Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Apr. 12, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-38612 | ||
Entity Registrant Name | ELECTRAMECCANICA VEHICLES CORP. | ||
Entity Incorporation, State or Country Code | A1 | ||
Entity Tax Identification Number | 98-1485035 | ||
Entity Address State Or Province | BC | ||
Entity Address, Address Line One | 8057 North Fraser Way | ||
Entity Address, City or Town | Burnaby | ||
Entity Address, Country | CA | ||
Entity Address, Postal Zip Code | V5J 5M8 | ||
City Area Code | 604 | ||
Local Phone Number | 428-7656 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 151,929,386 | ||
Entity Common Stock, Shares Outstanding | 119,287,917 | ||
Entity Central Index Key | 0001637736 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | KPMG LLP | ||
Auditor Location | Vancouver, Canada | ||
Auditor Firm ID | 85 | ||
Common Shares, without par value | |||
Document and Entity Information | |||
Title of 12(b) Security | Common Shares, without par value | ||
Trading Symbol | SOLO | ||
Security Exchange Name | NASDAQ | ||
Warrants, each to purchase one Common Share | |||
Document and Entity Information | |||
Title of 12(b) Security | Warrants, each to purchase one Common Share | ||
Trading Symbol | SOLOW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 134,255,538 | $ 221,928,008 |
Receivables, net | 273,958 | 372,021 |
Prepaid expenses and other current assets | 11,390,850 | 14,964,399 |
Inventory, net | 4,233,055 | 3,580,450 |
Total current assets | 150,153,401 | 240,844,878 |
Restricted cash | 515,449 | 291,676 |
Plant and equipment, net | 16,452,477 | 8,386,478 |
Operating lease right-of-use assets | 9,031,277 | 1,737,409 |
Other assets | 5,081,869 | 3,172,057 |
Goodwill | 549,760 | |
Intangible assets, net | 11,956 | 415,779 |
Total assets | 181,246,429 | 255,398,037 |
Current liabilities | ||
Trade payables and accrued liabilities | 19,346,250 | 6,810,781 |
Customer deposits | 339,744 | 489,040 |
Construction contract liability | 220 | 161,879 |
Current portion of lease liabilities | 810,677 | 392,279 |
Contract termination liability | 15,700,000 | |
Total current liabilities | 36,196,891 | 7,853,979 |
Derivative liabilities | 191,203 | |
Share-based compensation liability | 76,476 | 53,362 |
Long-term portion of operating lease liabilities | 17,528,282 | 1,494,992 |
Deferred revenue | 119,253 | 119,253 |
Total liabilities | 53,920,902 | 9,712,789 |
Commitments and contingencies | ||
Shareholders' equity | ||
Share capital - without par value, unlimited shares authorized; 119,287,917 and 117,338,964 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 395,564,470 | 390,290,103 |
Accumulated other comprehensive income | 4,566,225 | 4,501,800 |
Accumulated deficit | (272,805,168) | (149,106,655) |
Total shareholders' equity | 127,325,527 | 245,685,248 |
Total liabilities and shareholders' equity | $ 181,246,429 | $ 255,398,037 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Balance Sheets | ||
Share capital - without par value | $ 0 | $ 0 |
Share capital - shares authorized | Unlimited | Unlimited |
Share capital - shares issued | 119,287,917 | 117,338,964 |
Share capital - shares outstanding | 119,287,917 | 117,338,964 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Operations and Comprehensive Loss | ||
Revenue | $ 6,812,446 | $ 2,100,770 |
Cost of revenue | 33,067,782 | 4,334,681 |
Gross loss | (26,255,336) | (2,233,911) |
Operating expenses | ||
General and administrative expenses | 39,755,257 | 28,187,657 |
Research and development expenses | 22,031,212 | 17,090,282 |
Sales and marketing expenses | 14,663,968 | 10,773,938 |
Impairment | 7,592,641 | |
Total operating expenses | 84,043,078 | 56,051,877 |
Operating loss | (110,298,414) | (58,285,788) |
Other non-operating income (expense) | ||
Interest income | 2,301,218 | 421,104 |
Changes in fair value of derivative liabilities | 191,202 | 18,920,428 |
Contract termination loss | (15,700,000) | |
Other income / (expense), net | (44,764) | 175,368 |
Foreign exchange loss | (124,201) | (9,758) |
Loss before taxes | (123,674,959) | (38,778,646) |
Current income tax expense | 23,554 | 850 |
Net loss | (123,698,513) | (38,779,496) |
Other comprehensive income | ||
Foreign currency translation adjustments | 64,425 | 587 |
Comprehensive loss | $ (123,634,088) | $ (38,778,909) |
Loss per share - basic | $ (1.04) | $ (0.35) |
Loss per share - diluted | $ (1.04) | $ (0.35) |
Weighted average number of shares outstanding - basic | 118,739,410 | 111,720,726 |
Weighted average number of shares outstanding - diluted | 118,739,410 | 111,720,726 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (123,698,513) | $ (38,779,496) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,822,999 | 3,483,981 |
Stock-based compensation expense | 4,985,953 | 5,065,330 |
Inventory provision | 13,829,497 | 1,679,736 |
Impairment | 7,592,641 | |
Contract termination loss | 15,700,000 | |
Recall provision | 8,915,044 | |
Change in fair value of derivative liabilities | (191,202) | (18,920,428) |
Unrealized currency translation losses | 16,498 | |
Changes in operating assets and liabilities: | ||
Receivables | 79,361 | (320,991) |
Prepaid expenses and other assets | (5,594,460) | (13,080,960) |
Inventory | (14,664,270) | (4,714,161) |
Trade payables and accrued liabilities | 1,873,380 | 4,539,905 |
Operating lease liabilities | 1,233,699 | 193,804 |
Customer deposits and construction contract liabilities | (310,955) | 132,047 |
Net cash used in operating activities | (84,410,328) | (60,721,233) |
Cash flows in investing activities | ||
Expenditures on plant and equipment | (3,398,974) | (4,638,821) |
Net cash used in investing activities | (3,398,974) | (4,638,821) |
Cash flows from financing activities | ||
Proceeds on issuance of common shares - net of issue costs | 145,613,006 | |
Proceeds from / (payment for) issuance of common shares for RSU settlement | (106,187) | (185,274) |
Payment for DSU settlement | (19,625) | |
Proceeds from issuance of common shares for options exercised | 487,054 | 1,145,538 |
Proceeds from issuance of common shares for warrants exercised | 11,431,030 | |
Net cash provided by financing activities | 380,867 | 157,984,675 |
Increase / (decrease) in cash and cash equivalents and restricted cash | (87,428,435) | 92,624,621 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (20,262) | 587 |
Cash and cash equivalents and restricted cash, beginning | 222,219,684 | 129,594,476 |
Cash and cash equivalents and restricted cash, ending | $ 134,770,987 | $ 222,219,684 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Shares, without par value | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance (in shares) at Dec. 31, 2020 | 89,309,563 | |||
Beginning Balance at Dec. 31, 2020 | $ 228,505,236 | $ 4,501,213 | $ (110,327,159) | $ 122,679,290 |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Effect of change in functional currency | Effect of change in functional currency | $ (14,539,226) | (14,539,226) | ||
Ending Balance (in shares) at Jan. 01, 2021 | 89,309,563 | |||
Ending Balance at Jan. 01, 2021 | $ 213,966,010 | 4,501,213 | (110,327,159) | 108,140,064 |
Beginning Balance (in shares) at Dec. 31, 2020 | 89,309,563 | |||
Beginning Balance at Dec. 31, 2020 | $ 228,505,236 | 4,501,213 | (110,327,159) | 122,679,290 |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Shares issued for cash (in shares) | 21,179,495 | |||
Shares issued for cash | $ 145,768,108 | 145,768,108 | ||
Share issuance costs | $ (155,102) | (155,102) | ||
Shares issued pursuant to exercise of warrants (in shares) | 4,269,414 | |||
Shares issued pursuant to exercise of warrants | $ 24,758,479 | $ 24,758,479 | ||
Shares issued pursuant to exercise of options (in shares) | 2,456,240 | 3,785,174 | ||
Shares issued pursuant to exercise of options | $ 1,145,538 | $ 1,145,538 | ||
Shares issued pursuant to exercise of RSU (in shares) | 118,497 | 118,497 | ||
Shares issued pursuant to exercise of RSU | $ (185,274) | $ (185,274) | ||
Shares issued pursuant to exercise of DSU (in shares) | 5,755 | |||
Shares issued pursuant to exercise of DSU | $ 19,625 | 19,625 | ||
Transfer of DSU to liabilities | (152,165) | (152,165) | ||
Stock-based compensation | $ 5,124,884 | 5,124,884 | ||
Net loss | (38,779,496) | (38,779,496) | ||
Foreign currency translation | 587 | 587 | ||
Ending Balance (in shares) at Dec. 31, 2021 | 117,338,964 | |||
Ending Balance at Dec. 31, 2021 | $ 390,290,103 | 4,501,800 | (149,106,655) | $ 245,685,248 |
Consolidated Statements of Changes in Stockholders' Equity | ||||
Shares issued pursuant to exercise of options (in shares) | 1,615,430 | 1,623,864 | ||
Shares issued pursuant to exercise of options | $ 487,054 | $ 487,054 | ||
Shares issued pursuant to exercise of RSU (in shares) | 333,523 | 333,523 | ||
Shares issued pursuant to exercise of RSU | $ (175,526) | $ (175,526) | ||
Stock-based compensation | $ 4,962,839 | 4,962,839 | ||
Net loss | (123,698,513) | (123,698,513) | ||
Foreign currency translation | 64,425 | 64,425 | ||
Ending Balance (in shares) at Dec. 31, 2022 | 119,287,917 | |||
Ending Balance at Dec. 31, 2022 | $ 395,564,470 | $ 4,566,225 | $ (272,805,168) | $ 127,325,527 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | Jan. 01, 2021 |
Consolidated Statements of Changes in Stockholders' Equity | |
Exchange rate | 1.273 |
Nature and continuance of opera
Nature and continuance of operations | 12 Months Ended |
Dec. 31, 2022 | |
Nature and continuance of operations | |
Nature and continuance of operations | 1. ElectraMeccanica Vehicles Corp. (the “Company”) was incorporated on February 16, 2015, under the laws of the Province of British Columbia, Canada, and its principal activity is the development and manufacturing of electric vehicles (“EV”s). The head office and principal address of the Company are located at 8057 North Fraser Way, British Columbia, Canada, V5J 5M8. These consolidated financial statements have been prepared on the assumption that the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. The Company’s principal activity is the design, development, and manufacturing of electric vehicles. As at December 31, 2022, although the Company has commenced commercial sales of the purpose-built single seat SOLO, it is not able to finance day-to-day activities through operations. The Company’s continuation is dependent upon the successful results from its electric vehicle manufacturing activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. The Company commenced commercial deliveries of its first SOLO in October 2021. For the year ended December 31, 2022, the Company recognized $6,812,446 (December 31, 2021 - $1,174,310) in revenues from the sale of these electric vehicles. It is anticipated that additional funding will be required in the future. Management primarily intends to finance its operations over the next 12 months principally using existing cash on hand, and may supplement by additional funding through private placements and/or public offerings of equity capital or debt. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Basis of presentation and consolidation As a non-U.S. company listed on the NASDAQ, the United States Securities and Exchange Commission (“SEC”) requires the Company to perform a test on the last business day of the second quarter of each fiscal year to determine whether the Company continues to meet the definition of a foreign private issuer (“FPI”). Historically, the Company met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs. On June 30, 2022, the Company performed the test and determined that the Company no longer met the definition of an FPI. As such, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers. In the year ended December 31, 2022, the Company has therefore retrospectively adopted U.S. GAAP. The consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP for all periods presented. Comparative figures, which were previously prepared in accordance with IFRS, have been adjusted as required to be compliant with the Corporation’s accounting policies under US GAAP. These consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated from the Company’s consolidated financial statements. Use of estimates The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from the estimates made by management. Estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Estimates include the following: ● estimating the write down of inventory to net realizable value; ● estimating the fair value of stock options that are based on market conditions; ● estimating the incremental borrowing rate for calculating the lease liabilities; ● estimating the warranty provision and recall provision; ● estimating the contingent liabilities for the contract termination; and ● estimating the fair value of the long-lived assets to determine and measure impairment losses on property and equipment, right-of-use assets and cloud computing assets included in other assets. The Covid-19 outbreak brings significant uncertainty as to the potential impact on our operations, supply chains for parts and sales channels for our products, and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. Therefore, the Company has not changed any estimates and assumptions in the preparation of the consolidated financial statements. Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits with banks with original maturities of ninety days or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Inventory Inventory consists of vehicles and parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. The cost of inventory includes purchase costs and conversion costs, and is determined principally by using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, disposal, and transportation, and any other estimated costs necessary to make the sale. As necessary, the Company records write-downs for excess, slow moving and obsolete inventory. To determine these amounts, the Company regularly reviews inventory quantities on hand and compares them to estimates of historical utilization, future product demand, and production requirements. Write-downs of inventory to net realizable value are recorded in cost of revenue in the consolidated financial statements. Prepaid expenses and deposits The Company pays for some goods and services in advance and recognizes these expenses as prepaid expenses at the balance sheet date. If certain prepaid expenses extend beyond one-year, those are classified as non-current assets. Plant and equipment Plant and equipment are measured at historical cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditures that are directly attributable to the acquisition of the asset, including all costs incurred in bringing the asset to its present location and condition. Depreciation is generally computed using the straight-line method over the estimated useful lives of the respective assets, as follows: Furniture and equipment 5 years Computer hardware 3 years Computer software 2 years Vehicles 3 years Production molds 3 years Leasehold improvements over term of lease Right-of-use assets over term of lease Impairment of long-lived assets Long-lived assets, such as plant, and equipment, finite-lived intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group exceeds the undiscounted cash flows, an impairment is recognized to the extent that the carrying amount exceeds the fair value. Fair value can be determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Any impairment loss recognized is not reversed in future periods. Goodwill is assessed for impairment annually on December 31 or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. Goodwill is tested for impairment at the reporting unit level, which is the operating segment, or a component, which is one level below that operating segment. Components are aggregated as a single reporting unit if they have similar economic characteristics. Goodwill is tested for impairment when there is a triggering event indicating that the carrying amount may be impaired. When impairment indicators are identified, the Company compares the reporting unit’s fair value to its carrying amount, including goodwill. An impairment loss is recognized as the difference, if any, between the reporting unit’s carrying amount and its fair value, to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit. Any impairment loss recognized is not reversed in future periods. For the purposes of annual impairment testing, the carrying amounts of goodwill are allocated to the reporting units. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Factors considered in a qualitative assessment include, among other things, macroeconomic conditions, industry and market considerations, financial performance of the respective reporting unit and other relevant entity and reporting-unit specific considerations. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment. The fair value of the reporting unit is determined by analyzing scenarios of business projections and sensitivities attempting to model various assumptions as to how the revenues and cash flows of the business may evolve depending on factors including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance specific to the reporting unit. The Company estimates the fair values of its reporting units based on discounted cash flow (“DCF”) methodology reflecting the latest projections. Cloud computing arrangements Capitalized implementation costs for cloud computing arrangements represents the primary balance of the Company’s other assets. The Company’s cloud computing arrangements primarily comprise of hosting arrangements which are service contracts, whereby the Company gains remote access to use enterprise software hosted by the vendor or another third party on an as-needed basis for a period of time in exchange for a subscription fee. Subscription fees are usually prepaid and recorded in operating expense over the period that the Company has access to use the software. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. Amortization of capitalized implementation costs is recorded on a straight-line basis over the term of the cloud computing arrangement, which is the non-cancellable period of the agreement, together with periods covered by renewal options which the Company is reasonably certain to exercise. We only capitalize subsequent additions, modifications or upgrades to internal-use software to the extent that such changes allow the software to perform a task it previously did not perform. Leases The Company enters into contractual arrangements for the utilization of certain non-owned assets. These principally relate to property for the Company’s offices, assembly facility and kiosk locations which have varying terms including extension and termination options. The Company determines if an arrangement is a lease at inception. Leases are evaluated at commencement to determine proper classification as an operating lease or a finance lease. The Company’s leases are all operating leases. The Company recognizes a right-of-use (“ROU”) asset and lease liability at lease commencement based on the present value of lease payments over the lease term. The Company generally uses its incremental borrowing rate as the discount rate as most of the Company’s lease arrangements do not provide an implicit borrowing rate. The incremental borrowing rate is estimated using a combination of risk free interest rate corresponding to lease terms, as well as a blended credit risk spread. For operating leases, fixed lease payments are recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, and has elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component. Certain lease agreements include variable lease payments that depend on an index, as well as payments for non-lease components, such as common area maintenance, and certain pass-through operating expenses such as real estate taxes and insurance. In instances where these payments are fixed, they are included in the measurement of our lease liabilities, and when variable, are excluded and recognized in the period in which the obligations for those payments are incurred. The Company’s leases do not contain any material residual value guarantees or payments under purchase and termination options. Lease terms are initially determined as the non-cancellable period of a lease adjusted for options to extend or terminate a lease that are reasonably certain to be exercised. Lease liabilities are subsequently measured at amortized cost using the effective interest method. Right of use assets are carried at cost less accumulated amortization, impairment losses, and any subsequent remeasurement of the lease liability. Initial cost comprises the lease liability adjusted for lease payments at or before the commencement date, lease incentives received, initial direct costs and an estimate of restoration costs. The Company has elected not to present short-term leases on the consolidated balance for leases that have lease terms of 12 months or less and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. The lease expense related to those short-term leases is recognized on a straight-line basis over the lease term. Revenue The Company generates revenue primarily through the sale of electric vehicles as well as parts sales, services, repairs, and support services, and sales of custom built vehicles; however, the revenue from custom built vehicles permanently ceased in the fourth quarter 2022. Sales of electric vehicles Vehicle sales revenue is generated from the sale of electric vehicles to customers. There is one performance obligation identified in vehicle sale arrangements. Shipping and handling provided by Company is considered a fulfillment activity. Payment is typically received at or prior to the transfer of control of the vehicle to the customer. The Company recognizes revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed upon delivery location or upon pick up of the vehicle by the customer. The Company’s vehicle contracts do not contain a significant financing component. The Company has elected to exclude sales taxes and amounts collected on behalf of third parties from the measurement of the transaction price. The Company provides a manufacturer’s warranty on all vehicles sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item where failure is due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the sale of the vehicle. The estimated cost of the assurance-type warranty is accrued at the time of vehicle sale. These provisions are estimated based on historical warranty claim experience with consideration given to the expected level of future warranty costs as well as current information on repair costs. The provision for product warranties are utilized for expenditures based on the demand from customers. The warranty expense recorded as a component of cost of revenue in the consolidated statements of operations was approximately $0.7 million for the year ended December 31, 2022. As disclosed in Notes 10 and 21, the Company has decided to buy-back all the vehicles sold and has recognized a recall provision at December 31, 2022 in relation to the anticipated expenditures under this program to repurchase all the G3 SOLO vehicles previously sold. At December 31, 2022, no additional warranty provision has been recognized other than the recall provision as no future warranty services would be required following Company’s decision to buy-back the vehicles under the recall. As of December 31, 2021, $ nil warranty provision was recognized based on management’s estimate. Part sales The sale of parts is a single performance obligation to be recognized at the point in time when control is transferred to the customer. Shipping and handling provided by Company is considered a fulfillment activity. Payment for the products sold are made upon invoice or in accordance with payment terms customary to the business. The Company’s parts sales do not contain a significant financing component. The Company has elected to exclude sales taxes from the measurement of the transaction price. Services, repairs and support services Services, repairs and support services are recognized in the accounting period when the services are rendered. Payment for the services are made upon invoice or in accordance with payment terms customary to the business. The Company’s service revenue does not contain a significant financing component. The Company has elected to exclude sales taxes from the measurement of the transaction price. Sales of custom built vehicles The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized when the Company has transferred control to the customer which generally occurs upon completion of shipment to the customer. There is one performance obligation identified in vehicle sale arrangements. Shipping and handling provided by the Company is considered a fulfillment activity. Payment is typically received at or prior to the transfer of control of the vehicle to the customer. The Company’s vehicle contracts do not contain a significant financing component. The Company has elected to exclude sales taxes and amounts collected on behalf of third parties from the measurement of the transaction price. Foreign currency translation The Company and its subsidiaries’ functional currency is U.S. dollars (“USD”), except for the functional currency of Intermeccanica. International Inc. is CAD and the functional currency of EMV Automotive Technology (Chongqing) Inc. is the Chinese RMB. The Company reassessed the functional currency during its first quarter of 2021 and determined that the factors now supported USD as the functional currency for the Company and certain of its subsidiaries. The Company has applied the change in functional currency from Canadian dollars (“CAD”) to USD effective January 1, 2021. Each entity within the consolidated group records transactions using its functional currency, being the currency of the primary economic environment in which it operates. Foreign currency transactions are translated into the respective functional currency of each entity using the foreign currency rates prevailing at the date of the transaction. Period-end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period-end foreign currency rates. Foreign currency gains and losses arising from the settlement of foreign currency transactions are recognized in the consolidated statements of operations and comprehensive loss. On consolidation, the assets and liabilities of foreign operations that have a functional currency other than USD are translated into USD at the exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at the average monthly exchange rates prevailing during the period. The resulting translation gains and losses are included within other comprehensive loss. The cumulative deferred translation gains or losses on the foreign operations are reclassified to net income, only on disposal of the foreign operations. Advertising and marketing costs The Company expenses advertising costs when incurred in sales and marketing expenses. Research and development expenses Research and development expenses consist primarily of personnel-related expenses, contractor fees, engineering design and testing expenses, and allocated facilities cost. Most of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. Research and development expenses have been expensed as incurred and included in the consolidated statements of operations and comprehensive loss. Stock-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options, deferred stock units (DSUs) and restricted stock units (RSUs). We use the fair value method of accounting for our stock options, DSUs and RSUs. The fair value of stock option awards with only service and/or performance conditions is estimated on the grant or offering date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. These inputs are subjective and generally require significant judgment. The fair value of DSUs and RSUs is measured on the grant date based on the closing fair market value of our common stock. Stock-based compensation expense is recognized over the vesting period on a straight-line basis. The Company estimates expected forfeitures at the time of grant instead of accounting for forfeitures as they occur. For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. For performance-based awards with a vesting schedule based on the attainment of both performance and market conditions, stock-based compensation expense associated with each tranche is recognized over the longer of (i) the expected achievement period for the operational milestone for such tranche and (ii) the expected achievement period for the related market capitalization milestone determined on the grant date, beginning at the point in time when the relevant operational milestone is considered probable of being achieved. If such operational milestone becomes probable any time after the grant date, we will recognize a cumulative catch-up expense from the grant date to that point in time. If the related market capitalization milestone is achieved earlier than its expected achievement period and the achievement of the related operational milestone, then the stock-based compensation expense will be recognized over the expected achievement period for the operational milestone, which may accelerate the rate at which such expense is recognized. The fair value of such awards is estimated on the grant date using Monte Carlo simulations. Stock-based compensation expense is recorded in general and administrative expenses, research and development expenses and sales and marketing expenses in the consolidated statements of operations and comprehensive loss. Income taxes Income taxes are comprised of current and deferred taxes. These taxes are accounted for using the liability method. Current tax is recognized in connection with income for tax purposes, unrealized tax benefits and the recovery of tax paid in a prior period and measured using the enacted tax rates and laws applicable to the taxation period during which the income or loss for tax purposes arose. Deferred tax is recognized on the difference between the carrying amount of an asset or a liability, as reflected in the financial statements, and the corresponding tax base, used in the computation of income for tax purposes (temporary differences) and measured using the enacted tax rates and laws as at the balance sheet date that are expected to apply to the income that the Company expects to arise for tax purposes in the period during which the difference is expected to reverse. Management assesses the likelihood that a deferred tax asset will be realized, and a valuation allowance is provided to the extent that it is more likely than not that all or a portion of a deferred tax asset will not be realized. The determination of both current and deferred taxes reflects the Company’s interpretation of the relevant tax rules and judgement. An unrealized tax benefit may arise in connection with a period that has not yet been reviewed by the relevant tax authority. A change in the recognition or measurement of an unrealized tax benefit is reflected in the period during which the change occurs. Income taxes are recognized in the consolidated statements of operations and comprehensive loss, except when they relate to an item that is recognized in other comprehensive loss or directly in equity, in which case, the taxes are also recognized in other comprehensive loss or directly in equity respectively. Where income taxes arise from the initial accounting for a business combination, these are included in the accounting for the business combination. Interest and penalties in respect of income taxes are not recognized in the consolidated statement of operations and comprehensive loss as a component of income taxes but as a component of interest expense. Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount within a range of loss can be reasonably estimated. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. Legal costs incurred in connection with loss contingencies are expensed as incurred. Net income or loss per share Basic net earnings or loss per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted net earnings or loss per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise warrants, share options, deferred share units, restricted share units and restricted shares granted to employees and directors. Segment reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s operations consisted of two operating segments - electric vehicles and custom-built vehicles, which are its reportable segments in year for 2022 and 2021. Fair value measurements The Company follows the accounting guidance in ASC 820, Fair Value Measurement The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Our financial assets include cash and cash equivalents, receivables, and restricted cash. Our financial liabilities include trade payables and accrued liabilities, derivative liabilities, share-based compensation liability, and lease liabilities. The carrying amounts of these instruments, including cash and cash equivalents, receivables, restricted cash, and trade payables and accrued liabilities, are considered to be representative of their fair values because of their short-term nature. Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions. Balances with these institutions exceeded the Canadian Deposit Insurance Corporation insured amount of CAD$100 thousand as of December 31, 2022. The Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments. Concentration of supply risk In September 2017, we entered into the Manufacturing Agreement with Zongshen. In 2022 and 2021, the delivery of SOLO vehicles to our customers and the revenue derived depended on Zongshen’s ability to fulfil its obligations under that Manufacturing Agreement. On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles, pursuant to which, such concentration risk no longer existed (see Note 12). Standards issued but not yet effective All ASUs issued but not yet adopted were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures. |
Cash and cash equivalents and r
Cash and cash equivalents and restricted cash | 12 Months Ended |
Dec. 31, 2022 | |
Cash and cash equivalents and restricted cash | |
Cash and cash equivalents and restricted cash | 3. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. December 31,2022 December 31,2021 Cash and cash equivalents $ 134,255,538 $ 221,928,008 Restricted cash 515,449 291,676 Total cash, cash equivalents and restricted cash $ 134,770,987 $ 222,219,684 The Company’s restricted cash as of December 31, 2022 and 2021 consists of certificates of deposits related to the Company’s corporate credit card program. |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid expenses and other current assets | |
Prepaid expenses and other current assets | 4. December 31,2022 December 31,2021 Solo deposit (with manufacturer) $ 7,133,451 $ 4,734,914 Battery cell deposit 300,000 6,121,372 Battery deposit — 100,207 Prepaid insurance 1,095,152 2,027,001 Prepaid rent and security deposit 495,112 444,976 Cloud computing assets 1,234,039 536,282 Other prepaid expenses 1,133,096 999,647 $ 11,390,850 $ 14,964,399 For the year ended December 31, 2022, an impairment loss of $2,804,032 (2021 - $nil) was recognized for non-refundable deposits for battery cells dedicated to the SOLO, as a result of the Company’s decision to stop production of the SOLO as well as considering alternative uses and maintenance of such batteries. |
Inventory, net
Inventory, net | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, net | |
Inventory, net | 5. The Company’s inventory consisted of the following: December 31, 2022 December 31, 2021 Parts and batteries $ 1,242,055 $ 906,505 Work in progress — 128,424 Vehicles 18,022,771 4,232,736 Inventory provision (15,031,771) (1,687,215) $ 4,233,055 $ 3,580,450 For the year ended December 31, 2022 and 2021, the amounts of $13,829,497 and $1,687,215, respectively, were recognized as inventory write-downs and reflected in cost of revenue. In estimating the net realizable value of the vehicle inventory at December 31, 2022, the Company has concluded that it is able to recover the inventory value through exporting vehicles outside of the U.S. to recover tariffs already paid. The vehicle inventory’s net realizable value recognized at December 31, 2022 represents the amount that can be recovered from claiming the tariff. In estimating the net realizable value of vehicle inventory at December 31, 2021, the Company considered the selling price information for sales near the balance sheet date. |
Plant and equipment
Plant and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Plant and equipment | |
Plant and equipment | 6. December 31, 2022 December 31, 2021 Furniture and equipment $ 2,117,901 $ 927,430 Computer hardware and software 1,381,786 1,003,575 Vehicles 1,046,817 2,306,849 Leasehold improvements 12,862,333 1,560,676 Production tooling and molds 1,956,743 8,001,229 Total plant and equipment 19,365,580 13,799,759 Less: accumulated depreciation (2,913,103) (5,413,281) Plant and equipment, net $ 16,452,477 $ 8,386,478 During the year ended December 31, 2022 and 2021, depreciation expense of $4,938,545 and $3,480,055, respectively, was included in the general and administrative expenses. At December 31, 2022, production tooling and molds with a cost of $8,112,133 and accumulated depreciation of $6,294,544 were written off to nil as these molding assets for the SOLO will no longer be used and these assets were not considered to have any alternate use. As at December 31, 2022, vehicle assets with cost of $3,563,105 and accumulated depreciation of $966,175 were impaired. These vehicles are SOLO demo vehicles used for sales and services. An impairment loss of $2,001,930 was recognized based on the amount that can be recovered from claiming the tariff and disposing of the vehicles. |
Other assets
Other assets | 12 Months Ended |
Dec. 31, 2022 | |
Other assets | |
Other assets | 7. December 31, 2022 December 31, 2021 Security deposit $ 1,161,000 $ 1,161,000 Cloud computing assets 3,920,869 2,011,057 $ 5,081,869 $ 3,172,057 As of December 31, 2022, gross capitalized implementation costs incurred in a cloud computing arrangement and related accumulated amortization were $6,170,195 and $1,015,287, respectively (December 31, 2021 - $2,681,410 and $134,071, respectively). Our capitalized implementation costs primarily relate to the implementation of a new enterprise resource planning (“ERP”) system during 2021 and 2022. In October 2021, we successfully went live with the new ERP system and started to amortize the cost, and we continue to progress with additional functionality and integrations as scheduled. These capitalized costs are included as a component of prepaid expenses and other current assets and other non-current assets on our consolidated balance sheet. During the years ended December 31, 2022 and 2021, amortization expense of $881,216 and $134,071, respectively was recorded for capitalized implementation costs. The estimated aggregate amortization expense amounts to $1,234,039 for each of year 2023 2025 |
Impairment of long-lived assets
Impairment of long-lived assets | 12 Months Ended |
Dec. 31, 2022 | |
Impairment of long-lived assets | |
Impairment of long-lived assets | 8. We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles. Due to the cease of production of SOLO vehicles, the Company will no longer be using some production mold equipment and SOLO demo vehicles. As a result, we concluded that an impairment triggering event had occurred for the equipment no longer in use. The Company recorded a $3,819,519 non-cash impairment charge for production mold equipment and SOLO demo vehicles in 2022 (see Note 6). The Company started to sell the SOLO in October 2021 and has been generating a gross loss from selling the vehicles. In Q4 2022, we reduced the SOLO listing price from $18,500 to $15,500. On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles. On February 17, 2023, the Company announced a voluntary recall of the SOLO. The Company has paused deliveries and sales of the SOLO while investigating the issue. The recall was issued due to the vehicle potentially experiencing a loss of propulsion while driving. Due to the fact that the SOLO vehicles have been generating a negative cash flow, the plan to cease production of SOLO, as well as the quality issues with the SOLO, we concluded that an impairment triggering event had occurred for the SOLO asset group at December 31, 2022. For the purpose of impairment testing at December 31, 2022, all held-and-used long-lived assets, including plant and equipment, operating lease right-of-use assets, and other assets were grouped in one asset group – the SOLO asset group. The carrying amount of the SOLO asset group was higher than the recoverable amount on an undiscounted cash flow basis, and therefore the Company compared the carrying amount of the SOLO asset group to its fair value, being the aggregate of the fair values of the individual assets within the asset group. The Company estimated the fair values of the individual assets comprising the SOLO asset group using a combination of methods. The fair values of right-of-use assets and leasehold improvements were determined using a discounted cash flows approach, where the significant inputs included the estimated market rent and discount rate for each leased property. The Company used a combination of a market approach and cost approach to determine the fair values of the other plant and equipment and other assets. The significant input in the determination of the fair value of the cloud computing assets was the obsolescence factor applied to determine the depreciated replacement cost. For the year ended December 31, 2022, the Company recorded $Nil impairment There was no impairment of long-lived assets for the year ended December 31, 2021. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and intangible assets | |
Goodwill and intangible assets | 9. Goodwill The Company recognized goodwill and intangible assets from the acquisition of Intermeccanica International Inc. (“Intermeccanica”), a developer and manufacturer of high-end custom-built vehicles in year 2017, which belongs to the custom built vehicle reportable segment. The Company tests goodwill for impairment at the reporting unit level annually on December 31 and whenever events or circumstances make it more likely than not that an impairment may have occurred. A reporting unit is an operating segment or one level below an operating segment to which goodwill is assigned when initially recorded. The Company has two reporting units, which are the same as its two operating segments (see Note 18). Intermeccanica started the restricting process and stopped taking any further orders in 2022. As such and in connection with the Company’s annual and long-range planning process, which coincided with the Company’s annual goodwill impairment test in the fourth quarter, management determined that the custom built vehicle reporting unit’s financial performance would be lower than previously anticipated. The Company’s quantitative goodwill impairment test using an income methodology indicated that its fair value of the custom built vehicle reporting units no longer exceeded the carrying value, and therefore the Company recognized goodwill impairment of $549,760, representing the full amount of goodwill. The quantitative goodwill impairment test performed by the Company as of December 31, 2022, included significant level 3 fair value estimates and assumptions including, among others, cash flow projections and selecting an appropriate discount rate. There was no impairment of goodwill for the year ended December 31, 2021. Intangible assets The Company’s intangible assets consist of trade name, customer relationships, domain name and non-compete covenants. These intangible assets were acquired from the acquisition of Intermeccanica. The non-compete covenants asset is amortized over five years and the other intangible assets have indefinite lives. The trade name, customer relationships and non-compete covenants assets belong to the custom built vehicle reportable segment. The Company’s quantitative impairment test indicated that the fair value of the custom built vehicle reporting unit no longer exceeded its carrying value, consequently the Company recognized impairment charges of $400,628 for trade name, customer relationships and non-compete covenant assets during the year ended December 31, 2022. The gross carrying amounts, accumulated amortization and net carrying amounts of the Company’s definite-lived amortizable intangible assets, as well as its indefinite-lived intangible trade names, are as follows: As of December 31, 2022 Gross carrying Accumulated Net carrying amount amortization amount Domain name $ 11,956 $ — $ 11,956 As of December 31, 2021 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 68,342 $ — $ 68,342 Non-compete covenants 19,639 16,444 3,195 Trade name 332,286 — 332,286 Domain name 11,956 — 11,956 $ 432,223 $ 16,444 $ 415,779 There was no impairment of intangible assets for the year ended December 31, 2021. |
Trade payables and accrued liab
Trade payables and accrued liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Trade payables and accrued liabilities | |
Trade payables and accrued liabilities | 10. December 31, 2022 December 31, 2021 Trade payables $ 3,792,827 $ 1,249,861 Due to related parties 2,945 743,100 Recall provision (Note 21) 8,915,044 — Accrued liabilities 6,635,434 4,817,820 $ 19,346,250 $ 6,810,781 On February 17, 2023, the Company announced a voluntary recall of the G3 SOLO. The Company paused deliveries and sales of the SOLO while investigating the issue. The recall was made due to the vehicle potentially experiencing a loss of propulsion while driving. The Company was required to fix the issue within a specific timeframe from the date of recall announcement. After a thorough investigation, the Company was not able to determine the root cause and fix of the said issue and has therefore issued a buy-back program for all 429 retailed vehicles. The Company has recorded a recall provision of $8,915,044 as an estimate of the cost to buy back all retailed vehicles. This amount is included within accrued liabilities. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | 11. The Company has operating leases for engineering center and office and, warehouse spaces and kiosk locations to promote vehicle sales. These leases span a period of one The components of lease expense, included within general and administrative expenses and sales and marketing expenses are as follows within the Company’s consolidated statements of operations and comprehensive loss: Year ended December 31, Year ended December 31, 2022 2021 Operating lease expense Operating lease expense $ 2,260,556 $ 917,978 Short-term lease expense 1,238,114 1,230,716 $ 3,498,670 $ 2,148,694 During the year ended December 31, 2022, the Company commenced a lease agreement for the Mesa facility for a period of 129.5 months. As a result, the Company recognized a right-of-use asset of $6,736,373, a lease liability of $14,738,973 and leasehold improvements of $8,228,290 and derecognized the prepaid lease payment of $225,690 at the commencement of the lease. The lease grants the Company two renewal options of 5 years each that the Company determined are not reasonably certain to be exercised. Lease-related assets and liabilities as presented in the consolidated balance sheets consist of the following: December 31, 2022 December 31, 2021 Assets: Operating lease right-of-use assets $ 9,031,277 $ 1,737,409 Liabilities: Current portion of operating lease liabilities $ 810,677 $ 392,279 Long-term portion of operating lease liabilities 17,528,282 1,494,992 Total operating lease liabilities $ 18,338,959 $ 1,887,271 The Company has calculated the weighted-average remaining lease term, presented in years below, and the weighted-average discount rate for the operating lease population. The Company uses the incremental borrowing rate as the lease discount rate, unless the lessor’s rate implicit in the lease is readily determinable, in which case it is used. December 31, 2022 December 31, 2021 Weighted average remaining operating lease term (in years) 9.41 6.61 Weighted average operating lease discount rate 10.28 % 7.73 % Supplemental cash flow information related to leases where the Company is the lessee is as follows: Year ended December 31, Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,233,699 193,804 Non-cash item for amounts included in the measurement of lease liabilities: Leased assets obtained in exchange for new operating lease liabilities 8,592,776 1,575,434 As of December 31, 2022, the maturities of our operating lease liabilities (excluding short-term leases) are as follows: December 31, 2022 2023 $ 2,665,698 2024 3,003,762 2025 2,933,488 2026 2,996,149 2027 2,748,552 Thereafter 15,704,730 Total minimum lease payments 30,052,379 Less: interest 11,713,420 Present value of lease obligations 18,338,959 Less: Current portion 810,677 Long-term portion of lease obligations $ 17,528,282 |
Contract termination liability
Contract termination liability | 12 Months Ended |
Dec. 31, 2022 | |
Contract termination liability | |
Contract termination liability | 12. Pursuant to the Manufacturing Agreement, Zongshen agreed to manufacture the Company’s SOLO vehicles. The Company agreed to certain target purchase volumes for the period from June 1, 2021 to November 30, 2023. In December 2022, the Company provided written notice to Zongshen to cease production of the G3 SOLO in accordance with the terms of the Manufacturing Agreement. Subsequent to December 31, 2022, Zongshen provided written notice to the Company of $22.8 million related to the cease production notice and an estimate of costs associated with concluding the Manufacturing Agreement. The Company does not agree with Zongshen’s calculation of monetary claims; however, as of December 31, 2022, the Company has accrued a liability of $15.7 million in termination provisions under the Manufacturing Agreement including the purchase of excess parts, production molds and payment for an additional 129 completed vehicles. The Company is currently evaluating potential claims against Zongshen for breach of express and implied conditions and warranties arising from any defects previously noted for the G3 SOLO. The quantum of such claims cannot be ascertained at this time, and any formal claims which may be made by Zongshen. The Company is therefore evaluating its right to setoff such damages against any such formal claims if made. The parties are presently in discussions to conclude the Manufacturing Agreement and claims arising therefrom, however, there are no formal legal claims by either party at this time. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2022 | |
Income tax | |
Income tax | 13. Loss before income taxes consisted of the following: December 31, 2022 December 31, 2021 Canadian operations $ (90,933,403) $ (31,972,273) U.S. operations (32,734,055) (6,858,947) Other operations (7,501) 52,574 $ (123,674,959) $ (38,778,646) Provisions for federal, foreign and state income taxes in the consolidated statements of operations consisted of the following components: Year ended December 31, Year ended December 31, 2022 2021 Current expense: Federal $ 23,554 $ 850 Current expense and total income tax expense $ 23,554 $ 850 The Company’s effective tax rate was 27% for the years ended December 31, 2022 and 2021. The following summary reconciles income taxes at the statutory rate of 27% applicable for all periods presented to the Company’s actual income tax expense: Year ended Year ended December 31, 2022 December 31, 2021 Income taxes at statutory rate $ (33,392,239) $ (10,470,234) Increase (decrease) in taxes resulting from: Non-deductible business expenses 651,693 (4,611,226) Tax effects attributable to foreign operations 150 (11,566) Change in estimates 1,332,196 15,204 Share issue costs and other 56,869 (1,138,691) Change in valuation allowance 31,374,885 16,217,363 Income tax expense (benefit) $ 23,554 $ 850 The temporary differences that give rise to significant portion of the deferred tax assets and liabilities are as follows: December 31, 2022 December 31, 2021 Deferred tax assets Net operating loss carryforwards $ 49,865,691 $ 32,091,217 Inventory 2,216,526 — R&D expenditure 2,599,268 — Lease liability 680,539 509,063 Property, plant and equipment 1,898,663 1,563,933 Share issue costs 1,393,210 2,152,000 SR&ED expenditures 696,474 794,092 Other assets / liabilities 8,870,158 8,280 Stock based compensation 1,410,199 426,385 Deferred tax asset, gross 69,630,728 37,544,740 Valuation allowance 67,597,167 36,279,269 Deferred tax assets, net $ 2,033,561 $ 1,265,471 Deferred tax liabilities Cloud computing assets $ (1,391,825) $ (687,782) Lease assets (641,736) (468,657) Intangible assets — (109,032) Deferred tax liabilities $ (2,033,561) $ (1,265,471) Net deferred tax assets (liabilities) $ — $ — As of December 31, 2022, the Company has approximately $173,348,893 non-capital loss carryforwards in Canada with expiration dates between 2034 and 2042 and approximately $10,286,625 non-capital loss carryforwards in U.S. that can be carried forward indefinitely until used. The Company has provided a valuation allowance against the full amount of such losses, which the Company does not expect to utilize. |
Derivative liabilities
Derivative liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Derivative liabilities | |
Derivative liabilities | 14. The exercise price of certain warrants is denominated in CAD; however, the functional currency of the Company is USD. Consequently, the value of the proceeds on exercise is not fixed and will vary based on foreign exchange rate movements. The warrants when issued other than as compensation for goods and services are therefore a derivative for accounting purposes and are required to be recognized as derivative liabilities and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as non-cash gain or loss in the consolidated statements of operations and comprehensive loss. Upon exercise, the holders will pay the Company the respective exercise price for each warrant exercised in exchange for one common share of the Company and the fair value at the date of exercise and the associated non-cash liability will be reclassified to share capital. The non-cash liability associated with any warrants that expire unexercised will be recorded as a gain in the consolidated statements of operations and comprehensive loss. There are no circumstances in which the Company would be required to pay any cash upon exercise or expiry of the warrants. Changes in the value of the liability related to the warrants for the years ended December 31, 2022 and 2021 were as follows: Number of Warrants Amount Outstanding at December 31, 2020 9,231,196 $ 32,439,081 Warrants exercised (4,228,574) (13,327,450) Warrants expired (3,198,857) — Revaluation — (18,920,428) Outstanding at December 31, 2021 1,803,765 191,203 Warrants exercised — — Warrants expired 1,172,767 — Revaluation — (191,203) Outstanding at December 31, 2022 630,998 $ — The following table provides the relevant information on the outstanding warrants as at December 31, 2022: Number of warrants Number of warrants Date of issuance outstanding exercisable Exercise price Expiry date May 14, 2018 33,436 33,436 CAD$16 May 14, 2023 June 5, 2018 59,325 59,325 CAD$12 June 5, 2023 June 13, 2018 257,390 257,390 CAD$12 June 13, 2023 June 25, 2018 75,254 75,254 CAD$12 June 25, 2023 July 18, 2018 150,847 150,847 CAD$12 July 18, 2023 July 20, 2018 54,746 54,746 CAD$12 July 20, 2023 630,998 630,998 The fair value of the derivative warrant liabilities was estimated using the Black-Scholes option pricing model and based on the following assumptions: Year ended Year ended December 31, 2022 December 31, 2021 Share price $ 0.6 $ 2.28 Exercise price $ 8.85 $ 1.58-$9.49 Annualized volatility 77.8 % 61 % Risk-free interest rate 3.97 % 1.4 % Dividend rate 0 % 0 % The Company measured its derivative warrant liabilities at fair value on a recurring basis. These financial liabilities were measured using level 2 inputs. The Company uses the historical volatility of the underlying share to establish the expected volatility of the warrants. An increase or decrease in this assumption to estimate the fair values using the Black-Scholes option pricing model would result in a decrease or an increase in the fair value of the instruments, respectively. |
Share capital and other compone
Share capital and other components of equity | 12 Months Ended |
Dec. 31, 2022 | |
Share capital and other components of equity | |
Share capital and other components of equity | 15. Share capital The Company is authorized to issue an unlimited number of common shares without par value. The Company is authorized to issue an unlimited number of preferred shares without par value. At December 31, 2022, the Company had 119,287,917 issued and outstanding common shares (December 31, 2021 – 117,338,964) and Nil preferred shares (December 31, 2021 – Nil). Share options exercised During the year ended December 31, 2022, the Company issued 1,615,430 common shares for options exercised by option holders for proceeds of $487,054 (2021 – 2,456,240 shares for proceeds of $1,145,538). RSUs released During the year ended December 31, 2022, the Company issued 333,523 common shares for restricted share units (“RSUs”) exercised by officers and decreased share capital by $175,526 (2021 – 118,497 shares for share capital decrease of $185,274). Warrants On exercise, each warrant allows the holder to purchase one common share of the Company or to exchange common share of the Company cashless base on formula set in the warrant agreement. Changes in the value of equity related to the warrants for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average warrants exercise price warrants exercise price Warrants outstanding, beginning 5,598,256 $ 5.23 5,839,687 $ 4.01 Warrants exercised — — (41,431) 3.34 Warrants expired (202,775) 16.3 (200,000) 4.66 Warrants outstanding, ending 5,395,481 $ 4.28 5,598,256 $ 5.23 Warrants of the Company classified as equity are composed of the following as at December 31, 2022: Number of warrants Number of warrants Date of issuance outstanding exercisable Exercise price Expiry date October 31, 2017 125,000 125,000 $ 15 October 31, 2024 August 8, 2018 4,513,253 4,513,253 $ 4.27 August 8, 2023 November 9, 2018 7,440 7,440 $ 3.2 November 9, 2023 November 9, 2018 749,788 749,788 $ 2.56 May 9, 2024 5,395,481 5,395,481 |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-based payments | |
Share-based payments | 16. Under the Company’s share-based payment arrangements, a total stock-based compensation of $4,985,954 was recognized in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2022 (2021 - $5,065,330). Share-based compensation expense recorded in December 31, 2022 December 31, 2021 General and administrative expenses $ 3,956,824 $ 3,694,641 Research and development expenses 864,619 821,706 Sales and marketing expenses 164,511 548,983 $ 4,985,954 $ 5,065,330 Stock options The Company adopted its 2020 Stock Incentive Plan (the “Stock Incentive Plan”) on July 9, 2020, which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company certain stock-based compensation awards including non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 30,000,000. Such stock options may be exercisable for a period of up to 10 years from the date of grant. Stock options may be exercised no later than 90 days following cessation of the optionee’s position with the Company unless any exercise extension has been approved in advance by the Plan Administrator. Stock options granted may vest based on terms and conditions set out in the stock option agreements themselves. On exercise, each stock option allows the holder to purchase one common share of the Company or to exchange common share of the Company without cash payment for the number of common shares calculated by a formula as set forth in the stock option agreement. The changes in stock options during the years ended December 31, 2022, and 2021 are as follows: December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average options exercise price options exercise price Options outstanding, beginning 11,974,300 $ 2.73 13,008,364 $ 2.14 Options granted 7,346,185 1.39 3,217,378 3.94 Options exercised (1,623,864) 0.39 (3,785,174) 1.58 Options forfeited/expired/cancelled (2,974,623) 2.97 (466,268) 2.85 Options outstanding, ending 14,721,998 $ 2.27 11,974,300 $ 2.73 Details of stock options outstanding as at December 31, 2022 were as follows: Weighted average Number of options Number of options Exercise price contractual life outstanding exercisable $2.00 CAD 1.25 75,000 75,000 $1.08 6.81 455,616 235,333 $1.11 6.93 3,750,000 — $1.50 6.56 821,149 427,021 $1.91 3.05 2,955,000 2,756,391 $1.94 6.30 498,742 251,677 $2.13 6.10 97,340 55,415 $2.45 3.59 1,250,000 1,250,000 $2.53 3.61 50,000 50,000 $2.62 0.73 700,000 700,000 $3.01 1.93 750,000 750,000 $3.40 2.37 1,035,000 1,035,000 $3.41 4.56 702,973 618,407 $3.55 5.54 63,408 60,838 $3.56 5.87 207,479 134,012 $3.77 3.95 160,485 160,485 $4.15 1.95 754,532 754,532 $5.00 0.92 193,629 193,629 $7.23 5.03 75,455 75,455 $7.75 5.13 48,690 39,940 $9.60 1.49 77,500 77,500 14,721,998 9,700,635 The weighted average grant date fair value of stock options granted during the year ended December 31, 2022 was $0.90 (2021 - $1.99). The fair value was calculated using the Black-Scholes option pricing model using the following weighted average assumptions: Year ended Year ended December 31, 2022 December 31, 2021 Expected life of options 3.85-5 years 4-5 years Annualized volatility 61%-123.7 % 61%-62.29 % Risk-free interest rate 1.75% - 4.23 % 0.34% - 1.4 % Dividend rate 0 % 0 % During the year ended December 31, 2022, the Company recognized stock-based compensation expense of $3,920,423 (2021 - $4,389,344) for stock options granted. Unrecognized compensation cost of $3,400,865 as at December 31, 2022 with a weighted average period remaining of 6.85 years ($6,120,387 unrecognized compensation cost as at December 31, 2021 with a weighted average period remaining of 7.94 years). The use of a valuation model for the options requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the combination of the observed volatility for comparable companies and the Company’s historical volatility. The expected time to maturity was based on the weighted-average vesting terms and contractual terms of the awards. The dividend yield was based on the Company’s expected dividend rate. The risk-free interest rate was based on U.S. Treasury rates commensurate with the expected life of the award. We use the simplified method for stock options with no market conditions, which is a weighted average of the vesting term and contractual term, to determine expected term. The simplified method was adopted since we do not believe that historical experience is representative of future performance because of the changes in stock prices. DSUs Deferred Stock Units (“DSUs”) are stock-based awards that may be granted by the Company to certain eligible participants pursuant to its Stock Incentive Plan. The Company allows the holders of the DSUs to settle the DSUs in cash or common shares. During the year ended December 31, 2022, the Company issued 42,879 DSUs (2021 – 51,468 DSUs), which will vest over one year. Changes in the value of the DSUs liability for the years ended December 31, 2022 and 2021 were as follows: Number of DSU Amount Balance, December 31, 2020 — $ — Reclassification to liability 44,623 152,165 DSUs exercised (11,510) (39,250) Issuance 51,468 — Stock-based compensation expense — (59,553) Balance, December 31, 2021 84,581 $ 53,362 DSUs exercised — — Issuance 42,879 — Stock-based compensation expense — 23,114 Balance, December 31, 2022 127,460 $ 76,476 The number and weighted average share prices of DSUs are as follows: December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average DSUs share price DSUs share price DSUs outstanding, beginning 84,581 $ 3.41 44,623 $ 3.41 DSUs granted 42,879 2.24 51,468 3.41 DSUs exercised — — (11,510) 3.41 DSUs outstanding, ending 127,460 $ 3.02 84,581 $ 3.41 Details of DSUs outstanding as at December 31, 2022 are as follows: Weighted average Number of DSUs Number of DSUs Deemed value contractual life outstanding exercisable $3.02 8.59 127,460 127,460 The fair value of the DSUs liabilities was estimated using the stock price as of December 31, 2022. Stock-based compensation recognized under this plan amounted to $23,114 for the years ended December 31, 2022 (2021 – income of $59,553). Unrecognized compensation cost of $1,691,565 as at December 31, 2022 with a weighted average period remaining of 8.59 years ($223,107 unrecognized compensation cost as at December 31, 2021 with a weighted average period remaining of 9.92 years). RSUs RSUs are stock-based awards that may be granted by the Company to certain eligible participants pursuant to its current Plan which was ratified by Company shareholders on July 9, 2020. RSUs are accounted for as equity-settled share based payment transactions as the obligations under an RSU will be settled through the issuance of common shares. The changes in RSUs during the year ended December 31, 2022 were as follows: December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average options exercise price options exercise price RSUs outstanding, beginning 649,473 $ 3.42 507,849 $ 3.44 RSUs granted 1,875,000 1.02 450,442 3.41 RSUs exercised (466,731) 3.42 (169,283) 3.44 RSUs expired (182,742) 3.42 (139,535) 3.44 RSUs outstanding, ending 1,875,000 $ 1.02 649,473 $ 3.42 Details of RSUs outstanding as at December 31, 2022 were as follows: Weighted average Number of Number of contractual RSUs RSUs Deemed value life outstanding exercisable $1.02 9.94 1,875,000 — During the year ended December 31, 2022, the Company recognized stock-based compensation expense of $1,042,418 (2021 - $735,539) for RSUs granted during the year. Unrecognized compensation cost was $Nil as at December 31, 2022 ($978,449 unrecognized compensation cost as at December 31, 2021 with a weighted average period remaining of 9.72 years). |
Basic and Diluted loss per shar
Basic and Diluted loss per share | 12 Months Ended |
Dec. 31, 2022 | |
Basic and Diluted loss per share | |
Basic and Diluted loss per share | 17. The calculation of basic and diluted loss per share for year ended December 31, 2022, was based on the net loss attributable to common shareholders of $123,698,513 (2021 – $38,779,496) and the weighted average number of common shares outstanding of 118,739,410 (2021 – 111,720,726). Fully diluted loss per share did not include the effect of 14,721,998 stock options (2021 – 11,974,300), 6,026,479 warrants (2021 – 7,402,021), 127,460 DSUs (2021 – 84,581) and 1,875,000 RSUs (2021 – 649,473) as the effect would be anti-dilutive. |
Segmented information
Segmented information | 12 Months Ended |
Dec. 31, 2022 | |
Segmented information | |
Segmented information | 18. The Company operated in two reportable business segments for the years ended December 31, 2022 and 2021. The two reportable business segments offer different products, require different production processes, and are based on how the financial information is produced internally for the purposes of making operating decisions. The following summary describes the operations of each of the Company’s reportable business segments: ● Electric Vehicles – development and manufacture of electric vehicles for mass markets, and ● Custom built vehicles – development and manufacture of high-end custom-built vehicles. During the year ended December 31, 2022, the Company stopped receiving orders for the custom built vehicles. Effective the fourth quarter 2022, the Company has been operating in one reportable business segment – Electric Vehicles business segment in Canada and United States. Year ended December 31, 2022 Year ended December 31, 2021 Custom Built Custom Built Electric Vehicles Vehicles Electric Vehicles Vehicles Revenue $ 6,238,944 $ 573,502 $ 1,174,310 $ 926,460 Gross profit (26,087,321) (168,015) (2,334,898) 100,987 Depreciation and amortization (5,564,144) (16,513) (4,204,091) (47,183) Operating expenses (78,382,489) (79,932) (51,581,101) (219,502) Other items (13,397,864) 21,319 19,174,298 332,844 Current income tax recovery (23,554) — (850) — Deferred income tax recovery — — — — Net (loss)/income (123,455,372) (243,141) (38,946,642) 167,146 FX translation 24,844 39,581 587 — Comprehensive (loss)/income $ (123,430,528) $ (203,560) $ (38,946,055) $ 167,146 December 31, 2022 December 31, 2021 Electric Custom Built Electric Custom Built Vehicles Vehicles Vehicles Vehicles Inventory $ 4,233,055 $ — $ 3,243,267 $ 337,183 Plant and equipment, net 16,452,477 — 8,379,810 6,668 Operating lease right-of-use assets 9,031,277 — 1,511,875 225,534 Other assets 5,081,869 — 3,172,057 — Total assets $ 181,186,106 $ 60,323 $ 254,719,110 $ 678,927 Sales to unaffiliated customers: Year ended Year ended December 31, 2022 December 31, 2021 United States $ 6,238,950 $ 1,750,151 Canada 573,496 350,619 Total $ 6,812,446 $ 2,100,770 Plant and equipment and right-of-use assets: Year ended Year ended December 31, 2022 December 31, 2021 United States $ 23,113,904 $ 2,591,852 Canada 2,366,861 3,100,529 Other foreign countries 2,989 4,431,506 Total $ 25,483,754 $ 10,123,887 |
Fair value
Fair value | 12 Months Ended |
Dec. 31, 2022 | |
Fair value | |
Fair value | 19. The following table presents the hierarchy for our financial liabilities measured at fair value on a recurring basis as of December 31, 2022: Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ — $ — Share-based compensation liability — 76,476 — 76,476 Total $ — $ 76,476 $ — $ 76,476 The following table presents the hierarchy for our financial liabilities measured at fair value on a recurring basis as of December 31, 2021: Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ 191,203 $ — $ 191,203 Share-based compensation liability — 53,362 — 53,362 Total $ — $ 244,565 $ — $ 244,565 Financial liabilities measured at fair value at December 31, 2022 consisted of the non-transferrable warrants denominated in CAD and Deferred Stock Units. The fair value of Deferred Stock Units is classified as level 2, and the fair value of the non-transferrable warrants are classified as level 2 in the fair value hierarchy. The fair value of the Deferred Stock Units was measured using the quoted market price for common shares of the Company on the Nasdaq. The fair value of the DSUs was measured using the quoted market price on the Nasdaq. The fair value of the non-transferrable warrants denominated in CAD were calculated using the Black-Scholes Option Pricing Model using the historical volatility of comparable companies as an estimate of future volatility. At December 31, 2022, if the volatility used was increased by 10% the impact would be an increase to the derivative liabilities of $Nil (2021 - $53,376) with a corresponding increase in net loss and comprehensive loss. Also see Note 8 and Note 9. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and contingencies | |
Commitments and contingencies | 20. Commitments As at December 31, 2022 and 2021, the Company had $Nil (December 31, 2021 - $2,686,537) capital commitments for development of its IT infrastructure and purchase equipment for Mesa facility. Also see Note 21. Contingencies In the ordinary course of business, we may from time to time become subject to legal proceedings and claims arising in connection with ongoing business activities. The results of litigation and claims cannot be predicted with certainty, and unfavorable resolutions are possible and could materially affect our results of operations, financial condition, or cash flows. In addition, regardless of the outcome, litigation could have an adverse impact on us as a result of legal fees, the diversion of management’s time and attention and other factors. Also see Note 12. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent events | |
Subsequent events | 21. a. On February 17, 2023, the Company announced a voluntary recall of the G3 SOLO. The Company paused deliveries and sales of the SOLO while investigating the issue. The recall was made due to the vehicle potentially experiencing a loss of propulsion while driving, which is a condition that existed as of December 31, 2022. The Company was required to fix the issue within a specific timeframe from the date of recall announcement. After a thorough investigation, the Company was not able to determine the root cause and fix of the said issue and has therefore issued a buy-back program for all 429 retailed vehicles. The Company has recorded a recall provision of $ 8,915,044 as an estimate of the cost to buy back all retailed vehicles. This amount is included within accrued liabilities. b. On March 1, 2023, the Company entered into a Contract Assembly Agreement (the “Assembly Agreement”) with GLV, LLC (“GLV”) to assemble the Volcon Grunt EVO and Runt off-road electric motorcycles. In accordance with the Assembly Agreement, the Company will perform contract assembly services to GLV for 150 days in the Company’s Mesa facility and GLV will ship materials and parts to the plant. The Company will charge GLV a fixed service fee per product plus additional fees for support services. Both the Company and GLV have the option to terminate after the first 90 days of the Assembly Agreement upon giving the requisite 30 day notice. Upon termination, GLV will pay the Company all committed, non-cancellable costs and expenses and the Company will return in-process products as well as all GLV materials and parts. c. On March 3, 2023, the Company entered into a Design and Supply Agreement (the “Design Agreement”) with GLV, pursuant to which GLV will provide design, development, and manufacturing services of the Company’s two-seat electric motor vehicle, the “E4”. The estimated cost as set out in the Design Agreement is $ 13,692,000 , where 80 % will be paid during 2023 with the remaining costs to be paid in 2024. The Company may terminate the Design Agreement upon 30 days written notice to GLV. The Company will be responsible for the costs of any finished and conforming products delivered to the Company as well as the costs of the required materials on hand at GLV’s purchase price. d. On March 27, 2023, the Company received a deficiency letter from Nasdaq’s Listing Qualifications Department notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued inclusion on the Nasdaq Capital Market. In accordance with Nasdaq rules, the Company has been provided an initial period of 180 calendar days, or until September 25, 2023, to regain compliance with the Minimum Bid Price Requirement. If, at any time before this date, the closing bid price for the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days, the Staff will provide the Company written confirmation of compliance with the Minimum Bid Price Requirement. The Company may be eligible for an additional 180 calendar day compliance period. If the Company’s share price does not meet the minimum listing requirements in the initial or extended periods, it may seek shareholder approval to execute a reverse stock split. e. On March 28, 2023, the Company entered into a lease agreement with WeWork Workplace LLC to secure office space in Burnaby, BC, Canada beginning May 1, 2023, as the new location of the Company’s headquarters. The current headquarter lease has been renegotiated to end in June 2023. The new facility lease is for one year and costs $ 5,680 per month. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Basis of presentation and consolidation | Basis of presentation and consolidation As a non-U.S. company listed on the NASDAQ, the United States Securities and Exchange Commission (“SEC”) requires the Company to perform a test on the last business day of the second quarter of each fiscal year to determine whether the Company continues to meet the definition of a foreign private issuer (“FPI”). Historically, the Company met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs. On June 30, 2022, the Company performed the test and determined that the Company no longer met the definition of an FPI. As such, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers. In the year ended December 31, 2022, the Company has therefore retrospectively adopted U.S. GAAP. The consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP for all periods presented. Comparative figures, which were previously prepared in accordance with IFRS, have been adjusted as required to be compliant with the Corporation’s accounting policies under US GAAP. These consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated from the Company’s consolidated financial statements. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from the estimates made by management. Estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Estimates include the following: ● estimating the write down of inventory to net realizable value; ● estimating the fair value of stock options that are based on market conditions; ● estimating the incremental borrowing rate for calculating the lease liabilities; ● estimating the warranty provision and recall provision; ● estimating the contingent liabilities for the contract termination; and ● estimating the fair value of the long-lived assets to determine and measure impairment losses on property and equipment, right-of-use assets and cloud computing assets included in other assets. The Covid-19 outbreak brings significant uncertainty as to the potential impact on our operations, supply chains for parts and sales channels for our products, and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. Therefore, the Company has not changed any estimates and assumptions in the preparation of the consolidated financial statements. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits with banks with original maturities of ninety days or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. |
Inventory | Inventory Inventory consists of vehicles and parts held for resale or for use in fixed fee contracts and is valued at the lower of cost and net realizable value. The cost of inventory includes purchase costs and conversion costs, and is determined principally by using the weighted average method. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, disposal, and transportation, and any other estimated costs necessary to make the sale. As necessary, the Company records write-downs for excess, slow moving and obsolete inventory. To determine these amounts, the Company regularly reviews inventory quantities on hand and compares them to estimates of historical utilization, future product demand, and production requirements. Write-downs of inventory to net realizable value are recorded in cost of revenue in the consolidated financial statements. |
Prepaid expenses and deposits | Prepaid expenses and deposits The Company pays for some goods and services in advance and recognizes these expenses as prepaid expenses at the balance sheet date. If certain prepaid expenses extend beyond one-year, those are classified as non-current assets. |
Plant and equipment | Plant and equipment Plant and equipment are measured at historical cost less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditures that are directly attributable to the acquisition of the asset, including all costs incurred in bringing the asset to its present location and condition. Depreciation is generally computed using the straight-line method over the estimated useful lives of the respective assets, as follows: Furniture and equipment 5 years Computer hardware 3 years Computer software 2 years Vehicles 3 years Production molds 3 years Leasehold improvements over term of lease Right-of-use assets over term of lease |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets, such as plant, and equipment, finite-lived intangible assets, and operating lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group exceeds the undiscounted cash flows, an impairment is recognized to the extent that the carrying amount exceeds the fair value. Fair value can be determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Any impairment loss recognized is not reversed in future periods. Goodwill is assessed for impairment annually on December 31 or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit more likely than not exceeds its fair value. Goodwill is tested for impairment at the reporting unit level, which is the operating segment, or a component, which is one level below that operating segment. Components are aggregated as a single reporting unit if they have similar economic characteristics. Goodwill is tested for impairment when there is a triggering event indicating that the carrying amount may be impaired. When impairment indicators are identified, the Company compares the reporting unit’s fair value to its carrying amount, including goodwill. An impairment loss is recognized as the difference, if any, between the reporting unit’s carrying amount and its fair value, to the extent the difference does not exceed the total amount of goodwill allocated to the reporting unit. Any impairment loss recognized is not reversed in future periods. For the purposes of annual impairment testing, the carrying amounts of goodwill are allocated to the reporting units. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Factors considered in a qualitative assessment include, among other things, macroeconomic conditions, industry and market considerations, financial performance of the respective reporting unit and other relevant entity and reporting-unit specific considerations. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment. The fair value of the reporting unit is determined by analyzing scenarios of business projections and sensitivities attempting to model various assumptions as to how the revenues and cash flows of the business may evolve depending on factors including macroeconomic conditions, industry and market considerations, cost factors and overall financial performance specific to the reporting unit. The Company estimates the fair values of its reporting units based on discounted cash flow (“DCF”) methodology reflecting the latest projections. |
Cloud computing arrangements | Cloud computing arrangements Capitalized implementation costs for cloud computing arrangements represents the primary balance of the Company’s other assets. The Company’s cloud computing arrangements primarily comprise of hosting arrangements which are service contracts, whereby the Company gains remote access to use enterprise software hosted by the vendor or another third party on an as-needed basis for a period of time in exchange for a subscription fee. Subscription fees are usually prepaid and recorded in operating expense over the period that the Company has access to use the software. Implementation costs for cloud computing arrangements are capitalized if certain criteria are met and consist of internal and external costs directly attributable to developing and configuring cloud computing software for its intended use. Amortization of capitalized implementation costs is recorded on a straight-line basis over the term of the cloud computing arrangement, which is the non-cancellable period of the agreement, together with periods covered by renewal options which the Company is reasonably certain to exercise. We only capitalize subsequent additions, modifications or upgrades to internal-use software to the extent that such changes allow the software to perform a task it previously did not perform. |
Leases | Leases The Company enters into contractual arrangements for the utilization of certain non-owned assets. These principally relate to property for the Company’s offices, assembly facility and kiosk locations which have varying terms including extension and termination options. The Company determines if an arrangement is a lease at inception. Leases are evaluated at commencement to determine proper classification as an operating lease or a finance lease. The Company’s leases are all operating leases. The Company recognizes a right-of-use (“ROU”) asset and lease liability at lease commencement based on the present value of lease payments over the lease term. The Company generally uses its incremental borrowing rate as the discount rate as most of the Company’s lease arrangements do not provide an implicit borrowing rate. The incremental borrowing rate is estimated using a combination of risk free interest rate corresponding to lease terms, as well as a blended credit risk spread. For operating leases, fixed lease payments are recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, and has elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component. Certain lease agreements include variable lease payments that depend on an index, as well as payments for non-lease components, such as common area maintenance, and certain pass-through operating expenses such as real estate taxes and insurance. In instances where these payments are fixed, they are included in the measurement of our lease liabilities, and when variable, are excluded and recognized in the period in which the obligations for those payments are incurred. The Company’s leases do not contain any material residual value guarantees or payments under purchase and termination options. Lease terms are initially determined as the non-cancellable period of a lease adjusted for options to extend or terminate a lease that are reasonably certain to be exercised. Lease liabilities are subsequently measured at amortized cost using the effective interest method. Right of use assets are carried at cost less accumulated amortization, impairment losses, and any subsequent remeasurement of the lease liability. Initial cost comprises the lease liability adjusted for lease payments at or before the commencement date, lease incentives received, initial direct costs and an estimate of restoration costs. The Company has elected not to present short-term leases on the consolidated balance for leases that have lease terms of 12 months or less and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. The lease expense related to those short-term leases is recognized on a straight-line basis over the lease term. |
Revenue | Revenue The Company generates revenue primarily through the sale of electric vehicles as well as parts sales, services, repairs, and support services, and sales of custom built vehicles; however, the revenue from custom built vehicles permanently ceased in the fourth quarter 2022. Sales of electric vehicles Vehicle sales revenue is generated from the sale of electric vehicles to customers. There is one performance obligation identified in vehicle sale arrangements. Shipping and handling provided by Company is considered a fulfillment activity. Payment is typically received at or prior to the transfer of control of the vehicle to the customer. The Company recognizes revenue related to the vehicle when the customer obtains control of the vehicle which occurs at a point in time either upon completion of delivery to the agreed upon delivery location or upon pick up of the vehicle by the customer. The Company’s vehicle contracts do not contain a significant financing component. The Company has elected to exclude sales taxes and amounts collected on behalf of third parties from the measurement of the transaction price. The Company provides a manufacturer’s warranty on all vehicles sold. The warranty covers the rectification of reported defects via repair, replacement, or adjustment of faulty parts or components. The warranty does not cover any item where failure is due to normal wear and tear. This assurance-type warranty does not create a performance obligation separate from the sale of the vehicle. The estimated cost of the assurance-type warranty is accrued at the time of vehicle sale. These provisions are estimated based on historical warranty claim experience with consideration given to the expected level of future warranty costs as well as current information on repair costs. The provision for product warranties are utilized for expenditures based on the demand from customers. The warranty expense recorded as a component of cost of revenue in the consolidated statements of operations was approximately $0.7 million for the year ended December 31, 2022. As disclosed in Notes 10 and 21, the Company has decided to buy-back all the vehicles sold and has recognized a recall provision at December 31, 2022 in relation to the anticipated expenditures under this program to repurchase all the G3 SOLO vehicles previously sold. At December 31, 2022, no additional warranty provision has been recognized other than the recall provision as no future warranty services would be required following Company’s decision to buy-back the vehicles under the recall. As of December 31, 2021, $ nil warranty provision was recognized based on management’s estimate. Part sales The sale of parts is a single performance obligation to be recognized at the point in time when control is transferred to the customer. Shipping and handling provided by Company is considered a fulfillment activity. Payment for the products sold are made upon invoice or in accordance with payment terms customary to the business. The Company’s parts sales do not contain a significant financing component. The Company has elected to exclude sales taxes from the measurement of the transaction price. Services, repairs and support services Services, repairs and support services are recognized in the accounting period when the services are rendered. Payment for the services are made upon invoice or in accordance with payment terms customary to the business. The Company’s service revenue does not contain a significant financing component. The Company has elected to exclude sales taxes from the measurement of the transaction price. Sales of custom built vehicles The Company manufactures and sells custom built vehicles typically on fixed fee arrangements with its customers. Revenue is recognized when the Company has transferred control to the customer which generally occurs upon completion of shipment to the customer. There is one performance obligation identified in vehicle sale arrangements. Shipping and handling provided by the Company is considered a fulfillment activity. Payment is typically received at or prior to the transfer of control of the vehicle to the customer. The Company’s vehicle contracts do not contain a significant financing component. The Company has elected to exclude sales taxes and amounts collected on behalf of third parties from the measurement of the transaction price. |
Foreign currency translation | Foreign currency translation The Company and its subsidiaries’ functional currency is U.S. dollars (“USD”), except for the functional currency of Intermeccanica. International Inc. is CAD and the functional currency of EMV Automotive Technology (Chongqing) Inc. is the Chinese RMB. The Company reassessed the functional currency during its first quarter of 2021 and determined that the factors now supported USD as the functional currency for the Company and certain of its subsidiaries. The Company has applied the change in functional currency from Canadian dollars (“CAD”) to USD effective January 1, 2021. Each entity within the consolidated group records transactions using its functional currency, being the currency of the primary economic environment in which it operates. Foreign currency transactions are translated into the respective functional currency of each entity using the foreign currency rates prevailing at the date of the transaction. Period-end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period-end foreign currency rates. Foreign currency gains and losses arising from the settlement of foreign currency transactions are recognized in the consolidated statements of operations and comprehensive loss. On consolidation, the assets and liabilities of foreign operations that have a functional currency other than USD are translated into USD at the exchange rates in effect at the end of the reporting period. Revenues and expenses are translated at the average monthly exchange rates prevailing during the period. The resulting translation gains and losses are included within other comprehensive loss. The cumulative deferred translation gains or losses on the foreign operations are reclassified to net income, only on disposal of the foreign operations. |
Advertising and marketing costs | Advertising and marketing costs The Company expenses advertising costs when incurred in sales and marketing expenses. |
Research and development expenses | Research and development expenses Research and development expenses consist primarily of personnel-related expenses, contractor fees, engineering design and testing expenses, and allocated facilities cost. Most of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. Research and development expenses have been expensed as incurred and included in the consolidated statements of operations and comprehensive loss. |
Stock-based compensation | Stock-based compensation The Company has a share-based compensation plan under which various types of equity-based awards may be granted, including stock options, deferred stock units (DSUs) and restricted stock units (RSUs). We use the fair value method of accounting for our stock options, DSUs and RSUs. The fair value of stock option awards with only service and/or performance conditions is estimated on the grant or offering date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the risk-free interest rate, expected term and expected volatility. These inputs are subjective and generally require significant judgment. The fair value of DSUs and RSUs is measured on the grant date based on the closing fair market value of our common stock. Stock-based compensation expense is recognized over the vesting period on a straight-line basis. The Company estimates expected forfeitures at the time of grant instead of accounting for forfeitures as they occur. For performance-based awards, stock-based compensation expense is recognized over the expected performance achievement period of individual performance milestones when the achievement of each individual performance milestone becomes probable. For performance-based awards with a vesting schedule based on the attainment of both performance and market conditions, stock-based compensation expense associated with each tranche is recognized over the longer of (i) the expected achievement period for the operational milestone for such tranche and (ii) the expected achievement period for the related market capitalization milestone determined on the grant date, beginning at the point in time when the relevant operational milestone is considered probable of being achieved. If such operational milestone becomes probable any time after the grant date, we will recognize a cumulative catch-up expense from the grant date to that point in time. If the related market capitalization milestone is achieved earlier than its expected achievement period and the achievement of the related operational milestone, then the stock-based compensation expense will be recognized over the expected achievement period for the operational milestone, which may accelerate the rate at which such expense is recognized. The fair value of such awards is estimated on the grant date using Monte Carlo simulations. Stock-based compensation expense is recorded in general and administrative expenses, research and development expenses and sales and marketing expenses in the consolidated statements of operations and comprehensive loss. |
Income taxes | Income taxes Income taxes are comprised of current and deferred taxes. These taxes are accounted for using the liability method. Current tax is recognized in connection with income for tax purposes, unrealized tax benefits and the recovery of tax paid in a prior period and measured using the enacted tax rates and laws applicable to the taxation period during which the income or loss for tax purposes arose. Deferred tax is recognized on the difference between the carrying amount of an asset or a liability, as reflected in the financial statements, and the corresponding tax base, used in the computation of income for tax purposes (temporary differences) and measured using the enacted tax rates and laws as at the balance sheet date that are expected to apply to the income that the Company expects to arise for tax purposes in the period during which the difference is expected to reverse. Management assesses the likelihood that a deferred tax asset will be realized, and a valuation allowance is provided to the extent that it is more likely than not that all or a portion of a deferred tax asset will not be realized. The determination of both current and deferred taxes reflects the Company’s interpretation of the relevant tax rules and judgement. An unrealized tax benefit may arise in connection with a period that has not yet been reviewed by the relevant tax authority. A change in the recognition or measurement of an unrealized tax benefit is reflected in the period during which the change occurs. Income taxes are recognized in the consolidated statements of operations and comprehensive loss, except when they relate to an item that is recognized in other comprehensive loss or directly in equity, in which case, the taxes are also recognized in other comprehensive loss or directly in equity respectively. Where income taxes arise from the initial accounting for a business combination, these are included in the accounting for the business combination. Interest and penalties in respect of income taxes are not recognized in the consolidated statement of operations and comprehensive loss as a component of income taxes but as a component of interest expense. |
Contingencies | Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount within a range of loss can be reasonably estimated. When no amount within the range is a better estimate than any other amount, the Company accrues for the minimum amount within the range. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Net income or loss per share | Net income or loss per share Basic net earnings or loss per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted net earnings or loss per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held, for the effects of all dilutive potential common shares, which comprise warrants, share options, deferred share units, restricted share units and restricted shares granted to employees and directors. |
Segment reporting | Segment reporting Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s operations consisted of two operating segments - electric vehicles and custom-built vehicles, which are its reportable segments in year for 2022 and 2021. |
Fair value measurements | Fair value measurements The Company follows the accounting guidance in ASC 820, Fair Value Measurement The accounting guidance requires fair value measurements be classified and disclosed in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Our financial assets include cash and cash equivalents, receivables, and restricted cash. Our financial liabilities include trade payables and accrued liabilities, derivative liabilities, share-based compensation liability, and lease liabilities. The carrying amounts of these instruments, including cash and cash equivalents, receivables, restricted cash, and trade payables and accrued liabilities, are considered to be representative of their fair values because of their short-term nature. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentration of credit risk consist of principally cash and cash equivalents, bank deposits and certain receivables. The Company holds cash and cash equivalents with highly rated financial institutions. Balances with these institutions exceeded the Canadian Deposit Insurance Corporation insured amount of CAD$100 thousand as of December 31, 2022. The Company has not experienced any significant credit losses in these accounts and does not believe the Company is exposed to any significant credit risk on these instruments. |
Concentration of supply risk | Concentration of supply risk In September 2017, we entered into the Manufacturing Agreement with Zongshen. In 2022 and 2021, the delivery of SOLO vehicles to our customers and the revenue derived depended on Zongshen’s ability to fulfil its obligations under that Manufacturing Agreement. On December 20, 2022, the Company gave notice to Zongshen to immediately cease all production of SOLO vehicles due to the economic hardship and issues noted with the vehicles, pursuant to which, such concentration risk no longer existed (see Note 12). |
Standards issued but not yet effective | Standards issued but not yet effective All ASUs issued but not yet adopted were assessed and determined to be either not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of assets | Furniture and equipment 5 years Computer hardware 3 years Computer software 2 years Vehicles 3 years Production molds 3 years Leasehold improvements over term of lease Right-of-use assets over term of lease |
Cash and cash equivalents and_2
Cash and cash equivalents and restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and cash equivalents and restricted cash | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | December 31,2022 December 31,2021 Cash and cash equivalents $ 134,255,538 $ 221,928,008 Restricted cash 515,449 291,676 Total cash, cash equivalents and restricted cash $ 134,770,987 $ 222,219,684 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid expenses and other current assets | |
Schedule of prepaid expenses and other current assets | December 31,2022 December 31,2021 Solo deposit (with manufacturer) $ 7,133,451 $ 4,734,914 Battery cell deposit 300,000 6,121,372 Battery deposit — 100,207 Prepaid insurance 1,095,152 2,027,001 Prepaid rent and security deposit 495,112 444,976 Cloud computing assets 1,234,039 536,282 Other prepaid expenses 1,133,096 999,647 $ 11,390,850 $ 14,964,399 |
Inventory, net (Tables)
Inventory, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory, net | |
Schedule of inventory, net | December 31, 2022 December 31, 2021 Parts and batteries $ 1,242,055 $ 906,505 Work in progress — 128,424 Vehicles 18,022,771 4,232,736 Inventory provision (15,031,771) (1,687,215) $ 4,233,055 $ 3,580,450 |
Plant and equipment (Tables)
Plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Plant and equipment | |
Schedule of plant and equipment | December 31, 2022 December 31, 2021 Furniture and equipment $ 2,117,901 $ 927,430 Computer hardware and software 1,381,786 1,003,575 Vehicles 1,046,817 2,306,849 Leasehold improvements 12,862,333 1,560,676 Production tooling and molds 1,956,743 8,001,229 Total plant and equipment 19,365,580 13,799,759 Less: accumulated depreciation (2,913,103) (5,413,281) Plant and equipment, net $ 16,452,477 $ 8,386,478 |
Other assets (Tables)
Other assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other assets | |
Schedule of other assets | December 31, 2022 December 31, 2021 Security deposit $ 1,161,000 $ 1,161,000 Cloud computing assets 3,920,869 2,011,057 $ 5,081,869 $ 3,172,057 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and intangible assets | |
Schedule of definite-lived amortizable intangible assets and indefinite-lived intangibles | As of December 31, 2022 Gross carrying Accumulated Net carrying amount amortization amount Domain name $ 11,956 $ — $ 11,956 As of December 31, 2021 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 68,342 $ — $ 68,342 Non-compete covenants 19,639 16,444 3,195 Trade name 332,286 — 332,286 Domain name 11,956 — 11,956 $ 432,223 $ 16,444 $ 415,779 |
Trade payables and accrued li_2
Trade payables and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Trade payables and accrued liabilities | |
Schedule of trade payables and accrued liabilities | December 31, 2022 December 31, 2021 Trade payables $ 3,792,827 $ 1,249,861 Due to related parties 2,945 743,100 Recall provision (Note 21) 8,915,044 — Accrued liabilities 6,635,434 4,817,820 $ 19,346,250 $ 6,810,781 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of components of lease expense | Year ended December 31, Year ended December 31, 2022 2021 Operating lease expense Operating lease expense $ 2,260,556 $ 917,978 Short-term lease expense 1,238,114 1,230,716 $ 3,498,670 $ 2,148,694 |
Schedule of lease-related assets and liabilities as presented in the consolidated balance sheets | December 31, 2022 December 31, 2021 Assets: Operating lease right-of-use assets $ 9,031,277 $ 1,737,409 Liabilities: Current portion of operating lease liabilities $ 810,677 $ 392,279 Long-term portion of operating lease liabilities 17,528,282 1,494,992 Total operating lease liabilities $ 18,338,959 $ 1,887,271 |
Schedule of weighted-average remaining lease term and the weighted-average discount rate for the operating lease | December 31, 2022 December 31, 2021 Weighted average remaining operating lease term (in years) 9.41 6.61 Weighted average operating lease discount rate 10.28 % 7.73 % |
Schedule of supplemental cash flow information related to leases | Year ended December 31, Year ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,233,699 193,804 Non-cash item for amounts included in the measurement of lease liabilities: Leased assets obtained in exchange for new operating lease liabilities 8,592,776 1,575,434 |
Schedule of maturities of operating lease liabilities (excluding short-term leases) | December 31, 2022 2023 $ 2,665,698 2024 3,003,762 2025 2,933,488 2026 2,996,149 2027 2,748,552 Thereafter 15,704,730 Total minimum lease payments 30,052,379 Less: interest 11,713,420 Present value of lease obligations 18,338,959 Less: Current portion 810,677 Long-term portion of lease obligations $ 17,528,282 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income tax | |
Schedule of loss before income taxes | December 31, 2022 December 31, 2021 Canadian operations $ (90,933,403) $ (31,972,273) U.S. operations (32,734,055) (6,858,947) Other operations (7,501) 52,574 $ (123,674,959) $ (38,778,646) |
Schedule of provisions for federal, foreign and state income taxes | Year ended December 31, Year ended December 31, 2022 2021 Current expense: Federal $ 23,554 $ 850 Current expense and total income tax expense $ 23,554 $ 850 |
Summary of reconciliation of income taxes at the statutory rate to actual income tax expense | Year ended Year ended December 31, 2022 December 31, 2021 Income taxes at statutory rate $ (33,392,239) $ (10,470,234) Increase (decrease) in taxes resulting from: Non-deductible business expenses 651,693 (4,611,226) Tax effects attributable to foreign operations 150 (11,566) Change in estimates 1,332,196 15,204 Share issue costs and other 56,869 (1,138,691) Change in valuation allowance 31,374,885 16,217,363 Income tax expense (benefit) $ 23,554 $ 850 |
Schedule of temporary differences that give rise to significant portion of the deferred tax assets and liabilities | December 31, 2022 December 31, 2021 Deferred tax assets Net operating loss carryforwards $ 49,865,691 $ 32,091,217 Inventory 2,216,526 — R&D expenditure 2,599,268 — Lease liability 680,539 509,063 Property, plant and equipment 1,898,663 1,563,933 Share issue costs 1,393,210 2,152,000 SR&ED expenditures 696,474 794,092 Other assets / liabilities 8,870,158 8,280 Stock based compensation 1,410,199 426,385 Deferred tax asset, gross 69,630,728 37,544,740 Valuation allowance 67,597,167 36,279,269 Deferred tax assets, net $ 2,033,561 $ 1,265,471 Deferred tax liabilities Cloud computing assets $ (1,391,825) $ (687,782) Lease assets (641,736) (468,657) Intangible assets — (109,032) Deferred tax liabilities $ (2,033,561) $ (1,265,471) Net deferred tax assets (liabilities) $ — $ — |
Derivative liabilities (Tables)
Derivative liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative liabilities | |
Schedule of changes in the value of the liability related to the warrants | Number of Warrants Amount Outstanding at December 31, 2020 9,231,196 $ 32,439,081 Warrants exercised (4,228,574) (13,327,450) Warrants expired (3,198,857) — Revaluation — (18,920,428) Outstanding at December 31, 2021 1,803,765 191,203 Warrants exercised — — Warrants expired 1,172,767 — Revaluation — (191,203) Outstanding at December 31, 2022 630,998 $ — |
Schedule of information on the outstanding warrants | Number of warrants Number of warrants Date of issuance outstanding exercisable Exercise price Expiry date May 14, 2018 33,436 33,436 CAD$16 May 14, 2023 June 5, 2018 59,325 59,325 CAD$12 June 5, 2023 June 13, 2018 257,390 257,390 CAD$12 June 13, 2023 June 25, 2018 75,254 75,254 CAD$12 June 25, 2023 July 18, 2018 150,847 150,847 CAD$12 July 18, 2023 July 20, 2018 54,746 54,746 CAD$12 July 20, 2023 630,998 630,998 |
Schedule of fair value of the derivative warrant liabilities was estimated using the Black-Scholes option pricing model based on assumptions | Year ended Year ended December 31, 2022 December 31, 2021 Share price $ 0.6 $ 2.28 Exercise price $ 8.85 $ 1.58-$9.49 Annualized volatility 77.8 % 61 % Risk-free interest rate 3.97 % 1.4 % Dividend rate 0 % 0 % |
Share capital and other compo_2
Share capital and other components of equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share capital and other components of equity | |
Schedule of changes in the value of equity related to the warrants | December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average warrants exercise price warrants exercise price Warrants outstanding, beginning 5,598,256 $ 5.23 5,839,687 $ 4.01 Warrants exercised — — (41,431) 3.34 Warrants expired (202,775) 16.3 (200,000) 4.66 Warrants outstanding, ending 5,395,481 $ 4.28 5,598,256 $ 5.23 |
Schedule of warrants | Warrants of the Company classified as equity are composed of the following as at December 31, 2022: Number of warrants Number of warrants Date of issuance outstanding exercisable Exercise price Expiry date October 31, 2017 125,000 125,000 $ 15 October 31, 2024 August 8, 2018 4,513,253 4,513,253 $ 4.27 August 8, 2023 November 9, 2018 7,440 7,440 $ 3.2 November 9, 2023 November 9, 2018 749,788 749,788 $ 2.56 May 9, 2024 5,395,481 5,395,481 |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based payments | |
Schedule of total stock-based compensation recognized in the consolidated statements of operations and comprehensive loss | Share-based compensation expense recorded in December 31, 2022 December 31, 2021 General and administrative expenses $ 3,956,824 $ 3,694,641 Research and development expenses 864,619 821,706 Sales and marketing expenses 164,511 548,983 $ 4,985,954 $ 5,065,330 |
Schedule of changes in stock options and details of stock options outstanding | December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average options exercise price options exercise price Options outstanding, beginning 11,974,300 $ 2.73 13,008,364 $ 2.14 Options granted 7,346,185 1.39 3,217,378 3.94 Options exercised (1,623,864) 0.39 (3,785,174) 1.58 Options forfeited/expired/cancelled (2,974,623) 2.97 (466,268) 2.85 Options outstanding, ending 14,721,998 $ 2.27 11,974,300 $ 2.73 Weighted average Number of options Number of options Exercise price contractual life outstanding exercisable $2.00 CAD 1.25 75,000 75,000 $1.08 6.81 455,616 235,333 $1.11 6.93 3,750,000 — $1.50 6.56 821,149 427,021 $1.91 3.05 2,955,000 2,756,391 $1.94 6.30 498,742 251,677 $2.13 6.10 97,340 55,415 $2.45 3.59 1,250,000 1,250,000 $2.53 3.61 50,000 50,000 $2.62 0.73 700,000 700,000 $3.01 1.93 750,000 750,000 $3.40 2.37 1,035,000 1,035,000 $3.41 4.56 702,973 618,407 $3.55 5.54 63,408 60,838 $3.56 5.87 207,479 134,012 $3.77 3.95 160,485 160,485 $4.15 1.95 754,532 754,532 $5.00 0.92 193,629 193,629 $7.23 5.03 75,455 75,455 $7.75 5.13 48,690 39,940 $9.60 1.49 77,500 77,500 14,721,998 9,700,635 |
Schedule of weighted average assumptions used in calculation of fair value of stock options | Year ended Year ended December 31, 2022 December 31, 2021 Expected life of options 3.85-5 years 4-5 years Annualized volatility 61%-123.7 % 61%-62.29 % Risk-free interest rate 1.75% - 4.23 % 0.34% - 1.4 % Dividend rate 0 % 0 % |
Schedule of changes in the value of the DSUs liability | Number of DSU Amount Balance, December 31, 2020 — $ — Reclassification to liability 44,623 152,165 DSUs exercised (11,510) (39,250) Issuance 51,468 — Stock-based compensation expense — (59,553) Balance, December 31, 2021 84,581 $ 53,362 DSUs exercised — — Issuance 42,879 — Stock-based compensation expense — 23,114 Balance, December 31, 2022 127,460 $ 76,476 |
Schedule of number and weighted average share prices of DSUs | December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average DSUs share price DSUs share price DSUs outstanding, beginning 84,581 $ 3.41 44,623 $ 3.41 DSUs granted 42,879 2.24 51,468 3.41 DSUs exercised — — (11,510) 3.41 DSUs outstanding, ending 127,460 $ 3.02 84,581 $ 3.41 |
Schedule of DSUs outstanding | Weighted average Number of DSUs Number of DSUs Deemed value contractual life outstanding exercisable $3.02 8.59 127,460 127,460 |
Schedule of changes in RSUs | December 31, 2022 December 31, 2021 Number of Weighted average Number of Weighted average options exercise price options exercise price RSUs outstanding, beginning 649,473 $ 3.42 507,849 $ 3.44 RSUs granted 1,875,000 1.02 450,442 3.41 RSUs exercised (466,731) 3.42 (169,283) 3.44 RSUs expired (182,742) 3.42 (139,535) 3.44 RSUs outstanding, ending 1,875,000 $ 1.02 649,473 $ 3.42 |
Schedule of RSUs outstanding | Weighted average Number of Number of contractual RSUs RSUs Deemed value life outstanding exercisable $1.02 9.94 1,875,000 — |
Segmented information (Tables)
Segmented information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segmented information | |
Schedule of operations of each of the Company's reportable business segments | Year ended December 31, 2022 Year ended December 31, 2021 Custom Built Custom Built Electric Vehicles Vehicles Electric Vehicles Vehicles Revenue $ 6,238,944 $ 573,502 $ 1,174,310 $ 926,460 Gross profit (26,087,321) (168,015) (2,334,898) 100,987 Depreciation and amortization (5,564,144) (16,513) (4,204,091) (47,183) Operating expenses (78,382,489) (79,932) (51,581,101) (219,502) Other items (13,397,864) 21,319 19,174,298 332,844 Current income tax recovery (23,554) — (850) — Deferred income tax recovery — — — — Net (loss)/income (123,455,372) (243,141) (38,946,642) 167,146 FX translation 24,844 39,581 587 — Comprehensive (loss)/income $ (123,430,528) $ (203,560) $ (38,946,055) $ 167,146 December 31, 2022 December 31, 2021 Electric Custom Built Electric Custom Built Vehicles Vehicles Vehicles Vehicles Inventory $ 4,233,055 $ — $ 3,243,267 $ 337,183 Plant and equipment, net 16,452,477 — 8,379,810 6,668 Operating lease right-of-use assets 9,031,277 — 1,511,875 225,534 Other assets 5,081,869 — 3,172,057 — Total assets $ 181,186,106 $ 60,323 $ 254,719,110 $ 678,927 |
Schedule of sales to unaffiliated customers and plant and equipment and right-of-use assets | Sales to unaffiliated customers: Year ended Year ended December 31, 2022 December 31, 2021 United States $ 6,238,950 $ 1,750,151 Canada 573,496 350,619 Total $ 6,812,446 $ 2,100,770 Plant and equipment and right-of-use assets: Year ended Year ended December 31, 2022 December 31, 2021 United States $ 23,113,904 $ 2,591,852 Canada 2,366,861 3,100,529 Other foreign countries 2,989 4,431,506 Total $ 25,483,754 $ 10,123,887 |
Fair value (Tables)
Fair value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair value | |
Schedule of financial liabilities measured at fair value on a recurring basis | The following table presents the hierarchy for our financial liabilities measured at fair value on a recurring basis as of December 31, 2022: Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ — $ — $ — Share-based compensation liability — 76,476 — 76,476 Total $ — $ 76,476 $ — $ 76,476 The following table presents the hierarchy for our financial liabilities measured at fair value on a recurring basis as of December 31, 2021: Level 1 Level 2 Level 3 Total Liabilities: Derivative liabilities $ — $ 191,203 $ — $ 191,203 Share-based compensation liability — 53,362 — 53,362 Total $ — $ 244,565 $ — $ 244,565 |
Nature and continuance of ope_2
Nature and continuance of operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Nature and continuance of operations | ||
Revenues from the sale of electric vehicles | $ 6,812,446 | $ 2,100,770 |
Electric Vehicles | ||
Nature and continuance of operations | ||
Revenues from the sale of electric vehicles | $ 6,238,944 | $ 1,174,310 |
Summary of significant accoun_4
Summary of significant accounting policies - Estimated useful lives of assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and equipment | |
Estimated useful lives of assets | |
Estimated useful life | 5 years |
Computer hardware and software | |
Estimated useful lives of assets | |
Estimated useful life | 3 years |
Computer software | |
Estimated useful lives of assets | |
Estimated useful life | 2 years |
Vehicles | |
Estimated useful lives of assets | |
Estimated useful life | 3 years |
Production tooling and molds | |
Estimated useful lives of assets | |
Estimated useful life | 3 years |
Summary of significant accoun_5
Summary of significant accounting policies (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 segment | |
Summary of significant accounting policies | ||
Warranty expense | $ 700,000 | |
Provision of warranty | $ 0 | |
Number of operating segments | segment | 2 | 2 |
Cash and cash equivalents and_3
Cash and cash equivalents and restricted cash (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and cash equivalents and restricted cash | |||
Cash and cash equivalents | $ 134,255,538 | $ 221,928,008 | |
Restricted cash | 515,449 | 291,676 | |
Total cash, cash equivalents and restricted cash | $ 134,770,987 | $ 222,219,684 | $ 129,594,476 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Prepaid expenses and other current assets | ||
Solo deposit (with manufacturer) | $ 7,133,451 | $ 4,734,914 |
Battery cell deposit | 300,000 | 6,121,372 |
Battery deposit | 100,207 | |
Prepaid insurance | 1,095,152 | 2,027,001 |
Prepaid rent and security deposit | 495,112 | 444,976 |
Cloud computing assets | 1,234,039 | 536,282 |
Other prepaid expenses | 1,133,096 | 999,647 |
Prepaid expenses and other current assets | 11,390,850 | 14,964,399 |
Impairment loss on non-refundable deposits for battery cells | $ 2,804,032 | $ 0 |
Inventory, net (Details)
Inventory, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory, net | ||
Parts and batteries | $ 1,242,055 | $ 906,505 |
Work in progress | 128,424 | |
Vehicles | 18,022,771 | 4,232,736 |
Inventory provision | (15,031,771) | (1,687,215) |
Inventory, net | 4,233,055 | 3,580,450 |
Inventory write-downs | $ 13,829,497 | $ 1,687,215 |
Plant and equipment (Details)
Plant and equipment (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Plant and equipment | ||
Plant and equipment, gross | $ 19,365,580 | $ 13,799,759 |
Less: accumulated depreciation | (2,913,103) | (5,413,281) |
Plant and equipment, net | 16,452,477 | 8,386,478 |
Furniture and equipment | ||
Plant and equipment | ||
Plant and equipment, gross | 2,117,901 | 927,430 |
Computer hardware and software | ||
Plant and equipment | ||
Plant and equipment, gross | 1,381,786 | 1,003,575 |
Vehicles | ||
Plant and equipment | ||
Plant and equipment, gross | 1,046,817 | 2,306,849 |
Leasehold improvements | ||
Plant and equipment | ||
Plant and equipment, gross | 12,862,333 | 1,560,676 |
Production tooling and molds | ||
Plant and equipment | ||
Plant and equipment, gross | $ 1,956,743 | $ 8,001,229 |
Plant and equipment- Additional
Plant and equipment- Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Plant and equipment | ||
Depreciation expense | $ 4,938,545 | $ 3,480,055 |
Impairment charges | 0 | $ 0 |
Production tooling and molds | ||
Plant and equipment | ||
Cost of plant and equipment written off | 8,112,133 | |
Accumulated depreciation of plant and equipment written off | 6,294,544 | |
Impairment charges | 0 | |
Vehicles | ||
Plant and equipment | ||
Cost of plant and equipment written off | 3,563,105 | |
Accumulated depreciation of plant and equipment written off | 966,175 | |
Impairment charges | $ 2,001,930 |
Other assets (Details)
Other assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other assets | ||
Security deposit | $ 1,161,000 | $ 1,161,000 |
Cloud computing assets | 3,920,869 | 2,011,057 |
Other assets | 5,081,869 | 3,172,057 |
Gross capitalized implementation costs of cloud computing arrangement | 6,170,195 | 2,681,410 |
Accumulated amortization of capitalized implementation costs of cloud computing arrangement | 1,015,287 | 134,071 |
Amortization expense of capitalized implementation costs | $ 881,216 | $ 134,071 |
Other assets - Additional infor
Other assets - Additional information (Details) | Dec. 31, 2022 USD ($) |
Estimated aggregate amortization expense | |
2023 | $ 1,234,039 |
2024 | 1,234,039 |
2025 | 1,234,039 |
2026 | 925,529 |
2027 | $ 0 |
Impairment of long-lived asse_2
Impairment of long-lived assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Impairment of long-lived assets | ||||
Impairment charge on mold equipment and demo vehicles | $ 3,819,519 | |||
Listing price of vehicles | $ 18,500 | $ 15,500 | ||
Impairment charges | $ 0 | $ 0 | ||
Impairment | Impairment |
Goodwill and intangible asset_2
Goodwill and intangible assets (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) segment | |
Goodwill and intangible assets | ||
Number of reportable business segments | segment | 2 | 2 |
Number of Operating Segments | segment | 2 | 2 |
Impairment of goodwill | $ 549,760 | $ 0 |
Impairment on intangible assets | 0 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 432,223 | |
Accumulated Amortization | 16,444 | |
Total | 415,779 | |
Indefinite-Lived Intangible Assets | ||
Intangible assets, net | 11,956 | 415,779 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 68,342 | |
Total | 68,342 | |
Trade Names [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 332,286 | |
Total | 332,286 | |
Internet Domain Names [Member] | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 11,956 | 11,956 |
Total | $ 11,956 | 11,956 |
Non-compete covenants | ||
Goodwill and intangible assets | ||
Amortization period | 5 years | |
Impairment on intangible assets | $ 400,628 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Value | 19,639 | |
Accumulated Amortization | 16,444 | |
Total | $ 3,195 |
Trade payables and accrued li_3
Trade payables and accrued liabilities (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Trade payables and accrued liabilities | ||
Trade payables | $ 3,792,827 | $ 1,249,861 |
Due to related parties | 2,945 | 743,100 |
Recall provision | 8,915,044 | |
Accrued liabilities | 6,635,434 | 4,817,820 |
Trade payables and accrued liabilities | $ 19,346,250 | $ 6,810,781 |
Number of retailed vehicles | item | 429 |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating lease expense | ||
Operating lease expense | $ 2,260,556 | $ 917,978 |
Short-term lease expense | 1,238,114 | 1,230,716 |
Operating lease expense | $ 3,498,670 | $ 2,148,694 |
Leases - Lease-related assets a
Leases - Lease-related assets and liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Operating lease right-of-use assets | $ 9,031,277 | $ 1,737,409 |
Liabilities: | ||
Current portion of lease liabilities | 810,677 | 392,279 |
Long-term portion of operating lease liabilities | 17,528,282 | 1,494,992 |
Total operating lease liabilities | $ 18,338,959 | $ 1,887,271 |
Leases - Weighted-average remai
Leases - Weighted-average remaining lease term and discount rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Weighted average remaining operating lease term (in years) | 9 years 4 months 28 days | 6 years 7 months 9 days |
Weighted average operating lease discount rate | 10.28% | 7.73% |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 123,369,900 | $ 19,380,400 |
Non-cash item for amounts included in the measurement of lease liabilities: | ||
Leased assets obtained in exchange for new operating lease liabilities | $ 859,277,600 | $ 157,543,400 |
Leases - Maturities of operatin
Leases - Maturities of operating lease liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Maturity of operating lease liabilities | ||
2023 | $ 2,665,698 | |
2024 | 3,003,762 | |
2025 | 2,933,488 | |
2026 | 2,996,149 | |
2027 | 2,748,552 | |
Thereafter | 15,704,730 | |
Total minimum lease payments | 30,052,379 | |
Less: interest | 11,713,420 | |
Total operating lease liabilities | 18,338,959 | $ 1,887,271 |
Less: Current portion | 810,677 | 392,279 |
Long-term portion of lease obligations | $ 17,528,282 | $ 1,494,992 |
Leases - Additional information
Leases - Additional information (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) Options | Dec. 31, 2021 USD ($) | |
Leases | ||
Operating lease right-of-use assets | $ 9,031,277 | $ 1,737,409 |
Lease liabilities | $ 17,528,282 | $ 1,494,992 |
Operating leases for engineering center and office and, warehouse spaces and kiosk locations | Minimum | ||
Leases | ||
Lease term | 1 year | |
Operating leases for engineering center and office and, warehouse spaces and kiosk locations | Maximum | ||
Leases | ||
Lease term | 11 years | |
Operating lease agreement for the Mesa facility | ||
Leases | ||
Lease term | 129 months 15 days | |
Operating lease right-of-use assets | $ 6,736,373 | |
Lease liabilities | 14,738,973 | |
Derecognition of prepaid lease payments | $ 225,690 | |
Number of renewal options | Options | 2 | |
Renewal term | 5 years | |
Operating lease agreement for the Mesa facility | Leasehold improvements | ||
Leases | ||
Lease liabilities | $ 8,228,290 |
Contract termination liability
Contract termination liability (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) item | |
Contract termination liability | |
Estimate of costs associated with concluding the Manufacturing Agreement | $ 22.8 |
Accrual liability of termination provisions | $ 15.7 |
Number of additional completed vehicles | item | 129 |
Income tax - Loss before income
Income tax - Loss before income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | ||
Loss before income taxes | $ (123,674,959) | $ (38,778,646) |
Canadian operations | ||
Income tax | ||
Loss before income taxes | (90,933,403) | (31,972,273) |
U.S operations | ||
Income tax | ||
Loss before income taxes | (32,734,055) | (6,858,947) |
Other operations | ||
Income tax | ||
Loss before income taxes | $ (7,501) | $ 52,574 |
Income tax - Loss before inco_2
Income tax - Loss before income taxes - Provisions for federal, foreign and state income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current expense: | ||
Federal | $ 23,554 | $ 850 |
Current expense and total income tax expense | $ 23,554 | $ 850 |
Income tax - Loss before inco_3
Income tax - Loss before income taxes - Reconciliation of statutory income tax to effective income tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | ||
Statutory income tax rate | 27% | 27% |
Income taxes at statutory rate | $ (33,392,239) | $ (10,470,234) |
Increase (decrease) in taxes resulting from: | ||
Non-deductible business expenses | 651,693 | (4,611,226) |
Tax effects attributable to foreign operations | 150 | (11,566) |
Change in estimates | 1,332,196 | 15,204 |
Share issue costs and other | 56,869 | (1,138,691) |
Change in valuation allowance | 31,374,885 | 16,217,363 |
Current expense and total income tax expense | $ 23,554 | $ 850 |
Income tax - Loss before inco_4
Income tax - Loss before income taxes - Deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating loss carryforwards | $ 49,865,691 | $ 32,091,217 |
Inventory | 2,216,526 | |
R&D expenditure | 2,599,268 | |
Lease liability | 680,539 | 509,063 |
Property, plant and equipment | 1,898,663 | 1,563,933 |
Share issue costs | 1,393,210 | 2,152,000 |
SR&ED expenditures | 696,474 | 794,092 |
Other assets / liabilities | 8,870,158 | 8,280 |
Stock based compensation | 1,410,199 | 426,385 |
Deferred tax asset, gross | 69,630,728 | 37,544,740 |
Valuation allowance | 67,597,167 | 36,279,269 |
Deferred tax assets, net | 2,033,561 | 1,265,471 |
Deferred tax liabilities | ||
Cloud computing assets | (1,391,825) | (687,782) |
Lease assets | (641,736) | (468,657) |
Intangible assets | (109,032) | |
Deferred tax liabilities | $ (2,033,561) | $ (1,265,471) |
Income tax - Loss before inco_5
Income tax - Loss before income taxes - Additional information (Details) | Dec. 31, 2022 USD ($) |
Canada | |
Non-capital loss carryforwards | |
Non-capital loss carryforwards | $ 173,348,893 |
U.S | |
Non-capital loss carryforwards | |
Non-capital loss carryforwards | $ 10,286,625 |
Derivative liabilities - Change
Derivative liabilities - Change in warrant liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative liabilities | ||
Beginning balance (in shares) | 5,598,256 | 5,839,687 |
Warrants exercised (in shares) | 41,431 | |
Warrants expired (in shares) | (202,775) | (200,000) |
Ending balance (in shares) | 5,395,481 | 5,598,256 |
Warrants exercised | $ (11,431,030) | |
Warrant liability | ||
Derivative liabilities | ||
Beginning balance (in shares) | 1,803,765 | 9,231,196 |
Warrants exercised (in shares) | (4,228,574) | |
Warrants expired (in shares) | 1,172,767 | (3,198,857) |
Ending balance (in shares) | 630,998 | 1,803,765 |
Beginning balance | $ 191,203 | $ 32,439,081 |
Warrants exercised | (13,327,450) | |
Revaluation | $ (191,203) | (18,920,428) |
Ending balance | $ 191,203 |
Derivative liabilities - Outsta
Derivative liabilities - Outstanding warrants (Details) | Dec. 31, 2022 $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | Dec. 31, 2020 $ / shares shares |
Warrants | ||||
Number of warrants outstanding | 5,395,481 | 5,395,481 | 5,598,256 | 5,839,687 |
Number of warrants exercisable | 5,395,481 | 5,395,481 | ||
Exercise price | $ / shares | $ 4.28 | $ 5.23 | $ 4.01 | |
Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 630,998 | 630,998 | 1,803,765 | 9,231,196 |
Number of warrants exercisable | 630,998 | 630,998 | ||
Warrants issued on 14 May 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 33,436 | 33,436 | ||
Number of warrants exercisable | 33,436 | 33,436 | ||
Exercise price | $ / shares | $ 16 | |||
Warrants issued on 5 June 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 59,325 | 59,325 | ||
Number of warrants exercisable | 59,325 | 59,325 | ||
Exercise price | $ / shares | $ 12 | |||
Warrants issued on 13 June 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 257,390 | 257,390 | ||
Number of warrants exercisable | 257,390 | 257,390 | ||
Exercise price | $ / shares | $ 12 | |||
Warrants issued on 25 June 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 75,254 | 75,254 | ||
Number of warrants exercisable | 75,254 | 75,254 | ||
Exercise price | $ / shares | $ 12 | |||
Warrants issued on 18 July 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 150,847 | 150,847 | ||
Number of warrants exercisable | 150,847 | 150,847 | ||
Exercise price | $ / shares | $ 12 | |||
Warrants issued on 20 July 2018 | Warrant liability | ||||
Warrants | ||||
Number of warrants outstanding | 54,746 | 54,746 | ||
Number of warrants exercisable | 54,746 | 54,746 | ||
Exercise price | $ / shares | $ 12 |
Derivative liabilities - Assump
Derivative liabilities - Assumptions (Details) - Warrant liability - Level 2 - item | Dec. 31, 2022 | Dec. 31, 2021 |
Share price | ||
Derivative liabilities | ||
Derivative liability, measurement input | 0.6 | 2.28 |
Exercise price | ||
Derivative liabilities | ||
Derivative liability, measurement input | 8.85 | |
Exercise price | Minimum | ||
Derivative liabilities | ||
Derivative liability, measurement input | 1.58 | |
Exercise price | Maximum | ||
Derivative liabilities | ||
Derivative liability, measurement input | 9.49 | |
Annualized volatility | ||
Derivative liabilities | ||
Derivative liability, measurement input | 0.778 | 0.61 |
Risk-free interest rate | ||
Derivative liabilities | ||
Derivative liability, measurement input | 0.0397 | 0.014 |
Dividend rate | ||
Derivative liabilities | ||
Derivative liability, measurement input | 0 | 0 |
Share capital and other compo_3
Share capital and other components of equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share capital and other components of equity | ||
Share capital - shares issued | 119,287,917 | 117,338,964 |
Share capital - shares outstanding | 119,287,917 | 117,338,964 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Shares issued pursuant to exercise of options (in shares) | 1,623,864 | 3,785,174 |
Proceeds from issuance of common shares for options exercised | $ 487,054 | $ 1,145,538 |
Shares issued pursuant to exercise of RSU (in shares) | 333,523 | 118,497 |
Shares issued pursuant to exercise of RSU | $ (175,526) | $ (185,274) |
Number of common stock issued on exercise of each warrant | 1 | |
Share options | ||
Share capital and other components of equity | ||
Shares issued pursuant to exercise of options (in shares) | 1,615,430 | 2,456,240 |
Proceeds from issuance of common shares for options exercised | $ 487,054 | $ 1,145,538 |
Share capital and other compo_4
Share capital and other components of equity - Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share capital and other components of equity | ||
Beginning balance (in shares) | 5,598,256 | 5,839,687 |
Warrants exercised (in shares) | (41,431) | |
Warrants expired (in shares) | (202,775) | (200,000) |
Ending balance (in shares) | 5,395,481 | 5,598,256 |
Beginning balance (in dollars per share) | $ 5.23 | $ 4.01 |
Warrants exercised (in dollars per share) | 3.34 | |
Warrants expired (in dollars per share) | 16.3 | 4.66 |
Ending balance (in dollars per share) | $ 4.28 | $ 5.23 |
Share capital and other compo_5
Share capital and other components of equity - Warrants Outstanding (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 5,395,481 | 5,598,256 | 5,839,687 |
Number of warrants exercisable | 5,395,481 | ||
Exercise price | $ 4.28 | $ 5.23 | $ 4.01 |
Warrants issued on 31 October 2017 | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 125,000 | ||
Number of warrants exercisable | 125,000 | ||
Exercise price | $ 15 | ||
Warrants issued on 8 August 2018 | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 4,513,253 | ||
Number of warrants exercisable | 4,513,253 | ||
Exercise price | $ 4.27 | ||
Warrants issued on 9 November 2018, One | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 7,440 | ||
Number of warrants exercisable | 7,440 | ||
Exercise price | $ 3.2 | ||
Warrants issued on 9 November 2018, Two | |||
Class of Warrant or Right [Line Items] | |||
Number of warrants outstanding | 749,788 | ||
Number of warrants exercisable | 749,788 | ||
Exercise price | $ 2.56 |
Share-based payments - Total st
Share-based payments - Total stock-based compensation recognized in the consolidated statements of operations and comprehensive loss (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based payments | ||
Share-based compensation expense recorded | $ 4,985,954 | $ 5,065,330 |
General and administrative expenses | ||
Share-based payments | ||
Share-based compensation expense recorded | 3,956,824 | 3,694,641 |
Research and development expenses | ||
Share-based payments | ||
Share-based compensation expense recorded | 864,619 | 821,706 |
Sales and marketing expenses | ||
Share-based payments | ||
Share-based compensation expense recorded | $ 164,511 | $ 548,983 |
Share-based payments - Stock op
Share-based payments - Stock options (Details) - Stock options | 12 Months Ended |
Dec. 31, 2022 shares | |
Share-based payments | |
Common stock reserved for issuance | 30,000,000 |
Expiration period | 10 years |
Exercise period | 90 days |
Number of common share per award | 1 |
Share-based payments - Changes
Share-based payments - Changes in Stock options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of options | ||
Options outstanding, beginning | 11,974,300 | 13,008,364 |
Options granted | 7,346,185 | 3,217,378 |
Options exercised | (1,623,864) | (3,785,174) |
Options forfeited/expired/cancelled | (2,974,623) | (466,268) |
Options outstanding, ending | 14,721,998 | 11,974,300 |
Weighted average exercise price | ||
Options outstanding, beginning | $ 2.73 | $ 2.14 |
Options granted | 1.39 | 3.94 |
Options exercised | 0.39 | 1.58 |
Options forfeited/expired/cancelled | 2.97 | 2.85 |
Options outstanding, ending | $ 2.27 | $ 2.73 |
Share-based payments - Details
Share-based payments - Details of stock options outstanding (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based payments | |||
Number of options outstanding | 14,721,998 | 11,974,300 | 13,008,364 |
Number of options exercisable | 9,700,635 | ||
Stock options with Exercise price $2.00 CAD | |||
Share-based payments | |||
Exercise price | $ 2 | ||
Weighted average contractual life | 1 year 3 months | ||
Number of options outstanding | 75,000 | ||
Number of options exercisable | 75,000 | ||
Stock options with Exercise price $1.08 CAD | |||
Share-based payments | |||
Exercise price | $ 1.08 | ||
Weighted average contractual life | 6 years 9 months 21 days | ||
Number of options outstanding | 455,616 | ||
Number of options exercisable | 235,333 | ||
Stock options with Exercise price $1.11 CAD | |||
Share-based payments | |||
Exercise price | $ 1.11 | ||
Weighted average contractual life | 6 years 11 months 4 days | ||
Number of options outstanding | 3,750,000 | ||
Stock options with Exercise price $1.50 CAD | |||
Share-based payments | |||
Exercise price | $ 1.50 | ||
Weighted average contractual life | 6 years 6 months 21 days | ||
Number of options outstanding | 821,149 | ||
Number of options exercisable | 427,021 | ||
Stock options with Exercise price $1.91 CAD | |||
Share-based payments | |||
Exercise price | $ 1.91 | ||
Weighted average contractual life | 3 years 18 days | ||
Number of options outstanding | 2,955,000 | ||
Number of options exercisable | 2,756,391 | ||
Stock options with Exercise price $1.94 CAD | |||
Share-based payments | |||
Exercise price | $ 1.94 | ||
Weighted average contractual life | 6 years 3 months 18 days | ||
Number of options outstanding | 498,742 | ||
Number of options exercisable | 251,677 | ||
Stock options with Exercise price $2.13 CAD | |||
Share-based payments | |||
Exercise price | $ 2.13 | ||
Weighted average contractual life | 6 years 1 month 6 days | ||
Number of options outstanding | 97,340 | ||
Number of options exercisable | 55,415 | ||
Stock options with Exercise price $2.45 CAD | |||
Share-based payments | |||
Exercise price | $ 2.45 | ||
Weighted average contractual life | 3 years 7 months 2 days | ||
Number of options outstanding | 1,250,000 | ||
Number of options exercisable | 1,250,000 | ||
Stock options with Exercise price $2.53 CAD | |||
Share-based payments | |||
Exercise price | $ 2.53 | ||
Weighted average contractual life | 3 years 7 months 9 days | ||
Number of options outstanding | 50,000 | ||
Number of options exercisable | 50,000 | ||
Stock options with Exercise price $2.62 CAD | |||
Share-based payments | |||
Exercise price | $ 2.62 | ||
Weighted average contractual life | 8 months 23 days | ||
Number of options outstanding | 700,000 | ||
Number of options exercisable | 700,000 | ||
Stock options with Exercise price $3.01 CAD | |||
Share-based payments | |||
Exercise price | $ 3.01 | ||
Weighted average contractual life | 1 year 11 months 4 days | ||
Number of options outstanding | 750,000 | ||
Number of options exercisable | 750,000 | ||
Stock options with Exercise price $3.40 CAD | |||
Share-based payments | |||
Exercise price | $ 3.40 | ||
Weighted average contractual life | 2 years 4 months 13 days | ||
Number of options outstanding | 1,035,000 | ||
Number of options exercisable | 1,035,000 | ||
Stock options with Exercise price $3.41 CAD | |||
Share-based payments | |||
Exercise price | $ 3.41 | ||
Weighted average contractual life | 4 years 6 months 21 days | ||
Number of options outstanding | 702,973 | ||
Number of options exercisable | 618,407 | ||
Stock options with Exercise price $3.55 CAD | |||
Share-based payments | |||
Exercise price | $ 3.55 | ||
Weighted average contractual life | 5 years 6 months 14 days | ||
Number of options outstanding | 63,408 | ||
Number of options exercisable | 60,838 | ||
Stock options with Exercise price $3.56 CAD | |||
Share-based payments | |||
Exercise price | $ 3.56 | ||
Weighted average contractual life | 5 years 10 months 13 days | ||
Number of options outstanding | 207,479 | ||
Number of options exercisable | 134,012 | ||
Stock options with Exercise price $3.77 CAD | |||
Share-based payments | |||
Exercise price | $ 3.77 | ||
Weighted average contractual life | 3 years 11 months 12 days | ||
Number of options outstanding | 160,485 | ||
Number of options exercisable | 160,485 | ||
Stock options with Exercise price $4.15 CAD | |||
Share-based payments | |||
Exercise price | $ 4.15 | ||
Weighted average contractual life | 1 year 11 months 12 days | ||
Number of options outstanding | 754,532 | ||
Number of options exercisable | 754,532 | ||
Stock options with Exercise price $5.00 CAD | |||
Share-based payments | |||
Exercise price | $ 5 | ||
Weighted average contractual life | 11 months 1 day | ||
Number of options outstanding | 193,629 | ||
Number of options exercisable | 193,629 | ||
Stock options with Exercise price $7.23 CAD | |||
Share-based payments | |||
Exercise price | $ 7.23 | ||
Weighted average contractual life | 5 years 10 days | ||
Number of options outstanding | 75,455 | ||
Number of options exercisable | 75,455 | ||
Stock options with Exercise price $7.75 CAD | |||
Share-based payments | |||
Exercise price | $ 7.75 | ||
Weighted average contractual life | 5 years 1 month 17 days | ||
Number of options outstanding | 48,690 | ||
Number of options exercisable | 39,940 | ||
Stock options with Exercise price $9.60 CAD | |||
Share-based payments | |||
Exercise price | $ 9.60 | ||
Weighted average contractual life | 1 year 5 months 26 days | ||
Number of options outstanding | 77,500 | ||
Number of options exercisable | 77,500 |
Share-based payments - Fair val
Share-based payments - Fair value assumptions of stock options (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based payments | ||
Recognized stock-based compensation expense | $ 4,985,954 | $ 5,065,330 |
Unrecognized compensation cost, weighted average period remaining for recognition | 6 years 10 months 6 days | 7 years 11 months 8 days |
Stock options | ||
Share-based payments | ||
Weighted average grant date fair value of stock options granted | $ 0.90 | $ 1.99 |
Annualized volatility, minimum | 61% | 61% |
Annualized volatility, maximum | 123.70% | 62.29% |
Risk-free interest rate, minimum | 1.75% | 0.34% |
Risk-free interest rate, maximum | 4.23% | 1.40% |
Dividend rate | 0% | 0% |
Recognized stock-based compensation expense | $ 3,920,423 | $ 4,389,344 |
Unrecognized compensation cost | $ 3,400,865 | $ 6,120,387 |
Stock options | Minimum | ||
Share-based payments | ||
Expected life of options | 3 years 10 months 6 days | 4 years |
Stock options | Maximum | ||
Share-based payments | ||
Expected life of options | 5 years | 5 years |
Share-based payments - Change_2
Share-based payments - Changes in the value of the DSUs liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of DSU | ||
Opening balance | 84,581 | 44,623 |
exercised | (11,510) | |
Issuance | 42,879 | 51,468 |
Closing balance | 127,460 | 84,581 |
Amount | ||
Opening balance | $ 53,362 | |
Closing balance | $ 76,476 | $ 53,362 |
Deferred Stock Units | ||
Share-based payments | ||
Vesting period | 1 year | |
Number of DSU | ||
Opening balance | 84,581 | 0 |
Reclassification to liability | 44,623 | |
exercised | (11,510) | |
Issuance | 42,879 | 51,468 |
Closing balance | 127,460 | 84,581 |
Amount | ||
Opening balance | $ 53,362 | $ 0 |
Reclassification to liability | 152,165 | |
DSUs exercised | (39,250) | |
Stock-based compensation expense | 23,114 | (59,553) |
Closing balance | $ 76,476 | $ 53,362 |
Share-based payments - Number a
Share-based payments - Number and weighted average share prices of DSUs (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of DSU | ||
Opening balance | 84,581 | 44,623 |
granted | 42,879 | 51,468 |
exercised | (11,510) | |
Closing balance | 127,460 | 84,581 |
Weighted average share price | ||
DSUs outstanding, beginning | $ 3.41 | $ 3.41 |
DSUs granted | 2.24 | 3.41 |
DSUs exercised | 3.41 | |
DSUs outstanding, ending | $ 3.02 | $ 3.41 |
DSUs | ||
Number of DSU | ||
Opening balance | 84,581 | 0 |
granted | 42,879 | 51,468 |
exercised | (11,510) | |
Closing balance | 127,460 | 84,581 |
Weighted average share price | ||
DSUs outstanding, ending | $ 3.02 |
Share-based payments - Detail_2
Share-based payments - Details of DSUs outstanding (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based payments | |||
Deemed value | $ 3.02 | $ 3.41 | $ 3.41 |
Number of DSUs outstanding | 127,460 | 84,581 | 44,623 |
Recognized stock-based compensation expense | $ 4,985,954 | $ 5,065,330 | |
Unrecognized compensation cost, weighted average period remaining for recognition | 6 years 10 months 6 days | 7 years 11 months 8 days | |
DSUs | |||
Share-based payments | |||
Deemed value | $ 3.02 | ||
Weighted average contractual life | 8 years 7 months 2 days | ||
Number of DSUs outstanding | 127,460 | 84,581 | 0 |
Number of DSUs exercisable | 127,460 | ||
Recognized stock-based compensation expense | $ 23,114 | $ 59,553 | |
Unrecognized compensation cost | $ 1,691,565 | $ 223,107 | |
Unrecognized compensation cost, weighted average period remaining for recognition | 8 years 7 months 2 days | 9 years 11 months 1 day |
Share-based payments - Change_3
Share-based payments - Changes in RSUs (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of DSU | ||
Opening balance | 84,581 | 44,623 |
granted | 42,879 | 51,468 |
exercised | (11,510) | |
Closing balance | 127,460 | 84,581 |
RSUs | ||
Number of DSU | ||
Opening balance | 649,473 | 507,849 |
granted | 1,875,000 | 450,442 |
exercised | (466,731) | (169,283) |
RSUs expired | (182,742) | (139,535) |
Closing balance | 1,875,000 | 649,473 |
Weighted average exercise price | ||
RSUs outstanding, beginning | $ 3.42 | $ 3.44 |
RSUs granted | 1.02 | 3.41 |
RSUs exercised | 3.42 | 3.44 |
RSUs expired | 3.42 | 3.44 |
RSUs outstanding, ending | $ 1.02 | $ 3.42 |
Share-based payments - Detail_3
Share-based payments - Details of RSUs outstanding (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based payments | |||
Number of RSUs outstanding | 127,460 | 84,581 | 44,623 |
Recognized stock-based compensation expense | $ 4,985,954 | $ 5,065,330 | |
Unrecognized compensation cost, weighted average period remaining for recognition | 6 years 10 months 6 days | 7 years 11 months 8 days | |
RSUs | |||
Share-based payments | |||
Deemed value | $ 1.02 | $ 3.42 | $ 3.44 |
Weighted average contractual life | 9 years 11 months 8 days | ||
Number of RSUs outstanding | 1,875,000 | 649,473 | 507,849 |
Recognized stock-based compensation expense | $ 1,042,418 | $ 735,539 | |
Unrecognized compensation cost | $ 0 | $ 978,449 | |
Unrecognized compensation cost, weighted average period remaining for recognition | 9 years 8 months 19 days |
Basic and Diluted loss per sh_2
Basic and Diluted loss per share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Basic and Diluted loss per share | ||
Net loss attributable to common shareholders, basic | $ 123,698,513 | $ 38,779,496 |
Weighted average number of shares outstanding - basic | 118,739,410 | 111,720,726 |
Weighted average number of shares outstanding - diluted | 118,739,410 | 111,720,726 |
Stock options | ||
Basic and Diluted loss per share | ||
Antidilutive Securities | 14,721,998 | 11,974,300 |
Warrants | ||
Basic and Diluted loss per share | ||
Antidilutive Securities | 6,026,479 | 7,402,021 |
DSUs | ||
Basic and Diluted loss per share | ||
Antidilutive Securities | 127,460 | 84,581 |
RSUs | ||
Basic and Diluted loss per share | ||
Antidilutive Securities | 1,875,000 | 649,473 |
Segmented information - Operati
Segmented information - Operations of each of the Company's reportable business segments (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) segment | |
Segmented information | ||
Number of reportable business segments | segment | 2 | 2 |
Revenue | $ 6,812,446 | $ 2,100,770 |
Gross profit | (26,255,336) | (2,233,911) |
Operating expenses | (84,043,078) | (56,051,877) |
Other items | (44,764) | 175,368 |
Net loss | (123,698,513) | (38,779,496) |
Foreign currency translation | 64,425 | 587 |
Comprehensive loss | (123,634,088) | (38,778,909) |
Inventory | 4,233,055 | 3,580,450 |
Plant and equipment, net | 16,452,477 | 8,386,478 |
Operating lease right-of-use assets | 9,031,277 | 1,737,409 |
Other assets | 5,081,869 | 3,172,057 |
Total assets | 181,246,429 | 255,398,037 |
Electric Vehicles | ||
Segmented information | ||
Revenue | 6,238,944 | 1,174,310 |
Gross profit | (26,087,321) | (2,334,898) |
Depreciation and amortization | (5,564,144) | (4,204,091) |
Operating expenses | (78,382,489) | (51,581,101) |
Other items | (13,397,864) | 19,174,298 |
Current income tax recovery | (23,554) | (850) |
Net loss | (123,455,372) | (38,946,642) |
Foreign currency translation | 24,844 | 587 |
Comprehensive loss | (123,430,528) | (38,946,055) |
Inventory | 4,233,055 | 3,243,267 |
Plant and equipment, net | 16,452,477 | 8,379,810 |
Operating lease right-of-use assets | 9,031,277 | 1,511,875 |
Other assets | 5,081,869 | 3,172,057 |
Total assets | 181,186,106 | 254,719,110 |
Custom Built Vehicles | ||
Segmented information | ||
Revenue | 573,502 | 926,460 |
Gross profit | (168,015) | 100,987 |
Depreciation and amortization | (16,513) | (47,183) |
Operating expenses | (79,932) | (219,502) |
Other items | 21,319 | 332,844 |
Net loss | (243,141) | 167,146 |
Foreign currency translation | 39,581 | |
Comprehensive loss | (203,560) | 167,146 |
Inventory | 337,183 | |
Plant and equipment, net | 6,668 | |
Operating lease right-of-use assets | 225,534 | |
Total assets | $ 60,323 | $ 678,927 |
Segmented information - Sales t
Segmented information - Sales to unaffiliated customers and Plant and equipment and right-of-use assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Sales to unaffiliated customers and Plant and equipment and right-of-use assets | ||
Revenues from the sale of electric vehicles | $ 6,812,446 | $ 2,100,770 |
Plant and equipment and right-of-use assets | 25,483,754 | 10,123,887 |
U.S operations | ||
Sales to unaffiliated customers and Plant and equipment and right-of-use assets | ||
Revenues from the sale of electric vehicles | 6,238,950 | 1,750,151 |
Plant and equipment and right-of-use assets | 23,113,904 | 2,591,852 |
Canadian operations | ||
Sales to unaffiliated customers and Plant and equipment and right-of-use assets | ||
Revenues from the sale of electric vehicles | 573,496 | 350,619 |
Plant and equipment and right-of-use assets | 2,366,861 | 3,100,529 |
Other foreign countries | ||
Sales to unaffiliated customers and Plant and equipment and right-of-use assets | ||
Plant and equipment and right-of-use assets | $ 2,989 | $ 4,431,506 |
Fair value - Financial liabilit
Fair value - Financial liabilities measured at fair value on a recurring basis (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value | ||
Total | $ 76,476 | $ 244,565 |
Derivative liabilities | ||
Fair value | ||
Total | 191,203 | |
Share-based compensation liability | ||
Fair value | ||
Total | 76,476 | 53,362 |
Recurring | Level 2 | ||
Fair value | ||
Total | 76,476 | 244,565 |
Recurring | Level 2 | Derivative liabilities | ||
Fair value | ||
Total | 191,203 | |
Recurring | Level 2 | Share-based compensation liability | ||
Fair value | ||
Total | $ 76,476 | $ 53,362 |
Fair value - Additional informa
Fair value - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative liabilities | ||
Percentage of reasonably possible increase in volatility | 10% | |
Derivative liabilities | ||
Derivative liabilities | ||
Increase (decrease) in fair value measurement due to reasonably possible increase in volatility | $ 0 | $ 53,376 |
Commitments and contingencies (
Commitments and contingencies (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and contingencies | ||
Capital commitments for development of its IT infrastructure and purchase equipment for Mesa facility | $ 0 | $ 2,686,537 |
Subsequent events (Details)
Subsequent events (Details) | Mar. 28, 2023 USD ($) | Mar. 03, 2023 USD ($) D | Mar. 01, 2023 D | Feb. 17, 2023 USD ($) item D |
Subsequent events | ||||
Number of days notice required for termination of agreement | D | 30 | |||
Subsequent events | ||||
Subsequent events | ||||
Number of retailed G3 SOLO vehicles under the buy-back program | item | 429 | |||
Recall provision recorded for G3 SOLO vehicles under the buy-back program | $ | $ 8,915,044 | |||
Subsequent events | Lease agreement with WeWork Workplace LLC | ||||
Subsequent events | ||||
Lease term | 1 year | |||
Lease costs per month | $ | $ 5,680 | |||
Subsequent events | Assembly Agreement to assemble the Volcon Grunt Evo and Runt off-road electric motorcycles | ||||
Subsequent events | ||||
Period to provide contract assembly services to GLV | 150 days | |||
Number of days after which agreement can be terminated | D | 90 | |||
Number of days notice required for termination of agreement | D | 30 | |||
Subsequent events | Design Agreement | ||||
Subsequent events | ||||
Estimated cost of design, development, and manufacturing services | $ | $ 13,692,000 | |||
Percentage of estimated cost of design, development, and manufacturing services that will be paid during 2023 | 80% |