Restatement

3 Months Ended

Mar. 31, 2023

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, its Annual Report on Form 10-K for the year ended December 31, 2022, and its Quarterly Report on Form 10-Q for the period ended 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 10, 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 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 $95.1 million Loss on settlement of notes payable in the Consolidated Statement of Operations and Comprehensive Loss for the three months ended March 31, 2023 (and a corresponding $95.1 million increase in Additional paid-in capital as of March 31, 2023) 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 the first quarter of 2023.

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 Loss. Accordingly, the Company should have recognized an increase in Additional paid-in capital of $47.2 million as of March 31, 2023 with a corresponding impact on the Change in the fair value of warrant liabilities for the period 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 $11.6 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 March 31, 2023 and for the three months then ended relate to Change in fair value of earnout liability, Change in fair value of notes payable and warrant liabilities, Interest expense, Related party interest expense, Stock-based compensation expense, Other income (expense), net, Property and equipment, Accounts payable, Related party accrued interest, Accrued interest, Related party notes payable, Additional paid-in capital, Accumulated deficit, and weighted average shares outstanding. 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 5, Deposits and Other Current Assets; Note 6, Property and Equipment, Net; Note 8, Fair Value of Financial Instruments; Note 9, Related Party Notes Payable; Note 10, Notes Payable; Note 14, Stock-Based Compensation; and Note 15, Net Loss per Share.

Presented below is a reconciliation from the previously reported to the restated amounts as of and for the three months ended March 31, 2023. The amounts labeled “As Previously Reported” were derived from the Original Filing. The impacts to the Condensed Consolidated Statement of Commitment to Issue Class A Common Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2023 as a result of the restatement were due to the changes in the Conversion of notes payable and accrued interest into Class A Common Stock, Stock-based compensation expense, and Net loss. In addition, there was no impact to net cash used in operating, investing or financing activities for the three months ended March 31, 2023 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 - Condensed Consolidated Balance Sheet

	March 31, 2023
	As Previously Reported		Restatement Impacts		As Restated
Assets
Property and equipment, net	$	446,524	$	647	$	447,171
Total assets	$	575,289	$	647	$	575,936
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	76,926	$	3,318	$	80,244
Related party accrued interest	140		(140)		—
Accrued interest	2,505		(2,480)		25
Related party notes payable	8,643		558		9,201
Total current liabilities	192,873		1,256		194,129
Total liabilities	318,903		1,256		320,159
Stockholders’ equity
Additional paid-in capital	3,723,446		201,019		3,924,465
Accumulated deficit	(3,470,098)		(201,630)		(3,671,728)
Total stockholders’ equity	256,386		(609)		255,777
Total liabilities and stockholders’ equity	$	575,289	$	647	$	575,936

Condensed Consolidated Statement of Operations and Comprehensive Loss

	Three Months Ended March 31, 2023
	As Previously Reported		Restatement Impacts		As Restated
Operating expenses
Research and development	$	46,160	$	11,648	$	57,808
Sales and marketing	5,585		(520)		5,065
General and administrative	27,584		(1,071)		26,513
Loss on disposal of property and equipment	3,698		—		3,698
Change in fair value of earnout liability	—		2,764		2,764
Total operating expenses	83,027		12,821		95,848
Loss from operations	(83,027)		(12,821)		(95,848)
Change in fair value of notes payable and warrant liabilities	94,917		(46,782)		48,135
Loss on settlement of notes payable	(3,021)		(95,115)		(98,136)
Interest expense	(4,651)		4,359		(292)
Related party interest expense	(140)		140		—
Other income (expense), net	2,409		(1,241)		1,168
Income (loss) before income taxes	6,487		(151,460)		(144,973)
Income tax provision	—		—		—
Net income (loss)	$	6,487	$	(151,460)	$	(144,973)
Per share information (Note 15):
Net income (loss) per share of Class A and B Common Stock attributable to common stockholders:
Basic	$	0.01	$	(0.21)	$	(0.20)
Diluted	(0.07)		(0.13)		(0.20)
Weighted average shares used in computing net income (loss) per share of Class A and B Common Stock:
Basic	657,565,442		64,000,588		721,566,030
Diluted	988,638,662		(267,072,632)		721,566,030
Total comprehensive income (loss):
Net income (loss)	$	6,487	$	(151,460)	$	(144,973)
Change in foreign currency translation adjustment	(555)		—		(555)
Total comprehensive income (loss)	$	5,932	$	(151,460)	$	(145,528)

Summary of Restatement - Condensed Consolidated Statement of Cash Flows

	Three Months Ended March 31, 2023
	As Previously Reported		Restatement Impacts		As Restated
Cash flows from operating activities
Net income (loss)	$	6,487	$	(151,460)	$	(144,973)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization expense	1,103		—		1,103
Stock-based compensation	15,102		(6,469)		8,633
Loss on disposal of property and equipment	3,698		—		3,698
Change in fair value measurement of related party notes payable and notes payable	(79,462)		—		(79,462)
Change in fair value measurement of warrant liability	(18,219)		49,546		31,327
Change in fair value measurement of earnout liability	2,764		—		2,764
Amortization of operating lease right-of-use assets and intangible assets	736		—		736
Loss on foreign exchange	653		—		653
Non-cash interest expense	4,533		(4,499)		34
Loss on settlement of notes payable	3,021		95,115		98,136
Other	338		323		661
Changes in operating assets and liabilities:
Deposits	(29,370)		17,262		(12,108)
Other current and non-current assets	6,368		859		7,227
Accounts payable	(10,367)		(677)		(11,044)
Accrued expenses and other current liabilities	(9,626)		—		(9,626)
Operating lease liabilities	(542)		—		(542)
Accrued interest expense	(197)		—		(197)
Net cash used in operating activities	$	(102,980)	$	—	$	(102,980)

	Three Months Ended March 31, 2023
	As Previously Reported		Restatement Impacts		As Restated
Supplemental disclosure of noncash investing and financing activities
Conversion of notes payable and accrued interest into Class A Common Stock	$	46,296	$	91,884	$	138,180