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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2022
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | Note 9. Stockholders’ Equity As of September 30, 2022 and December 31, 2021, 1,350,000,000 shares, $0.0001 par value per share are authorized, of which, 1,000,000,000 shares are designated as Class A Common Stock, 250,000,000 shares are designated as Class B Common Stock, and 100,000,000 shares are designated as Preferred Stock. Common Stock Holders of the common stock are entitled to dividends when, as, and if, declared by the Board, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of September 30, 2022, the Company had not declared any dividends. The holder of each share of Class A Common Stock is entitled to one vote, and the holder of each share of Class B Common Stock is entitled to ten votes. In March 2021, the Company completed an underwritten public offering of shares of its Class A Common Stock and issued 11,960,000 shares for an aggregate purchase price of $462.9 million, net of issuance costs of $15.5 million (the “March 2021 Public Offering”). Equity Incentive Plans Prior to the Business Combination, the Company maintained its 2010 Equity Incentive Plan (the “2010 Plan”), under which the Company granted options and restricted share units to purchase or directly issue shares of common stock to employees, directors, and non-employees. Upon the closing of the Business Combination, awards under the 2010 Plan were converted at the Exchange Ratio and assumed into the 2020 Equity Incentive Award Plan (the “2020 Plan”, and together with the 2010 Plan, the “Plans”). The 2020 Plan permits the granting of awards in the form of incentive stock options, nonqualified stock options, stock appreciation rights, restricted shares, restricted share units and performance awards to employees, directors, and non-employees. As of September 30, 2022, 62,915,959 shares of Class A Common Stock are authorized for issuance pursuant to awards under the 2020 Plan, plus any shares of Class A Common Stock subject to stock options, restricted stock units or other awards that were assumed in the Business Combination and terminate as a result of being unexercised or are forfeited or repurchased by the Company, with the maximum number of shares to be added to the 2020 Plan equal to 69,846,580 shares of Class A Common Stock. Stock Options Stock option activity under the Plans, including the EPA Program discussed below is as follows:
|  | Number of Shares Outstanding (in thousands) |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Intrinsic value (in thousands) |
Balance as of December 31, 2021(1) |  |  | 53,078 |  |  | $ | 7.74 |  |  |  | 6.78 |  |  |  |
Cancelled and forfeited (2) |  |  | (1,207 | ) |  |  | 16.82 |  |  |  | — |  |  |  |
Exercised |  |  | (3,261 | ) |  |  | 1.44 |  |  |  | — |  |  |  |
Balance as of September 30, 2022 |  |  | 48,610 |  |  | $ | 7.94 |  |  |  | 6.13 |  |  | $ | 225,633 |
Vested and expected to vest as of September 30, 2022(3) |  |  | 40,295 |  |  | $ | 4.82 |  |  |  | 5.49 |  |  | $ | 225,633 |
Vested and exercisable as of September 30, 2022 |  |  | 30,765 |  |  | $ | 1.68 |  |  |  | 4.58 |  |  | $ | 207,022 |
(1) This includes 14.7 million options granted in December 2021 pursuant to the EPA Program. (2) This includes 0.8 million options forfeited from the EPA program. (3) This includes 5.5 million options granted pursuant to the EPA Program that are currently expected to vest. None of the options granted pursuant to the EPA Program were vested and exercisable as of September 30, 2022. There were no options granted during the nine months ended September 30, 2022 or September 30, 2021. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2022 and 2021 was $38.1 million and $355.0 million, respectively. Stock-based compensation expense is based on the grant-date fair value. The Company recognizes compensation expense for all stock-based awards with only service conditions on a straight-line basis over the requisite service period of the awards, which is generally the option vesting term of four years. Excluding options granted pursuant to the EPA Program, as of September 30, 2022, the Company had stock-based compensation of $7.9 million related to unvested stock options not yet recognized that are expected to be recognized over an estimated weighted average period of 1.89 years. EPA Program In December 2021, the Company granted stock options for the purchase of an aggregate of approximately 14.7 million shares of the Company's Class A Common Stock to the Company's Chief Executive Officer and other members of the Company’s management team pursuant to the EPA Program that was approved by the Company's stockholders in December 2021. There are 2.1 million remaining shares that may be granted under the EPA Program within the one-year anniversary of the initial grant. The EPA Program consists of five equal tranches (each a “Tranche”) that vest if the Company meets certain business milestones (performance conditions) and stock price targets (market conditions). Business Milestones The compensation committee of the Board selected the following eleven business milestones for the EPA Program, of which one milestone must be achieved for each tranche. • Delivery of an A-sample battery cell that meets specifications agreed upon with an automaker • The validation by an auto maker of a completed B-sample battery cell (a B-sample battery cell is a functional, complete battery cell prototype produced from our pre-pilot or sample production line) • Delivery of at least 1-gigawatt hour (GWh) of battery cells to a single customer • Delivery of at least 3-gigawatt hour (GWh) of battery cells to each of three or more customers, with at least one of such customer being an auto maker • $5 billion in GAAP revenue over a period of trailing four quarters • $10 billion in GAAP revenue over a period of trailing four quarters • Total cumulative battery cell production of 500 GWh • Total cumulative battery cell production of 1,000 GWh • Adjusted EBITDA margin of at least 25% over four consecutive quarters • 10% of worldwide market share in automotive battery cells (excluding China) • 20% of worldwide market share in automotive battery cells (excluding China) Once a business milestone has been achieved, that business milestone will be considered achieved, even if later the Company does not maintain performance at that level. Stock Price Targets The stock price targets of the five tranches of the EPA Program are $60, $120, $180, $240 and $300. To meet the stock price targets, the stock price must be sustained and not merely momentarily achieved. Except in the case of a change in control, the Company’s stock price for the purposes of assessing the stock price target will be the 120-day trailing average closing price (based on trading days), but a stock price target will not be achieved unless the trailing average closing price of the last 30 trading days of such 120-trading day period also meets or exceeds the applicable stock price target. For a stock price target for any given Tranche to be achieved, the last day of the 120-day measurement period must occur on or after the date that the requisite number of business milestones have been achieved for such Tranche. Vesting Tranches Each of the five Tranches vest only if the Company achieves one of the business milestones (in addition to the business milestones already achieved in a prior Tranche) and achieves the applicable stock price target on or after the business milestone is achieved, within 10 years of the initial grants. Additionally, in order to vest in any Tranche, Participants generally must continue to provide service through the date of vesting in the same position, or a similar or higher role, as when the EPA Program awards are granted.
Tranche |  | Business Milestone Requirement |  | Stock Price Target
1 |  | Achievement of 1 business milestone |  | $60
2 |  | Achievement of 2 business milestones (inclusive of the business milestone applicable to Tranche 1) |  | $120
3 |  | Achievement of 3 business milestones (inclusive of the business milestone applicable to Tranche 2) |  | $180
4 |  | Achievement of 4 business milestones (inclusive of the business milestone applicable to Tranche 3) |  | $240
5 |  | Achievement of 5 business milestones (inclusive of the business milestone applicable to Tranche 4) |  | $300
Change in Control In the event of a change in control of the Company, a portion of the EPA Program awards may also be eligible to vest; in such event, the business milestone requirement will not be applicable and the Company’s stock price for the purposes of the stock price targets will be the price per share paid in such change in control. In the event that the Company’s stock price by this measure falls between two stock price targets, linear interpolation between the two applicable stock price targets will be used to determine an additional portion of the EPA Program awards that will vest. Any portion of an EPA Program award that is not vested upon and after giving effect to a change in control will terminate. The Company accounts for the compensation expense associated with each tranche when it determines that achievement of a related business milestone is considered probable. As of September 30, 2022, two tranches were considered probable. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense of $12.1 million and $37.7 million, respectively related to the EPA Program. As of September 30, 2022, the Company had approximately $72.7 million of total unrecognized stock-based compensation expense for the business milestones currently considered probable of achievement, which will be recognized over an estimated weighted-average period of 2.3 years. As of September 30, 2022, the Company had approximately $172.4 million of total unrecognized stock-based compensation expense for the business milestones currently considered not probable of achievement. Restricted Stock Units Restricted stock unit activity under the Plans are as follows:
|  | Number of Restricted Stock Units (in thousands) |  |  | Weighted Average Grant Date Fair Value |
Balance as of December 31, 2021 |  |  | 10,555 |  |  | $ | 14.48 |
Granted |  |  | 10,467 |  |  |  | 14.17 |
Vested |  |  | (3,795 | ) |  |  | 12.79 |
Forfeited |  |  | (849 | ) |  |  | 16.33 |
Balance as of September 30, 2022 |  |  | 16,378 |  |  | $ | 14.52 |
The fair value of restricted stock units which vested during the nine months ended September 30, 2022 and September 30, 2021 was $53.3 million and $156.3 million, respectively. As of September 30, 2022, unrecognized compensation costs related to restricted stock units granted were $219.0 million and are expected to be recognized over a weighted average period of 3.0 years. Stock-Based Compensation Expense Total stock-based compensation expense recognized in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for all equity awards is as follows (amounts in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Research and development |  | $ | 17,233 |  |  | $ | 7,489 |  |  | $ | 45,255 |  |  | $ | 20,490 |
General and administrative |  |  | 16,345 |  |  |  | 5,238 |  |  |  | 47,730 |  |  |  | 15,520 |
Total stock-based compensation expense |  | $ | 33,578 |  |  | $ | 12,727 |  |  | $ | 92,985 |  |  | $ | 36,010 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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