Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Palantir License

In July 2021, the Company and Palantir entered into a master agreement that sets forth the terms of the Palantir’s platform hosting arrangement which is expected to be used as a central operating system for data. Subsequent to entering into this arrangement, Palantir invested $25,000 in the Company through the PIPE Financing and became a shareholder of the Company. Under the platform hosting agreement, the Company committed to pay a total of $47,000 as hosting fees over a six-year term, $3,000 of which was paid in the three months ended September 30, 2021. The software will be cloud hosted for the entirety of the subscription term and the Company cannot take possession of the software. Accordingly, the Company determined that the subscription agreement represents a hosting arrangement that is a service contract. The Company amortizes the hosting costs on a straight-line basis over the agreement term.

Legal Matters

The Company is, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of management, while the outcome of any such claims and disputes cannot be predicted with certainty, the ultimate liability in connection with these matters is not expected to have a material adverse effect on the Company’s results of operations and cash flows.

As of September 30, 2021 and December 31, 2020, the Company had accrued contingent liabilities of $13,730 and $6,025, respectively, for potential financial exposure related to ongoing legal matters primarily related to breach of contracts and employment matters which are deemed both probable of loss and reasonably estimable. As of September 30, 2021, the accrual related to five legal matters which were recorded in the amount of $13,730 in Accrued Expenses and Other Current Liabilities on the unaudited Condensed Consolidated Balance Sheets. As of December 31, 2020, the accrual related to four legal matters which were recorded in the amounts of $5,025 and $1,000 in Accrued Expenses and Other Current Liabilities and in Other Liabilities, Less Current Portion on the unaudited Condensed Consolidated Balance Sheets, respectively. In January 2022, the Company settled a litigation which is included in the contingent liabilities accrual as of September 30, 2021 and December 31, 2020 by agreeing to pay $1,800 in cash in January 2022 and an additional $3,400 plus 5% interest in October 2022.

In July 2021, the Company settled a legal matter with a former employee for $2,850 in cash and issued stock options to purchase 847,800 shares of Class A Common Stock at an exercise price of $2.55 per share (“Settlement Options”) and a grant date fair value of $8,459. The Settlement Options vested 21 days after the Closing Date of the Business Combination. As part of the settlement agreement, no party admitted or acknowledged the existence of any liability or wrongdoing and all claims, including those asking for damages, were voluntarily dismissed. As of December 31, 2020, the Company accrued $5,000 related to this matter and upon reaching the settlement in June 2021, recorded an incremental loss of $6,309 in general and administrative expense in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ending September 30, 2021.

For the three and nine months ending September 30, 2021, the Company recorded an incremental loss of: (i) $7,431 related to an outstanding legal dispute for breach of a loan contract with the plaintiff seeking damages; (ii) $4,200 related to a legal dispute for breach of lease under which the Company was named a co-defendant in a civil action case with the plaintiff seeking damages including unpaid rent, future unpaid rent, unpaid expenses, and unpaid taxes related to the lease, which was settled in January 2022, pursuant to which the Company agreed to pay $1,800 in cash in January 2022 and an additional $3,400 plus 5% interest in October 2022; and (iii) $1,074 related to an outstanding legal dispute for breach of service contract with the plaintiff seeking damages including late payments.