Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 |
Accounting Policies [Abstract] | |
Basis of Presentation | These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States (“U.S. GAAP”) for interim reporting. Accordingly, certain notes or other information that are normally required by U.S. GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements should be read in connection with the Company’s audited financial statements and related notes as of and for the year ended December 31, 2020 included in the definitive proxy statement filed on June 9, 2021. The accompanying condensed consolidated financial statements are unaudited; however, in the opinion of management, they include all normal and recurring adjustments necessary for a fair presentation of the Company’s unaudited condensed consolidated financial statements for the periods presented. Results of operations reported for interim periods are not necessarily indicative of results for the entire year or any other periods. The Company’s condensed consolidated financial statements and certain note presentations for the periods prior to June 25, 2021 are presented in two distinct periods to indicate the application of a different basis of accounting between EVAP Operations (the “Predecessor”) and ELM (the “Successor”). The Predecessor reporting period represents the presentation of EVAP Operations up to the date of its acquisition by ELM on June 25, 2021. The Successor reporting period represents operations of ELM for the applicable periods subsequent to its inception on August 20, 2020. The accompanying financial statements of the Company include a black line division which indicates that the Predecessor and Successor reporting entities shown are not comparable. The Successor reporting period overlaps the Predecessor reporting period for the period from August 20, 2020 through June 25, 2021 during which time ELM was formed to raise capital including through the completion of the Business Combination. The Business Combination was accounted for as a reverse recapitalization, with the Company treated as the “acquired” company for financial reporting purposes based on ELM security holders having a majority of the voting power of the Company, ELM having the authority to appoint the majority of the directors on the board of directors, and senior management of ELM comprising all of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of ELM, with the acquisition being treated as the equivalent of ELM issuing stock for the net assets of the Company, accompanied by a recapitalization. As a result of ELM being the accounting acquirer, all historical financial information presented in the consolidated financial statements for the Successor periods represents the accounts of ELM. For historical periods prior to the Business Combination, common stock, additional paid-in capital, shares and net loss per common share have been recasted to reflect the exchange ratio established in the Business Combination. The full impact of the COVID-19 pandemic continues to evolve as of the date of these financial statements. Management is actively monitoring the situation and its impact on the Company’s business, operations, financial condition and results of operations. Since our formation, the Company continues to increase employment levels of personnel to support the operations that, as of the date of these financial statements, have been largely administrative in nature and have focused on vehicle engineering, procuring suppliers, and preparing for necessary capital expenditures in the ELMS Facility. Due to the travel restrictions imposed globally, the Company's ability to collaborate with its suppliers, many of whom are international, has been impacted. The Company continues to monitor for new developments related to the COVID-19 pandemic, which are unpredictable. Future COVID-19 developments could result in additional impacts on the Company's business, operations, financial condition, and results of operations. Predecessor The Predecessor condensed financial statements have been prepared on a carve-out basis and are derived from the accounting records of SERES using the historical results of operations and historical basis of assets and liabilities of the EVAP Operations. The Predecessor financial statements include all expenses, assets and liabilities determined to be directly attributable to EVAP Operations as well as an allocation of general corporate expenses of SERES. The direct expenses include participation in SERES employee benefit and share based compensation plans for employees dedicated to EVAP Operations. The allocation of general corporate expense are based on expenses for certain functions located at the SERES Santa Clara, California and Auburn Hills, Michigan locations, such as corporate executives, finance, human resources, information technology, legal affairs, office operations, project management office, and supply chain as well as other general overhead costs. Corporate expense allocations have been determined on a basis that EVAP Operations considered to be a reasonable reflection of the utilization of services provided or the benefit received by EVAP Operations during the periods presented. However, these allocations are not based on arms’ length transactions and it is impractical for management to estimate costs that would be reflective if EVAP Operations were operating on a standalone basis. Until June 25, 2021, EVAP Operations was a component owned by SERES, which did not constitute a separate legal entity, and had no treasury functions or bank accounts. All transactions between SERES and EVAP Operations have been included as related party transactions and considered to be effectively settled at the time the transaction was recorded. The total net effect of the settlement of these transactions is reflected within Predecessor parent’s net investment in the Predecessor balance sheet and as a financing activity in the Predecessor statement of cash flows. |
Use of Estimates | Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Actual results may differ from those estimates. |
Emerging Growth Company | Emerging Growth Company — The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"). Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging growth companies (“EGC”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard, until such time the Company is no longer considered to be an EGC. At times, the Company may elect to early adopt a new or revised standard. This may make the comparison of the Company’s consolidated financial statements with another public company difficult due to potential differences in accounting standards used. |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers all short - |
Restricted Cash | Restricted Cash — Restricted cash represents cash collateral held by the bank as security covering our credit card purchases and a letter of credit. The letter of credit was issued to SERES in conjunction with the SERES Asset Purchase and will be required until the Promissory Note is settled. As monthly payments reduce the obligation due, the Company may request a reduction in the amount of the letter of credit, subject to the confirmation by the counterparty. Upon approval, additional funds will be made available for use by the Company. |
Concentration of Credit Risk | Concentration of Credit Risk — The Company’s cash and cash equivalents are placed in accounts that exceed federally insured limits as of June 30, 2021 and December 31, 2020. The Company has not experienced any credit loss related to its cash and cash equivalents. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets — Prepaid expenses may include prepaid insurance, prepaid engineering costs, prepaid software subscriptions, prepaid inventory and other prepaid amounts to vendors. Prepaid expenses for the Predecessor are related to prepaid rent associated with the Mishawaka parking lot. Other current assets primarily consist of the current portion of service contracts to be amortized over the next 12 months. |
Inventories | Inventories — Inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) methods. As of June 30, 2021 inventories consisted primarily of batteries to be installed into electric vehicles. |
Property, Plant and Equipment | Property, Plant and equipment — Property, Plant and equipment is stated at cost less accumulated depreciation. Property and equipment are initially recorded at cost or fair value established at the acquisition date if acquired as part of a business combination. Maintenance, repairs and minor improvements are charged to expense as incurred, while major renewals and betterment are capitalized. Leasehold improvements are amortized over the terms of the leases or useful lives, whichever is shorter. Construction in progress is not depreciated until available for its intended use. Depreciation is computed using the straight-line method over the following estimated useful lives: Years Buildings 39* Machinery and equipment 7* Vehicles 5 Computer hardware 3 Furniture and fixtures 3 Site improvements 15* Leasehold improvements 3-10 * Certain assets in these categories are currently included in construction in progress and are not being depreciated. |
Leases | Leases — The Company leases an office building and land under long-term operating leases. Operating lease expense is recognized on a straight-line basis over the expected lease term. The lease term begins on the date the Company has the right to control the use of the leased property pursuant to the terms of the lease. The difference recognized between rental expense and amounts payable under the lease is recorded as deferred rent. Lease payments required in advance are recorded as prepaid rent expense. |
Intangibles and other assets | Intangibles and other assets — The Company's intangible assets consist of an intellectual property and technology ("IP") license, a favorable lease intangible, computer software and website development. Other assets consist of service contract assets and related development costs. Intangibles and other assets are stated at cost less accumulated amortization. Development costs for computer software, cloud computing arrangements and website development are expensed or capitalized based on the nature of the activities. Planning stage activities are expensed as incurred. Application and development stage activities are capitalized. Operating stage activities post-implementation are generally expensed as incurred unless they add additional functionality to the software. Training costs regardless of the stage of development are expensed as incurred. The intangibles and other assets are amortized on a straight line basis. • The IP license intangible consists of technological know how obtained as part of the SERES Asset Purchase and is being amortized over a useful life of 2 years. • The favorable lease intangible relates to the ground lease assumed as part of the SERES Asset Purchase and is being amortized to rent expense over the remaining noncancellable term of the lease of approximately 30 years. • Computer software and website development consist of perpetual software licenses and capitalized development costs, which are being amortized over the useful life of 3 years. |
Impairment and Disposal of Long-Lived Assets | Impairment and Disposal of Long-Lived Assets — The carrying amount of long-lived assets is reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. When such events occur, the Company will compare the carrying amounts of the assets to their undiscounted expected future cash flows. If the Company determines that the carrying value of the asset is not recoverable, a permanent impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair value. When a long-lived asset is disposed, the related costs and accumulated depreciation or amortization are removed and any gain or loss on the disposal is recorded. |
Research and Development Costs | Research and Development Costs — The Company expenses research and development costs as they are incurred. Research and development costs consist primarily of contracted development services, prototype and sample costs including any related shipping or transport costs. There were no research and development costs for the Predecessor. |
Segment Information | Segment Information — Operating segments are defined as components of an entity for which separate financial information is available and regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assessing the performance of an individual segment. The CODM is the Chief Executive Officer (“CEO”). The Company has determined that it currently has one reportable segment as the CEO reviews financial information presented at the total Company level based on discrete financial information, which is only available at this level, for purposes of assessing the operating performance and allocating resources. |
Defined Benefit Pension Plan | Defined Benefit Pension Plan — The Company provides a defined benefit plan to certain former and current union employees. The determination of the obligation and expense is dependent on certain actuarial assumptions. Changes in those assumptions are recognized immediately through earnings. The service component of net periodic benefit costs is reported as general and administrative expense while all other components of net periodic benefit costs are reported as other expense in the consolidated statements of operations and comprehensive loss. |
Income Taxes | Income Taxes — Deferred tax assets and liabilities are recognized on the basis of the future tax consequences attributable to temporary differences that exist between the financial statement carrying value of the assets and liabilities and the respective tax values, and net operating losses and tax credit carryforwards on a tax jurisdiction basis. Deferred tax assets and liabilities are measured using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. The effect on deferred tax assets and liabilities of a change in tax rates is recorded in the results of operations in the period that includes the enactment date under the law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its combined financial position, results of operations or cash flows. Therefore, no reserves for uncertain tax positions have been recorded. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months. |
Warrant Liabilities | Warrant Liabilities — The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. For periods subsequent to the detachment of the public warrants from the units issued in the Forum's initial public offering, the public warrant quoted market price was used as the fair value of the warrants as of each relevant date. |
Other Long-Term Liabilities | Other Long-Term Liabilities — Other long-term liabilities for the Successor consist of the long-term portion of a noncancellable service contract that are payable beyond one year. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share — The Company computes basic earnings (loss) per share by dividing income available to common shareholders by the weighted average number of common shares outstanding. As a result of the Business Combination, the Company has retrospectively adjusted the weighted average number of common shares outstanding prior to the Business Combination by multiplying them by the merger exchange ratio. The computation of diluted earnings (loss) per share is similar to the computation of basic earnings (loss) per share, except the Company adjusts the weighted average number of shares outstanding to include estimates of additional shares that would be issued if potentially dilutive common shares had been issued. In addition, the Company adjusts income (loss) available to common shareholders to include any changes in income or loss that would result from the assumed issuance of the dilutive common shares. |
Fair Value Measurements | Fair Value Measurements —Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements for assets or liabilities required to measured or disclosed at fair value are 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. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”. This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods beginning after December 31, 2021, with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company early adopted ASU 2018-15 effective April 1, 2021. As the Company had no implementation costs incurred related to a cloud computing arrangement prior to that date, there was no impact on the retrospective periods. For the three months ended June 30, 2021, the Company capitalized $0.2 million of development cost related to a SAP cloud computing arrangement that will be amortized over the noncancellable service contract period of five years beginning in June 2021. Recently Issued Accounting Pronouncements — In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right of use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The amendments in this ASU are effective for fiscal years beginning after December 15, 2021. Additionally, in July 2018, the FASB issued ASU 2018-11, Leases: Targeted Improvements (“ASU 2018-11”), which provided an alternate transition method by allowing entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The adoption of the standard will impact the balance sheet requiring the Company to record an operating lease liability for the present value of the remaining lease payments on the date of transition and a right-of-use asset equal to the operating lease liability adjusted for any deferred rent, prepaid rent expense and lease intangibles. The Company does not expect there to be any impact on the consolidated statements of operations and comprehensive loss as the rent expense for operating leases will continue to be on a straight-line basis under the new standard. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective |