Weichai Transactions

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Weichai Transactions

Weichai Transactions

In March 2017, the Company and Weichai executed the SPA in which the Company issued stock and a warrant to Weichai for aggregate proceeds of $60.0 million (the “Weichai Transactions”), composed of the following:

•2,728,752 shares of Common Stock;

•2,385,624 shares of Series B Redeemable Convertible Preferred Stock (“Series B Convertible Preferred Stock”) that was converted into 4,771,248 shares of Common Stock in November 2017; and

•the Weichai Warrant as discussed further below.

The Company used proceeds from the sale of the above securities pursuant to the SPA and borrowings under the Credit Agreement to pay off the outstanding TPG Term Loan (the “TPG Term Loan”) with TPG Specialty Lending, Inc. (“TPG”).

Weichai Shareholder’s Loan Agreements

In December 2020, the Company entered into the $130 million First Shareholder’s Loan Agreement with Weichai. The First Shareholder’s Loan Agreement was amended and restated in March 2021 and again on March 25, 2022. On July 14, 2021, the Company entered into the $25 million Second Shareholder’s Loan Agreement with Weichai, which was amended and restated on March 25, 2022. On December 10, 2021, the Company entered into the $50 million Third Shareholder’s Loan Agreement with Weichai. See additional discussion of these debt agreements in Note 6. Debt.

Weichai Collaboration Arrangement and Other Related Party Transactions

The Company and Weichai executed a strategic collaboration agreement (the “Collaboration Agreement”) on March 20, 2017, in order to achieve their respective strategic objectives and enhance the strategic cooperation alliance to share experiences, expertise and resources. Among other things, the collaboration arrangement established a joint steering committee, permitted Weichai to second a limited number of certain technical, marketing, sales, procurement and finance personnel to work at the Company and established several collaborations, related to stationary natural-gas applications and Weichai diesel engines. The collaboration arrangement provided for the steering committee to create various sub-committees with operating roles and otherwise governs the treatment of intellectual property of parties prior to the collaboration and the intellectual property developed during the collaboration. The Collaboration Agreement had a term of three years that was set to expire in March 2020. On March 26, 2020, the Collaboration Agreement was extended for an additional term of three years.

The Company evaluates whether an arrangement is a collaborative arrangement at its inception based on the facts and circumstances specific to the arrangement. The Company also reevaluates whether an arrangement qualifies or continues to qualify as a collaborative arrangement whenever there is a change in either the roles of the participants or the participants’ exposure to significant risks and rewards dependent on the ultimate commercial success of the endeavor. For those collaborative arrangements where it is determined that the Company is the principal participant, costs incurred and revenue generated from third parties are recorded on a gross basis in the financial statements. For the years ended December 31, 2021 and 2020, the Company’s sales to and outstanding receivables from Weichai were immaterial. The Company purchased $12.4 million and $18.6 million of inventory from Weichai during 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company had outstanding payables to Weichai of $12.5 million and $4.0 million, respectively.

Stockholders’ Equity (Deficit)

Common and Treasury Stock

The changes in shares of Common and Treasury Stock are as follows:

(in thousands)	Common Shares Issued	Treasury Stock Shares	Common Shares Outstanding
Balance as of December 31, 2019	23,117	260	22,857
Net shares issued for stock awards	—	(35)	35
Balance as of December 31, 2020	23,117	225	22,892
Net shares issued for stock awards	—	(34)	34
Balance as of December 31, 2021	23,117	191	22,926

Preferred Stock

The Company is authorized to issue 5,000,000 shares of Preferred stock, par value $0.001 per share. The Preferred stock may be designated into one or more series as determined by the Board. As of December 31, 2021, the Board had authorized two series of Preferred stock. At December 31, 2021 and 2020, there were no shares of Preferred stock outstanding.