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Notes Payable (Tables)
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Schedule of notes payable agreements with third parties
   December 31, 2022
Note Name  Contractual
Maturity
Date		  Contractual
Interest
Rates		   Unpaid
Principal
Balance		   Fair Value
Measurement
Adjustments		   Original issue
discount and
proceeds
allocated to
warrants		   Net
Carrying
Value		   Interest
Expense for
the Twelve
Months
Ended
December 31,
2022		 
Bridge Notes (3)  October 27, 2028   10%  $36,622   $264   $(10,878)  $26,008   $1,676 
Notes payable - China other (4)  Due on Demand   
         -
%   4,997                -    -    4,997         - 
Auto loans  October 26, 2026   7%   100    -    -    100    7 
           $41,719   $264   $(10,878)  $31,105   $1,683 

 

   December 31, 2021
Note Name  Contractual
Maturity Date		  Contractual
Interest
Rates		   Unpaid
Balance		   Fair Value
Measurement
Adjustments		   Original issue
discount and
proceeds
allocated to
warrants		   Net
Carrying
Value		 
March 1, 2021 Notes (1)  March 1, 2022   14%  $55,000   $7,692   $(5,997)  $56,695 
August 26, 2021 Notes (1)  March 1, 2022   14%   30,000    1,011    (87)   30,924 
June 9, 2021 Note 1 and Note 2 (2)  December 9, 2022   
           -
%   40,000    8,503    (9,522)   38,981 
August 10, 2021 Optional Notes(2)  February 10, 2023   15%   33,917    12,283    (11,518)   34,682 
Notes payable - China other(4)  Due on demand   
-
%   5,458    -    -    5,458 
PPP Loan(5)  April 17, 2022   1%   193    -    -    193 
Auto loans  October 26, 2026   7%   121    -    -    121 
Total notes payable          $164,689   $29,489   $(27,124)  $167,054 

 

(1)On March 1, 2021, the Company amended the NPA to permit the issuance of additional notes payable with principal amounts up to $85.0 million. On the same day, the Company entered into notes payable agreements with Ares for an aggregate principal of $55.0 million, receiving net proceeds of $51.5 million, inclusive of a 4.00% original issue discount and $0.1 million of debt issuance costs paid directly by the lender (“March 1, 2021 Notes”). The notes payable were collateralized by a first lien on virtually all tangible and intangible assets of the Company, bore interest at 14% per annum and matured on March 1, 2022. On February 25, 2022, the Company repaid the $55.0 million principal amount of the March 1, 2021 Notes with accrued interest of $7.7 million.

 

(2)In addition, in conjunction with the issuance of the notes payable, the Company committed to issue the Ares Warrants to the lender to purchase the Company’s Class A Common Stock no later than August 11, 2021, or if earlier, 15 days after consummation of the Business Combination. The warrants have a term of six years, be equal to 0.20% of the fully diluted capitalization of FFIE’s Class A Common Stock and have an exercise price of $10.00 per share. The commitment to issue the warrants meets the definition of a derivative, was accounted for as a liability, and will be marked to fair value at the end of each reporting period with changes in fair market value recorded in the Consolidated Statements of Operations and Comprehensive Loss. The Company determined the commitment to issue warrants was a liability as of March 1, 2021, and estimated the fair value of the warrants to be $5.0 million using the Black-Scholes option-pricing model (see Note 8, Fair Value of Financial Instruments).

 
Schedule of notes payable
   Year ended December 31, 2022
Note Name  Contractual
Maturity Date		  Contractual
Interest Rates		   Net carrying value at 12/31/2021
Balance		   Fair Value
Measurement
Adjustments		   Payment Premium   Cash Payment   Conversion into Class A Common Stock 
March 1, 2021 Notes (1)  March 1, 2022   14%  $56,695   $(1,695)  $
-
   $(55,000)  $
-
 
August 26, 2021 Notes (1)  March 1, 2022   14%   30,924    (924)   2,065    (32,065)   
-
 
June 2021 Notes (2)  October 31, 2026   
          -
%   38,981    1,019    
-
    
-
    (40,000)
Optional Notes (2)  October 31, 2026   15%   34,682    (765)   
-
    
-
    (33,917)
PPP Loan (5)  April 17, 2022   1%   193    
-
    
-
    (193)   
-
 
           $161,475   $(2,365)  $2,065   $(87,258)  $(73,917)

 

(1)On March 1, 2021, the Company amended the NPA to permit the issuance of additional notes payable with principal amounts up to $85.0 million. On the same day, the Company entered into notes payable agreements with Ares for an aggregate principal of $55.0 million, receiving net proceeds of $51.5 million, inclusive of a 4.00% original issue discount and $0.1 million of debt issuance costs paid directly by the lender (“March 1, 2021 Notes”). The notes payable were collateralized by a first lien on virtually all tangible and intangible assets of the Company, bore interest at 14% per annum and matured on March 1, 2022. On February 25, 2022, the Company repaid the $55.0 million principal amount of the March 1, 2021 Notes with accrued interest of $7.7 million.

 

(2)In addition, in conjunction with the issuance of the notes payable, the Company committed to issue the Ares Warrants to the lender to purchase the Company’s Class A Common Stock no later than August 11, 2021, or if earlier, 15 days after consummation of the Business Combination. The warrants have a term of six years, be equal to 0.20% of the fully diluted capitalization of FFIE’s Class A Common Stock and have an exercise price of $10.00 per share. The commitment to issue the warrants meets the definition of a derivative, was accounted for as a liability, and will be marked to fair value at the end of each reporting period with changes in fair market value recorded in the Consolidated Statements of Operations and Comprehensive Loss. The Company determined the commitment to issue warrants was a liability as of March 1, 2021, and estimated the fair value of the warrants to be $5.0 million using the Black-Scholes option-pricing model (see Note 8, Fair Value of Financial Instruments).

 
Schedule of notes settlement
March 1, 2021 Notes  December 31,
2022		   December 31,
2021		 
Outstanding principal  $
-
   $55,000 
Accrued interest   
-
    6,455 
Interest expense for the year ended December 31, 2022   1,266    
-
 
Principal payments   55,000    
-
 
Interest payments   7,721    
-
 

 

August 26, 2021 Notes  December 31,
2022		   December 31,
2021		 
Outstanding principal  $
-
   $30,000 
Accrued interest   
-
    1,473 
Interest expense for the year ended December 31, 2022   662    
-
 
Principal payments   30,000    
-
 
Interest payments   2,135    
-
 
Payment Premium payments   2,065    
-
 

 

June 9, 2021 Note 1  As of and
for the Year
Ended		 
(dollars in thousands)  2021 
Outstanding principal  $20,000 
Original issue discount and debt issuance costs   1,797 
Proceeds   18,203 

 

June 9, 2021 Note 2  As of and
for the Year
Ended		 
(dollars in thousands)  2021 
Outstanding principal  $20,000 
Original issue discount and debt issuance costs   2,600 
Proceeds   17,400 

 

August 10, 2021 Optional Notes  As of and
for the Year
Ended		 
(dollars in thousands)  2021 
Outstanding principal  $33,917 
Accrued interest   183 
Interest expense   183 
Original issue discount and debt issuance costs   3,542 
Proceeds   30,375 

 

Optional Notes  December 31,
2022		   December 31,
2021		 
Outstanding principal  $
-
   $33,917 
Accrued interest   
-
    183 
Interest expense for the year ended December 31, 2022   2,572    
-
 
Principal conversion into Class A Common Stock   33,917    
-
 
Interest payments   2,756    
-
 

 

June 2021 Notes  December 31,
2022		   December 31,
2021		 
Outstanding principal  $
-
   $40,000 
Accrued interest   
-
    
-
 
Interest expense for the year ended December 31, 2022   
-
    
-
 
Principal conversion into Class A Common Stock   40,000    
-
 
Interest payments   
-
    
-
 

 

   As of and for
the Year Ended
December 31,		 
(dollars in thousands)  2021 
Outstanding principal  $5,458 
Foreign exchange (gain) loss on principal   133 
Reclassification from related party notes payable   730 

 

January 13 and March 12, 2021 Notes  As of and
for the Year
Ended
December 31,		 
   2021 
Outstanding principal  $
-
 
Original issue discount and debt issuance costs   1,940 
Principal and conversion premium settled with equity   23,725 
Proceeds   16,310 

 

  As of and
for the Year
Ended
December 31,		 
January 13 and March 8, 2021 Notes  2021 
Outstanding principal  $
-
 
Original issue discount and debt issuance costs   1,132 
Interest expense   632 
Principal conversion premium settled with equity   2,069 
Interest settled with equity   82 
Principal and conversion premium payments in cash   11,582 
Interest payments in cash   550 
Proceeds   8,218 

 
Schedule of business combination and combination of cash payments and commitment
   Year ending December 31, 2021 
Note Name  Net Carrying Value at 12/31/2020   Borrowings, net of OID   Fair Value Measurement Adjustments   Accrued Interest at Settlement   FX and Other   Cash Payment   Equity Settlement   Net Carrying Value at 12/31/2021   Loss (Gain) at Settlement   Interest Expense for the year ended December 31, 2021 
Settlement prior to the Business Combination:                                                  
Note payable  $57,293   $
-
   $
    -
   $17,177   $(1,293)  $
-
   $(73,177)  $
-
   $
-
   $3,408 
Notes payable   19,100    
-
    
-
    6,098    
-
    
-
    (25,198)   
-
    
-
    1,281 
Subtotal settlements prior to the Business Combination   76,393    
-
    
-
    23,275    (1,293)   
-
    (98,375)   
-
    
-
    4,689 
Settlements in the Business Combination:                                                  
Notes payable - NPA   21,059    
-
    104    3,614    
-
    (17,636)   (7,141)   
-
    2,699    976 
Notes payable - China   3,659    
-
    
-
    2,713    56    
-
    (6,428)   
-
    2,430    374 
Notes payable - China   4,807    
-
    
-
    757    110    
-
    (5,674)   
-
    2,145    164 
Note payable   17,712    
-
    1,988    
-
    667    
-
    (20,367)   
-
    7,698    
-
 
January 13 and March 12, 2021 Notes(6)   
-
    16,790    6,935    
-
    
-
    
-
    (23,725)   
-
    8,968    
-
 
Note payable   20,972    
-
    138    270    667    (18,992)   (3,055)   
-
    1,155    1,334 
January 13 and March 8, 2021 Notes(7)   
-
    8,750    4,901    82    
-
    (11,582)   (2,151)   
-
    813    632 
Subtotal settlements in the Business Combination   68,209    25,540    14,066    7,436    1,500    (48,210)   (68,541)   
-
    25,908    3,480 
PPP Loan(5)   9,168    
-
    
-
    
-
    (8,975)   
-
    
-
    193    (8,975)   92 
Total  $153,770   $25,540   $14,066   $30,711   $(8,768)  $(48,210)  $(166,916)  $193   $16,933   $8,261 

 

(5)On April 17, 2020, the Company received loan proceeds from East West Bank of $9.2 million under the Paycheck Protection Program (“PPP”). The PPP was established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and provided for loans to qualifying businesses. The loans and accrued interest are forgivable so long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities, as described in the CARES Act. The amount of loan forgiveness will be reduced if the borrower terminates employees or reduces salaries. The unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%, with a deferral of payments for the later of the first six months or when the amount of the loan forgiveness is determined. The Company used the proceeds for purposes consistent with the PPP requirements. The note matured on April 17, 2022, had no covenants, and was unsecured.

 

(6)On January 13, 2021, the Company entered into a notes payable agreement under the NPA, (“January 13 Notes”) with a US-based investment firm for total principal of $11.3 million, receiving net proceeds of $9.9 million, net of an 8% original issue discount and $0.5 million of debt issuance costs paid directly by the lender. The note payable is collateralized by a first lien on virtually all tangible and intangible assets of the Company and bears interest at 0% per annum. On March 12, 2021, the Company and the US-based investment firm entered into a notes payable agreement (“March 12 Notes”) for an aggregate principal amount of $7.0 million, receiving net proceeds of $6.4 million, net of an 8% original issue discount. The terms of this note payable were the same as the note payable issued on January 13, 2021. The Company elected the fair value option for these note payable because the inclusion of a conversion feature that allowed the lenders to convert the notes payable into Class A Common Stock after the closing of the Business Combination.

 

(7)On January 13, 2021, the Company amended the NPA to permit the issuance of additional secured convertible notes payable and issued $3.8 million of notes payable to Birch Lake (“BL Notes”), receiving net proceeds of $3.3 million, net of a 6.50% original issue discount and $0.2 million of debt issuance costs paid directly by the lender. The BL Notes accrued interest at 8% per annum. The BL Notes contained a liquidation premium that ranges from 35% to 45% depending on the timing of settlement, with 50% of this premium convertible into equity. The Company determined that the feature to settle the BL Notes at a premium upon the occurrence of a default, change in control, or a Qualified SPAC Merger was a contingently exercisable put option with a liquidation premium and represents an embedded derivative. The Company elected the fair value option to measure this note payable (see Note 8, Fair Value of Financial Instruments).

 
Schedule of principal maturities of notes payable
Due on demand  $4,997 
2026   100 
2028   36,622 
    41,719