| QUARTERLY ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| QUARTERLY TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Page | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Item 9C. | ||||||||
PART III. | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
PART IV. | ||||||||
Item 15. | ||||||||
Item 16. | ||||||||
Name | Age | Current Position and Five-Year Business Experience | ||||||||||||
John Carrington | 55 | Chief Executive Officer and Director, since December 2013. | ||||||||||||
Bill Bush | 56 | Chief Financial Officer, since November 2016. | ||||||||||||
Saul R. Laureles | 56 | Chief Legal Officer and Secretary, since May 2021; Director, Corporate Legal Affairs and Assistant Corporate Secretary at Schlumberger Limited (a global oilfield services company), from May 2007 to May 2021. | ||||||||||||
Mark Triplett | 60 | Chief Operating Officer, since March 2018; Chief Operating Officer at Green Charge Networks, LLC (an energy storage company), from July 2015 to March 2018. | ||||||||||||
Alan Russo | 52 | Chief Revenue Officer, since February 2019; Senior Vice President of Global Sales and Marketing, April 2018 to February 2019; Senior Vice President of Sales and Marketing at REC Solar Holdings AS (subsidiary of Duke Energy), from October 2015 to April 2018. | ||||||||||||
Larsh Johnson | 64 | Chief Technical Officer, since January 2016. | ||||||||||||
Prakesh Patel | 47 | Chief Strategy Officer since January 2020; Vice President of Capital Markets and Strategy from 2013 to January 2020. |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Revenue | $ | 127.4 | $ | 36.3 | |||||||
Cost of revenue | (126.1) | (40.2) | |||||||||
GAAP Gross Margin | 1.2 | (3.9) | |||||||||
GAAP Gross Margin % | 1 | % | (11) | % | |||||||
Adjustments to Gross Margin: | |||||||||||
Amortization of Capitalized Software | 5.3 | 4.0 | |||||||||
Impairments | 4.6 | 3.1 | |||||||||
Other Adjustments (1) | 2.8 | 0.3 | |||||||||
Non-GAAP Gross Margin | $ | 14.0 | $ | 3.5 | |||||||
Non-GAAP Gross Margin % | 11 | % | 10 | % | |||||||
(1) Consists of certain operating expenses including communication and cloud service expenditures reclassified to cost of revenue. |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(in thousands) | |||||||||||
Net loss | $ | (101,211) | $ | (156,124) | |||||||
Adjusted to exclude the following: | |||||||||||
Depreciation and amortization | 29,098 | 20,871 | |||||||||
Interest expense | 17,395 | 20,806 | |||||||||
Loss on extinguishment of debt | 5,064 | — | |||||||||
Stock-based compensation | 13,546 | 4,542 | |||||||||
Issuance of warrants for services | 9,183 | — | |||||||||
Change in fair value of warrants and embedded derivative | (3,424) | 84,455 | |||||||||
Provision for income taxes | — | 5 | |||||||||
Adjusted EBITDA | $ | (30,349) | $ | (25,445) |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
(in millions) | |||||||||||
Financial Results | |||||||||||
Revenue | $ | 127.4 | $ | 36.3 | |||||||
GAAP Gross Margin | $ | 1.2 | $ | (3.9) | |||||||
GAAP Gross Margin % | 1 | % | (11) | % | |||||||
Non-GAAP Gross Margin | $ | 14.0 | $ | 3.5 | |||||||
Non-GAAP Gross Margin % | 11 | % | 10 | % | |||||||
Net Loss | $ | (101.2) | $ | (156.1) | |||||||
Adjusted EBITDA | $ | (30.3) | $ | (25.4) | |||||||
Key Operating Metrics | |||||||||||
12-Month Pipeline (in billions) (1) | $ | 4.0 | $ | 1.6 | |||||||
Bookings (in millions) (2) | 416.5 | 137.7 | |||||||||
Contracted Backlog (in millions) (3) | $ | 449.0 | $ | 184.0 | |||||||
Contracted AUM (in GWh) (4) | 1.6 | 1.0 | |||||||||
* at period end | |||||||||||
** not available | |||||||||||
(1) As described below. | |||||||||||
(2) As described below. | |||||||||||
(3) Total value of bookings in dollars, as reflected on a specific date. Backlog increases as new contracts are executed (bookings) and decreases as integrated storage systems are delivered and recognized as revenue. | |||||||||||
(4) Total GWh of systems in operation or under contract. |
Year Ended December 31, | $ Change | % Change | |||||||||||||||||||||
2021 | 2020 | ||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Service revenue | $ | 20,463 | $ | 15,645 | $ | 4,818 | 31% | ||||||||||||||||
Hardware revenue | 106,908 | 20,662 | 86,246 | * | |||||||||||||||||||
Total revenue | 127,371 | 36,307 | 91,064 | 251% | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Cost of service revenue | 28,177 | 21,187 | 6,990 | 33% | |||||||||||||||||||
Cost of hardware revenue | 97,947 | 19,032 | 78,915 | * | |||||||||||||||||||
Total cost of revenue | 126,124 | 40,219 | 85,905 | 214% | |||||||||||||||||||
Gross margin | 1,247 | (3,912) | 5,159 | (132)% | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | 19,950 | 14,829 | 5,121 | 35% | |||||||||||||||||||
Research and development | 22,723 | 15,941 | 6,782 | 43% | |||||||||||||||||||
General and administrative | 41,648 | 14,705 | 26,943 | 183% | |||||||||||||||||||
Total operating expenses | 84,321 | 45,475 | 38,846 | 85% | |||||||||||||||||||
Loss from operations | (83,074) | (49,387) | (33,687) | 68% | |||||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||
Interest expense | (17,395) | (20,806) | 3,411 | (16)% | |||||||||||||||||||
Loss on extinguishment of debt | (5,064) | — | (5,064) | * | |||||||||||||||||||
Change in fair value of warrants and embedded derivative | 3,424 | (84,455) | 87,879 | (104)% | |||||||||||||||||||
Other expenses, net | 898 | (1,471) | 2,369 | (161)% | |||||||||||||||||||
Total other income (expense) | (18,137) | (106,732) | 88,595 | (83)% | |||||||||||||||||||
Income (loss) before income taxes | (101,211) | (156,119) | 54,908 | (35)% | |||||||||||||||||||
Income tax expense | — | (5) | 5 | (100)% | |||||||||||||||||||
Net income (loss) | $ | (101,211) | $ | (156,124) | $ | 54,913 | (35)% |
Year Ended December 31, | |||||||||||
2021 | 2020 | ||||||||||
Net cash used in operating activities | $ | (101,266) | $ | (33,671) | |||||||
Net cash used in investing activities | (185,233) | (12,036) | |||||||||
Net cash provided by financing activities | 1,027,095 | 40,294 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 242 | (534) | |||||||||
Net increase (decrease) in cash and cash equivalents | $ | 740,838 | $ | (5,947) |
Page | |||||
Index to Audited Consolidated Financial Statements | |||||
Report of Independent Registered Public Accounting Firm (PCAOB ID No. | |||||
Financial Statements: | |||||
December 31, 2021 | December 31, 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net | |||||||||||
Inventory, net | |||||||||||
Other current assets (includes $ | |||||||||||
Total current assets | |||||||||||
Energy storage systems, net | |||||||||||
Contract origination costs, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating leases right-of-use assets | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Accrued payroll | |||||||||||
Notes payable, current portion | |||||||||||
Convertible promissory notes (includes $ | |||||||||||
Financing obligation, current portion | |||||||||||
Deferred revenue, current portion | |||||||||||
Other current liabilities (includes $ | |||||||||||
Total current liabilities | |||||||||||
Deferred revenue, noncurrent | |||||||||||
Asset retirement obligation | |||||||||||
Notes payable, noncurrent | |||||||||||
Convertible notes, noncurrent | |||||||||||
Financing obligation, noncurrent | |||||||||||
Warrant liabilities | |||||||||||
Lease liability, noncurrent | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 19) | |||||||||||
Stockholders’ equity (deficit): | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity (deficit) | ( | ||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | $ |
Years Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Revenue | |||||||||||||||||
Service revenue | $ | $ | $ | ||||||||||||||
Hardware revenue | |||||||||||||||||
Total revenue | |||||||||||||||||
Cost of revenue | |||||||||||||||||
Cost of service revenue | |||||||||||||||||
Cost of hardware revenue | |||||||||||||||||
Total cost of revenue | |||||||||||||||||
Gross margin | ( | ( | |||||||||||||||
Operating expenses | |||||||||||||||||
Sales and marketing | |||||||||||||||||
Research and development | |||||||||||||||||
General and administrative | |||||||||||||||||
Total operating expenses | |||||||||||||||||
Loss from operations | ( | ( | ( | ||||||||||||||
Other income (expense), net | |||||||||||||||||
Interest expense | ( | ( | ( | ||||||||||||||
Loss on extinguishment of debt | ( | ||||||||||||||||
Change in fair value of warrants and embedded derivative | ( | ||||||||||||||||
Other expenses, net | ( | ( | |||||||||||||||
Total other income (expense) | ( | ( | ( | ||||||||||||||
Loss before income taxes | ( | ( | ( | ||||||||||||||
Income tax expense | ( | ( | |||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
Net loss per share attributable to common shareholders, basic and diluted | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted-average shares used in computing net loss per share, basic and diluted |
Years Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Unrealized loss on available-for-sale securities | ( | ||||||||||||||||
Foreign currency translation adjustment | ( | ||||||||||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( |
Convertible Preferred Stock | Series 1 Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2019 | $ | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization (Note 1) | ( | ( | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted balance, beginning of period | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of exchange transaction (Note 12) | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants to purchase common stock | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares upon conversion of promissory note | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of litigation | — | — | — | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options and warrants | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of exchange transaction (Note 12) | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of exchange transaction by shareholder | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of beneficial conversion feature related to convertible notes | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of warrants to purchase common stock | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares upon exercise of stock options and warrants | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merger and PIPE financing (Note 1) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of warrants into common stock upon Merger (Note 13) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible notes into common stock (Note 12) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange of warrants into common stock (Note 13) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants for services (Note 13) | — | — | — | — | — | — | — | — |
Public Warrants exercises (Note 13) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of 2028 Convertible Notes, net (Note 12) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase of capped call options (Note 12) | — | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Legacy stock warrant exercises (Note 13) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gain | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | — | — | $ | $ | $ | $ | ( | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||
Depreciation and amortization expense | |||||||||||||||||
Non-cash interest expense, including interest expenses associated with debt issuance costs | |||||||||||||||||
Stock-based compensation | |||||||||||||||||
Change in fair value of warrant liability and embedded derivative | ( | ( | |||||||||||||||
Noncash lease expense | |||||||||||||||||
Accretion expense | |||||||||||||||||
Impairment of energy storage systems | |||||||||||||||||
Issuance of warrants for services | |||||||||||||||||
Net (accretion of discount) amortization of premium on investments | |||||||||||||||||
Other | ( | ( | ( | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | ( | ( | ( | ||||||||||||||
Inventory | ( | ( | ( | ||||||||||||||
Other assets | ( | ( | ( | ||||||||||||||
Right-of-use assets | ( | ||||||||||||||||
Contract origination costs, net | ( | ( | ( | ||||||||||||||
Accounts payable and accrued expenses | |||||||||||||||||
Deferred revenue | ( | ||||||||||||||||
Lease liabilities | ( | ( | ( | ||||||||||||||
Other liabilities | ( | ( | |||||||||||||||
Net cash used in operating activities | ( | ( | ( | ||||||||||||||
INVESTING ACTIVITIES | |||||||||||||||||
Purchase of available-for-sale investments | ( | ||||||||||||||||
Sale of available-for-sale investments | |||||||||||||||||
Purchase of energy storage systems | ( | ( | ( | ||||||||||||||
Capital expenditures on internally-developed software | ( | ( | ( | ||||||||||||||
Purchase of equity method investment | ( | ||||||||||||||||
Purchase of property and equipment | ( | ( | ( | ||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
FINANCING ACTIVITIES | |||||||||||||||||
Proceeds from exercise of stock options and warrants | |||||||||||||||||
Payments for taxes related to net share settlement of stock options | ( | ||||||||||||||||
Net contributions from Merger and PIPE financing, net of transaction costs of $ | |||||||||||||||||
Proceeds from financing obligations | |||||||||||||||||
Repayment of financing obligations | ( | ( | ( | ||||||||||||||
Proceeds from issuance of convertible notes, net of issuance costs of $ | |||||||||||||||||
Purchase of capped call options | ( | ||||||||||||||||
Proceeds from issuance of notes payable, net of issuance costs of $ | |||||||||||||||||
Repayment of notes payable | ( | ( | ( | ||||||||||||||
Net cash provided by financing activities | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | |||||||||||||||
Cash and cash equivalents, beginning of period | |||||||||||||||||
Cash and cash equivalents, end of period | $ | $ | $ |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||||||||
Cash paid for interest | $ | $ | $ | ||||||||||||||
Cash paid for income taxes | $ | $ | $ | ||||||||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||||||||
Change in asset retirement costs and asset retirement obligation | $ | $ | $ | ( | |||||||||||||
Exchange of warrants for common stock | $ | $ | $ | ||||||||||||||
Conversion of warrants upon Merger | $ | $ | $ | ||||||||||||||
Conversion of convertible notes upon Merger | $ | $ | $ | ||||||||||||||
Conversion of accrued interest into outstanding note payable | $ | $ | $ | ||||||||||||||
Right-of-use asset obtained in exchange for lease liability | $ | $ | $ | ||||||||||||||
Settlement of warrant liability into common stock due to exercise | $ | $ | $ | ||||||||||||||
Settlement of warrant liability into common stock due to redemption | $ | $ | $ | ||||||||||||||
Issuance of common stock warrants | $ | $ | $ | ||||||||||||||
Stock-based compensation capitalized to internal-use software | $ | $ | $ | ||||||||||||||
Purchase of energy storage systems in accounts payable | $ | $ | $ | ||||||||||||||
Conversion of convertible promissory notes and accrued interest into Series D preferred stock | $ | $ | $ |
Recapitalization | |||||
Cash — STPK trust and working capital cash | $ | ||||
Cash — PIPE (as described below) | |||||
Less: transaction costs and advisory fees paid | ( | ||||
Merger and PIPE financing | $ |
(overstatement)/understatement | Year Ended December 31, | ||||||||||||||||
2020 | 2019 | Periods prior to 2019 | |||||||||||||||
Energy storage systems, net | $ | ( | $ | ( | $ | ( | |||||||||||
Contract origination costs, net | $ | ( | $ | ( | $ | ( | |||||||||||
Cost of service revenue | $ | $ | $ | ||||||||||||||
Sales and marketing | $ | $ | $ |
(overstatement)/understatement | |||||||||||||||||
Quarter ended September 30, 2021 | Quarter ended June 30, 2021 | Quarter ended March 31, 2021 | |||||||||||||||
Energy storage systems, net | $ | ( | $ | ( | $ | ( | |||||||||||
Contract origination costs, net | $ | ( | $ | ( | $ | ( | |||||||||||
Cost of service revenue | $ | $ | $ | ||||||||||||||
Sales and marketing | $ | $ | $ |
Accounts Receivable | Revenue | ||||||||||||||||||||||||||||
December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2019 | |||||||||||||||||||||||||
Customers: | |||||||||||||||||||||||||||||
Customer A | % | * | % | * | * | ||||||||||||||||||||||||
Customer B | % | * | % | % | * | ||||||||||||||||||||||||
Customer C | % | % | % | % | * | ||||||||||||||||||||||||
Customer D | * | % | * | * | * | ||||||||||||||||||||||||
Customer E | * | % | * | * | * | ||||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Partnership hardware and service revenue | $ | $ | $ | ||||||||||||||
Host customer service revenue | |||||||||||||||||
Total revenue | $ | $ | $ |
Total remaining performance obligations | Percent Expected to be Recognized as Revenue | ||||||||||||||||||||||
Less than one year | Two to five years | Greater than five years | |||||||||||||||||||||
Service revenue | $ | % | % | % | |||||||||||||||||||
Hardware revenue | % | % | % | ||||||||||||||||||||
Total revenue | $ |
2021 | 2020 | 2019 | |||||||||||||||
Beginning balance as of Beginning balance as of January 1, | $ | $ | $ | ||||||||||||||
Upfront payments received from customers | |||||||||||||||||
Upfront or annual incentive payments received | |||||||||||||||||
Revenue recognized related to amounts that were included in beginning balance of deferred revenue | ( | ( | ( | ||||||||||||||
Revenue recognized related to deferred revenue generated during the period | ( | ( | ( | ||||||||||||||
Ending balance as of Ending balance as of December 31, | $ | $ | $ |
Amortized cost | Unrealized gain | Unrealized Loss | Estimated Fair Value | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market fund | $ | $ | — | $ | — | $ | |||||||||||||||||
Total cash equivalents | $ | $ | — | $ | — | $ | |||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
U.S. government bonds | ( | ||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||
Total debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Classified as: | |||||||||||||||||||||||
Cash equivalents | $ | ||||||||||||||||||||||
Short-term debt securities | |||||||||||||||||||||||
Long-term debt securities |
December 31, 2021 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market fund | $ | $ | $ | $ | |||||||||||||||||||
Debt securities | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
U.S. government bonds | |||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total financial assets | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market fund | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Convertible preferred stock warrant liability | $ | $ | $ | $ |
Year Ended December 31, 2021 | |||||
Volatility | % | ||||
Risk-free interest rate | % | ||||
Expected term (in years) | |||||
Dividend yield | % | ||||
Discount for lack of marketability | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Balance as of January 1, | $ | $ | |||||||||
Changes in estimated fair value | |||||||||||
Assumption of warrant liability upon Merger | |||||||||||
Issuance of warrants | |||||||||||
Conversion of warrants upon Merger | ( | ||||||||||
Exchange of warrants | ( | ||||||||||
Exercise of warrants | ( | ( | |||||||||
Balance as of December 31, | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Goodwill | $ | $ | |||||||||
Effect of foreign currency translation | |||||||||||
Total goodwill | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Developed technology | $ | $ | |||||||||
Internally developed software | |||||||||||
Intangible assets | |||||||||||
Less: Accumulated amortization | ( | ( | |||||||||
Add: Currency translation adjustment | |||||||||||
Total intangible assets, net | $ | $ |
Operating Leases | |||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: imputed interest | ( | ||||
Total operating lease liability future lease payments | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
$ | $ | ||||||||||
Non-current portion of operating lease liabilities | |||||||||||
Total | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Weighted average remaining operating lease term (in years) | |||||||||||
Weighted average discount rate | % | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Beginning balance at January 1, | $ | $ | |||||||||
Asset retirement obligation | |||||||||||
Settlement of asset retirement obligation | ( | ||||||||||
Retirement cost revaluation | ( | ( | |||||||||
Accretion expense | |||||||||||
Ending balance at December 31, | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Energy storage systems placed into service | $ | $ | |||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Energy storage systems not yet placed into service | |||||||||||
Total energy storage systems, net | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Work in process inventory | $ | $ | |||||||||
Batteries | |||||||||||
Total inventory | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred costs with suppliers | $ | $ | |||||||||
Prepaid expenses | |||||||||||
Utility program deposits | |||||||||||
Due from related parties | |||||||||||
Other | |||||||||||
Total other current assets | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Prepaid warranties and maintenance | $ | $ | |||||||||
Receivable from SPEs (Note 16) | |||||||||||
Deferred SPAC costs | |||||||||||
Self-generation incentive program deposits | |||||||||||
Investment in VIEs | |||||||||||
Revolver debt issuance costs | |||||||||||
Property and equipment, net | |||||||||||
Other | |||||||||||
Total other noncurrent assets | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Accrued payables | $ | $ | |||||||||
Accrued interest – notes payable | |||||||||||
Other accrued liabilities | |||||||||||
Total accrued liabilities | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
System advances | $ | $ | |||||||||
Lease liabilities – current portion | |||||||||||
Due to related parties | |||||||||||
Other | |||||||||||
Total other current liabilities | $ | $ |
December 31, 2021 | |||||
Outstanding principal | $ | ||||
Unamortized discount | ( | ||||
Carrying value of debt | $ |
Amount | Equity Component | Debt Component | |||||||||||||||
Initial Purchaser’s Debt Discount | $ | $ | $ | ||||||||||||||
Debt Issuance Costs | |||||||||||||||||
Total | $ | $ | $ |
December 31, 2021 | |||||
Debt Component | |||||
Outstanding principal | $ | ||||
Unamortized initial purchaser’s debt discount and debt issuance cost | ( | ||||
Net carrying amount | $ |
December 31, 2021 | |||||
Cash interest expense | |||||
Contractual interest expense | $ | ||||
Non-cash interest expense | |||||
Amortization of debt discount and debt issuance cost | $ | ||||
Total interest expense | $ |
December 31, 2021 | |||||
Shares reserved for warrants | |||||
Options issued and outstanding | |||||
Shares available for future issuance under equity incentive plan | |||||
Conversion of 2028 Convertible Notes | |||||
Total |
Number of Options Outstanding | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Life (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Balances as of December 31, 2020 | $ | $ | |||||||||||||||||||||
Retroactive application of recapitalization | ( | — | — | ||||||||||||||||||||
Adjusted Balance as of December 31, 2020 | |||||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Options forfeited | ( | ||||||||||||||||||||||
Options expired | ( | ||||||||||||||||||||||
Balances as of December 31, 2021 | $ | $ | |||||||||||||||||||||
Options vested and exercisable — December 31, 2021 | $ | $ |
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Expected volatility | % | % | % | ||||||||||||||
Risk-free interest rate | % | % | % | ||||||||||||||
Expected term (years) | |||||||||||||||||
Dividend yield |
Number of RSUs Outstanding | Weighted- Average Grant Date Fair Value Per Share | ||||||||||
Balances as of December 31, 2020 | $ | ||||||||||
RSUs granted | |||||||||||
RSUs vested | |||||||||||
RSUs forfeited | ( | ||||||||||
Balances as of December 31, 2021 |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Sales and marketing | $ | $ | $ | ||||||||||||||
Research and development | |||||||||||||||||
General and administrative | |||||||||||||||||
Total stock-based compensation expense | $ | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Energy storage systems, net | $ | $ | |||||||||
Deferred revenue, current | $ | $ | |||||||||
Deferred revenue, noncurrent | $ | $ | |||||||||
Other liabilities | $ | $ |
SPV II | SPV III | SPV IV | COPEC | ||||||||||||||||||||
Date formed | January 23, 2015 | June 7, 2016 | June 30, 2017 | March 24, 2020 | |||||||||||||||||||
Initial ownership % | % | % | % | % | |||||||||||||||||||
Stem’s interest | |||||||||||||||||||||||
Initial distributions: | |||||||||||||||||||||||
Class A | % | To be determined | |||||||||||||||||||||
Class B | % | N/A |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Investment in SPV II | $ | $ | |||||||||
Investment in SPV III | |||||||||||
Investment in SPV IV | |||||||||||
Copec | |||||||||||
Total equity method investments | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Financing obligation, current portion | $ | $ | |||||||||
Financing obligation, noncurrent | $ | $ |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Energy storage systems, net | $ | $ | |||||||||
Deferred revenue, current | $ | $ | |||||||||
Deferred revenue, noncurrent | $ | $ | |||||||||
Other liabilities | $ | $ |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Numerator - Basic and Diluted: | |||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | |||||||||||
Less: Deemed Dividend | ( | ( | |||||||||||||||
Net loss attributable to common stockholders, basic and diluted | ( | ( | ( | ||||||||||||||
Denominator: | |||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | |||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( |
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Outstanding Pre-Merger Convertible Promissory Notes | |||||||||||||||||
Outstanding 2028 Convertible Notes | |||||||||||||||||
Outstanding stock options | |||||||||||||||||
Outstanding warrants | |||||||||||||||||
Outstanding RSUs | |||||||||||||||||
Total |
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Domestic | $ | ( | $ | ( | $ | ( | |||||||||||
Foreign | |||||||||||||||||
Loss before income taxes | $ | ( | $ | ( | $ | ( |
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Current: | |||||||||||||||||
Federal | $ | $ | $ | ||||||||||||||
State | |||||||||||||||||
Total current | |||||||||||||||||
Deferred: | |||||||||||||||||
Federal | |||||||||||||||||
State | |||||||||||||||||
Total deferred | |||||||||||||||||
Total provision for income taxes | $ | $ | $ |
December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Statutory rate | % | % | % | ||||||||||||||
State tax | % | % | % | ||||||||||||||
Foreign income and withholding taxes | % | % | % | ||||||||||||||
Stock-based compensation | % | ( | % | ( | % | ||||||||||||
Change in fair value of warrants | % | ( | % | % | |||||||||||||
Other | ( | % | % | ( | % | ||||||||||||
Non-deductible interest expense | ( | % | ( | % | ( | % | |||||||||||
Valuation allowance | ( | % | ( | % | ( | % | |||||||||||
Total | % | % | — | % | % |
December 31, | |||||||||||
2021 | 2020 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating losses | $ | $ | |||||||||
Tax credits | |||||||||||
Depreciable assets | |||||||||||
Operating lease liabilities | |||||||||||
Accruals and allowances | |||||||||||
Stock-based compensation | |||||||||||
Deferred revenue | |||||||||||
Interest expense | |||||||||||
Other | |||||||||||
Total gross deferred tax assets | |||||||||||
Less: Valuation allowance | ( | ( | |||||||||
Net deferred tax assets | |||||||||||
Deferred tax liabilities: | |||||||||||
Amortization of asset retirement obligation | ( | ( | |||||||||
Intangibles | ( | ( | |||||||||
Right-of-use assets | ( | ||||||||||
Total gross deferred tax liabilities | ( | ( | |||||||||
Net deferred taxes | $ | $ |
EXHIBIT INDEX | ||||||||||||||
Exhibit No. | Description | |||||||||||||
3.1 | Second Amended and Restated Certificate of Incorporation, dated April 28, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 4, 2021). | |||||||||||||
3.2 | Second Amended and Restated by-Laws, dated April 28. 2021 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on May 4, 2021). | |||||||||||||
4.1 | Indenture dated as of November 22, 2021, between the Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Stem’s Current Report on Form 8-K filed on November 22, 2021). | |||||||||||||
4.2 | Form of 0.50% Convertible Senior Note due 2028 (included in Exhibit 4.1). | |||||||||||||
4.3* | ||||||||||||||
10.1 | Form of Confirmation for Capped Call Transactions (incorporated by reference to Exhibit 10.1 to Stem’s Current Report on Form 8-K filed on November 22, 2021). | |||||||||||||
10.2 | Purchase Agreement dated as of November 17, 2021, between the Company and the Initial Purchasers (incorporated by reference to Exhibit 10.2 to Stem’s Current Report on Form 8-K filed on November 22, 2021). | |||||||||||||
10.3* | ||||||||||||||
10.4†* | ||||||||||||||
10.5†* | ||||||||||||||
10.6† | Stem, Inc. 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Stem’s Registration Statement on Form S-8 filed on July 2, 2021) | |||||||||||||
10.7† | Form of Stock Option Agreement under the Stem, Inc. 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Stem’s Quarterly Report on Form 10-Q filed on August 11, 2021). | |||||||||||||
10.8† | Form of Restricted Stock Unit Award Agreement under the Stem, Inc. 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Stem’s Quarterly Report on Form 10-Q filed on August 11, 2021). | |||||||||||||
10.9 | Investor Rights Agreement dated April 28, 2021, by and among the Company and certain of its stockholders (incorporated by reference to Exhibit 10.3 of the Company Current Report on Form 8-K filed on May 4, 2021) | |||||||||||||
10.10†* | ||||||||||||||
10.11†* | ||||||||||||||
16 | Letter from WithumSmith+Brown, PC to the SEC (incorporated by reference to Exhibit 16 to the Current Report on Form 8-K filed on August 11, 2021). | |||||||||||||
21* | ||||||||||||||
23* | ||||||||||||||
24* | ||||||||||||||
31.1 | ||||||||||||||
31.2 | ||||||||||||||
32.1 |
32.2 | ||||||||||||||
101.INS | Inline XBRL Instance Document | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||||||||
*Filed herewith | ||||||||||||||
** Furnished herewith | ||||||||||||||
† Management or compensatory plan or arrangement |
Date: February 28, 2022 | STEM, INC. | ||||||||||
By: | /s/ William Bush | ||||||||||
William Bush | |||||||||||
Chief Financial Officer |
Name | Title | |||||||
* | Chief Executive Officer and Director | |||||||
John Carrington | (Principal Executive Officer) | |||||||
/s/ William Bush | Chief Financial Officer | |||||||
William Bush | (Principal Financial Officer) | |||||||
/s/Rahul Shukla | Chief Accounting Officer | |||||||
Rahul Shukla | (Principal Accounting Officer) | |||||||
* | Chairman of the Board | |||||||
David Buzby | ||||||||
* | Director | |||||||
Adam E. Daley | ||||||||
* | Director | |||||||
Anil Tammineedi | ||||||||
* | Director | |||||||
Michael E. Morgan | ||||||||
* | Director | |||||||
Laura D’Andrea Tyson | ||||||||
* | Director | |||||||
Lisa L. Troe | ||||||||
* | Director | |||||||
Jane Woodward | ||||||||
/s/ Saul R. Laureles | February 28, 2022 | |||||||
* By Saul R. Laureles, Attorney-in-Fact |
STEM, INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
CLAIRVEST EQUITY PARTNERS V LIMITED PARTNERSHIP, by its general partner, CLAIRVEST GP MANAGECO INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
CLAIRVEST EQUITY PARTNERS V-A LIMITED PARTNERSHIP, by its general partner, CLAIRVEST GENERAL PARTNER V L.P., by its general partner, CLAIRVEST GP (GPLP) INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
CEP V CO-INVESTMENT HOLDINGS LIMITED PARTNERSHIP, by its general partner, CLAIRVEST GENERAL PARTNER V L.P., by its general partner, CLAIRVEST GP (GPLP) INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
2431134 ONTARIO INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
SCHAEFER DESCENDANTS TRUST | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
2021 KEVIN BRADLEY SCHAEFER LEGACY TRUST | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
2021 NICOLE ROBIN SCHAEFER LEGACY TRUST | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
Robert Schaefer |
Holden Caine |
Ali Seymen Ertaş |
Jennifer Park |
Kevin Smart |
CLAIRVEST GP MANAGECO INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
Robert Schaefer |
CLAIRVEST GROUP INC. | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: | |||||||||||
Per: | |||||||||||
Name: | |||||||||||
Title: |
A | B | C | D | E | F | G | H | ||||||||||||||||
Seller / Specified Optionholder | Series A Common Stock | Series B Common Stock | Series A Preferred Stock | Series B Preferred Stock | Options | Stock Percentage | Cash Percentage | ||||||||||||||||
Robert Schaefer | 66,897.50 | 526,764.00 | - | 481,605.24 | - | 30% | 70% | ||||||||||||||||
Holden Caine | 66,897.50 | 1,500,000.00 | 481,605.24 | - | 30% | 70% | |||||||||||||||||
Clairvest Equity Partners V Limited Partnership | 1,132,708.35 | - | 1,986,643.70 | 21,643.58 | - | 20% | 80% | ||||||||||||||||
Clairvest Equity Partners V-A Limited Partnership | 215,047.22 | - | 377,168.80 | 4,109.08 | - | 20% | 80% | ||||||||||||||||
CEP V Co-Investment Holdings Limited Partnership | 577,609.54 | - | 1,013,062.50 | 11,036.86 | - | 20% | 80% | ||||||||||||||||
2431134 Ontario Inc. | 1,882.53 | - | 42,210.94 | - | - | 20% | 80% | ||||||||||||||||
Schaefer Descendants Family Trust | - | 486,618.00 | - | - | - | 30% | 70% | ||||||||||||||||
2021 Kevin Bradley Schaefer Legacy Trust | - | 243,309.00 | - | - | - | 30% | 70% |
2021 Nicole Robin Schaefer Legacy Trust | - | 243,309.00 | - | - | - | 30% | 70% | ||||||||||||||||
Ali Seymen Ertas | - | 168,850.00 | - | - | 81,400 | 30% | 70% | ||||||||||||||||
Jennifer Park | - | 168,850.00 | - | - | 40,600 | 30% | 70% | ||||||||||||||||
Kevin Smart | - | 39,175.00 | - | - | 168,800 | 30% | 70% | ||||||||||||||||
Brian Musfeldt | - | - | - | - | 110,800 | 30% | 70% | ||||||||||||||||
Daniel Sweeney | - | - | - | - | 85,000 | 30% | 70% | ||||||||||||||||
Mesa Scharf | - | - | - | - | 79,200 | 30% | 70% | ||||||||||||||||
Matthew Brocklehurt | - | - | - | - | 50,000 | 30% | 70% | ||||||||||||||||
Olaf Donner | - | - | - | - | 25,000 | 30% | 70% | ||||||||||||||||
Sushain Sharma | - | - | - | - | 10,000 | 30% | 70% |
Date of Grant: | ||||||||
Vesting Commencement Date: | ||||||||
Exercise Price per Share: | ||||||||
Total Number of Shares Granted: | ||||||||
Total Exercise Price: | ||||||||
Type of Option: | Incentive Stock Option (ISO) | |||||||
Nonstatutory Stock Option (NSO) | ||||||||
Term/Expiration Date: |
Subsidiary Name | Country or state of incorporation | ||||
Generate-Stem LCR, LLC | Delaware | ||||
Logan Energy Storage ULC | Canada | ||||
Rollins Road Acquisition Company | Delaware | ||||
Saturn Energy Storage 1 LLC | Delaware | ||||
Saturn Energy Storage 2 LLC | Delaware | ||||
Saturn Energy Storage 3 LLC | Delaware | ||||
Saturn Energy Storage 4 LLC | Delaware | ||||
SCF 1, LLC | Delaware | ||||
Stem Canada US Holdings, Inc. | Delaware | ||||
Stem Development, LLC | Delaware | ||||
Stem Energy Canada ULC | Canada | ||||
Stem Energy Southern California, LLC | Delaware | ||||
Stem Equipment Finance, LLC | Delaware | ||||
Stem Finance SPV II, LLC | Delaware | ||||
Stem Finance SPV III, LLC | Delaware | ||||
Storage Finance, L.L.C. | Delaware | ||||
Stem Finance SPV IV, LLC | Delaware | ||||
Stem Finance SPV V ULC | Canada | ||||
Stem Finance SPV VI ULC | Canada | ||||
Stem Operations Canada ULC | Canada | ||||
Stem Operations, LLC | Delaware | ||||
Syncarpha Devstor I, LLC | Delaware | ||||
Trillium Storage Limited Partnership | Canada |
______________________ David Buzby Chairman of the Board | |||||
_____________________ | ______________________ | ||||
John Carrington | David Buzby | ||||
Chief Executive Officer and Director | Chairman of the Board | ||||
______________________ | _______________________ | ||||
Adam E. Daley | Anil Tammineedi | ||||
Director | Director | ||||
_______________________ | ______________________ | ||||
Michael E. Morgan | Laura D’Andrea Tyson | ||||
Director | Director | ||||
_____________________ | ____________________ | ||||
Lisa L. Troe | Jane Woodward | ||||
Director | Director |
STEM, INC. | |||||||||||
Date: February 28, 2022 | By: | /s/ John Carrington | |||||||||
Name: | John Carrington | ||||||||||
Title: | Chief Executive Officer |
STEM, INC. | |||||||||||
Date: February 28, 2022 | By: | /s/ William Bush | |||||||||
Name: | William Bush | ||||||||||
Title: | Chief Financial Officer | ||||||||||
(Principal Financial Officer) | |||||||||||
STEM, INC. | |||||||||||
Date: February 28, 2022 | By: | /s/ John Carrington | |||||||||
Name: | John Carrington | ||||||||||
Title: | Chief Executive Officer |
STEM, INC. | |||||||||||
Date: February 28, 2022 | By: | /s/ William Bush | |||||||||
Name: | William Bush | ||||||||||
Title: | Chief Financial Officer | ||||||||||
(Principal Financial Officer) | |||||||||||
Audit Information |
12 Months Ended |
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Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | DELOITTE & TOUCHE LLP |
Auditor Location | San Francisco, California |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Due from related parties | $ 213 | $ 123 |
Convertible promissory notes, due to related parties | 0 | 45,271 |
Other current liabilities, due to related parties | $ 306 | $ 399 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 144,671,624 | 40,202,785 |
Common stock, shares outstanding (in shares) | 144,671,624 | 40,202,785 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (101,211) | $ (156,124) | $ (59,414) |
Other comprehensive income (loss): | |||
Unrealized loss on available-for-sale securities | (175) | 0 | 0 |
Foreign currency translation adjustment | 387 | (246) | 54 |
Total comprehensive income (loss) | $ (100,999) | $ (156,370) | $ (59,360) |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Transaction costs | $ 58,061 | ||
Noncash lease expense | 896 | $ 589 | $ 906 |
Convertible Notes | |||
Payment of debt issuance costs | 14,299 | 240 | 2,308 |
Notes Payable | |||
Payment of debt issuance costs | $ 0 | $ 1,502 | $ 0 |
BUSINESS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
BUSINESS | BUSINESS Description of the Business Stem, Inc. and its subsidiaries (together, “Stem” or the “Company”) is one of the largest digitally connected, intelligent energy storage networks, providing customers (i) with an energy storage system, sourced from leading, global battery original equipment manufacturers (“OEMs”), that the Company delivers through its partners, including solar project developers and engineering, procurement and construction firms and (ii) through its Athena® artificial intelligence (“AI”) platform (“Athena”), with ongoing software-enabled services to operate the energy storage systems for up to 20 years. In addition, in all the markets where the Company operates its customers’ systems, the Company has agreements to manage the energy storage systems using the Athena platform to participate in energy markets and to share the revenue from such market participation. The Company delivers its battery hardware and software-enabled services through its Athena platform to its customers. The Company’s hardware and recurring software-enabled services mitigate customer energy costs through services such as time-of-use and demand charge management optimization and by aggregating the dispatch of energy through a network of virtual power plants. The resulting network created by the Company’s growing customer base increases grid resilience and reliability through the real-time processing of market-based demand cycles, energy prices and other factors in connection with the deployment of renewable energy resources to such customers. Additionally, the Company’s energy storage solutions support renewable energy generation by alleviating grid intermittency issues and thereby reducing customer dependence on traditional, fossil fuel resources. The Company operated as Rollins Road Acquisition Company (f/k/a Stem, Inc.) (“Legacy Stem”) prior to the Merger (as defined below). Stem, Inc. was incorporated on March 16, 2009 in the State of Delaware and is headquartered in San Francisco, California. Star Peak Acquisition Corp. Merger On December 3, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Star Peak Transition Corp. (“STPK”), an entity listed on the New York Stock Exchange under the trade symbol “STPK”, and STPK Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of STPK (“Merger Sub”), providing for, among other things, and subject to the conditions therein, the combination of the Company and STPK pursuant to the merger of Merger Sub with and into the Company with the Company continuing as the surviving entity (the “Merger”). On April 28, 2021, shareholders of STPK approved the Merger, under which Stem received approximately $550.3 million, net of fees and expenses as follows (in thousands):
Immediately prior to the closing of the Merger, (i) all issued and outstanding shares of Legacy Stem preferred stock, par value $0.00001 per share (the “Legacy Stem Preferred Stock”), were converted into shares of Legacy Stem common stock, par value $0.000001 per share (the “Legacy Stem Common Stock”) in accordance with Legacy Stem’s amended and restated certificate of incorporation, (ii) all outstanding convertible promissory notes of Legacy Stem (the “Legacy Stem Convertible Notes”) were converted into Legacy Stem Preferred Stock in accordance with the terms of the Legacy Stem Convertible Notes and (iii) certain warrants issued by Legacy Stem to purchase Legacy Stem Common Stock and Legacy Stem Preferred Stock (the “Legacy Stem Warrants”) were exercised by holders into Legacy Stem Common Stock in accordance with the terms thereof. Upon the consummation of the Merger, each share of Legacy Stem common stock then issued and outstanding was canceled and converted into the right to receive shares of common stock of Stem using an exchange ratio of 4.6432. In connection with the execution of the Merger Agreement, STPK entered into separate subscription agreements (each, a “Subscription Agreement”) with a number of investors (each a “Subscriber”), pursuant to which the Subscribers agreed to purchase, and STPK agreed to sell to the Subscribers, an aggregate of 22,500,000 shares of common stock (the “PIPE Shares”), for a purchase price of $10 per share and an aggregate purchase price of $225.0 million, in a private placement pursuant to the subscription agreements (the “PIPE”). The PIPE investment closed simultaneously with the consummation of the Merger. The Merger is accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles (“GAAP”). Under this method of accounting, STPK was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Stem issuing stock for the net assets of STPK, accompanied by a recapitalization. The net liabilities of STPK of $302.2 million, comprised primarily of the warrant liabilities associated with the Public and Private Placement Warrants discussed in Note 13 - Warrants, are stated at historical cost, with no goodwill or other intangible assets recorded. Liquidity The accompanying consolidated financial statements have been prepared in accordance with GAAP and with the instructions to Form 10-K and Regulation S-X, assuming the Company will continue as a going concern. As of December 31, 2021, the Company had cash and cash equivalents of $747.8 million, short-term investments of $173.0 million, an accumulated deficit of $509.1 million and net working capital of $935.9 million, with $15.3 million of financing obligation coming due within the next 12 months. During the year ended December 31, 2021, the Company incurred a net loss of $101.2 million and had negative cash flows from operating activities of $101.3 million. However, the net proceeds from the Merger of $550.3 million, the proceeds of $145.3 million from the exercise of Public Warrants (as described in Note 13 - Warrants), and the net proceeds of $445.7 million from the issuance of the Company’s 0.50% Green Convertible Senior Notes due 2028 (the “2028 Convertible Notes”) (as described in Note 12 - Convertible Promissory Notes) provided the Company with a significant amount of cash proceeds. As discussed in Note 21 - Subsequent Events, the Company completed the acquisition of 100% of the outstanding shares of AlsoEnergy, Inc., (“AlsoEnergy”) for an aggregate purchase price of $695.0 million, consisting of approximately 75% in cash. The Company believes that its cash position is sufficient to meet capital and liquidity requirements for at least the next 12 months after the date that the financial statements are available to be issued. The Company’s business prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in the early stages of commercial operations. Prior to the Merger, the Company had been funded primarily by equity financings, convertible promissory notes and borrowings from affiliates. The attainment of profitable operations is dependent upon future events, including obtaining adequate financing to complete the Company’s development activities, securing adequate supplier relationships, building its customer base, successfully executing its business and marketing strategy, and hiring and retaining appropriate personnel. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay or abandon some of its planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results and financial condition. COVID-19 The ongoing COVID-19 pandemic has resulted and may continue to result in widespread adverse impacts on the global and U.S. economies. Ongoing government and business responses to COVID-19, along with the COVID-19 Omicron variant and resurgence of related disruptions, could have a continued material adverse effect on economic and market conditions and trigger a period of continued global and U.S. economic slowdown. The Company’s industry is currently facing shortages and shipping delays affecting the supply of energy storage systems, batteries, modules and component parts for inverters and battery energy storage systems available for purchase. These shortages and delays can be attributed in part to the COVID-19 pandemic and resulting government action. While a majority of the Company’s suppliers have secured sufficient quantities to permit them to continue delivery and installing through the end of 2022, if these shortages and delays persist into 2023, they could adversely affect the timing of when energy storage systems can be delivered and installed and when the Company can begin to generate revenue from those systems. The Company cannot predict the full effect the COVID-19 pandemic will have on its business, cash flows, liquidity, financial condition and results of operations at this time due to numerous uncertainties. The Company will continue to monitor developments affecting its workforce, its customers and its business operations generally, and will take actions it determines are necessary in order to mitigate these effects.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with GAAP. Immaterial Out-of-Period Corrections During the year ended December 31, 2021, the Company recorded certain out-of-period corrections related to prior interim and annual periods pertaining to the amortization of contract origination costs and valuation of energy storage systems that were decommissioned. The impact of out-of-period corrections to the year ended December 31, 2021 was an increase of $2.8 million to net loss, and increase to cost of service revenue of $1.7 million, and an increase to sales and marketing expenses of $1.1 million. The following table presents the amount of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, and the amounts and periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
The Company corrected the out of period errors in the quarter ended December 31, 2021. The impact of the out-of-period correction for the quarter ended December 31, 2021 included corrections for the prior quarterly periods presented below. The impact to the quarter ended December 31, 2021, was an increase of $4.2 million to net loss, increase to cost of service revenue of $1.8 million and increase to sales and marketing expenses of $2.4 million. The following table presents the amounts of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, as well as the quarterly periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
The errors and out of period corrections had no impact to the Company’s net cash used in operating activities for any of the periods presented. The Company performed a quantitative and qualitative evaluation of these out-of-period adjustments and has concluded that the amounts are not material in relation to the year ended December 31, 2021, or any prior interim or annual periods. Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassifications have no impact on previously reported net loss, stockholders' equity (deficit), or cash flows. Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary. Equity Method Investments The Company has ownership interests in SPEs which it does not control. Where the Company holds an interest in these SPEs of greater than 20% and has the ability to exercise significant influence, the Company uses the equity method to account for its investments in these SPEs. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. Such proportionate share of earnings or losses is included within other expenses, net in the consolidated statements of operations. The Company considers whether its equity method investments are impaired when events or circumstances suggest that the carrying amount may not be recoverable. An impairment charge is recognized in the consolidated statements of operations for a decline in value that is determined to be other-than-temporary. In determining if and when a decline in the fair value of these investments below their carrying value is other-than-temporary, the Company evaluates the market condition, trends of earnings and cash flows and other key measures of performance and recognizes such loss which is deemed to be other-than-temporary. No such losses have been recognized during the years ended December 31, 2021, 2020, and 2019. Use of Estimates The preparation of consolidated financial statements in conformity with 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, depreciable life of energy systems; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of financial instruments, equity-based instruments, debt, warrant liabilities and embedded derivatives. Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, management has determined that the Company operates as one operating segment that is focused exclusively on innovative technology services that transform the way energy is distributed and consumed. Net assets outside of the U.S. were less than 10% of total net assets as of December 31, 2021 and 2020. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained at financial institutions. The Company maintains all cash in a highly liquid form to meet current obligations. Short-Term Investments Investments with a maturity date greater than three months that the Company intends to convert to cash or cash equivalents within a year or less are classified as short-term investments in the Company’s consolidated balance sheets. Additionally, in accordance with ASC 320, Investments - Debt Securities, the Company has classified all short-term investments as available-for-sale securities and changes in fair market value are reported in other comprehensive income (loss). The Company utilizes its short-term investments as an alternative form of cash and, if the cash needs arise, could liquidate the investments at any point in time regardless of the contractual maturity of the investments. All of the Company’s investments are tradable on an active market and could be sold at fair value at any point in time. Accounts Receivable, Net Accounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Accounts receivable also include unbilled accounts receivable, which is composed of the monthly energy optimization services provided and recognized but not yet invoiced as of the end of the reporting period. The allowance for doubtful accounts is based on the Company’s best estimate and is determined based upon a variety of factors, including analyses of specific customer receivables, aging, and overall assessments of collectability. Accounts receivable balances are charged against the allowance when the Company believes it is probable that the receivable will not be recovered. The allowance for doubtful accounts balance was $0.1 million as of each December 31, 2021 and 2020. Concentrations of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced any material losses related to receivables from individual customers, or groups of customers during the years ended December 31, 2021, 2020 and 2019. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. Significant Customers A significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
*Total less than 10% for the respective period Inventory Inventory consists of batteries and related components either in-process at the Company’s OEM suppliers or as a finished product at the Company’s warehouse, which are sold and delivered directly to customers under the Company’s partnership arrangements as individual assets or assembled systems. Inventory is stated at lower of cost or net realizable value with cost being determined by the specific identification method. The Company periodically reviews its inventory for potentially slow-moving or obsolete items and writes down specific items in inventory to net realizable value based on its assessment of market conditions. Energy Storage Systems, Net The Company sells energy optimization services to host customers through the use of energy storage systems installed at customer locations. The Company determined that it does not transfer control of these energy storage systems to the customer, which are operated and controlled via the Company’s proprietary cloud-based software (“SaaS”) platform; therefore, these energy storage systems do not qualify as a leased asset. The energy storage systems are stated at cost, less accumulated depreciation and impairment (as applicable). Energy storage systems, net is comprised of equipment costs, which include components such as batteries, inverters, and other electrical equipment, and associated design, installation, and interconnection costs required to begin providing the energy optimization services to customers. Depreciation of the energy storage systems is a component of cost of revenues within the consolidated statements of operations and is calculated using the straight-line method over the estimated useful lives of the energy storage systems, or 10 years, once the respective energy storage systems have been installed and interconnected to the power grid, the Company has received permission to operate, and the Company has begun to provide energy optimization services to the customer (i.e., energy storage system is live). Repairs and maintenance costs are expensed as incurred. Impairment charges related to energy storage system that were determined to no longer be recoverable totaled $4.3 million, $1.4 million and $0.3 million for the years ended December 31, 2021, 2020, and 2019, respectively. Contract Origination Costs, Net Contract origination costs, net is stated at gross contract origination costs less accumulated amortization. Contract origination costs consists of sales commissions earned by the Company’s sales team, as well as related payroll taxes and other relevant fringe benefits that are direct, incremental, and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized on the consolidated balance sheets. The Company deferred incremental costs of obtaining a contract of $3.0 million and $2.6 million during the years ended December 31, 2021 and 2020, respectively. Contract origination costs are amortized over the expected period of benefit. The period of benefit is estimated by considering factors such as the timing of fulfillment of performance obligations, historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in its industry. Amortization of contract costs were $3.9 million, $0.8 million and $0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively, and are included in sales and marketing expense in the accompanying consolidated statements of operations. The Company also recorded $0.5 million, $0.1 million and $0.5 million in impairment losses in sales and marketing expense in the statements of operations related to the contract origination costs that were determined to no longer be recoverable during the years ended December 31, 2021, 2020, and 2019, respectively. Business Combinations The Company accounts for business acquisitions under ASC 805, Business Combinations. The total purchase consideration for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities assumed at the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. Identifiable assets (including intangible assets), liabilities assumed (including contingent liabilities) and noncontrolling interests in an acquisition are measured initially at their fair values at the acquisition date. The Company recognizes goodwill if the fair value of the total purchase consideration and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. The Company recognizes a bargain purchase gain within other income (expense), net, on the consolidated statement of operations if the net fair value of the identifiable assets acquired and the liabilities assumed is in excess of the fair value of the total purchase consideration and any noncontrolling interests. The Company includes the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date. Intangible Assets Internal-use software The Company capitalizes costs incurred in the development of internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life of the software once it is ready for its intended use. The estimated useful life of costs capitalized is generally five years. The Company recorded amortization for internal-use software of $5.0 million, $4.0 million and $3.0 million in cost of revenues in the accompanying consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019, respectively. Finite-lived Intangible Assets Finite-lived intangible assets consist of developed technology acquired in a business combination. Finite-lived intangible assets acquired in business combinations are initially recorded at fair value and subsequently presented net of accumulated amortization. These intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company amortizes its developed technology over five years. These intangible assets were fully amortized as of December 31, 2021. Amortization of these intangible assets was not material for the years ended December 31, 2020 and 2019. Impairment of Long-Lived Assets The Company reviews its long-lived assets, which primarily consist of energy storage systems, right-of- use assets, and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset over its remaining useful life. If such assets are impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. If the useful life is shorter than originally estimated, the Company depreciates or amortizes the remaining carrying value over the revised shorter useful life. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell. Leases The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The classification of the Company’s leases as operating or finance leases along with the initial measurement and recognition of the associated ROU assets and lease liabilities is performed at the lease commencement date. The measurement of ROU assets and lease liabilities is based on the present value of future lease payments over the lease term. The ROU asset also includes the effect of any lease payments made prior to or on lease commencement and excludes lease incentives and initial direct costs incurred, as applicable. As the implicit rate in the Company’s leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Company considers its credit risk, term of the lease, total lease payments and adjusts for the impacts of collateral, as necessary, when calculating its incremental borrowing rates. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise any such options. Rent expense for the Company’s operating leases is recognized on a straight-line basis over the lease term. Variable lease payments are recorded as an expense in the period incurred. The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less. Convertible Preferred Stock Warrant Liabilities The Company evaluates whether its warrants for shares of convertible redeemable preferred stock are freestanding financial instruments that obligate the Company to redeem the underlying preferred stock at some point in the future and determined that each of its outstanding warrants for preferred stock are liability classified. The warrants are subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the change in fair value of warrants and embedded derivatives in the consolidated statements of operations. As discussed in Note 13 - Warrants, upon effectiveness of the Merger, substantially all of the outstanding convertible preferred stock warrants were converted into shares of common stock of Stem. As such, the associated warrant liability was reclassified to additional paid-in-capital upon the Merger and was no longer an outstanding Level 3 financial instrument as of December 31, 2021. Common Stock Warrants The Company evaluates common stock warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company assesses whether common stock warrants are freestanding financial instruments and whether they meet the criteria to be classified in stockholders’ equity, or classified as a liability. Where common stock warrants do not meet the conditions to be classified in equity, the Company assesses whether they meet the definition of a liability under ASC 815. Common stock warrants that meet the definition of a liability are recognized on the balance sheet at fair value. Subsequent changes in their respective fair values are recognized in the consolidated statement of operations at each reporting date. As indicated in Note 13 - Warrants, as part of STPK’s initial public offering, the Company issued Public Warrants and Private Warrants, which upon issuance met the criteria for liability classification under ASC 815. Asset Retirement Obligations The Company recognizes a liability for the fair value of asset retirement obligations (“ARO”) associated with its energy storage systems in the period in which there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the energy storage systems and depreciated over the asset’s remaining useful life. This liability includes costs related to the removal of its energy storage systems at the conclusion of each respective customer contract. Subsequent to initial measurement, the asset retirement liability is accreted each period and such accretion is recognized as an expense in the consolidated statements of operations. If there are changes in the estimated amount or timing of cash flows, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost. Financing Obligations The Company has formed various SPEs to finance the development and construction of its energy storage systems. These SPEs, which are structured as limited liability companies, obtain financing in the form of large upfront payments from outside investors and purchase energy storage systems from the Company under master purchase agreements. The Company accounts for the large upfront payments received from the fund investor as a borrowing by recording the proceeds received as a financing obligation, which will be repaid through host customer payments and incentives received from the utilities that will be received by the investor. The financing obligation is non-recourse once the associated energy storage systems have been placed in-service and the associated customer arrangements have been assigned to the SPE. However, the Company is responsible for any warranties, performance guarantees, accounting, performance reporting, and all other costs associated with the operation of the energy storage systems. Despite such energy storage systems being legally sold to the SPEs, the Company recognizes host customer payments and incentives as revenue during the period as discussed in Note 3 - Revenue. The amounts received by the fund investor from customer payments and incentives are recognized as interest using the effective interest method, and the balance is applied to reduce the financing obligation. The effective interest rate is the interest rate that equates the present value of the cash amounts to be received by a fund investor in relation to the underlying Projects with the present value of the cash amounts paid by the investor to the Company, adjusted for any payments made by the Company. Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of December 31, 2021 and 2020, include cash and cash equivalents, short-term investments, warrant liabilities and embedded derivatives which are bifurcated from the host financial instrument. Revenue Recognition Revenues are recognized when control of the promised goods or services are transferred to the Company’s customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company generates all of its revenues from contracts with its customers. The Company recognizes revenue through two types of arrangements with customers, host customer arrangements and partnership arrangements as described below. Host Customer Arrangements Host customer contracts are generally entered into with commercial entities that have traditionally relied on power supplied directly from the grid. Host customer arrangements consist of a promise to provide energy optimization services through the Company’s proprietary SaaS platform coupled with a dedicated energy storage system owned and controlled by the Company throughout the term of the contract. The host customer does not obtain legal title to, or ownership of the dedicated energy storage system at any point in time. The host customer is the end consumer of the energy that directly benefits from the energy optimization services provided by the Company. The term for the Company’s contracts with host customers generally ranges from 5 to 10 years, which may include certain renewal options to extend the initial contract term or certain termination options to reduce the initial contract term. Although the Company installs an energy storage system at the host customer site in order to provide the energy optimization services, the Company directs how and for what purpose the asset is used through the operation of its SaaS platform and, as such, retains control of the energy storage system; therefore, the contract does not contain a lease. The Company determines the various energy optimization services provided throughout the term of the contract, which may include services such as remote monitoring, performance reporting, preventative maintenance and other ancillary services necessary for the safe and reliable operation of the energy storage system, are part of a combined output of energy optimization services and the Company provides a single distinct combined performance obligation representing a series of distinct days of services. The Company determines the transaction price at the outset of the arrangement, primarily based on the contractual payment terms dictated by the contract with the customer. Fees charged to customers for energy optimization services generally consist of recurring fixed monthly payments throughout the term of the contract. In certain arrangements, the transaction price may include incentive payments that are earned by the host customer from utility companies in relation to the services provided by the Company. Under such arrangements, the rights to the incentive payments are assigned by the host customer to the Company. These incentives may be in the form of fixed upfront payments, variable monthly payments, or annual performance-based payments over the first five years of the customer contract term. Incentive payments may be contingent on approval from utility companies or actual future performance of the energy storage system. Substantially all of the Company’s arrangements provide customers the unilateral ability to terminate for convenience prior to the conclusion of the stated contractual term or the contractual term is shorter than the estimated benefit period, which the Company has determined to be 10 years based on the estimated useful life of the underlying energy storage systems and the period over which the customer can benefit from the energy optimization services utilizing such energy storage systems. In these instances, the Company determined that upfront incentive payments received from its customers represent a material right that is, in effect, an advance payment for future energy optimization services to be recognized throughout the estimated benefit period. In contracts where the customer does not have the unilateral ability to terminate for convenience without a penalty during the estimated benefit period, the Company determined the upfront incentive payments do not represent a material right for services provided beyond the initial contractual period and are therefore a component of the initial transaction price. The Company revisits its estimate of the benefit period each reporting period. The Company’s contracts with host customers do not contain a significant financing component. The Company transfers control of its energy optimization services to its customers continuously throughout the term of the contract (a stand-ready obligation) and revenue is recognized ratably as control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be contractually entitled to in exchange for its services. Monthly incentive payments based on the performance of the energy storage system are allocated to the distinct month in which they are earned because the terms of the payments relate specifically to the outcome from transferring the distinct time increment (month) of service and because such amounts reflect the fees to which the Company expects to be entitled for providing energy optimization services each period, consistent with the allocation objective. Annual variable performance- based payments are estimated at the inception in the transaction price using the expected value method, which takes into consideration historical experience, current contractual requirements, specific known market events and forecasted energy storage system performance patterns, and the Company recognizes such payments ratably using a time-based measure of progress of days elapsed over the term of the contract to the extent that it is probable that a significant reversal of the cumulative revenue recognized will not occur in a future period. At the end of each reporting period, the Company reassesses its estimate of the transaction price. The Company does not begin recognition of revenue until the energy storage system is live (i.e., provision of energy optimization services has commenced) or, as it relates to incentive payments, when approval has been received from the utility company, if later. Partnership Arrangements Partnership arrangements consist of promises to transfer inventory in the form of an energy storage system to a “solar plus storage” project developer and separately provide energy optimization services as described previously to the ultimate owner of the project after the developer completes the installation of the project. Under partnership arrangements, the Company’s customer is the solar plus storage project developer. The customer obtains legal title to along with ownership and control of the inventory upon delivery and the customer is responsible for the installation of the project. Once installation of the project is complete, the owner of the solar plus storage project provides energy to the end consumer through a separate contractual arrangement directly with the end consumer. The term for the Company’s contracts with customers under partnership arrangements generally ranges from 10 to 20 years. The Company determined the promise to deliver the inventory as a component of the solar plus storage project for which the customer is responsible to develop is a separate and distinct performance obligation from the promise to provide energy optimization services. The Company determines the transaction price at the outset of the arrangement, primarily based on the contractual payment terms dictated by the contract with the customer. Fees charged for the sale of inventory generally consist of fixed fees payable upon or shortly after successful delivery to the customer. Fees charged to customers for energy optimization services consist of recurring fixed monthly payments throughout the term of the contract. The Company is responsible for designing, procuring, delivering and ensuring the proper components are provided in accordance with the requirements of the contract. Although the inventory is purchased by the Company from a third-party manufacturer, the Company determined it obtains control of the inventory prior to delivery to the customer and is the principal in the arrangement. The Company is fully responsible for responding to and correcting any customer issues related to the delivery of the inventory. The Company holds title and assumes all risks of loss associated with the inventory until the customer accepts the inventory. The Company is primarily responsible for fulfilling the delivery of the inventory to the customer, assumes substantial inventory risks and has discretion in the pricing charged to the customer. The Company has not entered into any partnership arrangements where it is not the principal in the transaction. The Company allocates revenue between the hardware and energy storage services performance obligations based on the standalone selling price of each performance obligation. The standalone selling price for the hardware is established based on observable pricing. The standalone selling price for the energy optimization services is established using a residual value approach due to the significant variability in the services provided to each individual customer based on the specific requirements of each individual project and the lack of observable standalone sales of such services. The Company’s partnership arrangements do not contain a significant financing component. The Company transfers control of the inventory upon delivery and simultaneous transfer of title to the customer. The Company transfers control of its energy optimization services to its customers continuously throughout the term of the contract (a stand-ready obligation), which does not commence until the customer successfully completes the installation of the project. As a result, the time frame between when the Company transfers control of the inventory to the customer upon delivery is generally several months, and can be in excess of one year, before the Company is required to perform any subsequent energy optimization services. Revenue is recognized ratably as control of these services is transferred to its customers based on a time-based output measure of progress of days elapsed over the term of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for its services. In some partnership arrangements, the Company charges shipping fees for the inventory. The Company accounts for shipping as a fulfillment activity, since control transfers to the customer after the shipping is complete and includes such amounts within cost of revenue. Cost of Revenue Cost of Hardware Revenue Cost of revenue related to the sale of hardware includes the cost of the hardware sold to project developers, which generally includes the cost to purchase the hardware from a manufacturer, shipping, and other costs required to fulfill the Company’s obligation to deliver the hardware to the customer location. Cost of revenue may also include any impairment of hardware held in inventory for sale to a customer. Cost of revenue related to the sale of hardware is recognized when the delivery of the hardware is completed. Cost of Service Revenue Cost of revenue related to energy optimization services includes depreciation of the cost of energy storage systems associated with long-term host customer contracts, which includes capitalized fulfillment costs, such as installation services, permitting and other related costs. Cost of revenue may also include any impairment of energy storage systems along with energy storage system maintenance costs associated with the ongoing services provided to customers and other amounts not qualifying for capitalization pursuant to the Company’s internal use software capitalization policy. Cost of revenue is recognized as the energy optimization and other supporting services are provided to the Company’s customers throughout the term of the contract. Sales and Marketing Sales and marketing expense consists primarily of payroll and other related personnel costs, including stock-based compensation, employee benefits, and travel for the Company’s sales & marketing department. These costs are recognized in the period incurred. Advertising expenses for the years ended December 31, 2021, 2020, and 2019 were not material. Research and Development Research and development expense consists primarily of payroll and other related personnel costs for engineers and third parties engaged in the design and development of products, third-party software, and technologies, including salaries, bonus and stock-based compensation expense, project material costs, services, and depreciation. The Company expenses research and development costs as they are incurred. General and Administrative General and administrative expense consists of payroll and other related personnel costs, including salaries, bonuses and stock-based compensation for executive management, legal, finance, and others. In addition, general and administrative expense includes fees for professional services and occupancy costs. Stock-Based Compensation The Company recognizes stock-based compensation expense related to employees over the requisite service period based on the grant-date fair value of the awards. The fair value of options granted is estimated using the Black-Scholes option valuation model. The Company recognizes the grant-date fair value of an award as compensation expense on a straight-line basis over the requisite service period, which typically corresponds to the vesting period for the award. The Company elects to account for forfeitures as they occur and, upon forfeiture of an award prior to vesting, the Company reverses any previously recognized compensation expense related to that award. Income Taxes The Company uses the asset and liability method of accounting for income taxes based on ASC 740, Accounting for Income Taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts and the tax basis of existing assets and liabilities. The Company records a valuation allowance to reduce tax assets to an amount for which realization is more likely than not. There are certain charges that are not deductible for tax purposes. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. The Company recognizes the tax benefit from uncertain tax positions in accordance with GAAP, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s tax return. No liability related to uncertain tax positions has been recognized in the financial statements. The Company includes interest and penalties for uncertain tax positions in the financial statements as a component of income tax expense. No accrual has been deemed necessary as of December 31, 2021 and 2020. Foreign Currency Translation The Company’s foreign subsidiaries financial position and results of operations are measured using the local currency as the functional currency. The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. Assets and liabilities of foreign subsidiaries are translated at exchange rates in effect as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. Translation adjustments are recorded within accumulated other comprehensive loss, a separate component of stockholders’ equity (deficit). Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted- average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible notes, warrants, restricted stock units (“RSUs”), and common stock options are considered to be potentially dilutive securities. As the Company was in a net loss position for the years ended December 31, 2021, 2020, and 2019, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders because the effects of potentially dilutive securities are antidilutive. Recently Adopted Accounting Standards In August 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The intent of this pronouncement is to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software as defined in ASC 350-40. Under ASU 2018-15, the capitalized implementation costs related to a cloud computing arrangement will be amortized over the term of the arrangement and all capitalized implementation amounts will be required to be presented in the same line items of the financial statements as the related hosting fees. ASU 2018-15 is effective for public and private companies’ fiscal years beginning after December 15, 2019, and December 15, 2020, respectively, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2018-15 as of January 1, 2021. The adoption did not have a material effect on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 was effective for public entities for interim and annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 will be effective for private entities for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 effective May 1, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Standards The Company will adopt Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, effective January 1, 2022 using the modified retrospective approach. As a result of the adoption of ASU 2020-06, the 2028 Convertible Notes will no longer bifurcated into separate liability and equity components in the March 31, 2022 condensed consolidated balance sheet. Rather, the $460.0 million principal amount of the Company’s 2028 Convertible Notes will be classified only as a liability prospectively in the balance sheet. Upon adoption of ASU 2020-06, an adjustment will be recorded to the convertible notes liability component, equity component (additional paid-in-capital) and retained earnings. The cumulative effect of the change will be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The comparative information will not restated and will continue to be presented according to accounting standards in effect for those periods. The adjustment will be calculated based on the carrying amount of the 2028 Convertible Notes as if it had always been treated only as a liability. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. In June 2016, the FASB issued ASU 2016-13, Financial instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, which amends the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. This ASU is effective for public and private companies’ fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and December 15, 2022, respectively. As the Company is no longer an emerging growth company as of January 1, 2022, the Company plans to adopt ASU 2016-13 effective on such date, utilizing the modified retrospective transition method. The Company believes that adoption of ASU 2016-13 will not have a material impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. As indicated in Note 21 - Subsequent Events, the Company completed the acquisition of AlsoEnergy on February 1, 2022. Therefore, the Company plans to adopt ASU 2021-08 on a prospective basis effective January 1, 2022 and is currently assessing the effect, if any, the guidance will have on the Company's consolidated financial statements.
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REVENUE |
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REVENUE | REVENUE Disaggregation of Revenue The following table provides information on the disaggregation of revenue as recorded in the consolidated statements of operations (in thousands):
Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not been recognized, which includes contract liabilities (deferred revenue) and amounts that will be billed and recognized as revenue in future periods. As of December 31, 2021, the Company had $217.8 million of remaining performance obligations, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages):
Contract Balances Deferred revenue primarily includes cash received in advance of revenue recognition related to energy optimization services and incentives. The following table presents the changes in the deferred revenue balance (in thousands):
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SHORT-TERM INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS The following tables summarize the estimated fair value of the Company’s cash equivalents and debt securities and the gross unrealized holding gains and losses as of December 31, 2021 (in thousands):
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. At December 31, 2021 and December 31, 2020, the carrying amount of accounts receivable, other current assets, accounts payable, and accrued and other current liabilities approximated their estimated fair value due to their relatively short maturities. There were no assets or liabilities classified as Level 3 as of December 31, 2021. The following table provides the financial instruments measured at fair value on a recurring basis (in thousands):
The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices. The Company’s short-term investments consist of available-for-sale securities and are classified as Level 2 because their value is based on valuations using significant inputs derived from or corroborated by observable market data. The convertible preferred stock warrant liabilities are defined as Level 3 in the fair value hierarchy as the valuations are based on significant unobservable inputs, which reflect the Company’s own assumptions incorporated in valuation techniques used to determine fair value; further discussion of these assumptions is set forth below. There were no transfers into or out of Level 3 of the fair value hierarchy during the periods presented. 2028 Convertible Notes In November 2021, the Company issued $460.0 million aggregate principal amount of its 2028 Convertible Notes. Upon issuance, the Company bifurcated the 2028 Convertible Notes for accounting purposes between a liability component and an equity component. The liability component was determined using a binomial lattice model by estimating the fair value of a hypothetical issuance of an identical offering excluding the conversion feature of the 2028 Convertible Notes. The initial carrying amount of the equity component was calculated as the difference between the liability component and the face value of the 2028 Convertible Senior Notes (See Note 12 - Convertible Promissory Notes). The estimated fair value of the 2028 Convertible Notes, which differs from their carrying value, is influenced by interest rates, the price of the Company’s common stock, the volatility, the expected term, and the prices for the notes observed in the market trading. The estimated fair value of the 2028 Convertible Notes, which are considered Level 2 financial instruments, was $324.8 million at issuance on November 22, 2021, and $447.8 million as of December 31, 2021. Capped Call Options with respect to the 2028 Senior Notes In connection with the issuance of the 2028 Convertible Notes, the Company entered into the capped call options with certain financial institutions. The capped calls cover 15,730,390 shares of common stock (subject to anti-dilution and certain other adjustments), which is the same number of shares of common stock that initially underlie the 2028 Convertible Notes. The Capped Calls have an initial strike price of approximately $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes, and have a cap price of approximately $49.6575 per share (See Note 12 - Convertible Promissory Notes). The strike price and cap price are subject to anti-dilution adjustments generally similar to those applicable to the 2028 Convertible Notes. These instruments meet certain accounting criteria to be classified in stockholders’ equity (deficit), and are not subsequently remeasured as long as the conditions for equity classification continue to be met. Convertible Preferred Stock Warrant Liabilities As discussed in Note 13 - Warrants, upon effectiveness of the Merger, substantially all of the outstanding convertible preferred stock warrants were converted into shares of common stock of Stem. As such, the associated warrant liability was reclassified to additional paid-in-capital upon the Merger and was no longer an outstanding Level 3 financial instrument as of December 31, 2021. The fair value of the convertible preferred stock warrants as of December 31, 2020 was determined using the Black-Scholes method as well as a discount for lack of marketability. Black-Scholes inputs used to value the warrants are based on information from purchase agreements and within valuation reports prepared by an independent third party for the Company. Inputs include exercise price, selection of guideline public companies, volatility, fair value of common or preferred stock, expected dividend rate and risk-free interest rate. The key assumptions used for the valuation of the preferred stock warrant liabilities upon remeasurement were as follows:
The following table presents the changes in the liability for the Company’s warrants during the years ended December 31, 2021 and 2020 (in thousands):
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Goodwill consists of the following (in thousands):
Intangible Assets, Net Intangible assets, net, consists of the following (in thousands):
Amortization expense for intangible assets was $5.3 million, $4.5 million and $3.1 million for the years ended December 31, 2021, 2020, and 2019, respectively, of which substantially all represents amortization of internally developed software recognized in cost of goods sold in the consolidated statements of operations.
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company leases and subleases certain office spaces with lease terms ranging from 3 to 8 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional five years. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases as the Company did not consider the exercise of these options to be reasonably certain. The Company performed evaluations of its contracts and determined each of its identified leases are operating leases. For the years ended December 31, 2021, 2020, and 2019, the Company incurred $1.3 million, $0.8 million and $1.2 million, respectively, of rent expense included in operating expenses in the consolidated statements of operations in relation to its operating leases, inclusive of short-term and variable lease expense which was immaterial. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2021, 2020, and 2019 was $0.5 million $0.7 million and $0.9 million, respectively, and was included in net cash used in operating activities in the Company’s consolidated statements of cash flows. As of December 31, 2021, future payments associated with the Company’s operating lease liabilities were as follows (in thousands):
Reported as of December 31, 2021 and 2020 (in thousands):
The following summarizes additional information related to operating leases:
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ASSET RETIREMENT OBLIGATION |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSET RETIREMENT OBLIGATION | ASSET RETIREMENT OBLIGATION The information below details the asset retirement obligation for the years ended December 31, 2021 and 2020 as follows (in thousands):
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ENERGY STORAGE SYSTEMS, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ENERGY STORAGE SYSTEMS, NET | ENERGY STORAGE SYSTEMS, NET Energy Storage Systems, Net Energy storage systems, net, consists of the following (in thousands):
Depreciation expense for energy storage systems was approximately $14.4 million, $13.9 million and $9.7 million for the years ended December 31, 2021, 2020, and 2019, respectively. Depreciation expense is recognized in cost of service revenue.
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BALANCE SHEET COMPONENTS |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET COMPONENTS | BALANCE SHEET COMPONENTS Inventory Inventory consists of the following (in thousands):
Other Current Assets Other current assets consist of the following (in thousands):
Other Noncurrent Assets Other noncurrent assets consist of the following (in thousands):
Depreciation expense for property and equipment was immaterial for each of the years ended December 31, 2021, 2020 and 2019. Accrued Liabilities Accrued liabilities consist of the following (in thousands):
Other Current Liabilities Other current liabilities consist of the following (in thousands):
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NOTES PAYABLE |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE | NOTES PAYABLE Revolving Loan Due to SPE Member In April 2017, the Company entered into a revolving loan agreement with an affiliate of a member of certain of the Company’s special purpose entities (“SPE”). This agreement was, from time to time, subsequently amended. The purpose of this revolving loan agreement was to finance the Company’s purchase of hardware for its various energy storage system projects. The agreement had a total revolving loan capacity of $45.0 million that bore fixed interest at 10% with a maturity date of June 2020. In May 2020, concurrent with the 2020 Credit Agreement discussed below, the Company entered into an amendment to the revolving loan agreement, which reduced the loan capacity to $35.0 million and extended the maturity date to May 2021. The amendment increased the fixed interest rate for any borrowings outstanding more than nine months to 14% thereafter. Additionally, under the original terms of the revolving loan agreement, the Company was able to finance 100% of the value of the hardware purchased up to the total loan capacity. The amendment reduced the advance rate to 85%, with an additional reduction to 70% in August 2020. The amendment was accounted for as a modification of the debt, which did not have a material impact on the consolidated financial statements. As of December 31, 2020, the Company had $7.4 million outstanding under the revolving loan agreement. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. The facility was terminated after the repayment in April 2021. Term Loan Due to SPE Member In December 2018, the Company entered into a term loan in the amount of $13.3 million with an affiliate of a member of certain SPEs with the Company. The term loan bore fixed interest of 12.5% on the outstanding principal balance with a final balloon payment of $3.0 million due at the maturity date of June 30, 2020. In May 2020, the Company repaid the remaining outstanding balance of $5.9 million with the proceeds received through the 2020 Credit Agreement discussed below. Term Loan Due to Former Non-Controlling Interest Holder In June 2018, the Company acquired the outstanding member interests of an entity controlled by the Company for $8.1 million. The Company financed this acquisition by entering into a term loan agreement with the noncontrolling member bearing fixed interest of 4.5% per quarter (18.0% per annum) on the outstanding principal balance. The loan required fixed quarterly payments throughout the term of the loan, which was scheduled to be paid in full by April 1, 2026. In May 2020, the Company amended the term loan and, using the proceeds from the 2020 Credit Agreement discussed below, prepaid $1.5 million of principal and interest on the note, of which $1.0 million was towards the outstanding principal balance, thereby reducing the fixed quarterly payment due to the lender. In relation to this amendment, the Company was required to issue warrants for 400,000 shares of common stock resulting in a discount to the term loan of $0.2 million. As of December 31, 2020, the outstanding balance was $5.8 million. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. Upon prepayment of this facility, the Company incurred $2.6 million in prepayment penalties that were recorded to loss on extinguishment of debt in the Company’s statement of operations. The facility was terminated after the repayment in April 2021. 2020 Credit Agreement In May 2020, the Company entered into a credit agreement (“2020 Credit Agreement”) with a new lender that provided the Company with proceeds of $25.0 million to provide the Company with access to working capital towards the purchase of energy storage system equipment. The 2020 Credit Agreement has a maturity date of the earlier of (1) May 2021, (2) the maturity date of the revolving loan agreement, or (3) the maturity date of the Pre-Merger Convertible Promissory Notes discussed below in Note 12 - Convertible Promissory Notes. The loan bore interest of 12% per annum, of which 8% was paid in cash and 4% added back to principal of the loan balance every quarter. The Company used a portion of the proceeds towards payments associated with existing debt as previously discussed. As of December 31, 2020, the outstanding balance was $25.6 million. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. Upon prepayment of this facility, the Company incurred $1.4 million in prepayment penalties that were recorded to loss on extinguishment of debt in the Company’s statement of operations. The facility was terminated after the repayment in April 2021. 2021 Credit Agreement In January 2021, the Company, through a wholly owned Canadian entity, entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement is structured on a non-recourse basis and the system will be operated by the Company. The credit agreement has a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under this credit agreement is determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. As of December 31, 2021, the outstanding balance was $1.9 million. The Company was in compliance with all covenants contained in the 2021 Credit Agreement as of December 31, 2021. The Company’s outstanding debt consisted of the following as of December 31, 2021 (in thousands):
As of December 31, 2020, the Company had various convertible notes outstanding to investors. The Company refers to the collective group of all such note instruments as the “Pre-Merger Convertible Promissory Notes.” As of December 31, 2020, these Pre-Merger Convertible Promissory Notes had a balance of $67.6 million. During the year ended December 31, 2021, the Company issued additional convertible notes, including convertible promissory notes issued and sold in January 2021 (the “Q1 2021 Convertible Notes”) and the 2028 Convertible Notes. Upon effectiveness of the Merger on April 28, 2021, all outstanding Pre-Merger Convertible Promissory Notes were converted to common stock and cancelled (see “—Conversion and Cancellation of Convertible Promissory Notes Upon Merger” below). As of December 31, 2021, the Pre-Merger Convertible Promissory Notes and the Q1 2021 Convertible Notes were no longer outstanding. Q1 2021 Convertible Notes In January 2021, the Company issued and sold the Q1 2021 Convertible Notes under the same terms as the then existing Pre-Merger Convertible Promissory Notes to various investors with aggregate gross proceeds of $1.1 million. The Company evaluated the conversion option within the Q1 2021 Convertible Notes and determined the effective conversion price was beneficial to the note holders. Conversion and Cancellation of Convertible Promissory Notes Upon Merger Immediately prior to the effectiveness of the Merger, the entire balance of the Company’s outstanding Pre-Merger Convertible Promissory Notes issued by Legacy Stem automatically converted into shares of Legacy Stem Common Stock. Upon the effectiveness of the Merger, these shares of Legacy Stem Common Stock automatically converted into 10,921,548 shares of common stock of Stem. The balance associated with the outstanding Pre-Merger Convertible Promissory Notes totaling $77.7 million, including $7.7 million of interest accrued on the notes through the date of Merger, was reclassified to additional paid-in-capital. The unamortized portion of the debt discount associated with the outstanding Q1 2021 Convertible Notes totaling $1.1 million was fully expensed to loss on extinguishment of debt on the Company’s statement of operations. 2028 Convertible Notes and Capped Call Options 2028 Convertible Notes On November 22, 2021, the Company issued $460.0 million aggregate principal amount of its 2028 Convertible Notes in a private placement offering to qualified institutional buyers (the “Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2028 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.5% per year, payable in cash semi-annually in arrears in June and December of each year, beginning in June 2022. The notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million, after deducting the Initial Purchasers’ discounts and debt issuance costs. To minimize the impact of potential dilution to the Company’s common stockholders upon conversion of the 2028 Convertible Notes, the Company entered into separate capped calls transactions (the “Capped Calls”) as described below. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2028 Convertible Notes by allocating the proceeds between the liability component and the equity component, due to the Company's ability to settle the 2028 Convertible Notes in cash, its common Stock, or a combination of cash and common Stock at the option of the Company. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The equity component of the 2028 Convertible Notes was recognized as a debt discount and represents the difference between the gross proceeds from the issuance of the 2028 Convertible Notes and the fair value of the liability component of the 2028 Convertible Notes on the date of issuance. The debt discount is amortized to interest expense using the effective interest method over approximately seven years, or the expected life of the 2028 Convertible Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. After allocating the proceeds of the liability and equity components, the Company further allocated $14.3 million initial purchasers’ debt discount and debt issuance cost of $12.4 million and $1.9 million, respectively. The initial purchaser’s discount and debt issuance costs primarily consisted of underwriters, advisory, legal, and accounting fees. These costs were allocated to the debt and equity components based on the allocation of the proceeds as follows (in thousands):
The portion allocated to the debt component is amortized to interest expense using the effective interest method over the expected life of the 2028 Convertible Notes, or approximately its seven-year term. The effective interest rate on the liability component of the 2028 Convertible Notes for the period from the date of issuance through December 2028 is 5.96%, which remains unchanged from the date of issuance. The outstanding 2028 Convertible Notes balances as of December 31, 2021, are summarized in the following table (in thousands):
At the original issuance date, the fair value of the debt component of the Company’s 2028 Convertible Notes was $324.8 million and the estimated fair value of the equity component was $135.2 million, as measured on the date of issuance, resulting in a total fair value of $460.0 million for the 2028 Convertible Notes. The 2028 Convertible Notes were priced at par at the valuation date resulting in the fair value of the 2028 Convertible Notes equal to the principal amount of $460.0 million. The fair value of the equity component has been calculated as the residual amount between the fair value of the 2028 Convertible Notes and the fair value of the debt component. The following table presents total interest expense recognized related to the 2028 Convertible Notes during the year ended December 31, 2021 (in thousands):
Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the Capped Calls. The Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The Capped Calls are considered separate transactions entered into by and between the Company and the Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the Capped Calls. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity (deficit) and are not subsequently remeasured as long as the conditions for equity classification continue to be met.
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CONVERTIBLE PROMISSORY NOTES | NOTES PAYABLE Revolving Loan Due to SPE Member In April 2017, the Company entered into a revolving loan agreement with an affiliate of a member of certain of the Company’s special purpose entities (“SPE”). This agreement was, from time to time, subsequently amended. The purpose of this revolving loan agreement was to finance the Company’s purchase of hardware for its various energy storage system projects. The agreement had a total revolving loan capacity of $45.0 million that bore fixed interest at 10% with a maturity date of June 2020. In May 2020, concurrent with the 2020 Credit Agreement discussed below, the Company entered into an amendment to the revolving loan agreement, which reduced the loan capacity to $35.0 million and extended the maturity date to May 2021. The amendment increased the fixed interest rate for any borrowings outstanding more than nine months to 14% thereafter. Additionally, under the original terms of the revolving loan agreement, the Company was able to finance 100% of the value of the hardware purchased up to the total loan capacity. The amendment reduced the advance rate to 85%, with an additional reduction to 70% in August 2020. The amendment was accounted for as a modification of the debt, which did not have a material impact on the consolidated financial statements. As of December 31, 2020, the Company had $7.4 million outstanding under the revolving loan agreement. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. The facility was terminated after the repayment in April 2021. Term Loan Due to SPE Member In December 2018, the Company entered into a term loan in the amount of $13.3 million with an affiliate of a member of certain SPEs with the Company. The term loan bore fixed interest of 12.5% on the outstanding principal balance with a final balloon payment of $3.0 million due at the maturity date of June 30, 2020. In May 2020, the Company repaid the remaining outstanding balance of $5.9 million with the proceeds received through the 2020 Credit Agreement discussed below. Term Loan Due to Former Non-Controlling Interest Holder In June 2018, the Company acquired the outstanding member interests of an entity controlled by the Company for $8.1 million. The Company financed this acquisition by entering into a term loan agreement with the noncontrolling member bearing fixed interest of 4.5% per quarter (18.0% per annum) on the outstanding principal balance. The loan required fixed quarterly payments throughout the term of the loan, which was scheduled to be paid in full by April 1, 2026. In May 2020, the Company amended the term loan and, using the proceeds from the 2020 Credit Agreement discussed below, prepaid $1.5 million of principal and interest on the note, of which $1.0 million was towards the outstanding principal balance, thereby reducing the fixed quarterly payment due to the lender. In relation to this amendment, the Company was required to issue warrants for 400,000 shares of common stock resulting in a discount to the term loan of $0.2 million. As of December 31, 2020, the outstanding balance was $5.8 million. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. Upon prepayment of this facility, the Company incurred $2.6 million in prepayment penalties that were recorded to loss on extinguishment of debt in the Company’s statement of operations. The facility was terminated after the repayment in April 2021. 2020 Credit Agreement In May 2020, the Company entered into a credit agreement (“2020 Credit Agreement”) with a new lender that provided the Company with proceeds of $25.0 million to provide the Company with access to working capital towards the purchase of energy storage system equipment. The 2020 Credit Agreement has a maturity date of the earlier of (1) May 2021, (2) the maturity date of the revolving loan agreement, or (3) the maturity date of the Pre-Merger Convertible Promissory Notes discussed below in Note 12 - Convertible Promissory Notes. The loan bore interest of 12% per annum, of which 8% was paid in cash and 4% added back to principal of the loan balance every quarter. The Company used a portion of the proceeds towards payments associated with existing debt as previously discussed. As of December 31, 2020, the outstanding balance was $25.6 million. In April 2021, the Company repaid the remaining outstanding balance of this facility with the proceeds received from the Merger. Upon prepayment of this facility, the Company incurred $1.4 million in prepayment penalties that were recorded to loss on extinguishment of debt in the Company’s statement of operations. The facility was terminated after the repayment in April 2021. 2021 Credit Agreement In January 2021, the Company, through a wholly owned Canadian entity, entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement is structured on a non-recourse basis and the system will be operated by the Company. The credit agreement has a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under this credit agreement is determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. As of December 31, 2021, the outstanding balance was $1.9 million. The Company was in compliance with all covenants contained in the 2021 Credit Agreement as of December 31, 2021. The Company’s outstanding debt consisted of the following as of December 31, 2021 (in thousands):
As of December 31, 2020, the Company had various convertible notes outstanding to investors. The Company refers to the collective group of all such note instruments as the “Pre-Merger Convertible Promissory Notes.” As of December 31, 2020, these Pre-Merger Convertible Promissory Notes had a balance of $67.6 million. During the year ended December 31, 2021, the Company issued additional convertible notes, including convertible promissory notes issued and sold in January 2021 (the “Q1 2021 Convertible Notes”) and the 2028 Convertible Notes. Upon effectiveness of the Merger on April 28, 2021, all outstanding Pre-Merger Convertible Promissory Notes were converted to common stock and cancelled (see “—Conversion and Cancellation of Convertible Promissory Notes Upon Merger” below). As of December 31, 2021, the Pre-Merger Convertible Promissory Notes and the Q1 2021 Convertible Notes were no longer outstanding. Q1 2021 Convertible Notes In January 2021, the Company issued and sold the Q1 2021 Convertible Notes under the same terms as the then existing Pre-Merger Convertible Promissory Notes to various investors with aggregate gross proceeds of $1.1 million. The Company evaluated the conversion option within the Q1 2021 Convertible Notes and determined the effective conversion price was beneficial to the note holders. Conversion and Cancellation of Convertible Promissory Notes Upon Merger Immediately prior to the effectiveness of the Merger, the entire balance of the Company’s outstanding Pre-Merger Convertible Promissory Notes issued by Legacy Stem automatically converted into shares of Legacy Stem Common Stock. Upon the effectiveness of the Merger, these shares of Legacy Stem Common Stock automatically converted into 10,921,548 shares of common stock of Stem. The balance associated with the outstanding Pre-Merger Convertible Promissory Notes totaling $77.7 million, including $7.7 million of interest accrued on the notes through the date of Merger, was reclassified to additional paid-in-capital. The unamortized portion of the debt discount associated with the outstanding Q1 2021 Convertible Notes totaling $1.1 million was fully expensed to loss on extinguishment of debt on the Company’s statement of operations. 2028 Convertible Notes and Capped Call Options 2028 Convertible Notes On November 22, 2021, the Company issued $460.0 million aggregate principal amount of its 2028 Convertible Notes in a private placement offering to qualified institutional buyers (the “Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2028 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.5% per year, payable in cash semi-annually in arrears in June and December of each year, beginning in June 2022. The notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million, after deducting the Initial Purchasers’ discounts and debt issuance costs. To minimize the impact of potential dilution to the Company’s common stockholders upon conversion of the 2028 Convertible Notes, the Company entered into separate capped calls transactions (the “Capped Calls”) as described below. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2028 Convertible Notes by allocating the proceeds between the liability component and the equity component, due to the Company's ability to settle the 2028 Convertible Notes in cash, its common Stock, or a combination of cash and common Stock at the option of the Company. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The equity component of the 2028 Convertible Notes was recognized as a debt discount and represents the difference between the gross proceeds from the issuance of the 2028 Convertible Notes and the fair value of the liability component of the 2028 Convertible Notes on the date of issuance. The debt discount is amortized to interest expense using the effective interest method over approximately seven years, or the expected life of the 2028 Convertible Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. After allocating the proceeds of the liability and equity components, the Company further allocated $14.3 million initial purchasers’ debt discount and debt issuance cost of $12.4 million and $1.9 million, respectively. The initial purchaser’s discount and debt issuance costs primarily consisted of underwriters, advisory, legal, and accounting fees. These costs were allocated to the debt and equity components based on the allocation of the proceeds as follows (in thousands):
The portion allocated to the debt component is amortized to interest expense using the effective interest method over the expected life of the 2028 Convertible Notes, or approximately its seven-year term. The effective interest rate on the liability component of the 2028 Convertible Notes for the period from the date of issuance through December 2028 is 5.96%, which remains unchanged from the date of issuance. The outstanding 2028 Convertible Notes balances as of December 31, 2021, are summarized in the following table (in thousands):
At the original issuance date, the fair value of the debt component of the Company’s 2028 Convertible Notes was $324.8 million and the estimated fair value of the equity component was $135.2 million, as measured on the date of issuance, resulting in a total fair value of $460.0 million for the 2028 Convertible Notes. The 2028 Convertible Notes were priced at par at the valuation date resulting in the fair value of the 2028 Convertible Notes equal to the principal amount of $460.0 million. The fair value of the equity component has been calculated as the residual amount between the fair value of the 2028 Convertible Notes and the fair value of the debt component. The following table presents total interest expense recognized related to the 2028 Convertible Notes during the year ended December 31, 2021 (in thousands):
Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the Capped Calls. The Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The Capped Calls are considered separate transactions entered into by and between the Company and the Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the Capped Calls. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity (deficit) and are not subsequently remeasured as long as the conditions for equity classification continue to be met.
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WARRANTS |
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Equity [Abstract] | |
WARRANTS | WARRANTS Legacy Stem Warrants Since inception the Company has issued warrants to purchase shares of Legacy Stem’s preferred stock in conjunction with various debt financings. See Note 5 - Fair Value Measurements, for further information regarding fair value measurements associated with the resulting warrant liabilities, which are remeasured on a recurring basis each period. The Company has also issued warrants to purchase shares of Legacy Stem’s common stock. Upon effectiveness of the Merger, the Company had 50,207,439 warrants outstanding, of which substantially all were converted into 2,759,970 shares of common stock of Stem. Upon conversion of the warrants, the existing warrant liabilities were remeasured to fair value resulting in a gain on remeasurement of $100.9 million and a total warrant liability of $60.6 million, which was then reclassified to additional paid-in-capital. As of December 31, 2021, there were 23,673 Legacy Stem Warrants outstanding. These instruments are exercisable into the Company’s common stock and are equity classified. Public Warrants and Private Placement Warrants As part of STPK’s initial public offering, under the Warrant Agreement dated as of August 20, 2020 (the “Warrant Agreement”) and, prior to the effectiveness of the Merger, STPK issued 12,786,168 warrants each of which entitled the holder to purchase one share of common stock at an exercise price of $11.50 per share of common stock (the “Public Warrants”). Simultaneously with the closing of the Initial Public Offering, STPK completed the private sale of 7,181,134 million warrants to STPK’s sponsor (the “Private Warrants”). Upon issuance, these warrants met the criteria for liability classification. Upon the effectiveness of the Merger, Stem assumed the outstanding Public Warrants and Private Warrants, which continued to meet the criteria for liability classification, resulting in assumed warrant liabilities of $185.9 million and $116.7 million, respectively, or a total warrant liability of $302.6 million. Such warrants were initially recorded at fair value and remeasured to fair value at each reporting period. The fair value of the Private Warrants was determined using the Black-Scholes method as well as a discount for lack of marketability. Black-Scholes inputs used to value the warrants are based on information from purchase agreements and within valuation reports prepared by an independent third party for the Company. Inputs include exercise price, selection of guideline public companies, volatility, fair value of common stock, expected dividend rate and risk-free interest rate. On June 25, 2021, the Company entered into an exchange agreement (the “Exchange Agreement”) with the holders of the 7,181,134 outstanding Private Placement Warrants, pursuant to which such holders received 4,683,349 shares of the Company’s common stock on June 30, 2021, in exchange for the cancellation of the outstanding Private Placement Warrants. The Exchange Shares were issued in reliance upon the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended. Immediately prior to the exchange, the Private Warrants were marked to fair value, resulting in a loss of $52.0 million. As a result of the Exchange Agreement, there were no Private Warrants outstanding as of December 31, 2021. On August 20, 2021, the Company issued an irrevocable notice for redemption of all 12,786,129 of the Company’s outstanding public warrants at 5:00 p.m. Eastern time on September 20, 2021 (“Redemption Date”). Pursuant to the notice of redemption, holders exercised 12,638,723 Public Warrants for a purchase price of $11.50 per share, for proceeds to the Company of approximately $145.3 million. The Company redeemed all remaining outstanding Public Warrants that had not been exercised as of 5:00 p.m. Eastern time on the Redemption Date. As a result of the settlement of the Public Warrants, the Company recorded a gain of $134.9 million on the revaluation of the warrant liability. The Company also recorded a gain of $2.1 million on the redemption of unexercised public warrants. These gains are recorded in “change in fair value of warrants and embedded derivative” in the consolidated statements of operation in the year ended December 31, 2021. The public warrants have been delisted from the NYSE, and there are no public warrants left outstanding. Warrants Issued for Services On April 7, 2021, the Company entered into a strategic relationship with an existing shareholder not deemed to be a related party to jointly explore on a non-exclusive basis possible business opportunities to advance projects in the United States, the United Kingdom, Europe and Asia. As consideration for the strategic relationship, upon closing of the Merger, the Company issued warrants to purchase 350,000 shares of the Company’s common stock at an exercise price of $0.01 per share. These warrants were deemed to have been fully earned as of the grant date. The warrants were valued at fair market value as of the grant date totaling $9.2 million and recorded to general and administrative expense in the Company’s statement of operations. In May 2021, all of these warrants were exercised for shares of the Company’s common stock.
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COMMON STOCK | COMMON STOCKThe Company had reserved shares of common stock for issuance as follows:
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STOCK-BASED COMPENSATION |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Under both the Stem, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) and the Stem Inc. 2021 Equity Incentive Plan (the “2021 Plan,” and together with the 2009 Plan, the “Plans”), the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and other awards that are settled in shares of the Company’s common stock. The Plans permit net settlement of vested awards, pursuant to which the award holder forfeits a portion of the vested award to satisfy the purchase price (in the case of stock options), the holder’s withholding tax obligation, if any, or both. When the holder net settles the tax obligation, the Company pays the amount of the withholding tax to the U.S. government in cash, which is accounted for as an adjustment to additional paid-in-capital. The Company does not intend to grant new awards under the 2009 Plan. At December 31, 2021, 7,754,811 stock options were outstanding under the 2009 Plan. In May 2021, the Company began issuing awards under the 2021 Plan, with 23,722,254 shares reserved thereunder. Stock Options Under the Plans, the exercise price of an option cannot be less than 100% of the fair value of one share of common stock for incentive or non-qualified stock options, and not less than 110% of the fair value for stockholders owning greater than 10% of all classes of stock, as determined by the Company’s Board of Directors (the “Board”). Options under the Plans generally expire after 10 years. Under the Plans, the Compensation Committee of the Board determines when the options granted will become exercisable. Options granted under the Plans generally vest 1/4 one year from the grant date and then 1/48 each month over the following three years and are exercisable for 10 years from the date of the grant. The Plans allow for exercise of unvested options with repurchase rights over the restricted common stock issued at the original exercise price. The repurchase rights lapse at the same rate as the options vest. The following table summarizes the stock option activity for the period ended December 31, 2021:
The weighted-average grant date fair value of stock options granted to employees was $18.84, $3.79 and $1.58 during the years ended December 31, 2021, 2020, and 2019, respectively. The intrinsic value of options exercised was $56.1 million, $1.1 million and less than $0.1 million during the years ended December 31, 2021, 2020, and 2019, respectively. During the year ended December 31, 2021, the Company issued 1,054,594 shares of common stock from the net settlement of 1,648,463 stock options and shares granted. The Company paid $12.6 million in withholding taxes in connection with the net share settlement of these awards. Significant Assumptions in Estimating Option Fair Value The Company uses the Black-Scholes model for estimating the fair value of options granted. The weighted-average assumptions used in the Black-Scholes are as follows:
Restricted Stock Units RSUs represent a right to receive one share of the Company’s common stock that is both non-transferable and forfeitable unless and until certain conditions are satisfied. RSUs generally, either cliff vest on the third anniversary of the award grant date, or vest 1/4 per year over a four-year period, subject to continued employment through each anniversary. During the year ended December 31, 2021, the Company granted RSUs, which vest 1/5 per year over approximately a seven-year period starting in April 2024. The fair value of restricted stock units is determined on the grant date and is amortized over the vesting period on a straight-line basis. The following table summarizes the RSU activity for the period ended December 31, 2021:
The fair value of all RSUs granted during the year ended December 31, 2021 was $64.8 million. During the year ended December 31, 2021, no RSUs vested. Stock-Based Compensation Expense The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s consolidated statements of operations and comprehensive loss (in thousands):
As of December 31, 2021, the Company had approximately $21.1 million of remaining unrecognized stock-based compensation expense for stock options, which is expected to be recognized over a weighted average period of 3.2 years. As of December 31, 2021, the Company had approximately $56.5 million of remaining unrecognized stock-based compensation expense for RSUs, which is expected to be recognized over a weighted average period of 4.9 years. Research and development expenses of $1.2 million corresponding to internal-use software, were capitalized during the year ended December 31, 2021.
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SPECIAL PURPOSE ENTITIES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SPECIAL PURPOSE ENTITIES | SPECIAL PURPOSE ENTITIES The Company has formed various SPEs to finance the development and construction of its energy storage systems. These SPEs, which are structured as limited liability companies, obtain financing from outside investors and purchase projects from the Company under master purchase agreements by making an upfront payment to the Company for such energy storage systems. As discussed in Note 2 - Summary of Significant Accounting Policies, the Company accounts for the large upfront payment received from the SPE as a financing obligation. The legal purchase of the energy storage system does not affect the Company’s legal or constructive obligation to the host customer. Consolidated VIE In September 2013, the Company entered into agreements to form SCF 1, LLC (“SCF 1”) and consolidated this SPE under the VIE consolidation model. During 2018, the Company acquired the outstanding non-controlling interests of SCF 1 which remained a VIE upon reconsideration at the acquisition. As of December 31, 2021 and 2020, the Company’s consolidated total assets include the assets of SCF 1 that can only be used to settle the liabilities, if any, of SCF 1. The assets and liabilities of SCF 1 are comprised primarily of the following:
Unconsolidated VIEs SPV II, SPV III, and SPV IV On January 23, 2015, June 7, 2016, and June 30, 2017 the Company entered into agreements to form three Limited Liability Companies: Stem Finance SPV II, LLC (“SPV II”), Stem Finance SPV III, LLC (“SPV III”), and Generate-Stem LCR, LLC (“SPV IV”), respectively. These agreements are accounted for as unconsolidated VIEs because the Company lacks the power to direct the activities that most significantly impact the economics of these entities. Although the Company is not the primary beneficiary of these entities, due to its significant continuing involvement in the generation of cash flows of the energy storage systems and legal responsibilities under the host customer contract, the Company is required to include the assets, liabilities, revenues, and expenses of these entities in its consolidated financial statements. The significant activities involve deciding which energy storage systems to be purchased by the SPE and setting of the annual operating budgets which govern the ongoing operation and maintenance of the energy storage systems. Both of these activities significantly impact the revenue, expenses, and resulting residual returns or losses that will accrue to the investors of the SPE and require approval by both Stem and the other third-party investor. Stem, the non-managing member of the SPE, shares power through its rights to (i) agree on SPE purchases of energy storage systems in the master purchase agreement, and (ii) approve the annual operating budgets in the operating and maintenance agreement. The other investor shares power through its rights as the managing member in the SPE. As a result, power is shared with the other investors in the SPE who are not considered related parties (including de facto agency relationships) of the Company. Investments in such SPEs are accounted for under the equity method of accounting and are recorded within other noncurrent assets on the consolidated balance sheets. The Company’s maximum loss exposure from these entities is limited to the aggregate carrying amount of its equity method investments. As of December 31, 2021, the Company had not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its SPEs, including circumstances in which it could be exposed to further losses (e.g., cash shortfalls). The Company’s cumulative share of the earnings/(losses) in SPV II, SPV III and SPV IV was $0.1 million, $0.1 million, and $0.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. Copec During March 2020, the Company entered into the JV Agreement with Compania de Petroleos de Chile Copec S.A. (“Copec”), a leading wholesaler and distributor of petroleum products, that supplies fuel, lubricants, and other retail services such as carwash and foods through its series of service stations. The Company operates more than 650 service stations in Chile and more than 2,500 through different subsidiaries companies around South America, Central America, and the United States. The purpose of the JV Agreement is to form an entity with equity contributions from both Stem and Copec to explore and develop business opportunities within the commercial and industrial space, including utilities and grid operators, in Latin America with the focus of providing intelligent energy storage solutions that leverage advanced software analytics and controls (principally through the Athena Platform developed by Stem). Stem’s technology and expertise will be combined with the strength of Copec’s scale, distribution network, energy knowledge and other expertise areas to develop business in certain territories as defined in the JV Agreement. The JV entity is a VIE and the Company holds a variable interest in the JV Entity. However, the Company does not have the power to direct activities that most significantly impact the economics of the JV Entity and, as such, is not the primary beneficiary. Accordingly, the Company does not consolidate the JV Entity. The Company has concluded that it has the ability to exercise significant influence over the JV Entity, and accounts for the investment using the equity method. The following table summarizes additional information about the Company’s equity method investments, SPV II, SPV III, SPV IV and Copec:
As of December 31, 2021 and 2020, the Company’s investment in its unconsolidated SPE’s, recorded within other noncurrent assets on the consolidated balance sheets, was as follows (in thousands):
As discussed in Note 2 - Summary of Significant Accounting Policies, the Company accounts for the legal sales of the energy storage systems to the SPEs as a financing obligation. This is because the Company has significant continuing involvement in the generation of cash flows of the energy storage systems and continue to be legally responsible under the host customer contract. Accordingly, in addition to the equity method investment, the Company has the following financing obligations associated with energy storage systems legally sold to the unconsolidated SPEs (in thousands):
Interest expense related to the financing obligations was $8.5 million, $6.9 million, and $5.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. As a result of being the accounting owner of energy storage systems sold to the SPEs and retaining the obligation to provide energy optimization services to host customers, the Company records the carrying value of energy storage system assets and obligations under the customer host contracts on its consolidated balance sheet. These balances were as follows as of December 31, 2021 and 2020 (in thousands):
Because the Company is the legal party responsible for providing services to the host customer and significantly involved in generating the revenue under the host customer arrangements, the Company records the revenue associated with services, and separately records payments to the VIE as debt and interest payments. Revenues recognized by the Company associated with energy storage systems legally sold to the unconsolidated SPEs were $16.9 million, $12.8 million, and $8.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. Such revenues are inclusive of incentive fees, consistent with the Company’s revenue policy. Depreciation expense recognized within cost of service revenue by the Company for the energy storage systems legally sold to the unconsolidated SPEs was $12.8 million, $11.8 million and $7.1 million for the years ended December 31, 2021, 2020, and 2019, respectively.
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NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHAREThe following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):
The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of loss before provision for income taxes for the years ended December 31, 2021, 2020, and 2019 are as follows (in thousands):
Due to the Company’s net losses, the Company did not record a provision for federal income taxes during the years ended December 31, 2021, 2020 and 2019, respectively. The Company continues to maintain a full valuation allowance for its net U.S. federal and state deferred tax assets. The components of the provision for income tax expense for the years ended December 31, 2021, 2020, and 2019 are as follows (in thousands):
The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:
Deferred income taxes arise from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, as well as net operating losses (“NOLs”) and tax credit carryforwards. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):
As of December 31, 2021 and 2020, the Company had federal NOL carryforwards of approximately $300.8 million and $199.8 million, respectively, and state NOL carryforwards of approximately $274.6 million and $200.5 million, respectively. The federal and state NOL carryforwards will both begin to expire in 2029. As of December 31, 2021 and 2020, the Company had federal research and development tax credit carryforwards of $0.7 million and $0.7 million, respectively, which begin to expire in 2029 if not utilized. As of December 31, 2021 and 2020, the Company had foreign NOL carryforwards of approximately $9.0 million and zero, respectively. As of December 31, 2021 and 2020, the Company had California research and development tax credit carryforwards of $0.7 million and $0.7 million, respectively, which do not expire. As of December 31, 2021 and 2020, the Company had California Enterprise Zone tax credits of zero and $0.1 million, respectively, which began to expire in 2021. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As a result of a history of taxable losses and uncertainties as to future profitability, the Company recorded a full valuation allowance against its deferred tax assets. The valuation allowance was $125.1 million and $91.3 million as of December 31, 2021 and 2020, respectively. Utilization of the NOL carryforwards and tax credit forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382, as well as similar state provisions. In general, an “ownership change,” as defined by the code, results from a transaction or series of transactions over a three- year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the NOL or tax credit carryforwards before utilization. The Company has not performed a detailed analysis to determine whether an ownership change under Section 382 of the Code has previously occurred. As a result, the Company’s ability to utilize existing carryforwards could be restricted. The Company had gross unrecognized tax benefits of $0.7 million and $0.8 million as of December 31, 2021 and 2020, respectively. There were no material additions, reductions or settlements of unrecognized tax benefits for years ended December 31, 2021 and 2020. The Company expects resolution of unrecognized tax benefits, if created, would occur while the full valuation allowance of deferred tax assets is maintained. The Company does not expect to have any unrecognized tax benefits that, if recognized, would affect the effective tax rate. As of December 31, 2021, the Company does not have a liability for potential penalties or interest. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. In the normal course of business, the Company is subject to examination by taxing authorities throughout the United States of America. The Company is not currently under audit by the Internal Revenue Service or similar state or local authorities in relation to its income taxes. The tax return years 2016 through 2020 remain open to examination by the major domestic taxing jurisdictions to which the Company is subject. Net operating losses generated on a tax return basis by the Company for calendar years 2009 through 2021 remain open to examination by the major domestic taxing jurisdictions.
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COMMITMENTS AND CONTINGENCIES |
12 Months Ended |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESContingenciesThe Company is party to various legal proceedings from time to time arising in the ordinary course of its business. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain and it is not possible to definitively predict the ultimate disposition of any of these proceedings. The Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial statements |
EMPLOYER RETIREMENT PLAN |
12 Months Ended |
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Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYER RETIREMENT PLAN | EMPLOYER RETIREMENT PLANThe Company sponsors a 401(k) profit sharing plan covering all eligible employees. Participants may elect to defer a percentage of their compensation ranging from 1% to 75%, up to the maximum allowable by law by making contributions to the plan. The Company may match, at its discretion, the employee contributions according to the terms of the plan. During the years ended December 31, 2021, 2020, and 2019, the Company did not match any of its employees’ contributions. |
SUBSEQUENT EVENTS |
12 Months Ended |
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Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On February 1, 2022, the Company completed the acquisition of 100% of the outstanding shares of AlsoEnergy for an aggregate purchase price of $695.0 million, consisting of approximately 75% in cash and approximately 25% in shares of the Company’s common stock. The acquisition was structured on a cash-free, debt free basis and subject to other customary adjustments as set forth in the purchase agreement. The transaction combines the Company’s storage optimization capabilities with AlsoEnergy’s solar asset performance monitoring and control software. The Company will complete the initial accounting for the acquisition during the first quarter of 2022.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The Company's consolidated financial statements have been prepared in accordance with GAAP.
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Immaterial Out-of-Period Corrections | Immaterial Out-of-Period Corrections During the year ended December 31, 2021, the Company recorded certain out-of-period corrections related to prior interim and annual periods pertaining to the amortization of contract origination costs and valuation of energy storage systems that were decommissioned. The impact of out-of-period corrections to the year ended December 31, 2021 was an increase of $2.8 million to net loss, and increase to cost of service revenue of $1.7 million, and an increase to sales and marketing expenses of $1.1 million. The following table presents the amount of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, and the amounts and periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
The Company corrected the out of period errors in the quarter ended December 31, 2021. The impact of the out-of-period correction for the quarter ended December 31, 2021 included corrections for the prior quarterly periods presented below. The impact to the quarter ended December 31, 2021, was an increase of $4.2 million to net loss, increase to cost of service revenue of $1.8 million and increase to sales and marketing expenses of $2.4 million. The following table presents the amounts of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, as well as the quarterly periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
The errors and out of period corrections had no impact to the Company’s net cash used in operating activities for any of the periods presented. The Company performed a quantitative and qualitative evaluation of these out-of-period adjustments and has concluded that the amounts are not material in relation to the year ended December 31, 2021, or any prior interim or annual periods.
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Reclassifications | Reclassifications Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassifications have no impact on previously reported net loss, stockholders' equity (deficit), or cash flows.
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). All intercompany balances and transactions have been eliminated in consolidation.
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Variable Interest Entities | Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary.
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Equity Method Investments | Equity Method InvestmentsThe Company has ownership interests in SPEs which it does not control. Where the Company holds an interest in these SPEs of greater than 20% and has the ability to exercise significant influence, the Company uses the equity method to account for its investments in these SPEs. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. Such proportionate share of earnings or losses is included within other expenses, net in the consolidated statements of operations. The Company considers whether its equity method investments are impaired when events or circumstances suggest that the carrying amount may not be recoverable. An impairment charge is recognized in the consolidated statements of operations for a decline in value that is determined to be other-than-temporary. In determining if and when a decline in the fair value of these investments below their carrying value is other-than-temporary, the Company evaluates the market condition, trends of earnings and cash flows and other key measures of performance and recognizes such loss which is deemed to be other-than-temporary. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, depreciable life of energy systems; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of financial instruments, equity-based instruments, debt, warrant liabilities and embedded derivatives.
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Segment Information | Segment InformationOperating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, management has determined that the Company operates as one operating segment that is focused exclusively on innovative technology services that transform the way energy is distributed and consumed. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents are maintained at financial institutions. The Company maintains all cash in a highly liquid form to meet current obligations.
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Short-Term Investments | Short-Term Investments Investments with a maturity date greater than three months that the Company intends to convert to cash or cash equivalents within a year or less are classified as short-term investments in the Company’s consolidated balance sheets. Additionally, in accordance with ASC 320, Investments - Debt Securities, the Company has classified all short-term investments as available-for-sale securities and changes in fair market value are reported in other comprehensive income (loss). The Company utilizes its short-term investments as an alternative form of cash and, if the cash needs arise, could liquidate the investments at any point in time regardless of the contractual maturity of the investments. All of the Company’s investments are tradable on an active market and could be sold at fair value at any point in time.
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Accounts Receivable, Net | Accounts Receivable, NetAccounts receivable are recorded at the invoiced amount, net of allowance for doubtful accounts. Accounts receivable also include unbilled accounts receivable, which is composed of the monthly energy optimization services provided and recognized but not yet invoiced as of the end of the reporting period. The allowance for doubtful accounts is based on the Company’s best estimate and is determined based upon a variety of factors, including analyses of specific customer receivables, aging, and overall assessments of collectability. Accounts receivable balances are charged against the allowance when the Company believes it is probable that the receivable will not be recovered. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentrations of Credit Risk and Other Uncertainties | Concentrations of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced any material losses related to receivables from individual customers, or groups of customers during the years ended December 31, 2021, 2020 and 2019. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable.
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Significant Customers | Significant CustomersA significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Inventory Inventory consists of batteries and related components either in-process at the Company’s OEM suppliers or as a finished product at the Company’s warehouse, which are sold and delivered directly to customers under the Company’s partnership arrangements as individual assets or assembled systems. Inventory is stated at lower of cost or net realizable value with cost being determined by the specific identification method. The Company periodically reviews its inventory for potentially slow-moving or obsolete items and writes down specific items in inventory to net realizable value based on its assessment of market conditions.
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Energy Storage Systems, Net | Energy Storage Systems, Net The Company sells energy optimization services to host customers through the use of energy storage systems installed at customer locations. The Company determined that it does not transfer control of these energy storage systems to the customer, which are operated and controlled via the Company’s proprietary cloud-based software (“SaaS”) platform; therefore, these energy storage systems do not qualify as a leased asset. The energy storage systems are stated at cost, less accumulated depreciation and impairment (as applicable). Energy storage systems, net is comprised of equipment costs, which include components such as batteries, inverters, and other electrical equipment, and associated design, installation, and interconnection costs required to begin providing the energy optimization services to customers. Depreciation of the energy storage systems is a component of cost of revenues within the consolidated statements of operations and is calculated using the straight-line method over the estimated useful lives of the energy storage systems, or 10 years, once the respective energy storage systems have been installed and interconnected to the power grid, the Company has received permission to operate, and the Company has begun to provide energy optimization services to the customer (i.e., energy storage system is live). Repairs and maintenance costs are expensed as incurred. Impairment charges related to energy storage system that were determined to no longer be recoverable totaled $4.3 million, $1.4 million and $0.3 million for the years ended December 31, 2021, 2020, and 2019, respectively.
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Contract Origination Costs, Net, Revenue Recognition, Host Customer and Partnership Arrangements | Contract Origination Costs, Net Contract origination costs, net is stated at gross contract origination costs less accumulated amortization. Contract origination costs consists of sales commissions earned by the Company’s sales team, as well as related payroll taxes and other relevant fringe benefits that are direct, incremental, and recoverable costs of obtaining a contract with a customer. As a result, these amounts have been capitalized on the consolidated balance sheets. The Company deferred incremental costs of obtaining a contract of $3.0 million and $2.6 million during the years ended December 31, 2021 and 2020, respectively. Contract origination costs are amortized over the expected period of benefit. The period of benefit is estimated by considering factors such as the timing of fulfillment of performance obligations, historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in its industry. Amortization of contract costs were $3.9 million, $0.8 million and $0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively, and are included in sales and marketing expense in the accompanying consolidated statements of operations.Revenue Recognition Revenues are recognized when control of the promised goods or services are transferred to the Company’s customers in an amount that reflects the consideration that is expected to be received in exchange for those goods or services. The Company generates all of its revenues from contracts with its customers. The Company recognizes revenue through two types of arrangements with customers, host customer arrangements and partnership arrangements as described below. Host Customer Arrangements Host customer contracts are generally entered into with commercial entities that have traditionally relied on power supplied directly from the grid. Host customer arrangements consist of a promise to provide energy optimization services through the Company’s proprietary SaaS platform coupled with a dedicated energy storage system owned and controlled by the Company throughout the term of the contract. The host customer does not obtain legal title to, or ownership of the dedicated energy storage system at any point in time. The host customer is the end consumer of the energy that directly benefits from the energy optimization services provided by the Company. The term for the Company’s contracts with host customers generally ranges from 5 to 10 years, which may include certain renewal options to extend the initial contract term or certain termination options to reduce the initial contract term. Although the Company installs an energy storage system at the host customer site in order to provide the energy optimization services, the Company directs how and for what purpose the asset is used through the operation of its SaaS platform and, as such, retains control of the energy storage system; therefore, the contract does not contain a lease. The Company determines the various energy optimization services provided throughout the term of the contract, which may include services such as remote monitoring, performance reporting, preventative maintenance and other ancillary services necessary for the safe and reliable operation of the energy storage system, are part of a combined output of energy optimization services and the Company provides a single distinct combined performance obligation representing a series of distinct days of services. The Company determines the transaction price at the outset of the arrangement, primarily based on the contractual payment terms dictated by the contract with the customer. Fees charged to customers for energy optimization services generally consist of recurring fixed monthly payments throughout the term of the contract. In certain arrangements, the transaction price may include incentive payments that are earned by the host customer from utility companies in relation to the services provided by the Company. Under such arrangements, the rights to the incentive payments are assigned by the host customer to the Company. These incentives may be in the form of fixed upfront payments, variable monthly payments, or annual performance-based payments over the first five years of the customer contract term. Incentive payments may be contingent on approval from utility companies or actual future performance of the energy storage system. Substantially all of the Company’s arrangements provide customers the unilateral ability to terminate for convenience prior to the conclusion of the stated contractual term or the contractual term is shorter than the estimated benefit period, which the Company has determined to be 10 years based on the estimated useful life of the underlying energy storage systems and the period over which the customer can benefit from the energy optimization services utilizing such energy storage systems. In these instances, the Company determined that upfront incentive payments received from its customers represent a material right that is, in effect, an advance payment for future energy optimization services to be recognized throughout the estimated benefit period. In contracts where the customer does not have the unilateral ability to terminate for convenience without a penalty during the estimated benefit period, the Company determined the upfront incentive payments do not represent a material right for services provided beyond the initial contractual period and are therefore a component of the initial transaction price. The Company revisits its estimate of the benefit period each reporting period. The Company’s contracts with host customers do not contain a significant financing component. The Company transfers control of its energy optimization services to its customers continuously throughout the term of the contract (a stand-ready obligation) and revenue is recognized ratably as control of these services is transferred to its customers, in an amount that reflects the consideration the Company expects to be contractually entitled to in exchange for its services. Monthly incentive payments based on the performance of the energy storage system are allocated to the distinct month in which they are earned because the terms of the payments relate specifically to the outcome from transferring the distinct time increment (month) of service and because such amounts reflect the fees to which the Company expects to be entitled for providing energy optimization services each period, consistent with the allocation objective. Annual variable performance- based payments are estimated at the inception in the transaction price using the expected value method, which takes into consideration historical experience, current contractual requirements, specific known market events and forecasted energy storage system performance patterns, and the Company recognizes such payments ratably using a time-based measure of progress of days elapsed over the term of the contract to the extent that it is probable that a significant reversal of the cumulative revenue recognized will not occur in a future period. At the end of each reporting period, the Company reassesses its estimate of the transaction price. The Company does not begin recognition of revenue until the energy storage system is live (i.e., provision of energy optimization services has commenced) or, as it relates to incentive payments, when approval has been received from the utility company, if later. Partnership Arrangements Partnership arrangements consist of promises to transfer inventory in the form of an energy storage system to a “solar plus storage” project developer and separately provide energy optimization services as described previously to the ultimate owner of the project after the developer completes the installation of the project. Under partnership arrangements, the Company’s customer is the solar plus storage project developer. The customer obtains legal title to along with ownership and control of the inventory upon delivery and the customer is responsible for the installation of the project. Once installation of the project is complete, the owner of the solar plus storage project provides energy to the end consumer through a separate contractual arrangement directly with the end consumer. The term for the Company’s contracts with customers under partnership arrangements generally ranges from 10 to 20 years. The Company determined the promise to deliver the inventory as a component of the solar plus storage project for which the customer is responsible to develop is a separate and distinct performance obligation from the promise to provide energy optimization services. The Company determines the transaction price at the outset of the arrangement, primarily based on the contractual payment terms dictated by the contract with the customer. Fees charged for the sale of inventory generally consist of fixed fees payable upon or shortly after successful delivery to the customer. Fees charged to customers for energy optimization services consist of recurring fixed monthly payments throughout the term of the contract. The Company is responsible for designing, procuring, delivering and ensuring the proper components are provided in accordance with the requirements of the contract. Although the inventory is purchased by the Company from a third-party manufacturer, the Company determined it obtains control of the inventory prior to delivery to the customer and is the principal in the arrangement. The Company is fully responsible for responding to and correcting any customer issues related to the delivery of the inventory. The Company holds title and assumes all risks of loss associated with the inventory until the customer accepts the inventory. The Company is primarily responsible for fulfilling the delivery of the inventory to the customer, assumes substantial inventory risks and has discretion in the pricing charged to the customer. The Company has not entered into any partnership arrangements where it is not the principal in the transaction. The Company allocates revenue between the hardware and energy storage services performance obligations based on the standalone selling price of each performance obligation. The standalone selling price for the hardware is established based on observable pricing. The standalone selling price for the energy optimization services is established using a residual value approach due to the significant variability in the services provided to each individual customer based on the specific requirements of each individual project and the lack of observable standalone sales of such services. The Company’s partnership arrangements do not contain a significant financing component. The Company transfers control of the inventory upon delivery and simultaneous transfer of title to the customer. The Company transfers control of its energy optimization services to its customers continuously throughout the term of the contract (a stand-ready obligation), which does not commence until the customer successfully completes the installation of the project. As a result, the time frame between when the Company transfers control of the inventory to the customer upon delivery is generally several months, and can be in excess of one year, before the Company is required to perform any subsequent energy optimization services. Revenue is recognized ratably as control of these services is transferred to its customers based on a time-based output measure of progress of days elapsed over the term of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for its services. In some partnership arrangements, the Company charges shipping fees for the inventory. The Company accounts for shipping as a fulfillment activity, since control transfers to the customer after the shipping is complete and includes such amounts within cost of revenue.
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Business Combinations | Business Combinations The Company accounts for business acquisitions under ASC 805, Business Combinations. The total purchase consideration for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities assumed at the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. Identifiable assets (including intangible assets), liabilities assumed (including contingent liabilities) and noncontrolling interests in an acquisition are measured initially at their fair values at the acquisition date. The Company recognizes goodwill if the fair value of the total purchase consideration and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. The Company recognizes a bargain purchase gain within other income (expense), net, on the consolidated statement of operations if the net fair value of the identifiable assets acquired and the liabilities assumed is in excess of the fair value of the total purchase consideration and any noncontrolling interests. The Company includes the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date.
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Internal-use software | Internal-use softwareThe Company capitalizes costs incurred in the development of internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Capitalized internal-use software is amortized on a straight-line basis over the estimated useful life of the software once it is ready for its intended use. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-lived Intangible Assets | Finite-lived Intangible Assets Finite-lived intangible assets consist of developed technology acquired in a business combination. Finite-lived intangible assets acquired in business combinations are initially recorded at fair value and subsequently presented net of accumulated amortization. These intangible assets are amortized on a straight-line basis over their estimated useful lives. The Company amortizes its developed technology over five years.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, which primarily consist of energy storage systems, right-of- use assets, and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or that the useful life is shorter than originally estimated. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset over its remaining useful life. If such assets are impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. If the useful life is shorter than originally estimated, the Company depreciates or amortizes the remaining carrying value over the revised shorter useful life. Assets to be disposed of by sale are reflected at the lower of their carrying amount or fair value less cost to sell.
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Leases | Leases The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The classification of the Company’s leases as operating or finance leases along with the initial measurement and recognition of the associated ROU assets and lease liabilities is performed at the lease commencement date. The measurement of ROU assets and lease liabilities is based on the present value of future lease payments over the lease term. The ROU asset also includes the effect of any lease payments made prior to or on lease commencement and excludes lease incentives and initial direct costs incurred, as applicable. As the implicit rate in the Company’s leases is generally unknown, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future lease payments. The Company considers its credit risk, term of the lease, total lease payments and adjusts for the impacts of collateral, as necessary, when calculating its incremental borrowing rates. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise any such options. Rent expense for the Company’s operating leases is recognized on a straight-line basis over the lease term. Variable lease payments are recorded as an expense in the period incurred. The Company has elected to not separate lease and non-lease components for any leases within its existing classes of assets and, as a result, accounts for any lease and non-lease components as a single lease component. The Company has also elected to not apply the recognition requirement to any leases within its existing classes of assets with a term of 12 months or less.
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Convertible Preferred Stock Warrant Liabilities | Convertible Preferred Stock Warrant Liabilities The Company evaluates whether its warrants for shares of convertible redeemable preferred stock are freestanding financial instruments that obligate the Company to redeem the underlying preferred stock at some point in the future and determined that each of its outstanding warrants for preferred stock are liability classified. The warrants are subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the change in fair value of warrants and embedded derivatives in the consolidated statements of operations. As discussed in Note 13 - Warrants, upon effectiveness of the Merger, substantially all of the outstanding convertible preferred stock warrants were converted into shares of common stock of Stem. As such, the associated warrant liability was reclassified to additional paid-in-capital upon the Merger and was no longer an outstanding Level 3 financial instrument as of December 31, 2021.
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Common Stock Warrants | Common Stock Warrants The Company evaluates common stock warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company assesses whether common stock warrants are freestanding financial instruments and whether they meet the criteria to be classified in stockholders’ equity, or classified as a liability. Where common stock warrants do not meet the conditions to be classified in equity, the Company assesses whether they meet the definition of a liability under ASC 815. Common stock warrants that meet the definition of a liability are recognized on the balance sheet at fair value. Subsequent changes in their respective fair values are recognized in the consolidated statement of operations at each reporting date.As indicated in Note 13 - Warrants, as part of STPK’s initial public offering, the Company issued Public Warrants and Private Warrants, which upon issuance met the criteria for liability classification under ASC 815.
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Asset Retirement Obligations | Asset Retirement Obligations The Company recognizes a liability for the fair value of asset retirement obligations (“ARO”) associated with its energy storage systems in the period in which there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The associated asset retirement costs are capitalized as part of the carrying amount of the energy storage systems and depreciated over the asset’s remaining useful life. This liability includes costs related to the removal of its energy storage systems at the conclusion of each respective customer contract. Subsequent to initial measurement, the asset retirement liability is accreted each period and such accretion is recognized as an expense in the consolidated statements of operations. If there are changes in the estimated amount or timing of cash flows, a revision is recorded to both the asset retirement obligation and the asset retirement capitalized cost.
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Financing Obligations | Financing Obligations The Company has formed various SPEs to finance the development and construction of its energy storage systems. These SPEs, which are structured as limited liability companies, obtain financing in the form of large upfront payments from outside investors and purchase energy storage systems from the Company under master purchase agreements. The Company accounts for the large upfront payments received from the fund investor as a borrowing by recording the proceeds received as a financing obligation, which will be repaid through host customer payments and incentives received from the utilities that will be received by the investor. The financing obligation is non-recourse once the associated energy storage systems have been placed in-service and the associated customer arrangements have been assigned to the SPE. However, the Company is responsible for any warranties, performance guarantees, accounting, performance reporting, and all other costs associated with the operation of the energy storage systems. Despite such energy storage systems being legally sold to the SPEs, the Company recognizes host customer payments and incentives as revenue during the period as discussed in Note 3 - Revenue. The amounts received by the fund investor from customer payments and incentives are recognized as interest using the effective interest method, and the balance is applied to reduce the financing obligation. The effective interest rate is the interest rate that equates the present value of the cash amounts to be received by a fund investor in relation to the underlying Projects with the present value of the cash amounts paid by the investor to the Company, adjusted for any payments made by the Company.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of December 31, 2021 and 2020, include cash and cash equivalents, short-term investments, warrant liabilities and embedded derivatives which are bifurcated from the host financial instrument.
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Cost of Revenue | Cost of Revenue Cost of Hardware Revenue Cost of revenue related to the sale of hardware includes the cost of the hardware sold to project developers, which generally includes the cost to purchase the hardware from a manufacturer, shipping, and other costs required to fulfill the Company’s obligation to deliver the hardware to the customer location. Cost of revenue may also include any impairment of hardware held in inventory for sale to a customer. Cost of revenue related to the sale of hardware is recognized when the delivery of the hardware is completed. Cost of Service Revenue Cost of revenue related to energy optimization services includes depreciation of the cost of energy storage systems associated with long-term host customer contracts, which includes capitalized fulfillment costs, such as installation services, permitting and other related costs. Cost of revenue may also include any impairment of energy storage systems along with energy storage system maintenance costs associated with the ongoing services provided to customers and other amounts not qualifying for capitalization pursuant to the Company’s internal use software capitalization policy. Cost of revenue is recognized as the energy optimization and other supporting services are provided to the Company’s customers throughout the term of the contract.
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Sales and Marketing | Sales and MarketingSales and marketing expense consists primarily of payroll and other related personnel costs, including stock-based compensation, employee benefits, and travel for the Company’s sales & marketing department. These costs are recognized in the period incurred. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development | Research and Development Research and development expense consists primarily of payroll and other related personnel costs for engineers and third parties engaged in the design and development of products, third-party software, and technologies, including salaries, bonus and stock-based compensation expense, project material costs, services, and depreciation. The Company expenses research and development costs as they are incurred.
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General and Administrative | General and Administrative General and administrative expense consists of payroll and other related personnel costs, including salaries, bonuses and stock-based compensation for executive management, legal, finance, and others. In addition, general and administrative expense includes fees for professional services and occupancy costs.
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Stock Based Compensation | Stock-Based CompensationThe Company recognizes stock-based compensation expense related to employees over the requisite service period based on the grant-date fair value of the awards. The fair value of options granted is estimated using the Black-Scholes option valuation model. The Company recognizes the grant-date fair value of an award as compensation expense on a straight-line basis over the requisite service period, which typically corresponds to the vesting period for the award. The Company elects to account for forfeitures as they occur and, upon forfeiture of an award prior to vesting, the Company reverses any previously recognized compensation expense related to that award. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes based on ASC 740, Accounting for Income Taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts and the tax basis of existing assets and liabilities. The Company records a valuation allowance to reduce tax assets to an amount for which realization is more likely than not. There are certain charges that are not deductible for tax purposes. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. The Company recognizes the tax benefit from uncertain tax positions in accordance with GAAP, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s tax return. No liability related to uncertain tax positions has been recognized in the financial statements. The Company includes interest and penalties for uncertain tax positions in the financial statements as a component of income tax expense.
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Foreign Currency Translation | Foreign Currency Translation The Company’s foreign subsidiaries financial position and results of operations are measured using the local currency as the functional currency. The functional currency is the currency of the primary economic environment in which an entity’s operations are conducted. Assets and liabilities of foreign subsidiaries are translated at exchange rates in effect as of the balance sheet date. Revenues and expenses are translated at average exchange rates in effect during the year. Translation adjustments are recorded within accumulated other comprehensive loss, a separate component of stockholders’ equity (deficit).
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Net Loss Per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period, without consideration for potential dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted- average number of common shares and common share equivalents of potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, convertible notes, warrants, restricted stock units (“RSUs”), and common stock options are considered to be potentially dilutive securities. As the Company was in a net loss position for the years ended December 31, 2021, 2020, and 2019, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders because the effects of potentially dilutive securities are antidilutive.
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Recently Adopted Accounting Standards And Recently Issued Accounting Standards | Recently Adopted Accounting Standards In August 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The intent of this pronouncement is to align the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software as defined in ASC 350-40. Under ASU 2018-15, the capitalized implementation costs related to a cloud computing arrangement will be amortized over the term of the arrangement and all capitalized implementation amounts will be required to be presented in the same line items of the financial statements as the related hosting fees. ASU 2018-15 is effective for public and private companies’ fiscal years beginning after December 15, 2019, and December 15, 2020, respectively, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2018-15 as of January 1, 2021. The adoption did not have a material effect on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 was effective for public entities for interim and annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 will be effective for private entities for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 effective May 1, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Standards The Company will adopt Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, effective January 1, 2022 using the modified retrospective approach. As a result of the adoption of ASU 2020-06, the 2028 Convertible Notes will no longer bifurcated into separate liability and equity components in the March 31, 2022 condensed consolidated balance sheet. Rather, the $460.0 million principal amount of the Company’s 2028 Convertible Notes will be classified only as a liability prospectively in the balance sheet. Upon adoption of ASU 2020-06, an adjustment will be recorded to the convertible notes liability component, equity component (additional paid-in-capital) and retained earnings. The cumulative effect of the change will be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The comparative information will not restated and will continue to be presented according to accounting standards in effect for those periods. The adjustment will be calculated based on the carrying amount of the 2028 Convertible Notes as if it had always been treated only as a liability. Interest expense recognized in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. In June 2016, the FASB issued ASU 2016-13, Financial instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, which amends the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. This ASU is effective for public and private companies’ fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and December 15, 2022, respectively. As the Company is no longer an emerging growth company as of January 1, 2022, the Company plans to adopt ASU 2016-13 effective on such date, utilizing the modified retrospective transition method. The Company believes that adoption of ASU 2016-13 will not have a material impact on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. Under ASU 2021-08, an acquirer must recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The guidance is effective for interim and annual periods beginning after December 15, 2022, with early adoption permitted. As indicated in Note 21 - Subsequent Events, the Company completed the acquisition of AlsoEnergy on February 1, 2022. Therefore, the Company plans to adopt ASU 2021-08 on a prospective basis effective January 1, 2022 and is currently assessing the effect, if any, the guidance will have on the Company's consolidated financial statements.
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BUSINESS (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule Of Reverse Recapitalization | On April 28, 2021, shareholders of STPK approved the Merger, under which Stem received approximately $550.3 million, net of fees and expenses as follows (in thousands):
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The following table presents the amount of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, and the amounts and periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
The Company corrected the out of period errors in the quarter ended December 31, 2021. The impact of the out-of-period correction for the quarter ended December 31, 2021 included corrections for the prior quarterly periods presented below. The impact to the quarter ended December 31, 2021, was an increase of $4.2 million to net loss, increase to cost of service revenue of $1.8 million and increase to sales and marketing expenses of $2.4 million. The following table presents the amounts of the errors identified for energy storage systems, net and contract origination costs, net as of the end of each period, as well as the quarterly periods in which the errors related to cost of service revenue and sales and marketing originated (in millions):
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Summary of Significant Customers | For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
*Total less than 10% for the respective period
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table provides information on the disaggregation of revenue as recorded in the consolidated statements of operations (in thousands):
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Remaining Performance Obligations | As of December 31, 2021, the Company had $217.8 million of remaining performance obligations, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages):
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Contract Balances | The following table presents the changes in the deferred revenue balance (in thousands):
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SHORT-TERM INVESTMENTS (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Investments | The following tables summarize the estimated fair value of the Company’s cash equivalents and debt securities and the gross unrealized holding gains and losses as of December 31, 2021 (in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Measured at Fair Value | The following table provides the financial instruments measured at fair value on a recurring basis (in thousands):
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Key Assumptions Used for Valuation | The key assumptions used for the valuation of the preferred stock warrant liabilities upon remeasurement were as follows:
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Schedule of Changes in Liability for Unobservable Inputs | The following table presents the changes in the liability for the Company’s warrants during the years ended December 31, 2021 and 2020 (in thousands):
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill consists of the following (in thousands):
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Schedule of Intangible Assets | Intangible assets, net, consists of the following (in thousands):
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LEASES (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating lease liabilities | As of December 31, 2021, future payments associated with the Company’s operating lease liabilities were as follows (in thousands):
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Summary of lease information | Reported as of December 31, 2021 and 2020 (in thousands):
The following summarizes additional information related to operating leases:
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ASSET RETIREMENT OBLIGATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Asset Retirement Obligations | The information below details the asset retirement obligation for the years ended December 31, 2021 and 2020 as follows (in thousands):
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ENERGY STORAGE SYSTEMS, NET (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Energy Storage Systems, Net | Energy storage systems, net, consists of the following (in thousands):
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BALANCE SHEET COMPONENTS (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consists of the following (in thousands):
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Schedule of Other Current Assets | Other current assets consist of the following (in thousands):
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Schedule of Other Assets, Noncurrent | Other noncurrent assets consist of the following (in thousands):
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Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands):
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Other Current Liabilities | Other current liabilities consist of the following (in thousands):
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NOTES PAYABLE (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Schedule of Outstanding Debt | The Company’s outstanding debt consisted of the following as of December 31, 2021 (in thousands):
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CONVERTIBLE PROMISSORY NOTES (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Convertible Debt | These costs were allocated to the debt and equity components based on the allocation of the proceeds as follows (in thousands):
The outstanding 2028 Convertible Notes balances as of December 31, 2021, are summarized in the following table (in thousands):
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COMMON STOCK (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Common Stock Reserved For Issuance | The Company had reserved shares of common stock for issuance as follows:
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STOCK-BASED COMPENSATION (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Activity Under the Plan | The following table summarizes the stock option activity for the period ended December 31, 2021:
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Schedule of Assumptions in Estimating Option Fair Value | The Company uses the Black-Scholes model for estimating the fair value of options granted. The weighted-average assumptions used in the Black-Scholes are as follows:
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Schedule of Restricted Stock Activity | The following table summarizes the RSU activity for the period ended December 31, 2021:
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Stock-based Compensation Expense | The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s consolidated statements of operations and comprehensive loss (in thousands):
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SPECIAL PURPOSE ENTITIES (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The assets and liabilities of SCF 1 are comprised primarily of the following:
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Schedule of Equity Method Investments | The following table summarizes additional information about the Company’s equity method investments, SPV II, SPV III, SPV IV and Copec:
As of December 31, 2021 and 2020, the Company’s investment in its unconsolidated SPE’s, recorded within other noncurrent assets on the consolidated balance sheets, was as follows (in thousands):
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NET LOSS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):
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Schedule of Potentially Dilutive Shares | The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive:
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | The components of loss before provision for income taxes for the years ended December 31, 2021, 2020, and 2019 are as follows (in thousands):
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Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income tax expense for the years ended December 31, 2021, 2020, and 2019 are as follows (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows (in thousands):
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BUSINESS - Schedule of Reverse Recapitalization (Details) - USD ($) $ in Thousands |
12 Months Ended | |
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Apr. 28, 2021 |
Dec. 31, 2021 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash — STPK trust and working capital cash | $ 383,383 | |
Cash — PIPE (as described below) | 225,000 | |
Less: transaction costs and advisory fees paid | (58,061) | $ (58,061) |
Merger and PIPE financing | $ 550,322 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Time periods in errors originated (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | 36 Months Ended | ||||||
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Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2020 |
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Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||
Contract origination costs, net | $ 2,622 | $ 2,552 | $ 1,302 | ||||||
Cost of service revenue | 126,124 | 40,219 | 20,812 | ||||||
Sales and marketing | $ 19,950 | 14,829 | 17,462 | ||||||
Retroactive application of recapitalization | |||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||
Energy storage systems, net | $ (1,800) | $ (1,700) | $ (1,700) | (1,700) | (1,500) | $ (900) | |||
Contract origination costs, net | (2,400) | (1,600) | (1,400) | (1,100) | (300) | (100) | |||
Cost of service revenue | $ 1,800 | 100 | 0 | 0 | 200 | 600 | 900 | $ 1,700 | |
Sales and marketing | $ 2,400 | $ 800 | $ 200 | $ 300 | $ 800 | $ 200 | $ 100 | $ 1,100 |
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 127,371 | $ 36,307 | $ 17,552 |
Partnership hardware and service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 107,135 | 20,713 | 4,076 |
Host customer service revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 20,236 | $ 15,594 | $ 13,476 |
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Contract With Customer, Liability [Roll Forward] | |||
Beginning balance | $ 52,410 | $ 20,728 | $ 11,859 |
Upfront payments received from customers | 89,951 | 40,481 | 6,698 |
Upfront or annual incentive payments received | 6,614 | 8,015 | 8,240 |
Revenue recognized related to amounts that were included in beginning balance of deferred revenue | (33,585) | (9,764) | (4,830) |
Revenue recognized related to deferred revenue generated during the period | (77,947) | (7,050) | (1,239) |
Ending balance | $ 37,443 | $ 52,410 | $ 20,728 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - Convertible Notes - USD ($) $ / shares in Units, $ in Millions |
Nov. 22, 2021 |
Dec. 31, 2021 |
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Level 2 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 447.8 | |
2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Face amount | $ 460.0 | |
2028 Convertible Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 324.8 | |
Capped Call Options | ||
Debt Instrument [Line Items] | ||
Number of shares covered by capped calls (in shares) | 15,730,390 | |
Cap price (in dollars per share) | $ 49.6575 |
FAIR VALUE MEASUREMENTS - Schedule of Changes in Liability for Unobservable Inputs (Details) - Warrant Liability - USD ($) $ in Thousands |
12 Months Ended | |
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Dec. 31, 2021 |
Dec. 31, 2020 |
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 95,342 | $ 6,094 |
Changes in estimated fair value | 488 | 85,623 |
Assumption of warrant liability upon Merger | 302,556 | 0 |
Issuance of warrants | 0 | 3,633 |
Conversion of warrants upon Merger | (60,568) | 0 |
Exchange of warrants | (168,647) | 0 |
Exercise of warrants | (169,171) | (8) |
Ending balance | $ 0 | $ 95,342 |
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill consists (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,625 | $ 1,625 |
Effect of foreign currency translation | 116 | 114 |
Total goodwill | $ 1,741 | $ 1,739 |
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible assets, net (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 30,206 | $ 23,045 | |
Less: Accumulated amortization | (16,276) | (10,993) | |
Add: Currency translation adjustment | 36 | 35 | |
Total intangible assets, net | 13,966 | 12,087 | |
Amortization expense for intangible assets | 5,300 | 4,500 | $ 3,100 |
Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 500 | 500 | |
Internally developed software | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 29,706 | $ 22,545 |
LEASES - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | |||
Lessee renewal term | 5 years | ||
Operating lease rent expense | $ 1.3 | $ 0.8 | $ 1.2 |
Cash paid for operating lease liabilities | $ 0.5 | $ 0.7 | $ 0.9 |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 3 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 8 years |
LEASES - Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
2022 | $ 1,818 | |
2023 | 2,473 | |
2024 | 2,239 | |
2025 | 2,109 | |
2026 | 2,172 | |
Thereafter | 4,937 | |
Total lease payments | 15,748 | |
Less: imputed interest | (2,325) | |
Operating lease liability | $ 13,423 | $ 390 |
LEASES - Summary of Lease Information (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities (includes $306 and $399 due to related parties as of December 31, 2021 and December 31, 2020, respectively) | Other current liabilities (includes $306 and $399 due to related parties as of December 31, 2021 and December 31, 2020, respectively) |
Current portion of operating lease liabilities included within other current liabilities | $ 1,240 | $ 333 |
Lease liability, noncurrent | 12,183 | 57 |
Total operating lease liability future lease payments | $ 13,423 | $ 390 |
Weighted average remaining operating lease term (in years) | 6 years 8 months 12 days | 9 months 18 days |
Weighted average discount rate | 4.50% | 11.30% |
ASSET RETIREMENT OBLIGATION (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance at January 1, | $ 4,137 | $ 5,759 |
Asset retirement obligation | 0 | 771 |
Settlement of asset retirement obligation | 0 | (1,375) |
Retirement cost revaluation | (231) | (1,235) |
Accretion expense | 229 | 217 |
Ending balance at December 31, | $ 4,135 | $ 4,137 |
ENERGY STORAGE SYSTEMS, NET - Schedule of Energy Storage Systems, Net (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (45,250) | $ (33,389) |
Total energy storage systems, net | 106,114 | 123,703 |
Energy storage systems placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | 143,592 | 144,425 |
Energy storage systems not yet placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | $ 7,772 | $ 12,667 |
ENERGY STORAGE SYSTEMS, NET - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 14.4 | $ 13.9 | $ 9.7 |
BALANCE SHEET COMPONENTS - Inventory (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Work in process inventory | $ 20,582 | $ 15,296 |
Batteries | 2,138 | 5,547 |
Inventory, net | $ 22,720 | $ 20,843 |
BALANCE SHEET COMPONENTS - Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred costs with suppliers | $ 13,744 | $ 6,204 |
Prepaid expenses | 3,137 | 698 |
Utility program deposits | 353 | 891 |
Due from related parties | 213 | 123 |
Other | 1,194 | 4 |
Total other current assets | $ 18,641 | $ 7,920 |
BALANCE SHEET COMPONENTS - Other Noncurrent Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid warranties and maintenance | $ 15,991 | $ 1,088 |
Receivable from SPEs | 3,565 | 3,583 |
Deferred SPAC costs | 0 | 1,256 |
Self-generation incentive program deposits | 940 | 1,036 |
Total equity method investments | 1,924 | 744 |
Net proceeds to pay cost | 0 | 73 |
Property and equipment, net | 512 | 44 |
Other | 1,599 | 458 |
Other noncurrent assets | $ 24,531 | $ 8,282 |
BALANCE SHEET COMPONENTS - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued payables | $ 25,062 | $ 9,799 |
Accrued interest – notes payable | 344 | 6,149 |
Other accrued liabilities | 587 | 124 |
Total accrued liabilities | $ 25,993 | $ 16,072 |
BALANCE SHEET COMPONENTS - Other Current Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
System advances | $ 267 | $ 640 |
Current portion of operating lease liabilities included within other current liabilities | 1,240 | 333 |
Due to related parties | 306 | 399 |
Other | 0 | 217 |
Total other current liabilities | $ 1,813 | $ 1,589 |
NOTES PAYABLE - Revolving Loan Due to SPE Member (Details) - Line of Credit - Revolving Loan Due To SPE Member - USD ($) $ in Millions |
1 Months Ended | ||||
---|---|---|---|---|---|
Aug. 31, 2020 |
May 31, 2020 |
Apr. 30, 2017 |
Dec. 31, 2020 |
Jan. 01, 2020 |
|
Debt Instrument [Line Items] | |||||
Total capacity | $ 35.0 | $ 45.0 | |||
Fixed interest rate, annual | 14.00% | 10.00% | |||
Period threshold for interest rate | 9 months | ||||
Percent of capacity usage for financing of hardware purchases | 70.00% | 85.00% | 100.00% | ||
Outstanding balance | $ 7.4 |
NOTES PAYABLE - Term Loan Due to SPE Member (Details) - Term Loan Due To SPE Member - Term Loan - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
May 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2018 |
|
Debt Instrument [Line Items] | |||
Face amount | $ 13.3 | ||
Fixed interest rate, annual | 12.50% | ||
Final balloon payment | $ 3.0 | ||
Repayment of debt | $ 5.9 |
NOTES PAYABLE - Term Loan Due to Former Non-Controlling Interest Holder (Details) - USD ($) $ in Millions |
1 Months Ended | |||
---|---|---|---|---|
Apr. 30, 2021 |
May 31, 2020 |
Jun. 30, 2018 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||||
Payment to acquire noncontrolling interest | $ 8.1 | |||
Term Loan Due To Former Non-Controlling Interest Holder | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Fixed interest rate, quarterly | 4500.00% | |||
Fixed interest rate, annual | 18.00% | |||
Prepaid principal and interest | $ 1.5 | |||
Prepaid principal | $ 1.0 | |||
Warrants issued (in shares) | 400,000 | |||
Unamortized discount | $ 0.2 | |||
Long-term debt securities | $ 5.8 | |||
Debt instrument, prepayment penalties | $ 2.6 |
NOTES PAYABLE - 2020 and 2021 Credit Agreements (Details) - Line of Credit - USD ($) $ in Millions |
1 Months Ended | ||||
---|---|---|---|---|---|
Apr. 30, 2021 |
Jan. 31, 2021 |
May 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
2020 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Proceeds from credit agreement | $ 25.0 | ||||
Fixed interest rate, annual | 12.00% | ||||
Fixed interest rate, paid in cash | 8.00% | ||||
Fixed interest rate, added back to principal | 4.00% | ||||
Outstanding balance | $ 25.6 | ||||
Prepayment penalties | $ 1.4 | ||||
2021 Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Proceeds from credit agreement | $ 1.8 | ||||
Fixed interest rate, annual | 5.45% | ||||
Outstanding balance | $ 1.9 | ||||
Total capacity | $ 2.7 |
NOTES PAYABLE - Schedule of Outstanding Debt (Details) - Notes Payable $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Outstanding principal | $ 1,902 |
Unamortized discount | (215) |
Carrying value of debt | $ 1,687 |
CONVERTIBLE PROMISSORY NOTES - Allocated To Debt And Equity Components Based (Details) - 2028 Convertible Notes - Convertible Notes - USD ($) $ in Thousands |
Dec. 31, 2021 |
Nov. 22, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Unamortized discount | $ 12,420 | |
Debt issuance costs | 1,871 | |
Total | $ 143,458 | 14,291 |
Equity Component | ||
Initial Purchaser’s Debt Discount | 3,650 | |
Debt Issuance Costs | 550 | |
Total | 4,200 | |
Debt Component | ||
Initial Purchaser’s Debt Discount | 8,770 | |
Debt Issuance Costs | 1,321 | |
Total | $ 10,091 |
CONVERTIBLE PROMISSORY NOTES - Outstanding 2028 Convertible Notes (Details) - Convertible Notes - 2028 Convertible Notes - USD ($) $ in Thousands |
Dec. 31, 2021 |
Nov. 22, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Outstanding principal | $ 460,000 | |
Unamortized discount | (143,458) | $ (14,291) |
Carrying value of debt | $ 316,542 |
CONVERTIBLE PROMISSORY NOTES - Interest Expense Recognized Related to Convertible Note (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||
Non-cash interest expense, including interest expenses associated with debt issuance costs | $ 9,648 | $ 10,044 | $ 4,759 |
2028 Convertible Notes | Convertible Notes | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 249 | ||
Non-cash interest expense, including interest expenses associated with debt issuance costs | 1,812 | ||
Interest expense | $ 2,061 |
STOCK-BASED COMPENSATION - Assumptions in Estimating Option Fair Value (Details) - Stock Options |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 74.00% | 71.41% | 69.10% |
Risk-free interest rate | 1.06% | 0.49% | 2.47% |
Expected term (years) | 6 years 2 months 23 days | 5 years 9 months 25 days | 5 years 9 months 29 days |
Dividend yield | 0.00% | 0.00% | 0.00% |
STOCK-BASED COMPENSATION - RSU Activity (Details) - RSU - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Number of RSUs Outstanding | ||
RSUs outstanding, ending of period (in shares) | 1,799,677 | 0 |
RSUs granted (in shares) | 1,801,831 | |
RSUs vested (in shares) | 0 | |
RSUs forfeited (in shares) | (2,154) | |
Weighted- Average Grant Date Fair Value Per Share | ||
RSUs outstanding, weighted average grant date fair value (in dollars per share) | $ 36.0 | $ 0 |
RSUs granted, weighted average grant date fair value (in dollars per share) | 36.0 | |
RSUs vested, weighted average grant date fair value (in dollars per share) | 0 | |
RSUs forfeited, weighted average grant date fair value (in dollars per share) | $ 26.1 |
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 13,546 | $ 4,542 | $ 1,531 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,723 | 396 | 364 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 2,367 | 1,211 | 901 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 9,456 | $ 2,935 | $ 266 |
SPECIAL PURPOSE ENTITIES - Assets and Liabilities of Consolidated VIE (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Energy storage systems, net | $ 106,114 | $ 123,703 |
Deferred revenue, current portion | 9,158 | 36,942 |
Deferred revenue, noncurrent | 28,285 | 15,468 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Energy storage systems, net | 649 | 1,463 |
Deferred revenue, current portion | 283 | 283 |
Deferred revenue, noncurrent | 753 | 1,047 |
Other liabilities | $ 159 | $ 239 |
SPECIAL PURPOSE ENTITIES - Investment in Unconsolidated SPE (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Class of Warrant or Right [Line Items] | ||
Total equity method investments | $ 1,924 | $ 744 |
Variable Interest Entity, Not Primary Beneficiary | ||
Class of Warrant or Right [Line Items] | ||
Total equity method investments | 1,924 | 744 |
SPV II | Variable Interest Entity, Not Primary Beneficiary | ||
Class of Warrant or Right [Line Items] | ||
Total equity method investments | 0 | 0 |
SPV III | Variable Interest Entity, Not Primary Beneficiary | ||
Class of Warrant or Right [Line Items] | ||
Total equity method investments | 421 | 487 |
SPV IV | Variable Interest Entity, Not Primary Beneficiary | ||
Class of Warrant or Right [Line Items] | ||
Total equity method investments | 291 | 257 |
COPEC | Variable Interest Entity, Not Primary Beneficiary | ||
Class of Warrant or Right [Line Items] | ||
Total equity method investments | $ 1,212 | $ 0 |
SPECIAL PURPOSE ENTITIES - Financing Obligations Associated (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Financing obligation, current portion | $ 15,277 | $ 14,914 |
Financing obligation, noncurrent | 73,204 | 73,128 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Financing obligation, current portion | 15,277 | 14,914 |
Financing obligation, noncurrent | $ 73,204 | $ 73,128 |
SPECIAL PURPOSE ENTITIES - Carrying Value of Energy Storage System Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Energy storage systems, net | $ 106,114 | $ 123,703 |
Deferred revenue, current portion | 9,158 | 36,942 |
Deferred revenue, noncurrent | 28,285 | 15,468 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Energy storage systems, net | 92,426 | 91,593 |
Deferred revenue, current portion | 4,417 | 3,713 |
Deferred revenue, noncurrent | 10,835 | 8,265 |
Other liabilities | $ 3,586 | $ 3,178 |
INCOME TAXES - Components Of Income Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (101,211) | $ (156,119) | $ (59,408) |
Foreign | 0 | 0 | 0 |
Income (loss) before income taxes | $ (101,211) | $ (156,119) | $ (59,408) |
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Contingency [Line Items] | |||
Income tax expense | $ 0 | $ 5 | $ 6 |
Valuation allowance | 125,082 | 91,315 | |
Uncertain tax positions | 700 | 800 | |
Domestic Tax Authority | |||
Income Tax Contingency [Line Items] | |||
NOL carryforwards | 300,800 | 199,800 | |
Domestic Tax Authority | Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward | 700 | 700 | |
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
NOL carryforwards | 274,600 | 200,500 | |
State and Local Jurisdiction | Research Tax Credit Carryforward | |||
Income Tax Contingency [Line Items] | |||
Tax credit carryforward | 0 | 100 | |
Tax credit carryforward, subject to expiration | 700 | 700 | |
Foreign Tax Authority | |||
Income Tax Contingency [Line Items] | |||
NOL carryforwards | $ 9,000 | $ 0 |
INCOME TAXES - Components Of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 0 | 5 | 6 |
Total current | 0 | 5 | 6 |
Deferred: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Total deferred | 0 | 0 | 0 |
Income tax expense | $ 0 | $ 5 | $ 6 |
INCOME TAXES - Provision (Benefit) Of Income Taxes Federal Statutory Rate (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Statutory rate | 21.00% | 21.00% | 21.00% |
State tax | 3.15% | 3.19% | 7.13% |
Foreign income and withholding taxes | 1.61% | 0.41% | 0.08% |
Stock-based compensation | 6.17% | (0.60%) | (0.51%) |
Change in fair value of warrants | 0.71% | (11.36%) | 0.53% |
Other | (1.19%) | 0.00% | (0.04%) |
Non-deductible interest expense | (2.53%) | (1.51%) | (2.63%) |
Valuation allowance | (28.92%) | (11.13%) | (25.56%) |
Total | 0.00% | 0.00% | 0.00% |
INCOME TAXES- Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred tax assets: | ||
Net operating losses | $ 92,160 | $ 59,960 |
Tax credits | 741 | 761 |
Depreciable assets | 604 | 635 |
Operating lease liabilities | 3,558 | 0 |
Accruals and allowances | 1,803 | 575 |
Stock-based compensation | 1,359 | 83 |
Deferred revenue | 24,734 | 27,962 |
Interest expense | 1,209 | 0 |
Other | 3,989 | 3,035 |
Total gross deferred tax assets | 130,157 | 93,011 |
Less: Valuation allowance | (125,082) | (91,315) |
Net deferred tax assets | 5,075 | 1,696 |
Deferred tax liabilities: | ||
Amortization of asset retirement obligation | (768) | (944) |
Intangibles | (862) | (752) |
Right-of-use assets | (3,445) | 0 |
Total gross deferred tax liabilities | (5,075) | (1,696) |
Net deferred taxes | $ 0 | $ 0 |
EMPLOYER RETIREMENT PLAN (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Employer match amount | $ 0 | $ 0 | $ 0 |
Minimum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defer compensation, percentage | 1.00% | ||
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defer compensation, percentage | 75.00% |
SUBSEQUENT EVENTS (Details) - Subsequent Event - AlsoEnergy, Inc $ in Millions |
Feb. 01, 2022
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Percent of outstanding shares acquired | 100.00% |
Aggregate purchase price | $ 695.0 |
Cash percentage | 75.00% |
Common Stock | |
Subsequent Event [Line Items] | |
Share percentage | 25.00% |
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