QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
QNGY W S |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page |
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1 |
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ITEM 1. |
1 |
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1 |
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2 |
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3 |
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4 |
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6 |
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7 |
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ITEM 2. |
28 |
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ITEM 3. |
41 |
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ITEM 4. |
41 |
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43 |
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ITEM 1. |
43 |
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ITEM 1A. |
44 |
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ITEM 2. |
75 |
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ITEM 3. |
75 |
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ITEM 4. |
75 |
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ITEM 5. |
75 |
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ITEM 6. |
75 |
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79 |
March 31, 2022 |
December 31, 2021 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Other long-term assets |
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Total assets |
$ | $ | ||||||
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Liabilities and stockholders’ equity / (deficit) |
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Current liabilities |
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Accounts payable |
$ | $ | ||||||
Accrued expenses |
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Accrued settlement liability |
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Other current liabilities |
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Short-term debt |
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Related party payable |
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Total current liabilities |
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Long-term debt |
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Long-term debt - related party |
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Derivative liability |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 15) |
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Stockholders’ equity / (deficit): |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Accumulated deficit |
( |
) | ( |
) | ||||
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Total stockholders’ equity / (deficit) |
( |
) | ||||||
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|
|||||
Total liabilities and stockholders’ equity / (deficit) |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net sales |
$ | $ | ||||||
Cost of goods sold |
||||||||
Gross loss |
( |
) | ( |
) | ||||
Operating expenses: |
||||||||
Research and development |
||||||||
Sales and marketing |
||||||||
General and administrative |
||||||||
Operating expenses |
||||||||
Loss from operations |
( |
) | ( |
) | ||||
Other income (expense): |
||||||||
Interest expense, net |
( |
) | ( |
) | ||||
Other expense, net |
( |
) | ( |
) | ||||
Loss before income taxes |
( |
) | ( |
) | ||||
Income tax provision |
( |
) | ( |
) | ||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Net loss attributable per share to common stockholders, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted-average shares used to compute net loss attributable per share to common stockholders, basic and diluted |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive loss (net of tax): |
||||||||
Foreign currency translation gain (loss) |
( |
) | ||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
Convertible |
Common |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||
Preferred Stock |
Stock |
Additional Paid-in Capital |
Accumulated Deficit |
|||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
Balance at December 31, 2021 (as previously reported) |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
Retroactive application of recapitalization (Note 2) |
( |
) | ( |
) | ||||||||||||||||||||||||||||
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Balance at December 31, 2021, as adjusted (Note 2) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
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Conversion of 2023 Notes into common stock |
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Issuance of common stock upon the reverse capitalization, net of offering costs |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||
Offering cost in connection with Business Combination and PIPE financing |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
Issuance of PIPE shares |
— | — | — | — | — | |||||||||||||||||||||||||||
Subsequent issuance of shares for offering costs incurred in connection with Business Combination and PIPE financing |
— | — | — | — | ||||||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units (“RSUs”) |
— | — | — | — | — | |||||||||||||||||||||||||||
Issuance of common stock warrants |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Shares issued upon exercise of options |
— | — | — | — | — | |||||||||||||||||||||||||||
Shares issued upon exercise of common stock warrants |
— | — | — | — | — | |||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
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Balance at March 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||
|
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|
|
|
|
|
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|
|
|
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Convertible |
Common |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||
Preferred Stock |
Stock |
Additional Paid-in Capital |
Accumulated Deficit |
|||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
Balance at December 31, 2020 (as previously reported) |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
Retroactive application of recapitalization (Note 2) |
( |
) | ( |
) | — | — | ||||||||||||||||||||||||||
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Balance at December 31, 2020, as adjusted (Note 2) |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
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Shares issued upon exercise of options |
— | — | — | — | — | |||||||||||||||||||||||||||
Issuance of common stock warrants |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of Restricted Stock Awards (“RSAs”) |
— | — | — | — | — | |||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
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Balance at March 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
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|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Stock-based compensation |
||||||||
Non-cash interest expense |
||||||||
Change in fair value of derivative liabilities |
||||||||
Non-cash bonus expense |
||||||||
Depreciation and amortization |
||||||||
Non-cash lease expense |
||||||||
Paid-in-kind interest and accrued interest on repayment of 2022 Notes |
( |
) | ||||||
Other |
||||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Inventory |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ||||||
Other long-term assets |
( |
) | ( |
) | ||||
Accounts payable |
||||||||
Accrued expenses |
( |
) | ( |
) | ||||
Other current liabilities |
( |
) | ( |
) | ||||
Other long-term liabilities |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from investing activities |
||||||||
Purchases of property and equipment |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ||||||
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|
|
|
|||||
Cash flows from financing activities |
||||||||
Related party proceeds from PIPE financing |
||||||||
Proceeds from Business Combination and PIPE financing |
||||||||
Payments of offering costs |
( |
) | ||||||
Repayment of 2022 Notes |
( |
) | ||||||
Proceeds from exercise of stock options |
||||||||
Proceeds from exercise of common stock warrants |
||||||||
Proceeds from issuance of convertible notes |
||||||||
Proceeds from issuance of convertible notes to related parties |
||||||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
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|
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
( |
) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash |
( |
) | ||||||
Cash, cash equivalents and restricted cash at beginning of period |
||||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Cash paid during the period for interest |
$ | $ | ||||||
Supplemental schedule of noncash investing and financing activities: |
||||||||
Conversion of redeemable convertible preferred stock to common stock |
$ | $ | ||||||
Conversion of 2023 Notes into equity |
$ | $ | ||||||
Issuance of common stock warrants |
$ | $ | ||||||
Assumption of net liabilities from Business Combination |
$ | $ | ||||||
Offering costs paid in common stock |
$ | $ | ||||||
GEMS commitment fee |
|
$ |
|
|
|
$ |
|
|
Unpaid offering costs |
$ | $ | ||||||
Fair value of debt derivative liabilities related to issuance of convertible notes |
$ | $ | ||||||
Unpaid debt issuance costs |
$ | $ |
• | All outstanding shares of Legacy Quanergy common stock were cancelled and converted into shares of Quanergy using a conversion ratio of |
• | All outstanding shares of Legacy Quanergy convertible preferred stock were cancelled and converted into shares of Quanergy’s common stock (all preferred stock except for Series B and Series C were cancelled and converted using a ratio of |
• | All outstanding stock options, Restricted Stock (“RSAs”), Restricted Stock Unit Awards (“RSUs”) and common stock warrants of Legacy Quanergy, whether vested or unvested, were assumed by the Company and converted into stock options, Restricted Stock, Restricted Stock Unit Awards and common stock warrants of Quanergy; |
• | The Note Financing Agreement issued in 2020 (the “2023 Initial Notes) and 2021 (the “Extension Notes”, and together with 2023 Initial Notes, referred to as the “2023 Notes”) converted into shares of Legacy Quanergy common stock, that subsequently converted into shares of common stock of Quanergy at the rate consistent with the terms of the note agreement; |
• | Legacy Quanergy’s indebtedness under the Note Financing Agreement issued in 2018 was paid off; |
• | All outstanding CCAC Class A and Class B Ordinary Shares were cancelled and converted into shares of common stock of Quanergy; |
• | All outstanding warrants of CCAC converted automatically into warrants to purchase Quanergy common stock at a ratio of |
Cash - CCAC’s trust and cash (net of redemption) |
$ | |||
Cash - PIPE |
||||
Less: transaction costs and advisory fees paid |
( |
) | ||
|
|
|||
Net cash from Business Combination and PIPE Financing |
||||
Less non-cash net liabilities assumed from CCAC |
( |
) | ||
|
|
|||
Net contributions from Business Combination and PIPE Financing |
$ | |||
|
|
CCAC Class A Ordinary Shares, outstanding prior to Business Combination |
||||
CCAC Class B Ordinary Shares, outstanding prior to Business Combination |
||||
Less: redemption of CCAC Class A Ordinary Shares |
( |
) | ||
Shares issued from PIPE Financing |
||||
|
|
|||
Total Shares from Business Combination and PIPE Financing |
||||
Legacy Quanergy shares (1) |
||||
|
|
|||
Total shares of common stock immediately after Business Combination |
||||
|
|
(1) | The number of Legacy Quanergy shares was determined as follows: |
Quanergy shares |
Quanergy shares, effected for Exchange Ratio |
|||||||
Balance at December 31, 2020 |
||||||||
Recapitalization applied to Convertible Preferred Stock outstanding at December 31, 2020 |
||||||||
Shares issued upon exercise of options - 2021 |
||||||||
Shares issued upon exercise of common stock warrants - 2021 |
||||||||
Issuance of restricted stock awards |
||||||||
Conversion of 2023 Notes (2) |
||||||||
|
|
|||||||
Total |
||||||||
|
|
(2) |
The 2023 Notes convert into shares of common stock of Quanergy at the rate consistent with the terms of note agreement. |
March 31, 2022 |
December 31, 2021 |
|||||||
Raw materials |
$ | $ | ||||||
Work in progress |
||||||||
Finished goods |
||||||||
|
|
|
|
|||||
Total inventory |
$ | $ | ||||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Sensata prepaid services |
$ | $ | ||||||
Prepaid business insurance |
||||||||
Prepaid other |
||||||||
|
|
|
|
|||||
Total prepaid expenses and other current assets |
$ | $ | ||||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Machinery and equipment |
$ | $ | ||||||
Furniture and fixtures |
||||||||
Computer equipment |
||||||||
Computer software |
||||||||
Leasehold improvements |
||||||||
|
|
|
|
|||||
Total property and equipment |
||||||||
Less: accumulated depreciation and amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total property and equipment, net |
$ | $ | ||||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Sensata prepaid services |
$ | $ | ||||||
Deferred cost s |
||||||||
ROU asset |
||||||||
Security deposit |
||||||||
|
|
|
|
|||||
Total other long-term assets |
$ | $ | ||||||
|
|
|
|
March 31, 2021 |
December 31, 2021 |
|||||||
GEM commitment fee |
$ | $ | ||||||
Lease liability |
||||||||
Restructuring liability |
||||||||
Customer deposits |
||||||||
Deferred revenue |
||||||||
Derivative liability |
||||||||
|
|
|
|
|||||
Total other current liabilities |
$ | $ | ||||||
|
|
|
|
March 31, 2022 |
December 31, 2021 |
|||||||
Transaction fees payable |
$ | $ | |
|||||
Customer deposits |
||||||||
Deferred revenue |
||||||||
Other long-term liabilities |
||||||||
|
|
|
|
|||||
Total other long-term liabilities |
$ | $ | ||||||
|
|
|
|
• | Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. |
• | Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. |
• | Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. |
As of March 31, 2022 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | — | $ | — | $ | ||||||||||
Financial Liabilities |
||||||||||||||||
Private placement warrant liability |
$ | — | $ | — | $ | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | — | $ | — | $ | $ | ||||||||||
|
|
|
|
|
|
|
|
As of December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Financial Assets |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Money market funds |
$ | $ | — | $ | — | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
$ | $ | — | $ | — | $ | ||||||||||
Financial Liabilities |
||||||||||||||||
Debt derivative liabilities |
$ | — | $ | — | $ | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
$ | — | $ | — | $ | $ | ||||||||||
|
|
|
|
|
|
|
|
February 8, 2022 |
||||||||||||
(Closing Date) |
||||||||||||
Preferred Stock Shares |
Exchange Ratio |
Common Stock Shares |
||||||||||
Series Seed Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
Series Seed-2 Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
Series A Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
Series A Plus Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
Series B Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
Series C Convertible Preferred Stock (Legacy Quanergy) |
||||||||||||
|
|
|
|
|||||||||
Total |
||||||||||||
|
|
|
|
Exercise |
||||||||||
Shares |
Price |
Expiration | ||||||||
Public Warrants |
$ | |||||||||
Private Placement Warrants |
||||||||||
GEM Warrants |
||||||||||
2023 Notes Warrants |
||||||||||
Sensata Warrants |
||||||||||
|
|
|||||||||
Total |
||||||||||
|
|
Input |
March 31, 2022 |
February 8, 2022 |
||||||
Risk-free interest rate |
% | % | ||||||
Expected term (years) |
||||||||
Expected volatility |
% | % | ||||||
Dividend yield |
% | % | ||||||
Exercise price |
$ | $ | ||||||
Price of underlying common stock |
$ | $ |
Warrant |
||||
Fair value at February 8, 2022 |
$ | |||
Change in fair value of Private Placement Warrants |
( |
) | ||
Fair value at March 31, 2022 |
$ | |||
Options outstanding |
||||||||||||||||
Number of shares |
Weighted average exercise price per share |
Weighted average contractual term (in years) |
Aggregate intrinsic value (in thousands) |
|||||||||||||
Outstanding - December 31, 2021 |
$ | $ | ||||||||||||||
Options granted |
||||||||||||||||
Options exercised |
( |
) | ||||||||||||||
Options cancelled |
( |
) | ||||||||||||||
Options expired |
||||||||||||||||
Outstanding at March 31, 2022 |
||||||||||||||||
Vested and exercisable - March 31, 2022 |
$ | $ | ||||||||||||||
Vested and expected to vest - March 31, 2022 |
$ | $ | ||||||||||||||
Restricted Stock Units (“RSUs”) |
||||||||
Number of |
Weighted average |
|||||||
shares |
grant date fair value |
|||||||
Outstanding as of December 31, 2021 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited or cancelled |
( |
) | ||||||
Outstanding as of March 31, 2022 |
$ | |||||||
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cost of goods sold |
$ | $ | ||||||
Research and development |
||||||||
Sales and marketing |
||||||||
General and administrative |
||||||||
Total stock-based compensation expense |
$ | $ | ||||||
Embedded Derivative Liability |
||||
Fair value as of December 31, 2021 |
$ | |||
Change in fair value |
||||
|
|
|||
Fair value prior to Closing |
||||
Payoff of 2022 Notes |
( |
) | ||
|
|
|||
Fair value as of March 31, 2022 |
$ | |||
|
|
Embedded Derivative Liability |
||||
Fair value as of December 31, 2021 |
$ | |||
Change in fair value |
||||
|
|
|||
Fair value prior to Closing |
||||
Conversion of 2023 Notes |
( |
) | ||
|
|
|||
Fair value as of March 31, 2022 |
$ | |||
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Contractual interest expense |
$ | $ | ||||||
Accretion of debt discount |
||||||||
Accretion of debt issuance costs |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
Three Months Ended March 31, 2022 |
||||
Cash paid for amounts included in the measurement of lease liabilities |
||||
Operating leases |
$ | |||
Weighted average lease term |
||||
Operating leases |
||||
Weighted average discount rate |
||||
Operating leases |
% |
Years ending December 31, |
Operating Leases |
|||
2022 (remaining nine months) |
$ | |||
2023 |
||||
Total undiscounted lease payments |
$ | |||
Less: imputed interest |
( |
) | ||
Total lease liabilities |
$ | |||
Operating Leases |
Lease Termination Agreement |
|||||||
2022 |
$ | $ | ||||||
2023 |
||||||||
Total minimum payments |
$ | $ | ||||||
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
Americas |
$ | $ | ||||||
Asia |
||||||||
Europe, Middle East and Africa |
||||||||
Total net sales |
$ | $ | ||||||
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
Numerator: |
||||||||
Net loss attributable to common stockholder, basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Denominator: |
||||||||
Weighted average shares of common stock outstanding, basic and diluted |
||||||||
Net loss per share attributable to common stockholder, basic and diluted |
$ | ( |
) | $ | ( |
) |
As of March 31, |
||||||||
2022 |
2021 |
|||||||
Public warrants |
||||||||
Private placement warrants |
||||||||
GEM warrants |
||||||||
Stock options and RSUs issued and outstanding |
||||||||
Convertible notes |
||||||||
Potential common shares excluded from diluted net loss per share |
||||||||
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
($ in thousands) |
||||||||
Adjusted EBITDA |
||||||||
Net loss |
$ | (104,682 | ) | $ | (14,714 | ) | ||
Stock-based compensation expense |
51,561 | 1,581 | ||||||
Depreciation and amortization |
228 | 251 | ||||||
Interest expense |
40,046 | 3,685 | ||||||
Interest income |
(2 | ) | (1 | ) | ||||
Change in fair value of derivative liability |
2,337 | 2,317 | ||||||
Income tax provision |
3 | 4 | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ | (10,509 | ) | $ | (6,877 | ) | ||
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Net sales |
$ | 1,367 | $ | 383 | $ | 984 | 257 | % | ||||||||
Cost of goods sold (1) |
1,853 | 497 | 1,356 | 273 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit (loss) |
(486 | ) | (114 | ) | (372 | ) | -326 | % | ||||||||
Research and development (1) |
12,824 | 4,357 | 8,467 | 194 | % | |||||||||||
Sales and marketing (1) |
7,196 | 1,745 | 5,451 | 312 | % | |||||||||||
General and administrative (1) |
41,792 | 2,493 | 39,299 | 1576 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses |
61,812 | 8,595 | 53,217 | 619 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
(62,298 | ) | (8,709 | ) | (53,589 | ) | -615 | % | ||||||||
Other income (expense): |
||||||||||||||||
Interest income (expense), net |
(40,044 | ) | (3,684 | ) | (36,360 | ) | -987 | % | ||||||||
Other income (expense), net |
(2,337 | ) | (2,317 | ) | (20 | ) | -1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(104,679 | ) | (14,710 | ) | (89,969 | ) | -612 | % | ||||||||
Provision for income taxes |
(3 | ) | (4 | ) | 1 | 25 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ | (104,682 | ) | $ | (14,714 | ) | $ | (89,968 | ) | -611 | % | |||||
|
|
|
|
|
|
|
|
(1) | Includes stock-based compensation expense (unaudited) as follows, in thousands: |
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cost of goods sold |
$ | 683 | $ | 20 | ||||
Research and development |
7,677 | 441 | ||||||
Sales and marketing |
4,598 | 212 | ||||||
General and administrative |
38,603 | 908 | ||||||
|
|
|
|
|||||
$ | 51,561 | $ | 1,581 | |||||
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Net Sales |
$ | 1,367 | $ | 383 | $ | 984 | 257 | % |
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Americas |
$ | 276 | $ | 171 | 105 | 61 | % | |||||||||
Asia |
744 | 149 | 595 | 399 | % | |||||||||||
Europe, Middle East and Africa |
347 | 63 | 284 | 451 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net sales |
$ | 1,367 | $ | 383 | 984 | 257 | % | |||||||||
|
|
|
|
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Cost of goods sold |
$ | 1,853 | $ | 497 | $ | 1,356 | 273 | % | ||||||||
Gross margin |
(486 | ) | (114 | ) | (372 | ) | -326 | % | ||||||||
Gross margin % |
-36 | % | -30 | % |
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Research and development |
$ | 12,824 | $ | 4,357 | $ | 8,467 | 194 | % | ||||||||
Sales and marketing |
7,196 | 1,745 | 5,451 | 312 | % | |||||||||||
General and administrative |
41,792 | 2,493 | 39,299 | 1,576 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 61,812 | $ | 8,595 | $ | 53,217 | 619 | % | |||||||||
|
|
|
|
|
|
|
|
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Interest expense, net |
$ | (40,044 | ) | $ | (3,684 | ) | $ | (36,360 | ) | 987 | % | |||||
Other income (expense), net |
(2,337 | ) | (2,317 | ) | (20 | ) | 1 | % |
Three months ended March 31, |
||||||||||||||||
2022 |
2021 |
$ Change |
% Change |
|||||||||||||
($ in thousands) |
||||||||||||||||
Loss before income taxes |
$ | (104,679 | ) | $ | (14,710 | ) | $ | (89,969 | ) | 612 | % | |||||
Provision for income taxes |
(3 | ) | (4 | ) | 1 | 25 | % |
Three months ended March 31, |
||||||||
2022 |
2021 |
|||||||
($ In thousands) |
||||||||
Net cash provided by (used in) |
||||||||
Operating activities |
$ | (22,746 | ) | $ | (6,618 | ) | ||
Investing activities |
(202 | ) | — | |||||
Financing activities |
18,029 | 48,735 | ||||||
Effect of exchange rate changes |
(11 | ) | 5 | |||||
|
|
|
|
|||||
$ | (4,930 | ) | $ | 42,122 | ||||
|
|
|
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
• | We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability. |
• | We will require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all. |
• | We operate in evolving markets, which make it difficult to evaluate our business and prospects. If markets for LiDAR products, including autonomous driving, security & smart spaces, mapping, robotics, industrial and other commercial applications, develop more slowly than we expect, or long- term end-customer adoption rates and demand are slower than we expect, our operating results and growth prospects could be harmed. |
• | Product integration could face complications or unpredictable difficulties, which may adversely impact customer adoption of our products and our financial performance. |
• | The market for LiDAR sensors is highly competitive and many companies are actively focusing on LiDAR technology or competing technologies based on camera, radar or other technologies. If we fail to differentiate ourselves and compete successfully with these companies, many of which have substantially greater resources, our products may become obsolete and it will be difficult for us to attract customers and our business will be harmed. |
• | Our Optical Phased Array (“OPA”) based product could fail to meet industry requirements for range, resolution or general performance or we could fall short of our cost objectives for OPA-based LiDAR, thereby limiting our revenue potential. |
• | Developments in alternative non-LiDAR technologies may adversely affect the demand for LiDAR sensors. |
• | If we are not able to effectively grow our global sales and marketing organization, or maintain or grow an effective network of distributors, value-added resellers, and integrators, our business prospects, results of operations and financial condition could be adversely affected. |
• | We continue to implement strategic initiatives designed to grow our business. These initiatives may prove more costly than we currently anticipate and we may not succeed in increasing our revenue in an amount sufficient to offset the costs of these initiatives and to achieve and maintain profitability. |
• | We have limited manufacturing capacity and intend to depend primarily on a small number of contract manufacturers and manufacturing partners in the future. Our operations could be disrupted if we encounter delays or other problems with these contract manufacturers. |
• | We may incur significant direct or indirect liabilities in connection with our product warranties which could adversely affect our business and operating results. |
• | We have been and may continue to be subject to litigation regarding intellectual property rights that could be costly, including claims that we are infringing third-party intellectual property, whether successful or not, and could result in the loss of rights important to our products or otherwise harm our business. |
• | We are subject to, and must remain in compliance with, numerous laws and governmental regulations across various jurisdictions concerning the manufacturing, use, distribution and sale of our products. |
• | The effects of the COVID-19 pandemic have had and could continue to have a material adverse effect on our business prospects, financial results, and results of operations. |
• | We have a global supply chain and the COVID-19 pandemic, Russia’s aggression in Ukraine and other macroeconomic factors may adversely affect our ability to source components in a timely or cost-effective manner from our third-party suppliers due to, among other things, work stoppages or interruptions. |
• | We identified a material weakness in our internal control over financial reporting as of December 31, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results. |
• | We may issue additional shares of Common Stock, including under the GEM Agreement, the GEM Warrant, the 2022 Equity Incentive Plan and the 2022 Employee Stock Purchase Plan. Any such issuances would dilute the interest of our shareholders and likely present other risks. |
• | continue to hire additional personnel and make investments in research and development in order to develop technology and related software; |
• | increase our sales and marketing functions, including expansion of our customer support and distribution capabilities; |
• | hire additional personnel to support compliance requirements in connection with being a public company; and |
• | expand operations and manufacturing. |
• | the accuracy of our forecasts for market requirements beyond near term visibility; |
• | our ability to anticipate and react to new technologies and evolving consumer trends; |
• | our development, licensing or acquisition of new technologies; |
• | our timely completion of new designs and development; |
• | the ability of our contract manufacturers to cost-effectively manufacture our new sensing solutions; |
• | the availability of materials and key components used in the manufacture of our new sensing solutions; and |
• | our ability to attract and retain world-class research and development personnel. |
• | differing regulatory requirements, including tax laws, trade laws, labor regulations, tariffs, export quotas, custom duties or other trade restrictions; |
• | greater difficulty supporting and localizing our products; |
• | challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, compensation and benefits and compliance programs; |
• | differing legal and court systems, including limited or unfavorable intellectual property protection; |
• | risk of change in international political or economic conditions; |
• | restrictions on the repatriation of earnings; and |
• | working capital constraints. |
• | investing in research and development; |
• | expanding our sales and marketing efforts to attract new customers across industries; |
• | investing in new applications and markets for our products; |
• | further enhancing our manufacturing processes and partnerships; and |
• | investing in legal, accounting, and other administrative functions necessary to support our operations as a public company. |
• | supplier capacity constraints; |
• | price increases; |
• | timely delivery; |
• | component quality; and |
• | delays in, or the inability to execute on, a supplier roadmap for components and technologies. |
• | manage a larger organization; |
• | hire more employees, including engineers with relevant skills and experience; |
• | expand our manufacturing and distribution capacity; |
• | increase our sales and marketing efforts; |
• | broaden our customer support capabilities; |
• | implement appropriate operational and financial systems; |
• | support the requirements of being a public company; |
• | expand internationally; and |
• | maintain effective financial disclosure controls and procedures. |
• | the realization of any of the risk factors presented in this Quarterly Report; |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; |
• | changes in the market’s expectations about our operating results; |
• | our operating results failing to meet the expectation of securities analysts of investors in a particular period; |
• | operating and share price performance of other companies that investors deem comparable to us; |
• | the volume of shares of Common Stock available for public sale; |
• | future issuances, sales, resales or repurchases or anticipated issuances, sales, resales or repurchases of our securities; |
• | our ability to effectively service any current and future outstanding debt obligations; |
• | the announcement of new services or enhancements by us or our competitors; |
• | developments concerning intellectual property rights; |
• | changes in legal, regulatory and enforcement frameworks impacting our business; |
• | changes in the prices of our services; |
• | announcements by us or our competitors of significant business developments, acquisitions or new offerings; |
• | our involvement in any litigation; |
• | changes in senior management or key personnel; |
• | changes in the anticipated future size and growth rate of our market; |
• | actual or perceived data security incidents or breaches; |
• | any delisting of our Common Stock or warrants from NYSE due to any failure to meet listing requirements; |
• | actual or anticipated variations in quarterly operating results; |
• | our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; |
• | publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; |
• | changes in the market valuations of similar companies; |
• | overall performance of the equity markets; |
• | speculation in the press or investment community; |
• | sales of Common Stock by us or our stockholders in the future; |
• | the effectiveness of our internal control over financial reporting; |
• | general political and economic conditions, including health pandemics, such as COVID-19; and |
• | other events or factors, many of which are beyond our control. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Common Stock is a “penny stock” which will require brokers trading in the Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | may significantly dilute the equity interests of our investors; |
• | may subordinate the rights of holders of Common Stock if preferred stock is issued with rights senior to those afforded our Common Stock; |
• | could cause a change in control if a substantial number of shares of our Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our Common Stock and/or warrants. |
• | providing for a classified board of directors with staggered, three-year terms which could delay the ability of stockholders to change the membership of a majority of our board of directors; |
• | the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; |
• | our Charter prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | the limitation of the liability of, and the indemnification of, our directors and officers; |
• | the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; |
• | the ability of our board of directors to amend the Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; and |
• | advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
OTHER INFORMATION |
ITEM 6. |
EXHIBITS |
Incorporated by Reference | ||||||||||
Exhibit No. |
Description |
Schedule/Form |
File No. |
Exhibit |
Filing Date | |||||
31.2* | Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||||
32.1** | Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||||
101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 (formatted as Inline XBRL and contained in Exhibit 101) |
† | Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant hereby agrees to furnish a copy of any omitted exhibits and schedules to the SEC upon its request. |
+ | Indicates a management contract or compensatory plan. |
* | Filed herewith. |
** | The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing. |
QUANERGY SYSTEMS, INC. | ||||||||
Date: May 16, 2022 | By: | /s/ Kevin J. Kennedy | ||||||
Name: | Kevin J. Kennedy | |||||||
Title: | Chief Executive Officer | |||||||
(Principal Executive Officer) | ||||||||
Date: May 16, 2022 | By: | /s/ Patrick Archambault | ||||||
Name: | Patrick Archambault | |||||||
Title: | Chief Financial Officer | |||||||
(Principal Financial Officer and | ||||||||
Principal Accounting Officer) |
Exhibit 31.1
CERTIFICATIONS
I, Kevin J. Kennedy, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Quanergy Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 16, 2022
/s/ Kevin J. Kennedy |
Kevin J. Kennedy |
Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATIONS
I, Patrick Archambault, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Quanergy Systems, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in exchange act rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: May 16, 2022
/s/ Patrick Archambault |
Patrick Archambault |
Chief Financial Officer |
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the Exchange Act) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Kevin J. Kennedy, Chief Executive Officer of Quanergy Systems, Inc. (the Company), and Patrick Archambault, Chief Financial Officer of the Company, each hereby certifies that, to the best of his knowledge:
1. | The Companys Quarterly Report on Form 10-Q for the period ended March 31, 2022, to which this Certification is attached as Exhibit 32.1 (the Quarterly Report), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: May 16, 2022
IN WITNESS WHEREOF, the undersigned have set their hands hereto as of the 16th day of May, 2022.
/s/ Kevin J. Kennedy |
/s/ Patrick Archambault | |||
Kevin J. Kennedy | Patrick Archambault | |||
Chief Executive Officer | Chief Financial Officer | |||
(Principal Executive Officer) | (Principal Financial Officer) |
This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Quanergy Systems, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Common shares, par value | $ 0.0001 | $ 0.0001 |
Common shares, shares authorized | 300,000,000 | 80,071,901 |
Common shares, shares issued | 98,498,731 | 57,020,151 |
Common shares, shares outstanding | 98,498,731 | 57,020,151 |
Accounts receivable, allowance for credit loss, current | $ 224 | $ 224 |
Condensed Consolidated Statements of Operations - USD ($) |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
|
Net sales | $ 1,367,000 | $ 383,000 |
Cost of goods sold | 1,853,000 | 497,000 |
Gross loss | (486,000) | (114,000) |
Operating expenses: | ||
Research and development | 12,824,000 | 4,357,000 |
Sales and marketing | 7,196,000 | 1,745,000 |
General and administrative | 41,792,000 | 2,493,000 |
Operating expenses | 61,812,000 | 8,595,000 |
Loss from operations | (62,298,000) | (8,709,000) |
Other income (expense): | ||
Interest expense, net | (40,044,000) | (3,684,000) |
Other expense, net | (2,337,000) | (2,317,000) |
Loss before income taxes | (104,679,000) | (14,710,000) |
Income tax provision | (3,000) | (4,000) |
Net loss | $ (104,682,000) | $ (14,714,000) |
Net loss attributable per share to common stockholders, basic and diluted | $ (1.19) | $ (0.23) |
Weighted-average shares used to compute net loss attributable per share to common stockholders, basic and diluted | 87,705,256 | 62,811,287 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2022 |
Mar. 31, 2021 |
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Income Statement [Abstract] | ||
Net loss | $ (104,682) | $ (14,714) |
Other comprehensive loss (net of tax): | ||
Foreign currency translation gain (loss) | (11) | 5 |
Comprehensive loss | $ (104,693) | $ (14,709) |
Condensed Consolidated Statements of Stockholder's Equity / (Deficit) - USD ($) $ in Thousands |
Total |
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Beginning balance at Dec. 31, 2020 | $ (35,826) | $ (188,804) | $ 152,978 | $ 152,978 | $ (152,978) | $ 5 | $ 0 | $ 5 | $ 208,283 | $ 55,310 | $ 152,973 | $ (244,053) | $ (244,053) | $ (61) | $ (61) | |||
Beginning balance, shares at Dec. 31, 2020 | 7,695,112 | (7,695,112) | 55,769,556 | 4,696,352 | 51,073,204 | |||||||||||||
Issuance of common stock warrants | 21,971 | 21,971 | ||||||||||||||||
Issuance of Restricted Stock Awards ("RSAs") | 563 | 563 | ||||||||||||||||
Issuance of Restricted Stock Awards ("RSAs"), shares | 1,163,984 | |||||||||||||||||
Stock-based compensation | 1,017 | 1,017 | ||||||||||||||||
Shares issued upon exercise of options | 74 | 74 | ||||||||||||||||
Shares issued upon exercise of options, shares | 77,595 | |||||||||||||||||
Other comprehensive gain (loss) | 5 | 5 | ||||||||||||||||
Net income (loss) | (14,714) | (14,714) | ||||||||||||||||
Ending balance at Mar. 31, 2021 | (26,910) | $ 0 | $ 5 | 231,908 | (258,767) | (56) | ||||||||||||
Ending balance, shares at Mar. 31, 2021 | 0 | 57,011,135 | ||||||||||||||||
Beginning balance at Dec. 31, 2021 | (65,353) | $ (218,331) | $ 152,978 | $ 0 | $ 152,978 | $ (152,978) | $ 6 | $ 1 | $ 5 | 242,299 | $ 89,326 | $ 152,973 | (307,597) | $ (307,597) | $ 0 | (61) | $ (61) | $ 0 |
Beginning balance, shares at Dec. 31, 2021 | 0 | 7,695,112 | (7,695,112) | 57,020,151 | 5,018,676 | 52,001,475 | ||||||||||||
Conversion of 2023 Notes into common stock | 101,978 | $ 0 | $ 1 | 101,977 | 0 | 0 | ||||||||||||
Conversion of 2023 Notes into common stock, Shares | 0 | 14,464,992 | ||||||||||||||||
Issuance of common stock upon the reverse capitalization, net of offering costs | (9,151) | $ 1 | (9,152) | |||||||||||||||
Issuance of common stock upon the reverse capitalization, net of offering costs, Shares | 8,232,204 | |||||||||||||||||
Offering cost in connection with Business Combination and PIPE financing | (12,450) | (12,450) | ||||||||||||||||
Issuance of PIPE shares | 36,950 | 36,950 | ||||||||||||||||
Issuance of PIPE shares, shares | 3,695,000 | |||||||||||||||||
Subsequent issuance of shares for offering costs incurred in connection with Business Combination and PIPE financing | 9,531 | $ 1 | 9,530 | |||||||||||||||
Subsequent issuance of shares for offering costs incurred in connection with Business Combination and PIPE financing, shares | 4,803,641 | |||||||||||||||||
Issuance of common stock upon vesting of restricted stock units ("RSUs") | 1 | $ 1 | ||||||||||||||||
Issuance of common stock upon vesting of restricted stock units ("RSUs"), shares | 7,177,204 | |||||||||||||||||
Issuance of common stock warrants | 17,602 | 17,602 | ||||||||||||||||
Stock-based compensation | 51,561 | 51,561 | ||||||||||||||||
Shares issued upon exercise of options | $ 58 | 58 | ||||||||||||||||
Shares issued upon exercise of options, shares | 197,875 | 197,875 | ||||||||||||||||
Shares issued upon exercise of common stock warrants | $ 29 | 29 | ||||||||||||||||
Shares issued upon exercise of common stock warrants, shares | 2,907,664 | |||||||||||||||||
Other comprehensive gain (loss) | (11) | (11) | ||||||||||||||||
Net income (loss) | (104,682) | (104,682) | ||||||||||||||||
Ending balance at Mar. 31, 2022 | $ 26,063 | $ 0 | $ 10 | $ 438,404 | $ (412,279) | $ (72) | ||||||||||||
Ending balance, shares at Mar. 31, 2022 | 0 | 98,498,731 |
Basis of Presentation and Summary of Significant Accounting Policies |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | (1) Basis of Presentation and Summary of Significant Accounting Policies (a) Description of Business Quanergy Systems, Inc. (the “Company” or “Quanergy”) formerly known as CITIC Capital Acquisition Corp., designs, develops and produces Light Detection and Ranging (“LiDAR”) sensors and is a leader in 3D sensing that delivers robust and intelligent real-time 3D object detection and classification solutions. CITIC Capital Acquisition Corp. (“CCAC”), the Company’s predecessor, was incorporated as a Cayman Islands exempted special purpose acquisition company. On February 7, 2022, CCAC effectuated the change of the Company’s jurisdiction of incorporation to the state of Delaware. Accordingly, each of CCAC’s issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares automatically converted on a one-for-one (b) Business Combination On February 8, 2022 (the “Closing Date” or “Closing”), the Company consummated the business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2021 (as amended, the “Merger Agreement”), by and among CCAC, CITIC Capital Merger Sub Inc. (“Merger Sub”), and Quanergy Systems, Inc., (“Legacy Quanergy”). Pursuant to the terms of the Merger Agreement, the Business Combination between the Company and Legacy Quanergy was effected through the merger of Merger Sub with and into Legacy Quanergy, with Legacy Quanergy continuing as the surviving corporation and a wholly-owned subsidiary of the Company. On the Closing Date, the registrant changed its name from CITIC Capital Acquisition Corp. to Quanergy Systems, Inc. On January 28, 2022, Legacy Quanergy changed its corporate name to Quanergy Perception Technologies, Inc. In connection with the Business Combination, holders of 26,867,796 of CCAC’s Class A Ordinary Shares, or approximately 97.3% of the shares with redemption rights, exercised their right to redeem their shares for cash at a redemption price of approximately $10.07 per share, for an aggregate redemption amount of $270.5 million. On the Closing Date, holders of 600,000 of CCAC’s Class A Ordinary Shares, or approximately 2.2% of the shares with redemption rights, reversed their prior redemptions, resulting in $6.0 million being returned to the trust account established at the consummation of CCAC’s initial public offering prior to the Closing. Pursuant to the terms of the Merger Agreement, at the effective time of the Business Combination:
On the Closing Date, certain investors (the “PIPE Investors”) purchased from the Company an aggregate of 3,695,000 shares (the “PIPE Shares”) of Common Stock at a price of $10.00 per share, for an aggregate purchase price of approximately $37.0 million (the “PIPE Financing”), in a private placement pursuant to separate subscription agreements consummated substantially concurrently with close of the Business Combination. The Company’s common stock and warrants are now listed on the New York Stock Exchange under the symbols “QNGY” and “QNGY WS”. Unless the context otherwise requires, “we,” “us,” “our,” “Quanergy,” and the “Company” refers to Quanergy Systems, Inc., the combined company and its subsidiaries following the Business Combination. Refer to “Note 2 – Reverse Recapitalization” for further discussion of the Business Combination. (c) Basis of Presentation and Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements as of March 31, 2022 are unaudited. The condensed consolidated balance sheet as of December 31, 2021, included herein was derived from the audited consolidated financial statements as of that date. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As such, the information included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2021, which was filed as Exhibit 99.1 to the Company’s Form 8-K/A filed with the SEC on March 31, 2022. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal year begins on January 1 and ends on December 31. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of March 31, 2022, the results of operations, including its comprehensive loss, and stockholders’ equity/(deficit) for the three months ended March 31, 2022 and 2021, and the statement of cash flows for the three months ended March 31, 2022 and 2021. All adjustments are of a normal recurring nature. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2022. (d) Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements for the fiscal year ended December 31, 2021. Other than the accounting policies discussed below related to the adoption of Accounting Standards Codification (“ASC”) 842, Leases, there has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2022. See “Recently Adopted Accounting Pronouncements” and “Note 13 – Leases” related to the adoption of ASC 842. (e) Liquidity and Capital Resources The Company has prepared its condensed consolidated financial statements assuming that the Company will continue as a going concern. The Company has had recurring losses and an accumulated deficit since its inception. The Company obtained additional funding of $43.8 million in connection with the Business Combination and effectively settled its outstanding debt balance of $106 million, thereby providing the Company with additional future financial flexibility. The Business Combination also gives the Company access to $125 million from a previously announced share subscription facility from Global Emerging Markets Group (“GEM”), a Luxembourg-based private alternative investment group, once the effectiveness of the resale S-1 Registration Statement and other requirements are completed, which is expected to occur in the second quarter of FY 2022. Should the company not be able to access the GEM facility, it would be forced to seek other forms of financing which may not be available in sufficient amounts to fund its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern, for a period of twelve months following the date of issuance of financial statements as of and for the three months ended March 31, 2022. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. (f) Impact of Covid-19 The extensive impact of the pandemic caused by the novel coronavirus (“COVID-19”) has resulted, and will likely continue to result, in significant disruptions to the global economy, as well as businesses and capital markets around the world. In an effort to halt the outbreak of COVID-19, a number of countries, states, counties, and other jurisdictions have imposed, and may impose in the future, various measures, including but not limited to, voluntary and mandatory quarantines, stay-at-home With respect to the Company’s results of operations, sales for the three months ended March 31, 2022 and for the full years of 2021 and 2020 were heavily impacted by Covid-19 primarily due to the delay of projects and slowing overall business activity, as well as, in certain cases, the inability to physically access customer sites. Despite these setbacks, we reacted quickly to help offset the negative cash flow impacts of these factors with key elements of our cash preservation plan in 2020 including furloughing nearly 50% of our employees, negotiating extended payment terms with vendors, cutting wages across the entire workforce and reducing overall external contractor spending. We also benefited from a $2.5 million Paycheck Protection Program (“PPP”) loan from the Small Business Administration. While business conditions improved significantly year over year, over the last four quarters including, the three months ended March 31, 2022, broader implications of the COVID-19 pandemic were present throughout the year on our workforce, operations, supply chain, and customer demand. For the remainder of 2022, we envision significant uncertainties remaining relating to disruptions from COVID-19, broad based supply chain shortages, and geopolitical risks related to the events in Ukraine. (g) Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (i) not to reassess prior conclusions on whether any expired or existing contracts are or contain a lease, lease classification, and initial direct costs; (ii) combine lease and non-lease components; and (iii) not to recognize right-of-use months or less. The Company’s operating leases primarily comprise of office facilities, with the most significant leases relating to corporate headquarters in Sunnyvale, CA. Upon adoption of the new leasing standard on January 1, 2022, the Company recognized ROU assets of $0.5 million and lease liabilities of $0.5 million. There was no cumulative impact of transition to retained earnings as of the adoption date. The standard did not impact the accompanying condensed consolidated statements of operations and the accompanying condensed consolidated statements of cash flows. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share Debt—Modifications and Extinguishments 470-50), Compensation—Stock Compensation Derivatives and Hedging—Contracts in Entity’s Own Equity 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). This guidance clarifies certain aspects of the current guidance to promote consistency among reporting of an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted the standard on January 1, 2022 and the standard did not impact the accompanying condensed consolidated financial statements. (h) Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s consolidated financial statements and does not expect it to have a material impact on its consolidated financial statements. In August 2020, the FASB issued ASU
2020-06, Debt with Conversion and Other Options 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity 815- 40): Accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing certain separation models required under current U.S. GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. The amendments are effective for the Company beginning January 1, 2024, with early adoption permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. |
Reverse Recapitalization |
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Reverse Recapitalization [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Recapitalization | (2) Reverse Recapitalization The Business Combination was accounted for as a reverse recapitalization for financial accounting and reporting purposes. Accordingly, Legacy Quanergy was deemed the accounting acquirer (and legal acquiree) and CCAC was treated as the accounting acquiree (and legal acquirer). Under this method of accounting, the reverse recapitalization was treated as the equivalent of Legacy Quanergy issuing stock for the net assets of CCAC, accompanied by a recapitalization. The net assets of CCAC are reflected at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities, and results of operations prior to the Business Combination are those of Legacy Quanergy. The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the Exchange Ratio. Upon the closing of the Business Combination and the PIPE Financing, the Company received net cash proceeds of $43.8 million. The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 (in thousands):
The number of shares of common stock issued immediately following the consummation of the Business Combination were:
In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $12.5 million related to legal, accounting, and other professional fees, which were offset against the Company’s additional
paid-in capital. The Company repaid $9.5 million of acquisition-related fees in shares of the combined company. |
Inventory |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | (3) Inventory Inventory consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Prepaid Expenses and Other Current Assets |
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Prepaid Expenses and Other Current Assets | (4) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Property and Equipment, Net |
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Property and Equipment, Net | (5) Property and Equipment, Net Property and equipment, net consist of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
Depreciation and amortization expense for the three months ended March 31, 2022 and 2021 was $0.2 million and $0.3 million, respectively. |
Other Long-Term Assets |
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Other Long-term Assets | (6) Other Long-term Assets Other long-term assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Other Current Liabilities |
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Other Current Liabilities | (7) Other Current Liabilities Other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Other Long-Term Liabilities |
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Other Liabilities, Noncurrent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-term Liabilities | (8) Other Long-term Liabilities Other long-term liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | (9) Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
The following table sets forth the Company’s financial assets and liabilities that were measured at fair value, on a recurring basis (in thousands):
The fair value of accounts receivable, accounts payable, and accrued expenses approximated their carrying values as of March 31, 2022 and December 31, 2021, due to their short-term nature. The Company records long-term debt and long-term debt due to related parties on an amortized cost basis. At March 31, 2022, Level 3 instruments consist solely of Private Placement Warrants. The Private Placement Warrants are fair valued using the Black Scholes Option Pricing Model at every reporting period. For the three months ended March 31, 2022, the Company recognized a gain to the condensed consolidated statement of operations resulting from a decrease in the fair value of warrants of approximately $1.4 million, presented as other income (expense) on the accompanying condensed statement of operations. The Private Placement Warrants are considered to be a Level 3 fair value measurements due to the use of unobservable inputs. At December 31, 2021, Level 3 instruments consist solely of the Company’s embedded derivatives in the Company’s convertible notes. The Company classifies its financial instruments within Level 3 of the fair value hierarchy due to lack of market data. For the three months ended March 31, 2022, the Company recognized a loss of $3.8 million to the condensed consolidated statement of operations resulting from an increase in the fair value of derivative liabilities prior to derecognition of the convertible notes on Closing Date, presented as other income (expense) on the accompanying condensed consolidated statement of operations. See “Note 12 – Borrowing Arrangements” for details on the valuation of the embedded derivative in the convertible notes. The fair value of the c onvertible n otes was $99.0 million as of December 31, 2021. The carrying value of the c onvertible n There were no transfers between Level 1, Level 2 or Level 3 fair value hierarchy categories of financial instruments for the three months periods ended March 31, 2022 and 2021. |
Common Stock |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | (10) Common Stock Shares Authorized and Outstanding As of March 31, 2022, the Company had authorized a total of 310,000,000 shares for issuance, with 300,000,000 shares designated as common stock and 10,000,000 shares designated as preferred stock. On Closing Date, all outstanding shares of Legacy Quanergy common stock and convertible preferred stock (except Series B and Series C convertible preferred stock) were cancelled and converted into shares of Quanergy using a conversion ratio of 3.8799 in accordance with the terms of the Merger Agreement. Series B and Series C were cancelled and converted using a ratio of 11.5423 and 14.3118, respectively, in accordance with the terms of the Merger Agreement. There were 83,412,347 shares of common stock outstanding immediately after the consummation of the Business Combination, excluding contingent shares.
GEM Agreement In December 2021, CCAC and GEM entered into the GEM Agreement for the Company’s liquidity needs post Business Combination. Under the GEM Agreement, the Company is entitled to draw down up to $125 million of gross proceeds, over a three year period in exchange for shares of the Company’s common stock. The shares of common stock issued in exchange for funding will be determined at a price equal to 90% of the average closing price of the Company’s common stock over a 30-day period. In exchange for GEM’s commitment to fund, the Company issued to GEM warrants to purchase common stock, which warrants were fair valued at $4.0 million at issuance, and agreed to pay $2.5 million in cash or in shares for the GEMS commitment fee by the first anniversary of the Closing Date. The Company has recorded $2.5 million as deferred offering costs for the commitment fee, recorded in other long-term assets on the condensed consolidated balance sheet at March 31, 2022, and the $2.5 million commitment fee payable within one year is recorded in other current liabilities on the condensed consolidated balance sheet at March 31, 2022. The Company accounts for the GEM Agreement as an equity-classified purchase put option. The Company determined that the fair value of the purchase put option approximates the fair value of the GEM warrant issued of approximately $4.0 million. Accordingly, the purchase put option and the common stock warrants are each reflected within equity in connection with the retrospective recapitalization as of December 31, 2021. Common Stock Warrants As of March 31, 2022, the Company had the following common stock warrants outstanding to purchase shares of the Company’s common stock:
Public and Private Placement Warrants On February 13, 2021, CCAC consummated the initial public offering (“IPO”) of 27,600,000 units (the “Units”), including the full exercise by the underwriters of their over-allotment option. Each Unit included one share of Class A Common Stock and one half of one warrant (the “Public Warrants”). Simultaneously with the closing of the IPO, CCAC consummated the sale of 7,520,000 warrants (the “Private Placement Warrants”) in a private placement to CITIC Capital Acquisition LLC (the “Sponsor”). As of March 31, 2022, the Company had 13,799,988 Public Warrants and 7,520,000 Private Placement Warrants outstanding. Each warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share. The Private Placement Warrants, which the Company assumed as part of the Business Combination, are recorded as warrant liabilities. The Company estimated the fair value of Private Placement Warrants exercisable for common stock measured at fair value on a recurring basis at the respective dates using the Black-Scholes option valuation model. The inputs are based on the estimated fair value of the underlying Common Stock at the valuation measurement date, the remaining contractual term of the warrant, the risk-free interest rates, the expected dividends, and the expected volatility of the price of the Company’s underlying stock. These estimates, especially the expected volatility, are highly judgmental and could differ materially in the future. The key inputs into the Black Scholes Option Pricing Model for the Private Placement Warrants were as follows:
The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the liabilities classified as Level 3:
Each whole Warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, at any time commencing on March 10, 2022, provided that the Company has an effective registration statement under the Securities Act covering the shares of the common stock issuable upon exercise of the Warrants and a current prospectus relating to them is available. The Warrants expire on February 8, 2027, or earlier upon redemption or liquidation. The Company may redeem the Public Warrants when the last reported sales price of the Company’s common stock for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”) exceeds $18.00. If the Reference Value exceeds $18.00, Public Warrants are redeemable at $0.01 per warrant, in whole and upon a minimum of 30 days prior written notice. The Company’s Board of Directors could also elect to require all warrant holders to exercise the Public Warrants on a cashless basis. The number of shares to be issued for the cashless exercise would be equal to the quotient obtained by dividing (x) the product of the number of shares underlying the warrants, multiplied by the excess of the fair market value over the warrant price by (y) the fair market value. The fair market value is the average reporting closing price of the shares for the ten trading days ending on the third day prior to the date on which the notice of redemption was send to warrant holders. The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. However, the Private Placement Warrants are not redeemable by the Company as long as they are held by a Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. GEM Warrants In December 2021, the Company issued the GEM Warrant, pursuant to the GEM Agreement, with a 36-month term to purchase 3,397,923 shares of Common Stock at a strike price per share equal to $10.00, to GEM Yield Bahamas Limited. 2023 Notes Warrants During fiscal year 2020, the Company issued warrants to purchase 3,527,241 shares of the Company’s common stock with an exercise price of $0.01 per share in conjunction with the issuance of $16.1 million convertible promissory notes (the “2023 Initial Notes”). These warrants expire in March 2025. The Company allocated the proceeds from the issuance of the 2023 Initial Notes between the convertible notes and the common stock warrants on a relative fair value basis, with approximately $7.2 million allocated to the common stock warrants, included within additional paid-in capital on the consolidated balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. See “Note 12 – Borrowing Arrangements” for additional details on the 2023 Initial Notes. In February 2021, the Company issued warrants to purchase 6,298,306 shares of common stock in conjunction with the issuance of $48.7 million in convertible promissory notes (the “Extension Notes”). These Extension Notes have similar terms to the 2023 Initial Notes (the “2023 Initial Notes”, together with the “Extension Notes”, referred to as the “2023 Notes”). These warrants are exercisable for shares of common stock at $0.01 per share and expire in March 2025. The Company allocated the proceeds from the issuance of the Extension Notes between the convertible notes and the common stock warrants on a relative fair value basis, with approximately $22.0 million allocated to the common stock warrants, included within additional paid-in capital on the consolidated balance sheets. The warrants are not remeasured in future periods as they meet the conditions for equity classification. See “Note 12 – Borrowing Arrangements” for additional details on the Extension Notes. Sensata Warrants In June 2021, the Company issued warrants to purchase shares of common stock of the Company in exchange for services to be provided under the Sensata Collaboration Agreement. These warrants are exercisable for shares of common stock at $0.01 per share and expire in June 2026. Upon the close of the Business Combination, the Sensata Warrants are exercisable for an aggregate of 2,500,000 shares of common stock. The Company recorded $17.6 million within additional
paid-in capital for issuance of the warrants, with $8.8 million recorded in prepaid expenses and other current assets, and $8.8 million in other long-term assets. The Company will recognize expense on the Sensata Warrants as services are provided. Refer to “Note 18 – Related Party Transactions” for additional details. |
Stock-Based Compensation Expense |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Expense | (11) Stock-based Compensation Expense 2013 Equity Incentive Plan Effective January 28, 2022, the Company increased the aggregate number of shares reserved for issuance under the 2013 Incentive Stock Plan by 1,500,000 shares. 2022 Equity Incentive Plan In June 2021, the Board of Directors adopted the Quanergy Systems, Inc. 2022 Plan (“the 2022 Plan”), which was subsequently approved by the Company’s stockholders. The 2022 Plan became effective on February 8, 2022 and 13,590,156 shares of common stock were reserved for issuance under the 2022 Plan. The 2022 Plan permits the granting of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and other equity-based awards to employees, directors and consultants. Employee Stock Purchase Plan The Board of Directors and stockholders approved the Quanergy Systems, Inc. 2022 Employee Stock Purchase Plan, or the ESPP, in June 2021 and January 2022, respectively. The initial number of shares of common stock authorized for sale under the ESPP was 834,123. Unless the Board of Directors provides otherwise, beginning on January 1, 2023, and continuing through and including January 1, 2032, the maximum number of shares which shall be made available for sale under the ESPP will automatically increase on the first day in January of each calendar year by the lesser of: (1) one percent (1%) of fully diluted Common Stock on December 31st of the preceding calendar year (2) shares of Common Stock equal to 200% of the initial share reserve, or (3) such lesser number of shares of the Company as determined by our board of directors. As of March 31, 2022, no enrollments have been initiated by the Company. Option Activity The stock option activity for the three months ended March 31, 2022 has been retrospectively adjusted to reflect the Exchange Ratio on the Legacy Quanergy stock options. The following table summarizes the stock option activity for the three months ended March 31, 2022:
As of March 31, 2022, there was $1.2 million of unrecognized compensation costs related to non-vested stock option awards, which is expected to be recognized over a weighted-average period of approximately 1.5 years. Restricted Stock Unit Activity The restricted stock unit activity for the three months ended March 31, 2022 has been retrospectively adjusted to reflect the Exchange Ratio on the Legacy Quanergy restricted stock units. The following table summarizes the restricted stock unit activity for the three months ended March 31, 2022:
Vesting of RSUs are subject to service and performance conditions. The Business Combination was a qualifying event that satisfied the performance condition. For the three months ended March 2022, $50.7 million has been recognized on these RSUs. As of March 31, 2022, there was $28.8 million unrecognized stock-based compensation expense related to outstanding unvested RSUs. On February 25, 2022, the Board of Directors approved 3,784,842 RSUs to be issued to certain employees and consultants of the Company. Of this amount, 1,905,031 restricted stock units were awarded to five related parties and officers of the Company. These RSUs have not been granted at the date of issuance of the condensed consolidated financial statements. Stock-based compensation expense The following table summarizes stock-based compensation expense and its allocation within the accompanying condensed consolidated statements of operations (in thousands):
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Borrowing Arrangements |
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Borrowing Arrangements | (12) Borrowing Arrangements Convertible Notes 2022 Notes In 2018, the Company issued an aggregate of $25.5 million in convertible promissory notes to various investors (the “2022 Notes”). The 2022 Notes were secured by a security agreement and matured in March 2022, unless earlier converted at the option of the investors. The principal amount accrued interest at 1.5% per annum, payable biannually, with additional interest at 8.0% per annum, which was added to the principal and compounded on each payment date. Prior to maturity, the investors could elect to convert all or a portion of the outstanding principal and accrued and unpaid interest on the 2022 Notes to equity based on various conversion events. The 2022 Notes contained an embedded derivative representing the debt conversion features and the fair value of the derivative was recorded as a liability with an offsetting amount recorded as a debt discount against the carrying value of the 2022 Notes. The debt discount was amortized to interest expense using the effective interest method over the term of the 2022 Notes. The derivative liability was re-valued at the end of each reporting period using a probability-weighted discounted cash flow model. Changes in the estimated fair value of the debt derivative were recorded in other income (expense), net, on the accompanying condensed consolidated statements of operations. The 2022 Notes were paid off at the Closing Date. The debt derivative on the 2022 Notes was remeasured at Closing Date, then derecognized upon payoff of the 2022 Notes. The Company recognized a $0.3 million loss on extinguishment of the 2022 Notes to interest expense, net on the condensed consolidated statements of operations. The estimated fair value of the 2022 Notes embedded derivative is as follows (in thousands):
The Company incurred approximately $0.9 million of fees related to issuance of the 2022 Notes in the form of advisor fees, legal fees and other related expenses. These costs were recorded as debt discount and were amortized to interest expense using the effective interest method over the term of the 2022 Notes. 2023 Notes In 2020, the Company issued an aggregate of $16.1 million in convertible promissory notes to various investors, which matured in March 2023 (the “2023 Initial Notes”). In 2021, the Company issued additional convertible promissory notes of $48.7 million to various investors, which also matured in March 2023 (the “Extension Notes”). The Company issued common stock warrants in conjunction with the 2023 Initial Notes and Extension Notes (together, the “2023 Notes”). See “Note 10 – Common Stock” for additional details. The principal amount of the outstanding balance on the 2023 Notes accrued interest at 10.0% per annum, payable at maturity in March 2023. Prior to maturity, the 2023 Notes could be redeemed for an amount equal to 200% of the principal amount of the outstanding balance and the unpaid accrued interest in the event of a change in control, or converted, either voluntarily at the option of the investor or automatically to equity based on various conversion events. In accounting for the issuance of the 2023 Notes, the Company separated the 2023 Notes into liability and equity components, consisting of embedded derivatives representing the redemption and conversion features, and common stock warrants, respectively. The fair value of the derivatives were calculated using the “with and without” method. The key valuation assumptions used consisting of the discount rate and the probability of the occurrence of various conversion events. The fair value of the liability and equity components exceeded the 2023 Initial Notes gross proceeds therefore, the fair value of the components were allocated on a relative fair value basis. At issuance of the 2023 Initial Notes, the derivative liability and common stock warrants received relative fair value allocations of $5.2 million and $7.2 million, respectively, with the offset to debt discount, and the remaining immaterial balance was recorded as a loss in other income (expense), net on the condensed consolidated statements of operations. At issuance of the Extension Notes, the fair value of the liability and equity components were $17.5 million and $22.0 million respectively. The equity component was included in additional paid-in capital on the condensed consolidated balance sheets. The equity component was not remeasured. The derivative liabilities were re-valued at the end of each reporting period. Changes in the estimated fair value of the derivatives were recorded in other income (expense), net, on the accompanying condensed consolidated statements of operations. The 2023 Notes were converted into shares of the Company at the Closing Date. The debt derivative on the 2023 Notes was remeasured at Closing Date, then derecognized upon conversion into equity. Upon conversion of the 2023 Notes, the Company recognized $36.7 million loss on settlement of the 2023 Notes to interest expense, net in the condensed consolidated statement of operations. The estimated fair value of the 2023 Notes embedded derivative is as follows (in thousands):
The 2023 Notes debt issuance costs were approximately $0.4 million, consisting of advisor fees, legal fees and other related expenses. The Company allocated the total amount incurred to the liability and equity components on a relative fair value basis, resulting in $0.3 million allocated to the liability component and recorded as debt discount and approximately $0.1 million to the equity component. The residual amount was immaterial and was allocated to loss on issuance of the 2023 Notes. As such, the total loss recorded on the 2023 Notes was immaterial. The following table represents the total amount of interest expense recognized on the 2022 Notes and 2023 Notes for the three months ended March 31, 2022 and 2021 (in thousands):
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Leases |
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Leases | (13) Leases The Company leases real estate facilities under non-cancelable operating leases with various expiration dates through fiscal year 2023. The Company adopted Topic 842 as of January 1, 2022, using the modified retrospective approach. For the three months ended March 31, 2022, the Company recorded operating lease costs of $0.2 million. For the three months ended March 31, 2022, the Company’s variable lease costs was not material. At March 31, 2022, the operating lease ROU asset and lease liability was $0.3 million and $0.3 million, respectively. The ROU asset balance was recorded in other long-term assets and the lease liability was recorded in other current liabilities, on the condensed consolidated balance sheet. The following table presents supplemental cash flow information related to leases (in thousands):
The following table presents the maturities of the Company’s operating lease liabilities as of March 31, 2022 (in thousands):
ASC 840 Disclosures The Company elected the modified retrospective transition method, which applies ASC 842 as of the effective date on January 1, 2022. Prior to the adoption of ASC 842, the Company applied ASC 840 to its lease transactions. The following table presents the future minimum lease commitments under the Company’s operating leases as of December 31, 2021, as previously disclosed (in thousands):
Rent expense was $0.2 million for the three months ended March 31, 2021. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (14) Income Taxes For the three months ended March 31, 2022, we recorded an income tax expense of $ 3,000 compared to an income tax expense of $4,000 for the three months ended March 31, 2021, which was primarily related to income taxes of our non-U.S. operations as our U.S. operations were in a loss position and we maintain a full valuation allowance against our U.S. deferred tax assets. |
Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (15) Commitments and Contingencies Legal Proceedings The Company is a party to various legal proceedings and claims which arise in the ordinary course of business. The Company records a liability when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the reasonably possible loss. In response to allegations of patent infringement and threats of litigation by one of its competitors (“Complainant”), the Company filed a complaint in the Northern District of California seeking a declaratory judgment of non-infringement of the complainant’s patent (patent # 7969558). The Complainant filed an answer and counterclaim seeking injunctions and damages for an unspecified amount. The Company answered the counterclaims asserting that the patent claims are not valid and also filed two petitions for inter parties review (“IPR”) before the Patent Trial and Appeal Board (“PTAB”), which were instituted in May 2018. All briefing and the oral hearing in the PTAB proceedings have concluded. On May 23, 2019, the PTAB issued Final Written Decisions finding all petitioned claims are not invalid. On June 24, 2019, the Company filed a Request for Rehearing in response to the Final Written Decision. On May 23, 2020, the PTAB denied the Request for Rehearing. Quanergy filed an appeal to the Court of Appeals for the Federal Circuit (“CAFC”) for each IPR (consolidated as docket no. CAFC-20-2070). In the fourth quarter of 2020, the Company started engaging in discussions with the Complainant for a potential out of court settlement related to the ongoing legal proceeding discussed above, in order to avoid future significant legal expenses. The Company determined that it had incurred a liability as of December 31, 2020 and recorded an estimated potential loss for this case in the amount of $2.5 million, recorded in general and administrative expenses on the consolidated statement of operations. As of the current date, negotiations have ceased and no settlement has been reached. The Company will continue to monitor developments on this case and record any necessary adjustments to reflect the effect of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case in the period they become known. Vendor Contract Liability In October 2017, the Company entered into an agreement with a contract manufacturer for production of various sub-assemblies and final assemblies of the Company’s M8 and S3 product lines. The contract manufacturer procures parts to fulfill the forecasted demand of the Company, holding title and risk of loss to the inventory. The terms of the agreement specify that the Company may be liable for this inventory should it not place orders for units sufficient to consume this inventory, or in varying amounts based on the termination of the agreement at any time by either party. The contract manufacturer holds $1.7 million and $1.6 million of inventory at cost subject to this agreement as of March 31, 2022 and December 31, 2021, respectively. The Company has recorded a liability of $0.3 million within accrued expenses on the condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021 for inventory at the contract manufacturer identified as excess and obsolete. Employee Retention Plan The Company adopted an employee retention plan (“Retention Plan”) in 2019, which was subsequently amended and restated in April 2021. Key employees as determined by the Board of Directors are eligible to participate in the Retention Plan, and have the right to payment of a retention bonus upon the occurrence of a covered transaction, defined as a change in control, IPO or a SPAC merger transaction. The retention bonus is expected to be paid out in equal installments, at the first and second anniversary of the occurrence of the covered transaction, and the employee will have to be actively employed by the Company at the time of payment. The Business Combination qualifies as a covered transaction, and at Closing, the amount of retention bonus totaled $4.6 million. The Company expects to record incremental obligation over the two defined payment dates and true up its obligation on actual exits from employment. No forfeitures have been estimated. As of March 31, 2022, the Company accrued and recorded $0.5 million of retention bonus expense, where $0.3 million was recorded in accrued expenses and $0.2 million in other long-term liabilities. |
Segment Information and Geographic Information |
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Segment Information and Geographic Information | (16) Segment Information and Geographic Information The Company conducts its business in one operating segment that designs, develops and produces LiDAR sensors used in intelligent real-time 3D object detection and classification solutions. The Company’s Chief Executive Officer (“CEO”) is the Chief Operating Decision Maker (“CODM”). The CODM allocates resources and makes operating decisions based on financial information presented on a consolidated basis. The profitability of the Company’s product group is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. Revenue by geographical region is as follows:
All long-lived assets are maintained in, and all losses are attributable to, the United States of America. |
Net Loss Per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | (17) Net Loss Per Share The unaudited basic and diluted net loss per share for the three months ended March 31, 2021 has been computed to give effect to the conversion of shares of Legacy Quanergy convertible preferred stock into shares of Legacy Quanergy common stock as though the conversion had occurred as of the beginning of the period. The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the three months ended March 31, 2022 and 2021, respectively (in thousands, except share and per share data).
Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following weighted-average outstanding common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (18) Related Party Transactions Related Party Collaboration Agreement To support the Company’s path towards automotive grade solid state LiDAR sensors, help de-risk the ramp towards high volume manufacturing, and improve the company’s marketing and distribution capabilities, the Company entered into a Strategic Partnership Agreement (“Collaborative Agreement”) with Sensata Technology, Inc (“Sensata”) on February 8, 2016. As part of the Collaborative Agreement, Sensata made a $50 million investment in the initial closing of the Company’s offering of Series B convertible preferred stock. The agreement committed both companies to engage in joint development and commercialization of the solid-state product for the transportation segment. The Company was expected to retain ultimate discretion relating to product roadmap and development, with Sensata retaining ultimate control over the manufacturing, sales and marketing decisions subject to certain terms and conditions. On March 29, 2020, Quanergy and Sensata signed an amendment to the agreement which eliminated exclusivity for the transportation sector, reduced specific development and commercialization obligations and added flexibility to the manufacturing model. No revenues on the February 2016 Collaborative Agreement have been recognized for the three months ended March 31, 2022 and 2021. In accordance with the Collaborative Agreement, the Company purchased equipment from Sensata totaling $1 million which is included in the accompanying condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. Depreciation expense on this equipment as of March 31, 2022 and 2021 were not material. On June 21, 2021, the Company entered into another collaborative arrangement with Sensata, wherein Sensata will provide consulting services with respect to areas of manufacturing, cost reduction, sourcing, and go to market strategies. In exchange for such services, the Company issued a warrant to Sensata to purchase 2.5 million shares of the Company. These warrants had a fair value of $23.3 million at December 31, 2021. On the Closing Date, these warrants were fair valued at $17.6 million. No revenues have been recognized and no expenses have been incurred under this collaborative arrangement for the three months ended March 31, 2022. Related Party Convertible Notes In 2020 and 2021, the Company issued convertible promissory notes of approximately $64.8 million to various investors, out of which $27.2 million was issued to four related parties. The related party debt is presented as “Long-term debt – related party” in the consolidated balance sheet, adjusted for deferred interest, allocated debt financing costs and derivative liability recorded as debt discount on the 2023 Notes. The principal amount of the outstanding balance accrued interest at 10.0% per annum, payable at maturity in March 2023. The Company also issued 4,900,929 common stock warrants to the four related parties in conjunction with the issuance of the 2023 Notes. The 2023 Notes were converted into equity of the Company on the Closing Date. For the three months ended March 31, 2022 and 2021, the Company accrued interest of $1.7 million and $1.2 million, respectively, for related party debt. See “Note 12 – Borrowing Arrangements” for additional details. Related Party Restricted Stock Units Out of the total RSU grants in 2021, 2,963,703 were issued to two related parties with an aggregate fair value of $20.1 million. On the Closing Date, both the performance-based and service-based conditions for vesting of the RSU grants had been satisfied, therefore, $20.1 million expenses has been recognized on these awards in the three months ended March 31, 2022. Related Party Private Placement Warrants An aggregate of 6,580,000 Private Placement Warrants are held by a related party. Each Private Placement Warrant is exercisable to purchase one share of common stock at a price of $11.50 per share. Related Party Payable On March 31, 2022, the Company issued 863,000 shares of common stock to reimburse a related party for merger-related expenses of $1.7 million. As of March 31, 2022, the remaining amount due to the related party was $1.1 million for merger related expenses paid by the related party on behalf of the Company. Related Party Common Stock As of March 31, 2022, a related party owns 6,037,500 shares of the Company wherein these shares are subject to a lock up period, which is set to end at the earlier of, (a) a year after the Closing Date or, (b) subsequent to the Closing Date, (x) if the closing price of the common stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing Date, or (y) the date the Company completes a liquidation, merger, share exchange or other similar transaction after the Business Combination, that results in all of the Company’s public shareholders having the right to exchange their shares for cash, securities or other property. |
Subsequent Events |
3 Months Ended |
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Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | (19) Subsequent Events Subsequent events have been evaluated through the May 16, 2022 issuance date of the financial statements and there were no events that required additional disclosures. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Description of Business | (a) Description of Business Quanergy Systems, Inc. (the “Company” or “Quanergy”) formerly known as CITIC Capital Acquisition Corp., designs, develops and produces Light Detection and Ranging (“LiDAR”) sensors and is a leader in 3D sensing that delivers robust and intelligent real-time 3D object detection and classification solutions. CITIC Capital Acquisition Corp. (“CCAC”), the Company’s predecessor, was incorporated as a Cayman Islands exempted special purpose acquisition company. On February 7, 2022, CCAC effectuated the change of the Company’s jurisdiction of incorporation to the state of Delaware. Accordingly, each of CCAC’s issued and outstanding Class A Ordinary Shares and Class B Ordinary Shares automatically converted on a
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Business Combination | (b) Business Combination On February 8, 2022 (the “Closing Date” or “Closing”), the Company consummated the business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2021 (as amended, the “Merger Agreement”), by and among CCAC, CITIC Capital Merger Sub Inc. (“Merger Sub”), and Quanergy Systems, Inc., (“Legacy Quanergy”). Pursuant to the terms of the Merger Agreement, the Business Combination between the Company and Legacy Quanergy was effected through the merger of Merger Sub with and into Legacy Quanergy, with Legacy Quanergy continuing as the surviving corporation and a wholly-owned subsidiary of the Company. On the Closing Date, the registrant changed its name from CITIC Capital Acquisition Corp. to Quanergy Systems, Inc. On January 28, 2022, Legacy Quanergy changed its corporate name to Quanergy Perception Technologies, Inc. In connection with the Business Combination, holders of 26,867,796 of CCAC’s Class A Ordinary Shares, or approximately 97.3% of the shares with redemption rights, exercised their right to redeem their shares for cash at a redemption price of approximately $10.07 per share, for an aggregate redemption amount of $270.5 million. On the Closing Date, holders of 600,000 of CCAC’s Class A Ordinary Shares, or approximately 2.2% of the shares with redemption rights, reversed their prior redemptions, resulting in $6.0 million being returned to the trust account established at the consummation of CCAC’s initial public offering prior to the Closing. Pursuant to the terms of the Merger Agreement, at the effective time of the Business Combination:
On the Closing Date, certain investors (the “PIPE Investors”) purchased from the Company an aggregate of 3,695,000 shares (the “PIPE Shares”) of Common Stock at a price of $10.00 per share, for an aggregate purchase price of approximately $37.0 million (the “PIPE Financing”), in a private placement pursuant to separate subscription agreements consummated substantially concurrently with close of the Business Combination. The Company’s common stock and warrants are now listed on the New York Stock Exchange under the symbols “QNGY” and “QNGY WS”. Unless the context otherwise requires, “we,” “us,” “our,” “Quanergy,” and the “Company” refers to Quanergy Systems, Inc., the combined company and its subsidiaries following the Business Combination. Refer to “Note 2 – Reverse Recapitalization” for further discussion of the Business Combination. |
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Basis of Presentation and Consolidation | (c) Basis of Presentation and Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements as of March 31, 2022 are unaudited. The condensed consolidated balance sheet as of December 31, 2021, included herein was derived from the audited consolidated financial statements as of that date. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. As such, the information included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2021, which was filed as Exhibit 99.1 to the Company’s Form 8-K/A filed with the SEC on March 31, 2022. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal year begins on January 1 and ends on December 31. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of March 31, 2022, the results of operations, including its comprehensive loss, and stockholders’ equity/(deficit) for the three months ended March 31, 2022 and 2021, and the statement of cash flows for the three months ended March 31, 2022 and 2021. All adjustments are of a normal recurring nature. The results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2022. |
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Summary of Significant Accounting Policies | (d) Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in Summary of Significant Accounting Policies in the notes to the audited consolidated financial statements for the fiscal year ended December 31, 2021. Other than the accounting policies discussed below related to the adoption of Accounting Standards Codification (“ASC”) 842, Leases, there has been no material change to the Company’s significant accounting policies during the three months ended March 31, 2022. See “Recently Adopted Accounting Pronouncements” and “Note 13 – Leases” related to the adoption of ASC 842. |
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Liquidity and Capital Resources | (e) Liquidity and Capital Resources The Company has prepared its condensed consolidated financial statements assuming that the Company will continue as a going concern. The Company has had recurring losses and an accumulated deficit since its inception. The Company obtained additional funding of $43.8 million in connection with the Business Combination and effectively settled its outstanding debt balance of $106 million, thereby providing the Company with additional future financial flexibility. The Business Combination also gives the Company access to $125
million from a previously announced share subscription facility from Global Emerging Markets Group (“GEM”), a Luxembourg-based private alternative investment group, once the effectiveness of the resale S-1 Registration Statement and other requirements are completed, which is expected to occur in the second quarter of FY 2022. Should the company not be able to access the GEM facility, it would be forced to seek other forms of financing which may not be available in sufficient amounts to fund its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern, for a period of twelve months following the date of issuance of financial statements as of and for the three months ended March 31, 2022. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
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Impact of Covid-19 | (f) Impact of Covid-19 The extensive impact of the pandemic caused by the novel coronavirus (“COVID-19”) has resulted, and will likely continue to result, in significant disruptions to the global economy, as well as businesses and capital markets around the world. In an effort to halt the outbreak of COVID-19, a number of countries, states, counties, and other jurisdictions have imposed, and may impose in the future, various measures, including but not limited to, voluntary and mandatory quarantines, stay-at-home With respect to the Company’s results of operations, sales for the three months ended March 31, 2022 and for the full years of 2021 and 2020 were heavily impacted by Covid-19 primarily due to the delay of projects and slowing overall business activity, as well as, in certain cases, the inability to physically access customer sites. Despite these setbacks, we reacted quickly to help offset the negative cash flow impacts of these factors with key elements of our cash preservation plan in 2020 including furloughing nearly 50% of our employees, negotiating extended payment terms with vendors, cutting wages across the entire workforce and reducing overall external contractor spending. We also benefited from a $2.5 million Paycheck Protection Program (“PPP”) loan from the Small Business Administration. While business conditions improved significantly year over year, over the last four quarters including, the three months ended March 31, 2022, broader implications of the COVID-19 pandemic were present throughout the year on our workforce, operations, supply chain, and customer demand. For the remainder of 2022, we envision significant uncertainties remaining relating to disruptions from COVID-19, broad based supply chain shortages, and geopolitical risks related to the events in Ukraine. |
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Recently Adopted Accounting Pronouncements | (g) Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (i) not to reassess prior conclusions on whether any expired or existing contracts are or contain a lease, lease classification, and initial direct costs; (ii) combine lease and non-lease components; and (iii) not to recognize right-of-use months or less. The Company’s operating leases primarily comprise of office facilities, with the most significant leases relating to corporate headquarters in Sunnyvale, CA. Upon adoption of the new leasing standard on January 1, 2022, the Company recognized ROU assets of $0.5 million and lease liabilities of $0.5 million. There was no cumulative impact of transition to retained earnings as of the adoption date. The standard did not impact the accompanying condensed consolidated statements of operations and the accompanying condensed consolidated statements of cash flows. In May 2021, the FASB issued ASU
2021-04, Earnings Per Share Debt—Modifications and Extinguishments 470-50), Compensation—Stock Compensation Derivatives and Hedging—Contracts in Entity’s Own Equity 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). This guidance clarifies certain aspects of the current guidance to promote consistency among reporting of an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted the standard on January 1, 2022 and the standard did not impact the accompanying condensed consolidated financial statements. |
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Recently Adopted Accounting Pronouncements | (h) Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses 2016-13 is effective for the Company beginning January 1, 2023, with early adoption permitted. The Company is currently in the process of evaluating the effects of this pronouncement on the Company’s consolidated financial statements and does not expect it to have a material impact on its consolidated financial statements. In August 2020, the FASB issued ASU
2020-06, Debt with Conversion and Other Options 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity 815- 40): Accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing certain separation models required under current U.S. GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and it revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. The amendments are effective for the Company beginning January 1, 2024, with early adoption permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements. |
Reverse Recapitalization (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Recapitalization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Business Acquisition Elements Reconciled To Consolidated Financial Statements | The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows and the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2022 (in thousands):
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Summary of Number of Shares of Common Stock Issued Immediately Following The Consummation of The Business Combination | The number of shares of common stock issued immediately following the consummation of the Business Combination were:
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Summary of Number of Legacy Quanergy Shares |
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Inventory (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Prepaid Expenses and Other Current Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expense and Other Assets, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Assets Current | Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Property and Equipment, Net (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property Plant and Equipment | Property and equipment, net consist of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Other Long-Term Assets (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Noncurrent Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Long Term Assets | Other long-term assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Other Current Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Liabilities | Other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Other Long-term Liabilities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities, Noncurrent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Non Current Liabilities | Other long-term liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Information About The Company's Financial Assets and Liabilities That Are Measured at Fair Value On Recurring Basis | The following table sets forth the Company’s financial assets and liabilities that were measured at fair value, on a recurring basis (in thousands):
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Common Stock (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock by Class |
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Summary of Stockholders' Equity Note, Warrants or Rights | As of March 31, 2022, the Company had the following common stock warrants outstanding to purchase shares of the Company’s common stock:
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Summary of Fair Value Measurements Inputs | The key inputs into the Black Scholes Option Pricing Model for the Private Placement Warrants were as follows:
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Summary of Reconciliation of Changes in Fair Value | The following table provides a reconciliation of changes in fair value of the beginning and ending balances for the liabilities classified as Level 3:
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Stock-Based Compensation Expense (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share-Based Payment Arrangement, Option, Activity | The following table summarizes the stock option activity for the three months ended March 31, 2022:
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Summary of Share-Based Payment Arrangement, Restricted Stock And Restricted Stock Unit, Activity | The following table summarizes the restricted stock unit activity for the three months ended March 31, 2022:
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Summary of Share-Based Payment Arrangement, Expensed And Capitalized, Amount | The following table summarizes stock-based compensation expense and its allocation within the accompanying condensed consolidated statements of operations (in thousands):
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Borrowing Arrangements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Estimated Fair Value Of The 2022 And 2023 Notes Embedded Derivative | The estimated fair value of the 2022 Notes embedded derivative is as follows (in thousands):
The estimated fair value of the 2023 Notes embedded derivative is as follows (in thousands):
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Schedule Of Interest Expense | The following table represents the total amount of interest expense recognized on the 2022 Notes and 2023 Notes for the three months ended March 31, 2022 and 2021 (in thousands):
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Leases (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Maturities of The Operating Lease Liabilities | The following table presents the maturities of the Company’s operating lease liabilities as of March 31, 2022 (in thousands):
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Summary of Supplemental Cash Flow Information Related To Leases | The following table presents supplemental cash flow information related to leases (in thousands):
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Summary of Future Minimum Rental Payments For Operating Leases | The following table presents the future minimum lease commitments under the Company’s operating leases as of December 31, 2021, as previously disclosed (in thousands):
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Segment Information and Geographic Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Revenue By Geographical Region | Revenue by geographical region is as follows:
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Net Loss Per Share (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Net Income (Loss) Per Ordinary Share | The following table sets forth the computation of the basic and diluted net loss per share attributable to common stockholders for the three months ended March 31, 2022 and 2021, respectively (in thousands, except share and per share data).
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Schedule Of Antidilutive Securities Excluded From Computation Of Earnings Per share | The following weighted-average outstanding common stock equivalents were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive.
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Reverse Recapitalization - Summary of Business Acquisition Elements Reconciled To Consolidated Financial Statements (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Schedule Of Business Acquisition Elements Reconciled To Consolidated Financial Statements [Line Items] | |
Cash - CCAC's trust and cash (net of redemption) | $ 13,414 |
Issuance of PIPE shares | 36,950 |
Less: transaction costs and advisory fees paid | (6,609) |
Net cash from Business Combination and PIPE Financing | 43,755 |
Less non-cash net liabilities assumed from CCAC | (15,955) |
Net contributions from Business Combination and PIPE Financing | $ 27,800 |
Reverse Recapitalization - Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Reverse Recapitalization [Line Items] | |
Cash acquired from business acquisition and PIPE financing | $ 43.8 |
Business Combination, Acquisition Related Costs | 12.5 |
Payment Of Acquisition Related Fees | $ 9.5 |
Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,513 | $ 2,292 |
Work in progress | 677 | 578 |
Finished goods | 105 | 372 |
Total inventory | $ 3,295 | $ 3,242 |
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Assets Current (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||
Sensata prepaid services | $ 8,801 | $ 0 |
Prepaid business insurance | 4,222 | 873 |
Prepaid other | 115 | 265 |
Total prepaid expenses and other current assets | $ 13,138 | $ 1,138 |
Property and Equipment, Net - Schedule of Property Plant and Equipment (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 7,344 | $ 7,142 |
Less: accumulated depreciation and amortization | (5,462) | (5,234) |
Total property and equipment, net | 1,882 | 1,908 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 5,770 | 5,568 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 182 | 182 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,008 | 1,008 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 35 | 35 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 349 | $ 349 |
Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Property, Plant and Equipment [Abstract] | ||
DepreciationAndAmortization | $ 228 | $ 251 |
Other Long-Term Assets - Schedule of Other Long-Term Assets (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Assets, Noncurrent Disclosure [Abstract] | ||
Sensata prepaid services | $ 8,801 | $ 0 |
Deferred costs | 2,506 | 3,403 |
ROU asset | 278 | 0 |
Security deposit | 133 | 136 |
Total other long-term assets | $ 11,718 | $ 3,539 |
Other Current Liabilities - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities, Current [Abstract] | ||
GEM commitment fee | $ 2,500 | $ 0 |
Lease liability | 291 | 0 |
Restructuring liability | 268 | 293 |
Customer deposits | 200 | 200 |
Deferred revenue | 61 | 72 |
Derivative liability | 0 | 172 |
Total other current liabilities | $ 3,320 | $ 737 |
Other Long-Term Liabilities - Schedule of Other Non Current Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities, Noncurrent [Abstract] | ||
Transaction fees payable | $ 9,660 | $ 0 |
Customer deposits | 750 | 750 |
Deferred revenue | 137 | 4 |
Other long-term liabilities | 192 | 49 |
Total other long-term liabilities | $ 10,739 | $ 803 |
Common Stock - Summary of Stockholders' Equity Note, Warrants or Rights (Detail) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
|
Class of Warrant or Right [Line Items] | |||
Shares | 34,135,794 | ||
Public Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Shares | 13,799,988 | ||
Exercise Price | $ 11.50 | ||
Expiration | February 2027 | ||
Private Placement Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Shares | 7,520,000 | ||
Exercise Price | $ 11.50 | ||
Expiration | February 2027 | ||
GEM Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Shares | 3,397,923 | ||
Exercise Price | $ 10.00 | $ 10.00 | |
Expiration | February 2025 | ||
2023 Notes Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Shares | 6,917,883 | ||
Exercise Price | $ 0.01 | ||
Expiration | March 2025 | ||
Sensata Warrants [Member] | |||
Class of Warrant or Right [Line Items] | |||
Shares | 2,500,000 | 2,500,000 | |
Exercise Price | $ 0.01 | ||
Expiration | June 2026 |
Common Stock - Summary of Reconciliation of Changes in Fair Value (Detail) - Private Placement Warrants [Member] $ in Thousands |
2 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value beginning | $ 3,248 |
Change in fair value of public and private warrants | (1,439) |
Fair Value Ending | $ 1,808 |
Stock-Based Compensation Expense - Summary of Share-Based Payment Arrangement, Expensed And Capitalized, Amount (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 51,561 | $ 1,581 |
Cost of Sales [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 683 | 20 |
Research and Development Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 7,677 | 441 |
Selling and Marketing Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 4,598 | 212 |
General and Administrative Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 38,603 | $ 908 |
Borrowing Arrangements - Summary of Estimated Fair Value of The 2022 And 2023 Notes Embedded Derivative (Detail) - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended |
---|---|---|
Feb. 07, 2022 |
Mar. 31, 2022 |
|
2022 Notes embedded derivative [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value beginning | $ 172 | $ 313 |
Change in fair value | 141 | |
Payoff of 2022 Notes | (313) | |
Fair Value Ending | 313 | 0 |
2023 Notes embedded derivative [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value beginning | 26,017 | 29,653 |
Change in fair value | 3,636 | |
Conversion of 2023 Notes | (29,653) | |
Fair Value Ending | $ 29,653 | $ 0 |
Borrowing Arrangements - Schedule of Interest Expense (Detail) - Two Thousand Twenty Two Notes And Two Thousand Twenty Three Notes [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Debt Instrument [Line Items] | ||
Contractual interest expense | $ 1,052 | $ 1,755 |
Accretion of debt discount | 38,757 | 1,857 |
Accretion of debt issuance costs | 223 | 73 |
Interest and debt expense | $ 40,032 | $ 3,685 |
Leases - Summary of Supplemental Cash Flow Information Related To Leases (Detail) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2022
USD ($)
| |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating leases | $ 178 |
Weighted average lease term | |
Operating leases | 6 months |
Weighted average discount rate | |
Operating leases | 8.60% |
Leases - Summary of Maturities of The Operating Lease Liabilities (Detail) - USD ($) $ in Thousands |
Mar. 31, 2022 |
Jan. 01, 2022 |
---|---|---|
Lessee Disclosure [Abstract] | ||
2022 (remaining nine months) | $ 308 | |
2023 | 4 | |
Total undiscounted lease payments | 312 | |
Less: imputed interest | (21) | |
Total lease liabilities | $ 291 | $ 500 |
Leases - Summary of Future Minimum Rental Payments For Operating Leases (Detail) $ in Thousands |
Mar. 31, 2022
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
2022 | $ 459 |
2023 | 4 |
Total minimum payments | 463 |
Lease Termination Agreement [Member] | |
Lessee, Lease, Description [Line Items] | |
2022 | 293 |
2023 | 49 |
Total minimum payments | $ 342 |
Leases - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
|
Lessee Disclosure [Abstract] | |||
Operating lease expense | $ 200 | ||
Operating lease right-of-use asset | 300 | $ 500 | |
Operating lease liability current | 291 | $ 0 | |
Operating leases, rent expense, net | $ 200 |
Income Taxes - Additional Information (Detail) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 3,000 | $ 4,000 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
Mar. 31, 2022 |
Feb. 08, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Loss contingency estimate of possible loss | $ 2.5 | |||
Inventory held by contract manufacturer | $ 1.7 | $ 1.6 | ||
Vendor contract liability | 0.3 | $ 0.3 | ||
Retention bonus | 0.5 | $ 4.6 | ||
Retention bonus current | 0.3 | |||
Other employee-related liabilities, non current | $ 0.2 |
Segment Information and Geographic Information - Summary of Revenue by Geographical Region (Detail) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Geographic Areas Revenues From External Customers [Line Items] | ||
Total net sales | $ 1,367 | $ 383 |
Americas [Member] | ||
Geographic Areas Revenues From External Customers [Line Items] | ||
Total net sales | 276 | 171 |
Asia [Member] | ||
Geographic Areas Revenues From External Customers [Line Items] | ||
Total net sales | 744 | 149 |
Europe Middle East And Africa [Member] | ||
Geographic Areas Revenues From External Customers [Line Items] | ||
Total net sales | $ 347 | $ 63 |
Net Loss Per Share - Summary of Basic and Diluted Net Income (Loss) Per Ordinary Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Net loss attributable to common stockholder, basic and diluted | $ (104,682) | $ (14,714) |
Weighted average shares of common stock outstanding, basic and diluted | 87,705,256 | 62,811,287 |
Net loss per share attributable to common stockholder, basic and diluted | $ (1.19) | $ (0.23) |