Restatement

12 Months Ended

Dec. 31, 2022

Accounting Changes and Error Corrections [Abstract]

Restatement

Restatement

On July 11, 2023, the Company announced that the Audit Committee of the Company’s Board of Directors determined, based on the recommendation of management that the Company’s previously issued financial statements included in the 2022 Form 10-K for the period ended December 31, 2022 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and September 30, 2022 (the “Affected Periods”) should no longer be relied upon due to errors identified in the Affected Periods primarily due to an error stemming from a non-cash and non-operating item related to the change in the fair value upon conversion of the notes payable issued under the Company’s debt arrangements. The Company has determined that it is appropriate to correct the misstatements in the Company’s previously issued financial statements and related disclosures by amending the Original Filing and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2023 and September 30, 2022.

In connection with remediating certain material weaknesses in the Company’s internal control over financial reporting previously disclosed in the Original Filing, the Company identified the error in its accounting for the conversion of the notes payable issued under its debt arrangements. The Company previously elected to measure such notes payable at fair value, as they contain embedded liquidation premiums with conversion rights that represent embedded derivatives (see Note 11, Notes Payable). Between the third quarter of 2022 and the first quarter of 2023 the purchasers converted certain of the notes into the

Company’s Class A Common Stock. The Company historically erroneously applied debt conversion accounting guidance to the notes payable conversion transactions that is not applicable to debt accounted for under the Company’s fair value accounting policy election, which resulted in such conversions being incorrectly accounted for with a credit to Class A Common Stock and Additional paid-in capital equity equal to the fair value of the notes payable on each conversion date and no conversion gain or loss being recognized in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company should have accounted for such conversions by applying debt extinguishment accounting with a credit to Class A Common Stock and Additional paid-in capital equal to the fair value of the Class A Common Stock issued on each conversion date. Under debt extinguishment accounting the difference between the fair value of the Class A Common Stock issued and the fair value of the debt at each conversion date represents a gain or loss on extinguishment. Accordingly, the Company should have recognized an additional $65.5 million Loss on settlement of notes payable in the Consolidated Statement of Operations and Comprehensive Income (Loss) for the year ended December 31, 2022 (and a corresponding $65.5 million increase in Additional paid-in capital as of December 31, 2022) because the fair value of the Class A Common Stock issued significantly exceeded the fair value of the notes payable converted on each of the various conversion dates during 2022.

During the course of correcting the aforementioned error, the Company identified an error in its accounting for the exercise of its liability-classified warrants that were previously issued in connection with the issuance of certain convertible notes payable under its debt arrangements. Upon exercise of the warrants the Company did not properly reclassify the fair value of the warrant liabilities on each conversion date to Additional paid-in capital. Rather, the Company incorrectly recognized the extinguishment of the warrant liabilities as a gain in the Change in fair value of warrant liabilities in the Statement of Operations and Comprehensive Income (Loss). Accordingly, the Company should have recognized an increase in Additional paid-in capital of $3.2 million as of December 31, 2022 with a corresponding impact on the Change in the fair value of warrant liabilities for the year then ended.

The restated financial information also includes adjustments to correct other immaterial errors, including errors that had previously been adjusted for as out of period corrections in the Affected Periods, the most significant of which is the Company’s $18.1 million understatement of Deposits with vendors and Inventory as of December 31, 2022 due to improperly recognizing such amount as Research and development expense during the fourth quarter of 2022 and subsequently correcting such error as an out of period adjustment during the first quarter of 2023. The other immaterial errors impacting the Company’s financial statements as of December 31, 2022 and for the year then ended relate to Change in fair value measurement of notes payable and warrant liabilities, Interest expense, Stock-based compensation expense, Other expense, net, Property and equipment, Accounts payable, Bridge Warrant liabilities, Accrued interest, Related party notes payable, Additional paid-in capital, Accumulated deficit, and the misclassification of certain expenses between Research and development, Sales and marketing, and General and administrative expenses. The restatement adjustments were tax effected and any tax adjustments reflected in the Affected Periods relate entirely to the tax effect on the restatement adjustments.

In addition to the restatement of the financial statements, certain information within the following notes to the financial statements has been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate: Note 6, Deposits and Other Current Assets; Note 7, Property and Equipment, Net; Note 9, Fair Value of Financial Instruments; Note 10, Related Party Notes Payable; Note 11, Notes Payable; and Note 16, Stock-Based Compensation.

Presented below is a reconciliation from the previously reported to the restated amounts as of December 31, 2022 and for the year then ended. The amounts labeled “As Previously Reported” were derived from the Original Filing. The impacts to the Consolidated Statements of Stockholders’ Equity (Deficit) for the year ended December 31, 2022 as a result of the restatement were due to the changes in the Conversion of notes payable into Class A Common Stock, Class A Common Stock to be delivered for conversion of notes payable, Stock-based compensation expense, Chongqing related party note payable restructuring, Issuance of SEPA commitment shares of Class A Common Stock, and Net loss. In addition, there was no impact to net cash used in operating, investing or financing activities for the year ended December 31, 2022 as a result of the restatement.

The following tables present the effect of correcting these accounting errors on the Company’s previously issued financial statements (in thousands, except share and per share data):

Summary of Restatement - Consolidated Balance Sheet

	December 31, 2022
	As Previously Reported		Restatement Impacts		As Restated
Assets
Current assets
Deposits	$	26,804	$	17,262	$	44,066
Other current assets	21,087		859		21,946
Total current assets	66,405		18,121		84,526
Property and equipment, net	417,803		879		418,682
Total assets	$	510,288	$	19,000	$	529,288
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	87,376	$	4,227	$	91,603
Bridge warrants	95,130		(2,349)		92,781
Accrued interest	1,864		(1,675)		189
Related party notes payable	8,406		558		8,964
Total current liabilities	267,484		761		268,245
Total liabilities	327,535		761		328,296
Commitments and contingencies (Note 14)
Stockholders’ equity
Additional paid-in capital	3,655,771		68,409		3,724,180
Accumulated deficit	(3,476,585)		(50,170)		(3,526,755)
Total stockholders’ equity	182,753		18,239		200,992
Total liabilities and stockholders’ equity	$	510,288	$	19,000	$	529,288

Consolidated Statement of Operations and Comprehensive Loss

	Year Ended December 31, 2022
	As Previously Reported		Restatement Impacts		As Restated
Operating expenses
Research and development	$	311,084	$	(11,095)	$	299,989
Sales and marketing	20,772		917		21,689
General and administrative	116,437		(3,666)		112,771
Loss on disposal of property and equipment	2,695		—		2,695
Total operating expenses	450,988		(13,844)		437,144
Loss from operations	(450,988)		13,844		(437,144)
Change in fair value measurements	(69,671)		(841)		(70,512)
Interest expense	(7,236)		1,675		(5,561)
Related party interest expense	(3,879)		—		(3,879)
Other expense, net	(12,544)		666		(11,878)
Loss on settlement of related party notes payable, notes payable, and vendor payables in trust, net	(7,690)		(65,514)		(73,204)
Loss before income taxes	(552,008)		(50,170)		(602,178)
Income tax provision	(61)		—		(61)
Net loss	$	(552,069)	$	(50,170)	$	(602,239)
Per share information (Note 18):
Net loss per Common Stock – Class A and Class B – basic and diluted	$	(1.50)	$	(0.14)	$	(1.64)
Weighted average Common Stock outstanding – Class A and Class B – basic and diluted	367,254,444		—		367,254,444
Total comprehensive loss
Net loss	$	(552,069)	$	(50,170)	$	(602,239)
Change in foreign currency translation adjustment	10,450		$	—	10,450
Total comprehensive loss	$	(541,619)	$	(50,170)	$	(591,789)

Summary of Restatement - Consolidated Statement of Cash Flows

	Year Ended December 31, 2022
	As Previously Reported		Restatement Impacts		As Restated
Cash flows from operating activities
Net loss	$	(552,069)	$	(50,170)	$	(602,239)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense	2,975		—		2,975
Amortization of operating lease right-of-use assets and intangible assets	2,520		—		2,520
Stock-based compensation	17,653		11		17,664
Vesting of restricted stock awards for employee bonus	—		—		—
Loss on disposal of property and equipment	2,695		—		2,695
Change in fair value measurement of related party notes payable and notes payable	(25,471)		3,190		(22,281)
Change in fair value measurement of warrant liability	95,130		(2,349)		92,781
Loss (gain) on foreign exchange	2,484		—		2,484
Loss (gain) on forgiveness of accounts payable and deposits, net (see Note 6)	5,200		—		5,200
Non-cash interest expense	10,078		(1,675)		8,403
Loss on extinguishment of related party notes payable, notes payable and vendor payables in trust, net	7,690		65,514		73,204
Gain on forgiveness of vendor payables in trust	—		—		—
Reserve for unrecoverable value added taxes	—		—		—
Other	776		252		1,028
Changes in operating assets and liabilities:
Deposits	28,136		(17,262)		10,874
Other current and non-current assets	(8,841)		(859)		(9,700)
Accounts payable	57,021		3,348		60,369
Accrued expenses and other current and non-current liabilities	(14,947)		—		(14,947)
Operating lease liabilities	(1,620)		—		(1,620)
Accrued interest expense	(12,468)		—		(12,468)
Transfers between vendor payables in trust and accounts payable	—		—		—
Net cash used in operating activities	$	(383,058)	$	—	$	(383,058)

	Year Ended December 31, 2022
	As Previously Reported		Restatement Impacts		As Restated
Supplemental disclosure of noncash investing and financing activities
Conversion of notes payable into Class A Common Stock (Note 11) (as restated)	$	99,481	$	64,588	$	164,069
Additions of property and equipment included in accounts payable and accrued expenses (as restated)	8,041		4,227		12,268
Troubled debt restructuring accounted for as a capital transaction (as restated)	17,399		(558)		16,841
Class A Common Stock to be delivered for conversion of notes payable (Note 11) (as restated)	926		(926)		—