number, including area code Statements (unaudited). March 31, 2021 38,698,308 36,524,863 Additional Paid-in - Embark Trucks. pursuant to the regulations of the SEC. The condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. going concern. and Restricted Cash Three Months Ended March 31, 2021 Fair Value of Financial Instruments Fair Value Measurements 45,444,582 March 31, 2023. The Company December 31, 2022. The Private and Working Capital Warrants were March 31, 2023. United States District Court for the Northern District of California (“Hardy Action”). Hardy brought the action purportedly on behalf of a class consisting of those who purchased or otherwise acquired Embark common stock between January 12, 2021 and January 5, 2022. The case, and his counsel at Pomerantz LLP as lead counsel. sub-lessee. In Embark’s Annual Report. 2023. and Significant Management Estimates three months ended March 31, 2023, from those discussed in Embark’s Annual Report. MARK ONE)☒ Mark One)x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023. 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarter ended March 31, 2021☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 number: number 001-39881NORTHERN GENESIS ACQUISITION CORP. IINamename of Registrantregistrant as Specifiedspecified in Its Charter) its charter)Delaware85-3433695Delaware 85-3343695 (State or other jurisdiction of
incorporation or organization)(I.R.S. Employer
Identification No.)321 Alabama St, San Francisco, California 94110 (Address of Principal Executive Offices) (Zip Code) 4801 Main Street, Suite 1000Kansas City, MO(Address of principal executive offices)(816) 514-0324(Issuer’snumber)Title of each class Trading Symbol(s) Name of each exchange on which registered Units, each consisting of one share ofClass A common stock, and one-third of one redeemable warrantNGAB.UNew York Stock ExchangeCommon Stock, par value $0.0001 per shareEMBK NGABNew York Stock ExchangeThe Nasdaq Global MarketWarrants, each whole warrant exercisable for one1/20th share of Class A common stock at an exercise price of $11.50 per sharewarrantEMBKW NGAB WSNew York Stock ExchangeThe Nasdaq Global MarketCheckissuerregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports),; and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐o☒x No ☐ocompany or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer”, and “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer ☐oAccelerated filer ☐oNon-accelerated filer ☒xSmaller reporting company ☒xEmerging growth company ☒x☐oExchange Act). Yes ☒o No ☐x24, 2021, there were 51,750,009, 2023, the number of shares of the issuer’s Class A common stock $0.0001 par value issuedoutstanding was 19,695,752 and outstanding. the number of outstanding shares of the issuer’s Class B common stock was 4,353,948.NORTHERN GENESIS ACQUISITION CORP. IIFORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021 PagePart I. Financial InformationPage 1StatementConsolidated Statements of Operations (Unaudited)and Comprehensive Loss2Condensed Statement of Changes in Stockholders’ Equity (Unaudited)34520302323Part II. Other Information2424242424242526iInterim Financial Statements.NORTHERN GENESIS ACQUISITION CORP. IICONDENSED BALANCE SHEETS December 31,
2020 (unaudited) ASSETS Current assets Cash $ 933,404 $ — Prepaid expenses and other current assets 301,170 — Total Current Assets 1,234,574 — Deferred offering costs — 249,917 Marketable securities held in Trust Account 414,008,341 — TOTAL ASSETS $ 415,242,915 $ 249,917 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accrued expenses $ 109,441 $ 1,450 Accrued offering costs — 107,000 Income taxes payable — — Promissory note – related party — 117,917 Total Current Liabilities 109,441 226,367 Warrant liability 24,098,867 — Deferred underwriting fee payable 14,490,000 — Total Liabilities 226,367 Commitments Common stock subject to possible redemption 37,153,752 and -0- shares at redemption value at March 31, 2021 and December 31, 2020, respectively 371,544,602 — Stockholders’ Equity Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding — — Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,596,248 and 10,350,000 shares issued and outstanding (excluding 37,153,752 and no shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively 1,460 1,035 Additional paid-in capital 119,812 23,695 Retained earnings/(Accumulated deficit) 4,878,733 (1,450 ) Total Stockholders’ Equity 5,000,005 23,550 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 415,242,915 $ 249,917 March 31,
2023December 31,
2022Assets Current assets: Cash and cash equivalents $ 126,202 $ 157,622 Restricted cash, short-term 667 65 Prepaid expenses and other current assets 7,333 7,886 Total current assets 134,202 165,573 Restricted cash, long-term 210 812 Property, equipment and software, net 4,754 20,608 Operating lease right-of-use assets 9,395 21,958 Other assets 4,874 5,779 Total assets $ 153,435 $214,730 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 909 $ 1,036 Accrued expenses and other current liabilities 7,902 3,885 Current portion of operating lease liabilities 2,498 3,250 Short-term notes payable 486 493 Total current liabilities 11,795 8,664 Long-term notes payable 1,178 1,297 Warrant liability 435 463 Non-current portion of operating lease liabilities 14,224 19,222 Other long-term liability 110 110 Total liabilities 27,742 29,756 Commitments and contingencies (Note 11) Stockholders’ equity: Preferred stock, $0.0001 par value; 10,000,000 shares authorized, none issued and none outstanding as of March 31, 2023 and December 31, 2022 — — Class A common stock, $0.0001 par value; 4,000,000,000 shares authorized, 19,532,651 shares issued as of March 31, 2023; 4,000,000,000 shares authorized, 19,050,207 shares issued as of December 31, 2022 2 2 Class B common stock, $0.0001 par value; 100,000,000 shares authorized, 4,353,948 shares issued as of March 31, 2023 and December 31, 2022 — — Additional paid-in capital 474,819 471,038 Accumulated deficit (349,128) (286,066) Total stockholders’ equity 125,693 184,974 Total liabilities and stockholders’ equity $ 153,435 $ 214,730 thethese unaudited condensed consolidated financial statements.NORTHERN GENESIS ACQUISITION CORP. IICONDENSED STATEMENT OF OPERATIONSTHREE MONTHS ENDED MARCH 31, 2021(UNAUDITED) Three Months Ended
March 31, 2021 Operating and formation costs $ 1,612,758 Loss from operations (1,612,758 ) Other income: Change in fair value of warrant liability 6,484,600 Interest earned on marketable securities held in Trust Account 8,341 Other income, net 6,492,941 Income before income taxes 4,880,183 Benefit for income taxes — Net income $ 4,880,183 Basic and diluted weighted average shares outstanding, Common stock subject to redemption Basic and diluted net income per share, Common stock subject to redemption $ 0.00 Basic and diluted weighted average shares outstanding, Non-redeemable common stock 14,187,614 Basic and diluted net income per share, Non-redeemable common stock $ 0.34 Three Months Ended March 31, 2023 2022 Operating expenses: Research and development $ 14,462 $ 18,695 General and administrative 17,850 21,926 Restructuring costs 9,531 — Impairment of long-lived assets 23,288 — Total operating expenses 65,131 40,621 Loss from operations (65,131) (40,621) Other income (expense): Change in fair value of warrant liability 28 22,156 Other income 261 26 Interest income 1,809 13 Interest expense (29) (21) Loss before provision for income taxes (63,062) (18,447) Provision for income taxes — — Net loss and comprehensive loss $ (63,062) $ (18,447) Net loss attributable to common stockholders, basic and diluted $ (63,062) $ (18,447) Net loss per share attributable to common stockholders: Basic and diluted, Class A and Class B $ (2.67) $ (0.82) Weighted-average shares used in computing net loss per share attributable to common stockholders: Basic and diluted 23,630,012 22,631,150 thethese unaudited condensed consolidated financial statements.NORTHERN GENESIS ACQUISITION CORP. IICONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITYTHREE MONTHS ENDED MARCH 31, 2021(UNAUDITED) Common Stock Accumulated Retained Earnings /
(Accumulated Total Stockholders’ Shares Shares Amount Capital Deficit) Equity Balance — January 1, 2021 10,350,000 1,035 $ — $ 23,965 $ (1,450 ) $ 23,550 Sale of 41,400,000 Units, net of underwriting discounts 41,400,000 4,140 — 371,625,771 — 371,629,911 Sale of 6,686,667 Private Placement Warrants — — — 10,963 — 10,963 Common stock subject to possible redemption (36,524,863 ) (3,652 ) — (365,244,981 ) — (365,248,633 ) Change in value of common stock subject to redemption (628,889 ) (63 ) — (6,295,906 ) — (6,295,969 ) Net Income — — — — 4,880,183 4,880,183 Balance – March 31, 2021 14,596,248 1,460 $ — $ 119,812 $ 4,878,733 $ 5,000,005 Class A Class B Warrants Additional
Paid-in
CapitalAccumulated
DeficitTotal
Stockholders'
EquityShares Amount Shares Amount Balance at January 1, 2023 19,050,207 $ 2 4,353,948 $ — 23,153,266 $ 471,038 $ (286,066) $ 184,974 Shares issued upon exercise of stock options 177,166 — — — — 220 — 220 Shares issued upon vesting of restricted stock units 305,278 — — — — — — — Vesting of early exercised options — — — — — 10 — 10 Stock-based compensation — — — — — 3,551 — 3,551 Net Loss — — — — — — (63,062) (63,062) Balance at March 31, 2023 19,532,651 $ 2 4,353,948 $ — 23,153,266 $ 474,819 $ (349,128) $ 125,693 thethese unaudited condensed consolidated financial statements.NORTHERN GENESIS ACQUISITION CORP. IICONDENSED STATEMENT OF CASH FLOWSTHREE MONTHS ENDED MARCH 31, 2021(UNAUDITED) Three Months Ended
March 31, 2021 Cash Flows from Operating Activities: Net income $ 4,880,183 Adjustments to reconcile net income to net cash used in operating activities: Interest earned on marketable securities held in Trust Account (8,341 ) Changes in fair value of warrant liability (6,484,600 ) Compensation expense 267,467 Offering costs allocable to warrant liabilities 1,148,289 Changes in operating assets and liabilities: Prepaid expenses and other current assets (301,170 ) Accrued expenses 107,991 Net cash used in operating activities (390,181 ) Cash Flows from Investing Activities: Investment of cash in Trust Account (414,000,000 ) Net cash used in investing activities (414,000,000 ) Cash Flows from Financing Activities: Proceeds from sale of Units, net of underwriting discounts paid 405,720,000 Proceeds from sale of Private Placement Warrants 10,030,000 Repayment of promissory note – related party (117,917 ) Payment of offering costs (308,498 ) Net cash provided by financing activities 415,323,585 Net Change in Cash 933,404 Cash – Beginning of period — Cash – End of period $ 933,404 Non-Cash investing and financing activities: Offering costs included in accrued offering costs $ Initial classification of common stock subject to possible redemption $ 365,248,633 Change in value of common stock subject to possible redemption $ 6,295,969 Deferred underwriting fee payable 14,490,000 Class A Class B Warrants Additional
Paid-in
CapitalAccumulated
DeficitTotal
Stockholders'
EquityShares Amount Shares Amount Balance at January 1, 2022 18,141,649 $ 2 4,353,948 $ — 23,153,266 $ 417,535 $ (182,903) $ 234,634 Shares issued upon exercise of stock options — — — — — 372 — 372 Vesting of early exercised options — — — — — 11 — 11 Stock-based compensation — — — — — 16,698 — 16,698 Net Loss — — — — — — (18,447) (18,447) Balance at March 31, 2022 18,141,649 $ 2 4,353,948 $ — 23,153,266 $ 434,616 $ (201,350) $ 233,268 thethese unaudited condensed consolidated financial statements.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE Three Months Ended March 31, 2023 2022 Cash flows from operating activities Net loss $ (63,062) $ (18,447) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 840 383 Right-of-use asset amortization 803 488 Stock-based compensation, net of amounts capitalized 3,610 16,602 Impairment of long-lived assets 23,288 — Change in fair value of warrants (28) (22,156) Loss on sale of property, plant and equipment (70) — Changes in operating assets and liabilities: Prepaid expenses and other current assets 527 682 Other assets 904 (126) Operating lease liabilities (846) — Accounts payable (311) 1,644 Other long-term liability — 60 Accrued expenses and other current liabilities 4,000 2,645 Net cash used in operating activities (30,345) (18,225) Cash flows from investing activities Purchase of property, equipment and software (1,147) (1,717) Net cash used in investing activities (1,147) (1,717) Cash flows from financing activities Payment towards notes payable (125) (81) Proceeds from exercise of stock options 197 372 Repurchase of early exercised options — (4) Net cash provided by financing activities 72 287 Net decrease in cash, cash equivalents and restricted cash (31,420) (19,655) Cash, cash equivalents and restricted cash at beginning of period 158,499 265,020 Cash, cash equivalents and restricted cash at end of period $ 127,079 $ 245,365 Supplemental disclosures of cash flow information: Cash paid during the year for interest $ — $ 18 Supplemental schedule of noncash investing and financing activities: Acquisition of property, equipment and software in accounts payable $ 198 $ 284 Operating lease liabilities $ — $ 6,587 Stock-based compensation capitalized into internally developed software $ — $ 156 Vesting of early exercised stock options $ 10 $ 15 Cash in transit for option exercise $ 24 $ — ORGANIZATIONBUSINESS AND BUSINESS OPERATIONSNorthern Genesis Acquisition Corp. II (the “Company”BASIS OF PRESENTATION2020. The Company is a blank check company2020 under the name Northern Genesis Acquisition Corp. II (“NGA”). Embark Technology was formed for the purpose of entering intoeffecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entitiesbusinesses. On November 10, 2021 (the “Closing Date”), Embark Technology (at such time named Northern Genesis Acquisition Corp. II) consummated the business combination (the “Business Combination”) pursuant to the Agreement and Plan of Merger, dated June 22, 2021 with the pre-Business Combination company, Embark Trucks, Inc. (“Embark Trucks”). AlthoughIn connection with the Company is not limited to a particular industry or geographic region for purposesconsummation of consummating athe Business Combination, the Company intendschanged its name from Northern Genesis Acquisition Corp. II to initially concentrate on target businesses making a positive contribution to sustainability throughEmbark Technology, Inc. (“Embark” or the ownership, financing“Company”) and managementbecame the parent entity of societal infrastructure.an early stageheadquartered in San Francisco, California and emerging growth company and, as such,was incorporated in the State of Delaware in 2016. Other than Embark Trucks, the Company is subject tohas one foreign subsidiary based in Australia, as of March 31, 2023.risks associatedMerger, NGA ordinary shares and warrants were traded on the New York Stock Exchange under the ticker symbols “NGAB” and “NGAB.WS”, respectively. On the Closing Date, the Company’s Class A common stock and warrants began trading on the NASDAQ under the ticker symbols “EMBK” and “EMBKW”, respectively. One of the primary purposes of the Merger was to provide a platform for Embark Trucks to gain access to the U.S. capital markets.early stageU.S. generally accepted accounting principles (“GAAP”) and emerging growth companies.2021, the Company had not commenced any operations. All activity through March2023 and December 31, 2021 relates to2022, the Company’s formation, initial public offering (“Initial Public Offering”), which is described below,balance of cash and subsequentcash equivalents was $126.2 million and $157.6 million, respectively. As Embark has not earned any revenue to date, it has financed its operations primarily through the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completionsale of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.The registration statement for the Company’s Initial Public Offering was declared effective on January 12, 2021. On January 15, 2021, the Company consummated the Initial Public Offering of 41,400,000 units (the “Units” and, with respect to the shares of common stock includedand preferred stock to fund operations, invest in research and development (“R&D”) and repay borrowings. Embark has explored and exhausted avenues following an extended evaluation by Embark of alternative markets in which to commercialize its technology, and with the lack of success in bringing Embark’s product to those markets, it will not generate revenues in the Units sold, the “Public Shares, which includes the full exercise by the underwriter of its over-allotment option in the amount of 5,400,000 Units, at $10.00 per Unit, generating gross proceeds of $414,000,000, which is described in Note 3.Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,686,667 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Company’s sponsor, Northern Genesis Sponsor II LLC (the “Sponsor”), generating gross proceeds of $10,030,000, which is described in Note 4.Transaction costs amounted to $23,221,415 consisting of $8,280,000 of underwriting fees, $14,490,000 of deferred underwriting feesnear future, and $451,415 of other offering costs.Following the closing of the Initial Public Offering on January 15, 2021, an amount of $414,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States and held as cash or invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account, as described below.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company willmay not be able to completeraise additional financing on terms that are favorable, or at all. As such, Embark believes that its operating losses and negative operating cash flows will continue into the foreseeable future requiring Embark to explore strategic alternatives. These conditions and events raise substantial doubt about Embark’s ability to continue as a Business Combination successfully. The Company must completegoing concern.Business Combination having an aggregate fair market valueprocess to explore, review and evaluate a range of at least 80%potential strategic alternatives, including, without limitation, exploring alternative uses of theEmbark’s assets held in the Trust Account (excluding the deferred underwriting commissionsto commercialize its technology, additional sources of financing, as well as potential dissolution or winding up of Embark and taxes payableliquidation of its assets. In addition, on income earned on the Trust Account) at the timeMarch 3, 2023, Embark announced a workforce restructuring plan and initiated a workforce reduction of the agreement to enter into an initial Business Combination. The Company intends to only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not toapproximately 230 employees. Management’s plan cannot be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Accountconsidered probable and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, if a majority of the then outstanding shares of common stock present and entitled to vote at the meeting to approve the business combination (or such greater number as may be required by applicable law or the rules of any applicable national securities exchange) are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Companythus does not decidealleviate the substantial doubt about Embark’s ability to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert orcontinue as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.Sponsor and the Company’s officers, directors and director nominees will agree (a) to waive redemption rights with respect to the Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination and certain amendments to the Amended and Restated Certificate of Incorporation or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provisions that specifically apply only to the period prior to the consummation of our initial business combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.The Company will have until January 15, 2023 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period and stockholders do not approve an amendment to the Amended and Restated Certificate of Incorporation to extend this date, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.The holders of the Founder Shares will agree to waive liquidation rights with respect to such shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).In order to protect the amounts held in the Trust Account, the Sponsor will agree to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of trust assets, in each case net of the interest which may be withdrawn to pay the Company’s tax obligation and up to $100,000 for liquidation excepts, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account (even if such waiver is deemed to be unenforceable) and except as to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESRisks and UncertaintiesManagement is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, close of the Initial Public Offering, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. Thecondensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty.Basis of PresentationThe accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on January 14, 2021, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on January 19, 2021. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future periods.stockholdershareholder approval of any golden parachute payments not previously approved.statementstatements with another public company whichthat is neithereither a) not an emerging growth company noror b) an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited) the condensed financial statements in conformity with GAAP requires the Company’s management to make certain estimates and assumptions. These estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dateas of the financial statements and thebalance sheet date, as well as reported amounts of revenues and expenses during the reporting period.Makingrequires management to exercise significant judgment. It is at least reasonably possible thatand judgments involve the estimateuseful lives of long-lived assets, the recoverability and impairment of long-lived assets, the incremental borrowing rate (“IBR”) applied in lease accounting, the capitalization of software development costs, the valuation of the effectCompany’s stock-based compensation, including the valuation of a condition, situation or setwarrants to purchase the Company’s stock and the valuation allowance for income taxes. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of circumstances that existed atwhich form the datebasis for making judgments about the carrying values of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actualassets and liabilities. Actual results could differ significantly from those estimates. and Cash Equivalentsshort-termhighly liquid investments purchased with an original maturitymaturities of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents asAs of March 31, 20212023 and December 31, 2020.Marketable Securities Held2022, the Company had $126.2 million and $157.6 million of cash and cash equivalents, respectively.Trust AccountAtconjunction with the letter of credit and is classified as restricted cash on the Company’s condensed consolidated balance sheets. As of March 31, 20212023 and December 31, 2020, substantially all2022, the Company had $0.9 million and $0.9 million in restricted cash, respectively. The Company determines short-term or long-term classification based on the expected duration of the assets heldrestriction.Trust Account were held in money market funds which are invested primarily in U.S. Treasury securities.Warrant LiabilityThe Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on thecondensed consolidated statements of operations. The fair valuecash flows are as follows (in thousands):As of March, As of December 31, 2023 2022 2022 Cash and cash equivalents $ 126,202 $ 244,488 $ 157,622 Restricted cash, short-term 667 65 65 Restricted cash, long-term 210 812 812 Total cash, cash equivalents and restricted cash $ 127,079 $ 245,365 $ 158,499 NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)Income TaxesThe Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The effective tax rate differs from the statutory tax rate of 21% for the three months ended March 31, 2021, due to the valuation allowance recorded on the Company’s net operating losses and permanent differences.Net income per Common ShareNet income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period, excluding shares of common stock subject to forfeiture. The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 20,486,667 shares in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.The Company’s statement of operations includes a presentation of income (loss) per share for common stock subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted, for common stock subject to possible redemption is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account by the weighted average number of common stock subject to possible redemption outstanding since original issuance.Net income (loss) per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net income (loss), adjusted for income or loss on marketable securities attributable to common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for the period.Non-redeemable common stock includes Founder Shares and non-redeemable shares of common stock as these shares do not have any redemption features. Non-redeemable common stock participates in the income or loss on marketable securities based on non-redeemable shares’ proportionate interest.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)The following table reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): Common stock subject to possible redemption Numerator: Earnings allocable to common stock subject to possible redemption Interest earned on marketable securities held in Trust Account $ 8,341 Less: interest available to be withdrawn for payment of taxes (8,341 ) Net income allocable to common stock subject to possible redemption $ — Denominator: Weighted Average common stock subject to possible redemption Basic and diluted weighted average shares outstanding, common stock subject to possible redemption 36,524,863 Basic and diluted net income per share, common stock subject to possible redemption $ 0.00 Non-Redeemable Common Stock Numerator: Net Income minus Redeemable Net Earnings Net income $ 4,880,183 Less: Net income allocable to common stock subject to possible redemption — Non-Redeemable Net Income $ 4,880,183 Denominator: Weighted Average Non-redeemable Common stock Basic and diluted weighted average shares outstanding, Non-redeemable Common stock 14,187,614 Basic and diluted net income per share, Non-redeemable Common stock $ 0.34 Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts.fair valueCompany’s financial instruments consist of the Company’scash and cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued expenses, short-term and long-term notes payable and other current liabilities. The assets and liabilities which qualify asthat were measured at fair value on a recurring basis are cash equivalents and warrant liabilities. The Company believes that the carrying values of the remaining financial instruments underapproximate their fair values. The Company applies fair value accounting in accordance with ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.Fair for valuation of financial instrumentsis defined as the priceunder GAAP that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAPexpands disclosures about fair value measurements, establishes a three-tier fair value hierarchy, which prioritizesand requires an entity to maximize the use of observable inputs used inand minimize the use of unobservable inputs when measuring fair value. The three levels of the fair value hierarchy gives the highest priority to unadjustedare summarized as follows: in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:●Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;●Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instrumentsin active markets. that are not active; and●Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.11NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)Derivative Financial InstrumentsThe Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrumentnot active or are directly or indirectly observable.initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changesdetermined using one or more significant inputs that are unobservable in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluatedactive markets at the end of each reporting period. Derivative liabilities are classified in the balance sheetmeasurement date, such as currentan option pricing model, discounted cash flow, or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.Recent Accounting StandardsIn August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.NOTE 2A. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENT AS OF January 15, 2021The Company previously accounted for its outstanding similar technique. Warrants (as defined in Note 3) and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”)in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the Warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In Addition, the warrant agreement includes a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of stock, all holders of the Warrants would be entitled to receive cash for their Warrants (the “tender offer provision”).On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement (the “Warrant Agreement”).NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)In further consideration of the SEC Staff Statement, the Company’s management further evaluated the Warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company’s audit committee, in consultation with management, concluded that the tender offer provision fails the “classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.As a result of the above, the Company should have classified the Warrants as derivative liabilities in its previously issued balance sheet as of January 15, 2021. Under this accounting treatment, the Company is required to measure the fair value of the Warrants at the end of each reporting period as well as re-evaluate the treatment of the warrants and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.The Company’s accounting for the Warrants as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust or cash. The following table summarizes the effect of the restatement on each financial statement line items as of January 15, 2021. As Previously As Reported Adjustments Restated Balance sheet as of January 15, 2021 (audited) Warrant Liability $ 0 $ 30,583,467 $ 30,583,467 Total Liabilities 14,861,115 30,583,467 Common Stock Subject to Possible Redemption 395,832,100 (30,583,467 ) 365,248,633 Common Stock 1,217 306 1,523 Additional Paid-in Capital 5,000,268 1,415,756 6,415,718 Accumulated Deficit (1,480 ) (1,415,756 ) (1,417,236 ) Number of shares subject to possible redemption 39,583,210 (3,058,347 ) 36,524,863 13NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE 3. PUBLIC OFFERINGPursuant to the Initial Public Offering, the Company sold 41,400,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 5,400,000 Units, at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one-third of one redeemable warrant redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment (see Note 8). NOTE 4. PRIVATE PLACEMENTSimultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,686,667 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $10,030,000, from the Company in a private placement. Each Private Placement Warrant will entitle the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment (see Note 8). The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.NOTE 5. RELATED PARTY TRANSACTIONSFounder SharesOn October 2, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration of 8,625,000 shares of the Company’s common stock (the “Founder Shares”). On January 12, 2021, the Company effected a stock dividend of 0.2 shares for each founder share outstanding, resulting in 10,350,000 shares of common stock outstanding. All share and per-share amounts have been retroactively restated to reflect the stock dividend. As a result of the underwriters’ election to fully exercise their over-allotment option, a total of 1,350,000 Founder Shares are no longer subject to forfeiture.The Sponsor will agree, subject to limited exceptions, not to transfer title to any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Administrative Services AgreementThe Company entered into an agreement, commencing on January 12, 2021, pursuant to which the Company will pay an affiliate of the Sponsor a total of up to $10,000 per month for office space, utilities, secretarial support and administrative services. For the three months ended March 31, 2021, the Company incurred and paid $30,000 in fees for these services, of which such amount is included in accounts payable and accrued expenses in the accompanying balance sheet.Due from SponsorAt the closing of the Initial Public Offering on January 15, 2021, a portion of the proceeds from the sale of the Private Placement Warrants in the amount of $1,080,000 was due to the Company to be held outside of the Trust Account for working capital purposes. Such amount was paid by the Sponsor to the Company on January 18, 2021.Promissory Note — Related PartyOn September 25, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) June 30, 2021, (ii) the consummation of the Initial Public Offering or (iii) the abandonment of the Initial Public Offering. As of March 31, 2021 and December 31, 2020, there was $0 and $117,917, respectively, outstanding under the Promissory Note.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)Related Party LoansIn order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or the Company’s officers, directors and director nominees or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $3,000,000 of the notes may be converted into warrants at a price of $1.50 per warrant (“Working Capital Warrants”). Such Working Capital Warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. NOTE 6. COMMITMENTSRegistration RightsPursuant to a registration rights agreement entered into on January 12, 2021, the holders of the Founder Shares, Private Placement Warrants and any Working Capital Warrants that may be issued upon conversion of the Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or Working Capital Warrants) will be entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale. The holders of these securities will be entitled to make up to four demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.Underwriting AgreementThe underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of the Initial Public Offering, or $14,490,000. The deferred fee will be payable in cash to the underwriters solely in the event that the Company completes a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.Forward Purchase AgreementOn January 8, 2021. the Company entered into the forward purchase agreement (the “Forward Purchase Agreement”) with Northern Genesis Capital LLC (the “forward purchase investor”), pursuant to which, if the Company determines to raise capital by issuing equity securities in connection with the closing of its initial business combination, the forward purchase investor, an entity which is affiliated with the Company’s Sponsor, agreed and has the first right to purchase, subject to certain conditions, in an aggregate maximum amount of $75,000,000 of either (i) a number ofthird party investors 41.4 million units, (the “forward purchase units”), consisting of one share of Class A common stock (the “forward purchase shares”)of NGA and one-sixthone-third of one redeemablewarrant, at a price of $10.00 per unit. Each whole warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per warrant (the “forward“Public Warrants”). Further, NGA completed the private sale of 6.7 million warrants to NGA's sponsor at a purchase warrants”), for $10.00price of $1.50 per unitwarrant (the “Private Placement Warrants” or (ii) a“Private Warrants”). Following the effectiveness of the Reverse Stock Split on August 16, 2022, the Public and Private Warrants were impacted by the same ratio upon exercise. The Reverse Stock Split did not affect the number of forward purchase shares for $9.75 per share (such forward purchase shares valued at $9.75 per share or the forward purchase units, as the case may be, the “forward purchase securities”), in a private placement that would close simultaneously with the closing of the Initial Business Combination. The forward purchase warrants would have the same terms as the Public Warrants and the forward purchase shares would be identical to the shares of common stock included in the Units sold in the Initial Public Offering, except the forward purchase shares and the forward purchase warrants would be subject to transfer restrictions and certain registration rights. The funds from the sale of the forward purchase securities may be used as part of the consideration to the sellers in the initial Business Combination and for expenses in connection with an initial Business Combination, and any excess funds may be used for the working capital needs of the post-transaction company.The forward purchase transaction is not dependent upon or affected by the percentage of stockholders electing to redeem their Public Shares and may provide the Company with an increased minimum funding level for the initial Business Combination. The forward purchase transaction is subject to conditions, including the forward purchase investor giving the Company its irrevocable written confirmation, confirming its commitment to purchase forward purchase securities and the amount thereof, no later than fifteen days after the Company notifies it of the Company’s intention to raise capital through the issuance of equity securities in connection with the closing of an initial Business Combination. The forward purchase investor may grant or withhold its consent and confirmation entirely within its sole discretion. Accordingly, if the forward purchase investor does not consent to and confirm the purchase, it will not be obligated to purchase any of the forward purchase securities. (See Note 10 for a description of the amended and restated Forward Purchase Agreements that occurred subsequent to March 31, 2021).NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE 7. STOCKHOLDERS’ EQUITYPreferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding.Common Stock — The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share. Holders of common stock are entitled to one vote for each share. At March 31, 2021 and December 31, 2020, there were 14,596,248 shares and 10,350,000 of common stock issued and outstanding excluding 37,153,752 and -0- shares of common stock subject to possible redemption, respectively.NOTE 8. WARRANT LIABILITYWarrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of common stock upon exercise of a warrant unless common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.The Company has agreed that as soon as practicable, but in no event later than 15 days, after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of common stock issuable upon exercise of the warrants and thereafter will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Company’s common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)Once the warrants become exercisable, the Company may redeem the Public Warrants:●in whole and not in part;●at a price of $0.01 per warrant;●upon not less than 30 days’ prior written notice of redemption to each warrant holder; and●if, and only if, the reported last sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 trading days within a 30 trading day period commencing once the warrants become exercisable and ending commencing once the warrants become exercisable and ending three business days before the Company sends the notice of redemption to the warrant holdersIf and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.In addition, if (x) the Company issues additional common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the common stock during the 10 trading day period starting on the trading day prior the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (towarrants. Each whole warrant is now exercisable for 1/20th of one share of Class A common stock at $11.50 per warrant. Subsequent to the nearest cent) to be equal to 115%Business Combination, 13.8 million Public Warrants and 6.7 million Private Warrants remained outstanding as of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Warrants and Working Capital Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants Working Capital Warrants, and the Class A common stock issuable upon the exercise of the Private Placement Warrants and Working Capital Warrants cannot be transferreddid not become transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants and Working Capital Warrants will beare exercisable on a cashless basis and beare non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If anythe Private Placement Warrants or Working Capital Warrants are held by someone other than the initial purchasers or their permitted transferees, suchthe Private Placement Warrants and Working Capital Warrants will beare redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE 9. FAIR VALUE MEASUREMENTS followsevaluated the Public and Private Warrants under ASC 815-40, Derivatives and Hedging-Contracts in Entity's Own Equity, and concluded that they do not meet the criteria to be classified in stockholders' equity. Since the Public and Private Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the closing of the Business Combination, with subsequent changes in their respective fair values recognized in the condensed consolidated statements of operations and comprehensive income (loss) at each reporting date.Property, Equipment and Software Useful life (years) Machinery and equipment 5 years Electronic equipment 3 years Vehicles and vehicle hardware 3 – 7 years Leasehold improvements Shorter of useful life or lease term Furniture and fixtures 7 years 820260, 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, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of this standard on its consolidated financial assetsstatements.liabilitiesrequire specific disclosures for equity securities that are re-measuredsubject to such restrictions. The amendments are effective in periods beginning after December 15, 2023 and reported at fairinterim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the impact of this standard on its consolidated financial statements.March 31,
2023December 31,
2022Prepaid insurance $ 3,085 $ 3,411 Prepaid software 1,643 2,648 Income tax receivable 494 494 Short-term deposits 431 452 Prepaid salary 558 558 Other current assets 1,122 323 Total prepaid expenses and other current assets $ 7,333 $ 7,886 March 31,
2023December 31,
2022Machinery and equipment $ 248 $ 569 Electronic equipment 776 1,645 Vehicles and vehicle hardware 7,741 10,777 Leasehold improvements — 1,037 Developed software — 11,261 Other 27 116 Property, equipment and software, gross 8,792 25,405 Less: accumulated depreciation and amortization (4,038) (4,797) Total property, equipment and software, net $ 4,754 $ 20,608 March 31,
2023December 31,
2022Lease deposits $ 3,230 $ 3,224 Prepaid insurance 1,455 2,000 Other long term assets 189 555 Total Other Assets $ 4,874 $ 5,779 March 31,
2023December 31,
2022Payroll expenses $ 3,059 $ 1,342 General expenses 257 412 Legal expenses 2,253 232 Software expenses 821 529 Consultant expenses 1,158 959 Other accrued expenses and current liabilities 354 411 Total accrued expenses and other current liabilities $ 7,902 $ 3,885 at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assetsinstruments as of March 31, 2023 and liabilities reflects management’s estimateDecember 31, 2022, respectively, are as follows:Level 1 Level 2 Level 3 Total Assets Cash equivalents: United States money market funds $ 100,246 $ — $ — $ 100,246 Liabilities $ 13 $ — $ — $ 13 Warrant liabilities - public warrants $ 259 $ — $ — $ 259 Warrant liabilities - working capital warrants $ — $ — $ 38 $ 38 Warrant liabilities - private warrants $ — $ — $ 126 $ 126 Level 1 Level 2 Level 3 Total Assets Cash equivalents: United States money market funds $ 1,379 $ — $ — $ 1,379 Liabilities Warrant liabilities - FPA warrants $ 13 $ — $ — $ 13 Warrant liabilities - public warrants $ 276 $ — $ — $ 276 Warrant liabilities - working capital warrants $ — $ — $ 40 $ 40 Warrant liabilities - private warrants $ — $ — $ 134 $ 134 Company would have receivedthree levels in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). hierarchy. following fair value hierarchy is used to classify assetsof the above liability classified Public, Private, Working Capital and liabilitiesFPA Warrants have been measured based on the observable inputslisted market price of such warrants on November 10, 2021. The FPA warrants and unobservable inputs used in order to valuePublic Warrants were valued using the assets and liabilities:Level 1:Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.Level 2:Observable inputs other than Level 1 inputs. Examplespublic price as of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.Level 3:Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at March 31, 2021,2023 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:Description Level March 31,
2021 Assets: Marketable securities held in Trust Account 1 $ 414,008,341 Liabilities: Warrant liability – Public Warrants 1 $ 16,008,000 Warrant liability – Private Placement Warrants 3 8,090,867 accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on our balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statement of operations.The Private Warrants were initially valued using a Modifiedthe Black Scholes Option Pricing Model which is considered to beas of March 31, 2023 and December 31, 2022. For the three months ended March 31, 2023, the Company recognized income in the condensed consolidated statement of operations resulting from a Level 3 fair value measurement. The Modified Black Scholes model’s primary unobservable input utilizedchange in determining the fair value of warrants of approximately $28,000, presented as other income (expense) on the Private Warrantsaccompanying condensed consolidated statement of operations.Gross Book Value Impairment Fair Value as on March 31, 2023 Property, equipment and software Developed software $ 11,261 $ 11,261 $ — Property and equipment 15,546 6,754 8,792 Gross Property, equipment and software 26,807 18,015 8,792 Less: Accumulated Depreciation (5,637) (1,599) (4,038) Net Property, equipment and software $ 21,170 $ 16,416 $ 4,754 Right-of-use Assets Headquarter lease $ 14,228 $ 6,241 $ 7,987 Other leases 2,039 631 1,408 Right-of-use Assets $ 16,267 $ 6,872 $ 9,395 Total $ 37,437 $ 23,288 $ 14,149 expected volatilitythree months ended March 31, 2023. The expected volatilityIPO date was derived from observable public warrant pricingearliest period presented, unless otherwise noted.comparable ‘blank-check’ companies without an identified target.November 10, 2021, the Embark Founders exchanged 4,353,948 shares of Founder’s common stock, which were entitled to one vote per share, into the same number of shares of Class B common stock, which are entitled to ten votes per share. The expected volatilityCompany recorded the incremental value of $13.6 million associated with this transaction as stock-based compensation in general and administrative expenses.subsequentMarch 31, 2023 are as follows:Description Classification Issue Date Fair Value Price Per Share Expiration FPA warrants Liability November 10, 2021 666,663 $ 0.02 $ 11.50 November 10, 2026 Public warrants Liability November 10, 2021 13,799,936 $ 0.02 $ 11.50 November 10, 2026 Private warrants Liability November 10, 2021 6,686,667 $ 0.02 $ 11.50 November 10, 2026 Working capital warrants Liability November 10, 2021 2,000,000 $ 0.02 $ 11.50 November 10, 2026 dates was impliedmodel using the following assumptions for values as of March 31, 2023:Risk – free interest rate 3.75% Expected term (in years) 3.61 Expected dividend yield 0% Expected volatility 123.7% own publictraded warrants and from historical volatility of select peer company’s common stock that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.pricing.exercisable is now for 1/20th share of Class A Monte Carlo simulation methodology was usedcommon stock at an exercise price of $11.50 per warrant.public warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuringinput of highly subjective assumptions.Private Warrants. For periods subsequentgrant date using the following assumptions:detachmentexpected life of the warrants fromaward.Units,three months ended March 31, 2023 and 2022.Number of Outstanding Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic value (in thousands Outstanding at December 31, 2022 725,721 $ 3.17 6.77 $ 1,288 Exercised (177,166) $ 1.22 — 284 Cancelled (31,979) $ 2.53 — — Outstanding at March 31, 2023 516,576 $ 3.84 6.04 $ 659,703 Vested and Exercisable as of March 31, 2023 447,111 $ 2.81 5.39 $ 622,407 closeabove table is calculated as the difference between the estimated fair value of the Company's common stock price and the exercise price of the stock options. The company did not grant any stock options for the three months ended March 31, 2023 and 2022. As of March 31, 2023, the total unrecognized compensation related to unvested stock option awards granted was $2.18 million, which the Company expects to recognize over a weighted-average period of approximately 1.67 years.Number of Shares Balance as of December 31, 2022 1,152,405 $ 52.05 Granted 1,966,961 2.61 Forfeited (475,200) 29.44 Vested (304,047) 34.29 Balance as of March 31, 2023 2,340,119 $ 17.25 price was usedawards, the restricted stock awards were issued for services at the time of consummation of the Business Combination, and are subject to service vesting terms, with the shares being subject to cancellation. The pre-Business Combination warrants were exercised in their entirety on a cashless basis, with the unvested shares being excluded from the stockholders’ equity and becoming subject to the service vesting condition going forward. Early exercises are reclassified to additional paid-in capital as the fair valueCompany’s cancellation right lapses. The number of unvested shares of Class A common stock were 40,749 as of each relevant date.
Number of SharesBalance as of December 31, 2022 47,410 $ 49.60 Vested (6,661) 49.60 Balance as of March 31, 2023 40,749 $ 49.60 changesimpact of stock-based compensation expense on the condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022, respectively (in thousands):Three Months Ended March 31, 2023 2022 Research and development $ (674) $ 3,765 General, and administrative 4,284 12,837 Total stock-based compensation expense $ 3,610 $ 16,602 Three Months Ended March 31, Award Type 2023 2022 Options $ 470 $ 727 RSUs 48 12,937 PSUs 2,601 2,603 CSUs 491 491 Total stock-based compensation expense $ 3,610 $ 16,758 SBC capitalized into internally developed software — (156) Total stock-based compensation expense, net $ 3,610 $ 16,602 Years ended December 31, Amounts 2023 (remaining nine months) $ 367 2024 403 2025 379 2026 382 2027 133 Total future payments $ 1,664 fair valueordinary course of warrant liabilities: Private Placement Public Warrant
Liabilities Fair value as of September 25, 2020 (inception) $ — $ — $ — Initial measurement on January 15, 2021 10,297,467 20,286,000 30,583,467 Change in valuation inputs or other assumptions (2,206,600 ) (4,278,000 ) (6,484,600 ) Fair value as of March 31, 2021 $ 8,090,867 $ 16,008,000 $ 24,098,867 There were no transfers inbusiness. The assessment as to whether a loss is probable or outreasonably possible, and as to whether such loss or a range of Level 3 from other levelssuch loss is estimable, often involves significant judgment about future events. In the opinion of management, all such matters are not expected to have a material effect on the financial position, results of operations or cash flows of the Company. However, the outcome of litigation is inherently uncertain.fair value hierarchy.fair valuecomplaint alleges that defendants made false and/or misleading statements in violations of Sections 10(b) and 20(a) of the Private Placement Warrants was estimated at January 15, 2021 to be $1.54 per shareSecurities Exchange Act of 1934 and at March 31, 2021 to be $1.21 per share usingRule 10b-5 promulgated thereunder. On July 7, 2022, the modified Black-Scholes option pricing model and the following assumptions: January 15, 2021 March 31,
2021 Expected Volatility 25.0 % 18.0 % Risk-free interest rate 0.58 % 1.04 % Expected term (years) 5.00 5.00 Fair value per share of common stock $ 9.51 $ 9.92 NORTHERN GENESIS ACQUISITION CORP. IINOTES TO CONDENSED FINANCIAL STATEMENTSMARCH 31, 2021(Unaudited)NOTE 10. SUBSEQUENT EVENTSThe Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, other thanCourt appointed Tyler Hardy as described below and in Note 2a, the Company did not identify any subsequent events that would have required adjustment or disclosurelead plaintiff in the condensed financial statements.April 21, 2021, the Company entered intoAugust 25, 2022, pursuant to Court-approved stipulation, Plaintiff Hardy filed a consolidated amended complaint, naming an Amendedadditional plaintiff, Danny Rochefort, and Restated Forward Purchase Agreement withadditional individual defendants that formerly served as directors of Northern Genesis Capital II LLC (formerly known as Northern Genesis Capital LLC)Acquisition Corp. prior to its business combination with Embark. The amended complaint alleges that defendants committed violations of Sections 11 and 15 of the Securities Act of 1933 (“NGC”Securities Act Claims”) (the “NGC Forward Purchase Agreement”), and certain additional Forward Purchase Agreements with additional institutional investors (collectively, withSections 14(a) and 20(a) of the NGC Forward Purchase Agreement,Securities Exchange Act of 1934 (“Exchange Act Claims”) through the “Forward Purchase Agreements”). The Forward Purchase Agreements collectively replace that certain Forward Purchase Agreement previously entered into byinclusion of allegedly inaccurate and misleading statements in the CompanyForm S-4 registration statement and NGCproxy statement/prospectus filed in connection with the closingbusiness combination. Plaintiffs do not quantify any damages in the complaint, but in addition to attorneys’ fees and costs, seek to recover damages on behalf of two classes: 1) a class that acquired shares traceable to the registration statement at issue in the Securities Act Claims and 2) a class that voted in favor of the Company’s initial public offering (the “Original Agreement”).Pursuantbusiness combination based on the information in the proxy statement/prospectus at issue in the Exchange Act Claims and purportedly suffered financial harm as a result.Forward Purchase Agreements, ifcourt on or about May 15, 2023 as part of a Stipulation and Agreement of Settlement. In the event the court approves the Stipulation and Agreement of Settlement, the Company determineswould be obligated to raise capitalpay a settlement amount of two million five hundred thousand dollars to an escrow account for payment of attorneys' fees and costs, administration expenses and distributions to putative class members.private placement of equity securities in connection with the closing of its initial business combination (subject to certain limited exceptions), the members of NGC (institutional investors that also are members of the Company’s Sponsor,) and the parties to the additional Forward Purchase Agreements have the first right to purchase an aggregate amount of up to 7,500,000 “forward purchase units” of the Company (under all Forward Purchase Agreements, taken together) for $10.00 per forward purchase unit, or an aggregate total of $75,000,000. Each forward purchase unit would consist of one share of the Company’s common stock and one-sixth of one warrant, with each whole warrant exercisable to purchase one share of the Company’s common stock at $11.50 per share. The common stock and warrants included in the forward purchase units would have the same terms as the Company’s publicly traded common stock and warrants but would not be freely tradable until registered. As with the Original Agreement, any commitment by any potential purchaser under any of the Forward Purchase Agreements is subject to and conditioned upon written confirmation from the prospective purchaser, following the Company’s notification to such purchaser of its intention to enter into an initial business combination agreement, which a prospective purchaser was grant or withhold in its sole discretion.addition, if a private placement of equity securities in connection with the Company’s initial business combination exceeds $75,000,000, the Company agreed under each Forward Purchase Agreement to use its commercially reasonable efforts to permit priority participation in such additional amount by the members of NGC and the parties to the additional Forward Purchase Agreements, in an aggregate additional amount up to $150,000,000, on the same terms as those offered to other prospective purchasers in connection with such additional private placement amount.Each Forward Purchase Agreement that the holders of the shares of common stock and warrants included in the forward purchase units will be entitled to registration rights pursuant togeneral, the terms of any registration rights agreement applicable to any equity securities issued by way of private placement in connection with the closing of the Company’s initial business combination or, in the absence of the foregoing, pursuantsublease are similar to the terms of the registration rights agreement entered into bymaster lease.Sponsorexecuted an agreement for the termination of two office spaces locations effective March 24, 2023 and NGCMarch 27, 2023, respectively, and recognized $0.6 million for early termination fees. The original term of each lease was through 2024 and 2027, respectively.connectiona $1.9 million decrease in lease liability with a corresponding reduction to right of use assets.
___________________Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Lease cost Operating lease cost $ 1,741 $ 600 Short-term lease cost (1) 5 102 Sublease income (210) — Total lease cost $ 1,536 $ 702 Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 1,445 477 Right-of-use assets obtained in exchange for lease obligations Operating lease liabilities $ — 6,587 March 31, 2023 December 31, 2022 Assets Operating lease right-of-use assets $ 9,395 $ 21,958 Liabilities Operating lease liability, current 2,498 3,250 Operating lease liability, non-current 14,224 19,222 Total operating lease liability $ 16,722 $ 22,472 March 31, 2023 December 31, 2022 Weighted Average Lease Term (in years) Operating Leases 4.92 5.00 Weighted Average Discount Rate Operating Leases 11.73 % 10.79 % Year ended December 31, Operating leases 2023 (remaining nine months) $ 3,155 2024 4,281 2025 3,591 2026 4,292 2027 4,332 Thereafter 2,554 Total undiscounted lease payments 22,205 Less: imputed interest (5,483) Total lease liabilities $ 16,722 Three Months Ended March 31, 2023 2022 Numerator: Net loss $ (63,062) $ (18,447) Net loss attributable to common stockholders $ (63,062) $ (18,447) Denominator: Net loss per share attributable to Class A and Class B common stockholders, basic and diluted $ (2.67) $ (0.82) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 23,630,012 22,631,150 Class A 19,276,064 18,277,202 Class B 4,353,948 4,353,948 Three Months Ended March 31, 2023 2022 Outstanding options 516,576 1,073,982 Warrants issued and outstanding 1,157,663 1,157,663 Restricted stock units 2,340,119 465,861 Common stock units 40,749 67,392 Performance stock units 2,235,788 2,235,788 Total 6,290,895 5,000,686 initial public offering (the “Registration Rights Agreement”Chief Financial Officer effective April 28, 2023 (“Separation Date”). Pursuant toOn April 26, 2023, the foregoing, on April 21, 2021, the Registration Rights Agreement was amended to clarify that the shares and warrants included in up to 7,500,000 total forward purchase units remain subject to the Registration Rights Agreement, regardlessBoard of Directors of the specific Forward Purchase Agreement pursuantCompany approved the appointment of Morgan Dioli to which they may be issued.Each Forward Purchase Agreement contains representationsserve as the Company’s interim Chief Financial Officer and warranties by each party, conditionsdesignated Mr. Dioli to closing,serve as the Company’s principal financial officer and additional provisions that are customary for agreementsprincipal accounting officer, succeeding Mr. Hawwa. Mr. Dioli’s appointment became nature. The termsprocess including: continued headcount reduction, termination of the TTP and return of the Embark-powered truck provided to Knight-Swift, cancellation of all reservations for future deliveries, termination of the Forward Purchase Agreements are substantively the same, except that the NGC Forward Purchase Agreement gives NGC board observation rights priorcertain outstanding warrants issued to the Company’s initial business combination,Werner Enterprises, Inc. and gives the membersZX Ventures LLC, termination of NGCour PDP and termination of leases to a priority right to subscribe for anysubstantial part of the forward purchase units that any other prospective purchasers do not elect to purchase under anyidentified transfer points.References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Northern Genesis Acquisition Corp. II. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Northern Genesis Sponsor II LLC. the Company’sEmbark’s financial condition and results of operations should be read in conjunction with theEmbark’s condensed consolidated financial statements and therelated notes thereto containedand other information included elsewhere in this Quarterly Report on Form 10-Q and in Embark’s Annual Report. Certain information contained in theThis discussion and analysis set forth below includescontains forward-looking statements that involve risks and uncertainties.Special Embark’s actual results could differ materially from such forward-looking statementsStatementsThisStatements” included elsewhere in this Quarterly Report includes “forward-looking statements”on Form 10-Q and in the Annual Report. Additionally, Embark’s historical results are not necessarily indicative of the results that may be expected in any future period.meaning of Section 27Acarrier’s fleet with the carrier’s drivers.Securities Actgrowing truck freight market, which is segmented by criteria such as type of 1933goods transported, geographies covered and Section 21Etrailer type. Embark may continue to evaluate a variety of different segments within the truck freight industry in the future.Exchange Act that are not historical factsCompany (the “Board”) approved a process to explore, review and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statementsevaluate a range of historical fact included in this Form 10-Qpotential strategic alternatives, including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors sectionexploring alternative uses of the Company’s final prospectus forassets to commercialize its Initial Public Offering filedtechnology, additional sources of financing, as well as potential dissolution or winding up of the Company and liquidation of its assets. To the extent Embark is unable to execute or identify strategic alternatives, its liquidity will be negatively impacted and may not be sufficient to fund its operations. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern.U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filingsCompany is reducing its workforce by approximately 230 employees, which represents 70% of its headcount. No assurance can be accessedgiven that the Company’s exploration of strategic alternatives will result in any change in strategy. To the extent Embark is unable to execute or identify strategic alternatives, the Board may explore potential alternatives including, without limitation, the potential dissolution or winding up of the Company and liquidation of its assets. As a result, management’s plan cannot be considered probable and thus does not alleviate the substantial doubt about the Company’s ability to continue as a going concern.EDGAR sectionoutcome of Embark’s evaluation of its strategic alternatives following the decision of the SEC’s website at www.sec.gov. ExceptEmbark board of directors to review strategic alternatives in March 2023:expressly requiredthe foundation to utilize Embark Driver and Guardian products in trucks manufactured by applicable securities law,a broad range of OEMs. Embark’s ability to introduce its products will be driven by a variety of factors including strategic use of the testing capacity of Embark’s research and development fleet capacity, the number of autonomous miles driven (measured as the number of miles driven by Embark’s research & development fleet as well as partner fleet autonomous miles), simulated miles and encounters, and the ability to effectively collect and act upon information gathered from the operation of Embark’s research and development fleet to develop a safe and sustainable solution. Embark develops most key technologies in-house to achieve a rapid pace of innovation and tests it extensively through research and development fleet operations. To date, Embark has not generated any revenue and until its products reach commercialization, autonomous miles driven will be comprised of autonomous miles driven by its research and development fleet and the fleet of its partners.disclaims any intention or obligation to update or revise any forward-looking statements whether asinitiated a reduction in workforce restructuring plan and simultaneously proceeded with potential liquidation of its assets. As a result of new information, future events or otherwise.OverviewWe are a blank check company formed underthis workforce reduction initiative, the laws of the State of Delaware on September 25, 2020 for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”). We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.We expect to continue to incurCompany incurred significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.Recent DevelopmentsOn April 21, 2021, the Company entered into an Amendedemployee severance pay and Restated Forward Purchase Agreement with Northern Genesis Capital II LLC (formerly known as Northern Genesis Capital LLC) (“NGC”) (the “NGC Forward Purchase Agreement”), and certain additional Forward Purchase Agreements with additional institutional investors (collectively, with the NGC Forward Purchase Agreement, the “Forward Purchase Agreements”). The Forward Purchase Agreements collectively replace that certain Forward Purchase Agreement previously entered into by the Company and NGC in connection with the closing of the Company’s initial public offering (the “Original Agreement”).Pursuant to the Forward Purchase Agreements, if the Company determines to raise capital by the private placement of equity securities in connection with the closing of its initial business combination (subject to certain limited exceptions), the members of NGC (institutional investors that also are members of the Company’s Sponsor) and the parties to the additional Forward Purchase Agreements have the first right to purchase an aggregate amount of up to 7,500,000 “forward purchase units” of the Company (under all Forward Purchase Agreements, taken together) for $10.00 per forward purchase unit, or an aggregate total of $75,000,000. Each forward purchase unit would consist of one share of the Company’s common stock and one-sixth of one warrant, with each whole warrant exercisable to purchase one share of the Company’s common stock at $11.50 per share. The common stock and warrants included in the forward purchase units would have the same terms as the Company’s publicly traded common stock and warrants but would not be freely tradable until registered. As with the Original Agreement, any commitment by any potential purchaser under any of the Forward Purchase Agreements is subject to and conditioned upon written confirmation from the prospective purchaser, following the Company’s notification to such purchaser of its intention to enter into an initial business combination agreement, which a prospective purchaser was grant or withhold in its sole discretion.In addition, if a private placement of equity securities in connection with the Company’s initial business combination exceeds $75,000,000, the Company agreed under each Forward Purchase Agreement to use its commercially reasonable efforts to permit priority participation in such additional amount by the members of NGC and the parties to the additional Forward Purchase Agreements, in an aggregate additional amount up to $150,000,000, on the same terms as those offered to other prospective purchasers in connection with such additional private placement amount. Each Forward Purchase Agreement that the holders of the shares of common stock and warrants included in the forward purchase units will be entitled to registration rights pursuant to the terms of any registration rights agreement applicable to any equity securities issued by way of private placement in connection with the closing of the Company’s initial business combination or, in the absence of the foregoing, pursuant to the terms of the registration rights agreement entered into by the Company, Sponsor and NGC in connection with the Company’s initial public offering (the “Registration Rights Agreement”). Pursuant to the foregoing, on April 21, 2021, the Registration Rights Agreement was amended to clarify that the shares and warrants included in up to 7,500,000 total forward purchase units remain subject to the Registration Rights Agreement, regardless of the specific Forward Purchase Agreement pursuant to which they may be issued.Each Forward Purchase Agreement contains representations and warranties by each party, conditions to closing, and additional provisions that are customary for agreements of this nature. The terms of all of the Forward Purchase Agreements are substantively the same, except that the NGC Forward Purchase Agreement gives NGC board observation rights prior to the Company’s initial business combination, and gives the members of NGC a priority right to subscribe for any of the forward purchase units that any other prospective purchasers do not elect to purchase under any of the other Forward Purchase Agreements.Results of OperationsWe have neither engaged in any operations nor generated any revenues to date. Our only activities from September 25, 2020 (inception) through January 15, 2021 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.Forrelated costs during the three months ended March 31, 2021, we had2023. The Company is expected to implement further reductions in workforce as a part its restructuring plan in the near future.of $4,880,183, which(expense) consists of sublease income, income generated certain arrangements related to truck transfer services resulting from research and development activities, the change in fair value of derivative liabilities and the change in fair value of Public, Private, Working Capital and Forward Purchase Agreement (“FPA”) Warrants. Change in fair value of derivative liabilities represents the increase or decrease in the fair value of the embedded conversion and redemption features, which are presented as a derivative liability, related to the convertible note payable, which was converted to Embark Class A common stock upon consummation of the Business Combination. Change in fair value of warrants represents the increase or decrease in the estimated fair value of such warrant. For each reporting period, Embark will determine the fair value of the derivative liability and warrants, and record a corresponding non-cash benefit or non-cash charge, due to a decrease or increase, respectively, in the calculated derivative liability or warrants.Three Months Ended March 31, $ % 2023 2022 Change Change Operating expenses: Research and development $ 14,462 $ 18,695 $ (4,233) (22.6) % General and administrative 17,850 21,926 (4,076) (18.6) % Restructuring costs 9,531 — 9,531 N.M. Impairment of long-lived assets 23,288 — 23,288 N.M. Total operating expenses 65,131 40,621 24,510 60.3 % Loss from operations (65,131) (40,621) (24,510) 60.3 % Other income (expense), net 2,069 22,174 (20,105) (90.7) % Loss before provision for income taxes (63,062) (18,447) (44,615) 241.9 % Provision for income taxes — — — N.M Net loss $ (63,062) $ (18,447) (44,615) 241.9 % Three Months Ended March 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (30,345) $ (18,225) Investing activities $ (1,147) $ (1,717) Financing activities $ 72 $ 287 $6,484,600impairment loss on long-lived assets (see Note 5, “Restructuring costs and interest earned on marketable securities held in our Trust AccountImpairment of $8,341,Long-Lived Assets” and $0.8 million of depreciation and amortization expenses; which was offset by $13.0 million of stock-based compensation ). In addition, the increase was offset further by $0.6 million net cashcostsassets and liabilities, which was primarily attributable to prepaid expenses and other current assets, accrued expenses and other current liabilities primarily due to overall growth and timing of $1,612,758.Liquidity and Capital ResourcesOn January 15, 2021, we completed the Initial Public Offering of 41,400,000 Units, at $10.00 per Unit, generating gross proceeds of $414,400,000. Simultaneously with the closing of the Initial Public Offering, we completed the sale of 6,686,667 Private Placement Warrants at a price of $1.50 per Private Placement Warrantpayables.a private placement to Northern Genesis Sponsor II LLC, the Sponsor, generating gross proceeds of $10,030,000.Following the Initial Public Offering, the full exercise of the over-allotment option, and the sale of the Private Placement Warrants, a total of $414,000,000 was placed in the Trust Account. We incurred $23,221,415 in Initial Public Offering related costs, including $8,280,000 of underwriting fees, $14,490,000 of deferred underwriting fees and $451,415 of other costs.Forinvesting activities for the three months ended March 31, 2021,2023 was $1.1 million, a decrease of $0.6 million from $1.7 million of net cash used in operatinginvesting activities for the three months ended March 31, 2022. The decrease was $390,181. due to a decrease of purchase of property, equipment, and software of $0.6 million.incomecash provided by financing activities for the three months ended March 31, 2023, was $0.1 million, a decrease of $4,880,183$0.2 million from the $0.3 million of net cash provided by financing activities for the three months ended March 31, 2022. The decrease was affected by interest earned on marketable securities held in the Trust Account of $8,341, the change in fair value of warrant liability of $6,484,600, compensation expense of $267,467 and transaction costs associated with the IPO of $1,148,289. Changes in operating assets and liabilities provided $193,179primarily due to $0.2 million of cash for operating activities. As of March 31, 2021, we had marketable securities held in the Trust Account of $414,008,341 (including $8,341 of interest income) consisting of U.S. Treasury Bills with a maturity of 185 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through March 31, 2021, we have not withdrawn any interest earnedproceeds received from the Trust Account. We intend to use substantially allexercise of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.As of March 31, 2021, we had cash of $933,404. We intend to use the funds heldoptions .Trust Account primarily to identify and evaluate target businesses, performordinary course of business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us fundsEmbark’s financing arrangements as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $3,000,000 of such loans may be convertible into warrants at a price of $1.50 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.We do not believe we will need to raise additional fundspreviously disclosed in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.Weno obligations, assets or liabilities, which would be consideredany off-balance sheet arrangements as of March 31, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.Contractual obligationsWe do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor or an affiliate of the Sponsor a monthly fee of $10,000 for office space, utilities, secretarial support and administrative services. We began incurring these fees on January 12, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of the Initial Public Offering, or $14,490,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.In connection with the Initial Public Offering, the Company entered into the forward purchase agreement (the “Forward Purchase Agreement”) with NGC, which Forward Purchase Agreement was subsequently amended and restated as described under “—Recent Developments” above.The forward purchase transaction is not dependent upon or affected by the percentage of stockholders electing to redeem their Public Shares and may provide the Company with an increased minimum funding level for the initial Business Combination. The forward purchase transaction is subject to conditions, including the forward purchase investor giving the Company its irrevocable written confirmation, confirming its commitment to purchase forward purchase securities and the amount thereof, no later than fifteen days after the Company notifies it of the Company’s intention to raise capital through the issuance of equity securities in connection with the closing of an initial Business Combination. The forward purchase investor may grant or withhold its consent and confirmation entirely within its sole discretion. Accordingly, if the forward purchase investor does not consent to and confirm the purchase, it will not be obligated to purchase any of the forward purchase securities.of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of Americaaccounting principles requires management to make judgments, estimates and assumptions that affectin the reported amountspreparation of assets and liabilities, disclosure of contingent assets and liabilities at the date of theEmbark’s financial statements and income and expenses during the periods reported.accompanying notes. Actual results could materially differ from those estimates. We have identifiedpolicies:Warrant LiabilityWe account for warrants as either equity-classified or liability-classified instruments based on an assessmentpolices given the level of the warrant’s specific termsjudgments and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changesestimates used in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.Common Stock Subject to Possible RedemptionWe account for our common stock subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity sectionpreparation of our condensed balance sheets.Net Income Per Common ShareWe applyconsolidated financial statements:two-class methodCompany initiated a reduction in calculating earnings per share. Net income per common share, basicworkforce restructuring plan and dilutedsimultaneously proceeded with potential liquidation of its assets. As a result of this workforce reduction initiative, the Company incurred $9.5 million in employee severance pay and related costs during the three months ended March 31, 2023. The Company is expected to implement further reductions in workforce as a part its restructuring plan in the near future.common stock subjectimpairment annually, or whenever events or circumstances indicate that the carrying amount of an asset may not be fully recoverable. The Company analyzed its long-lived assets for impairment in line with its impairment policy and recorded a $23.3 million impairment charge to possible redemption is calculated by dividing the interest income earned on the Trust Account, netproperty and equipment and its right-of-use assets in its condensed consolidated statements of applicable taxes, if any, by the weighted average number of shares of common stock subject to possible redemption outstandingoperations for the period. Net income per common share, basic and diluted for and non-redeemable common stock is calculated by dividing net loss less income attributablethree months ended March 31, 2023.common stock subject to possible redemption, byEmbark’s critical accounting policies or estimates during the weighted average number of shares of non-redeemable common stock outstanding for the period presented.StandardsIn August 2020,PronouncementsFinancial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”)JOBS Act. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards until such time as those standards apply to simplifyprivate companies. Embark intends to elect to adopt new or revised accounting for certain financial instruments. ASU 2020-06 eliminatesstandards under private company adoption timelines. Accordingly, the current models that require separationtiming of beneficial conversion and cash conversion features from convertible instruments and simplifiesEmbark’s adoption of new or revised accounting standards will not be the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instrumentssame as other public companies that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a fullnot EGCs or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We are currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, resultsopted out of operations or cash flows.Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.MarketMarket.Not requiredsmaller reporting companies.which the fair market value would be affected by changes in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of Embark’s investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of its cash, cash equivalents, and investments.Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.Under the supervision and with the participation of our management, including our principal executive officerits Chief Executive Officer (“CEO”) and principal financial and accounting officer, we conducted an evaluation ofInterim Chief Financial Officer (“CFO”), evaluated the effectiveness of ourEmbark’s disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2021, as such term is(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were not effective, due solely to the material weakness in our internal control over financial reporting described below in “Changes in Internal Control Over Financial Reporting.” In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.Restatement of Previously Issued Financial StatementsOn May 21, 2021, we revised our prior position on accounting for warrants and concluded that our previously issued audited balance sheet datedAct), as of January 15, 2021 (the “IPO Balance Sheet)” should not be relied on becausethe end of a misapplication in the guidance on warrant accounting. However, the non-cash adjustments to the financial statements do not impact the amounts previously reported for our cash and cash equivalents, total assets, revenue or cash flows.Changes in Internal Control over Financial ReportingThere was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2020period covered by this Quarterly Report on Form 10-Q10-Q. Based on that hasevaluation, Embark’s CEO and CFO concluded that, as of March 31, 2023, due to the material weakness described in Form 10-K for 2022 fiscal year, Embark’s disclosure controls and procedures were not effective.isare reasonably likely to materially affect, ourits internal control over financial reporting. Due solely to the events that led to our restatementNoneFactors that could cause our actual results to differ materiallyin this report include the risk factors described in ourthe Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC. Except as described below, as of the date of this Report, there have been no material changes to the risk factors disclosed in our Annual Report filed with the SEC.Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.On April 12, 2021, the SEC issued the SEC Staff Statement regarding the accounting and reporting considerations for warrants issued by SPACs. Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our public warrants and private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. As a result, included on our balance sheet as of March 31, 2021 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our warrants. ASC Subtopic 815, Derivatives and Hedging, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material.Proceeds.On January 15, 2021, we consummated the Initial Public Offering of 41,400,000 Units. The Units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $414,000,000. J.P. Morgan Securities LLC, Barclays Capital Inc. and CIBC Capital Markets acted as joint book-running managers of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-251639 and 333-252056). The Securities and Exchange Commission declared the registration statements effective on January 12, 2021.Simultaneous with the consummation of the Initial Public Offering, the Sponsor and Northern Genesis Sponsor II LLC consummated the private placement of an aggregate of 6,686,667 Units at a price of $1.50 per Private Placement Warrant, generating total proceeds of $10,030,000. Each Private Placement Warrant will entitle the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions.Of the gross proceeds received from the Initial Public Offering, the exercise of the over-allotment option and the Private Placement Warrants, an aggregate of $414,000,000 was placed in the Trust Account.We paid a total of $8,280,000 in underwriting fees, $14,490,000 of deferred underwriting fees and $451,415 for other costs and expenses related to the Initial Public Offering.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.NoneNoneNone
None.Incorporated by Reference Exhibit
NumberDescription Form File No. Date Exhibit Filed Herewith 2.1+ 8-K 001-39881 6/23/2021 2.1 3.1 8-K 001-39881 11/17/2021 3.1 3.2 8-K 001-39881 8/16/2022 3.1 3.3 8-K 001-39881 11/17/2021 3.2 4.1 S-4 333-257647 10/13/2021 4.5 4.2 S-4 333-257647 10/13/2021 4.6 4.3 8-K 001-39881 1/19/2021 4.1 31.1 X 31.2 X 32.1** 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 XBRIL document. X 101.SCH Inline XBRL Taxonomy Extension Schema Document. X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X 104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. X following exhibits are filedcertification attached as part of, or incorporated by reference into,Exhibit 32.1 that accompanies this Quarterly Report on Form 10-Q.*Filed herewith.(1)Previously filed as an exhibit to our Current Report on Form 8-K filed on January 19, 2021 and incorporated by reference herein.(2)Previously filed as an exhibit to our Registration Statement on Form S-1/A, Amendment No. 2, filed on January 8, 2021 and incorporated by reference herein.(3)Previously filed as an exhibit our Current Report on Form 8-K filed on April 27, 2021 and incorporated by reference herein.In accordance with the requirements of Section 13 or 15(d) of the ExchangeSecurities Act of 1934, the registrant has duly caused this reportQuarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.NORTHERN GENESIS ACQUISITION CORP. IIEMBARK TECHNOLOGY, INC. Date: May 25, 2021By: /s/ Ian RobertsonAlex RodriguesName: Ian RobertsonAlex RodriguesTitle: Chief Executive Officer (Principal Executive Officer) EMBARK TECHNOLOGY, INC. Date: May 25, 2021By: /s/ Ken MangetMorgan DioliName: Ken MangetMorgan DioliTitle: Interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 26