RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Public Investment Fund Internship Agreement

In July 2021, the Company entered into an agreement with PIF, which is an affiliate of Ayar, to implement a recruitment and talent development program pursuant to which the Company agreed to evaluate, employ and train participants nominated by PIF during six-month internships, and PIF agreed to reimburse us for expenses related to participant wages, visa fees, medical insurance, airfare and housing incurred by us. The program ended during the year ended December 31, 2022. Expenses incurred under the agreement were nil during the three and nine months ended September 30, 2023, and $0.3 million and $1.0 million, respectively, during the same periods in the prior year. The amount due from PIF was nil and $1 million as of September 30, 2023 and December 31, 2022, respectively.

Leases

In February 2022, the Company entered into a lease agreement with KAEC, a related party of PIF, which is an affiliate of Ayar, for our first international manufacturing plant in Saudi Arabia. The lease has an initial term of 25 years expiring in Year 2047. The right-of-use assets related to this lease were $4.6 million and $4.8 million as of September 30, 2023 and December 31, 2022, respectively. The lease liabilities were $5.6 million and $5.4 million as of September 30, 2023 and December 31, 2022, respectively. The lease expense recorded for the three and nine months ended September 30, 2023 and 2022 was immaterial.

In July 2023, the Company entered into a lease agreement with King Abdullah Financial District Development and Management Company, a subsidiary of PIF, which is an affiliate of Ayar, for its corporate office in Saudi Arabia. The lease has an initial term of 6 years expiring in Year 2029. The right-of-use asset and lease liability related to this lease were $2.4 million and $2.3 million, respectively, as of September 30, 2023. The lease expense recorded for the three and nine months ended September 30, 2023 was immaterial.

SIDF Loan Agreement

In February 2022, Lucid LLC entered into the SIDF Loan Agreement with the SIDF, a related party of PIF, which is an affiliate of Ayar. Under the SIDF Loan Agreement, SIDF has committed to provide the SIDF Loans to Lucid LLC in an aggregate principal amount of up to SAR 5.19 billion (approximately $1.4 billion); provided that SIDF may reduce the availability of SIDF Loans under the facility in certain circumstances. See Note 6 “Debt” for more information.

MISA Agreements

In February 2022, Lucid LLC entered into agreements with MISA, a related party of PIF, which is an affiliate of Ayar, pursuant to which MISA has agreed to provide economic support for certain capital expenditures in connection with Lucid LLC’s on-going design and construction of AMP-2. The support by MISA is subject to Lucid LLC’s completion of certain milestones related to the construction and operation of AMP-2. Following the commencement of construction, if operations at the plant do not commence within 30 months, or if the agreed scope of operations is not attained within 55 months, MISA may suspend availability of subsequent support.

Pursuant to the agreements, MISA has the right to require Lucid LLC to transfer the ownership of AMP-2 to MISA, at the fair market value thereof, minus an amortized value of the support provided in the event of customary events of default including abandonment or material and chronically low utilization of AMP-2. Alternatively, Lucid LLC is entitled to avoid the transfer of the ownership of AMP-2 by electing to pay such amortized value. The agreements will terminate on the fifteenth anniversary of the commencement of CBU operations at AMP-2 at the latest.

In 2022, the Company received support of SAR 366 million (approximately $97.3 million) in cash. The Company recorded nil and $64.0 million as deferred liability within other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The Company also recorded $97.3 million and $33.3 million as a deduction in calculating the carrying amount of the related assets in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. There were no unfulfilled conditions and contingencies attached to the payments received. In 2022, payment receipts were classified as investing cash inflows in the condensed consolidated statements of cash flows.

GIB Facility Agreement

In April 2022, Lucid LLC entered into the GIB Facility Agreement with GIB. GIB is a related party of PIF, which is an affiliate of Ayar. The GIB Facility Agreement provided for two committed revolving credit facilities in an aggregate principal amount of SAR 1 billion (approximately $266.1 million).

On March 12, 2023, Lucid LLC entered into an amendment of the GIB Facility Agreement to combine the Bridge Facility and the Working Capital Facility into a committed SAR 1 billion (approximately $266.6 million) GIB Credit Facility which may be used for general corporate purposes. See Note 6 “Debt” for more information.

Construction Service Contract

Lucid LLC entered into agreements with Al Bawani Company Limited (“Al Bawani”), an affiliate of PIF, which is an affiliate of Ayar, for certain design and construction services in connection with the development of AMP-2. The capital expenditures incurred under these agreements were SAR 120.2 million (approximately $32.1 million) and SAR 302.1 million (approximately $80.6 million), respectively, for the three and nine months ended September 30, 2023. Amounts due to Al Bawani under these agreements were SAR 97.2 million (approximately $25.9 million) and SAR 42.1 million (approximately $11.2 million) as of September 30, 2023 and December 31, 2022, respectively.

Subscription Agreements

On November 8, 2022, the Company entered into the Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company, up to $915.0 million shares of its common stock in one or more private placements through March 31, 2023. In December 2022, the Company issued 85,712,679 shares at a weighted average price per share of $10.68, and received aggregate proceeds of $915.0 million.

On May 31, 2023, the Company entered into the 2023 Subscription Agreement with Ayar, pursuant to which Ayar agreed to purchase from the Company 265,693,703 shares of the Company’s common stock at a price per share of $6.83 in a private placement for aggregate net proceeds of approximately $1.8 billion. In June 2023, the Company issued the shares to Ayar pursuant to the 2023 Subscription Agreement and received aggregate net proceeds of $1.8 billion after deducting issuance costs of approximately $2.0 million. See Note 8 “Stockholders’ Equity” for more information.

Common stock acquired by Ayar under the Subscription Agreements is subject to the investor rights agreement dated February 22, 2021 (the “Investor Rights Agreement”), which governs the registration for resale of such common stock. On May 31, 2023, concurrently with entering into the 2023 Subscription Agreement, the Company entered into an amendment to the Investor Rights Agreement (the “Second IRA Amendment”). Pursuant to the Second IRA Amendment, Ayar is entitled to certain registration rights with respect to the shares of common stock Ayar purchased in the private placement.

Human Resources Development Fund (“HRDF”) Joint Cooperation Agreement

In March 2023, Lucid LLC entered into a joint cooperation agreement with HRDF, a related party of PIF, which is an affiliate of Ayar. Pursuant to the agreement, Lucid LLC will train and develop local personnel in Saudi Arabia, and HRDF agreed to reimburse the Company training related costs in an aggregate of approximately SAR 29.3 million (approximately $7.8 million) during a one year program.

During the three and nine months ended September 30, 2023, the Company received a payment of nil and SAR 8.8 million (approximately $2.3 million), respectively, in cash. The Company recorded $2.0 million as deferred liability within other current liabilities in the condensed consolidated balance sheet as of September 30, 2023. The deduction recorded to operating expenses in the condensed consolidated statement of operations and comprehensive loss was immaterial, for the three and nine months ended September 30, 2023.

EV Purchase Agreement

In August 2023, Lucid LLC entered into an EV purchase agreement with the Government of Saudi Arabia, a related party of PIF, which is an affiliate of Ayar, as represented by the Ministry of Finance (the “EV Purchase Agreement”). The EV Purchase Agreement supersedes the Letter of Undertaking that Lucid LLC entered into in April 2022. Pursuant to the terms of the EV Purchase Agreement, the Government of Saudi Arabia and its entities and corporate subsidiaries and other beneficiaries (collectively, the “Purchaser”) may purchase up to 100,000 vehicles, with a minimum purchase quantity of 50,000 vehicles and an option to purchase up to an additional 50,000 vehicles during a ten-year period. Under the EV Purchase Agreement, the Purchaser may reduce the minimum vehicle purchase quantity by the number of vehicles set out in any purchase order not accepted by us or by the number of vehicles that Lucid LLC fails to deliver within six months from the date of the applicable purchase order. The Purchaser also has absolute discretion to decide whether to exercise the option to purchase the additional 50,000 vehicles. Vehicle sales during the three and nine months ended September 30, 2023 and amounts due from the Purchaser as of September 30, 2023 were not material.