
(Gain) loss (1,819)
Balance at end of period $ 446