COVER
COVER - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 15, 2021 | Jun. 30, 2020 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39277 | ||
Entity Registrant Name | MP Materials Corp. / DE | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4465489 | ||
Entity Address, Address Line One | 6720 Via Austi Parkway, Suite 450 | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89119 | ||
City Area Code | 702 | ||
Local Phone Number | 844-6111 | ||
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 | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 344 | ||
Entity Common Stock, Shares Outstanding | 170,738,350 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive 2021 proxy statement, anticipated to be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year, are incorporated by reference into Part III of this Form 10-K. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001801368 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Common Stock, par value of $0.0001 per share | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value of $0.0001 per share | ||
Trading Symbol | MP | ||
Security Exchange Name | NYSE | ||
Warrants to purchase Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants to purchase Common Stock | ||
Trading Symbol | MPWS | ||
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 519,652 | $ 2,757 |
Trade accounts receivable (including related parties) | 3,589 | 370 |
Inventories | 32,272 | 23,048 |
Prepaid expenses and other current assets | 5,534 | 1,234 |
Total current assets | 561,047 | 27,409 |
Non-current assets | ||
Restricted cash | 9,100 | 26,791 |
Property, plant and equipment, net | 501,974 | 46,386 |
Finance lease right-of-use assets | 1,028 | 586 |
Other non-current assets | 1,139 | 622 |
Total non-current assets | 513,241 | 74,385 |
Total assets | 1,074,288 | 101,794 |
Current liabilities | ||
Accounts payable and accrued liabilities | 16,136 | 12,029 |
Accounts payable and accrued liabilities—related parties | 23 | 2,146 |
Deferred revenue—related parties | 0 | 6,609 |
Current installments of long-term debt | 2,403 | 0 |
Current installments of long-term debt—related parties | 22,070 | 4,484 |
Current portion of finance lease liabilities | 266 | 194 |
Other current liabilities | 2,163 | 2,623 |
Other current liabilities—related parties | 0 | 3,230 |
Total current liabilities | 43,061 | 31,315 |
Non-current liabilities | ||
Asset retirement obligations | 25,570 | 23,894 |
Total environmental obligations | 16,602 | 16,628 |
Deferred revenue—related parties, net of current portion | 0 | 28,934 |
Long-term debt, net of current portion | 961 | 0 |
Long-term debt—related parties, net of current portion | 44,380 | 13,594 |
Finance lease liability, non-current | 736 | 399 |
Deferred income taxes | 87,473 | 0 |
Other non-current liabilities | 1,628 | 5,052 |
Total non-current liabilities | 177,350 | 88,501 |
Total liabilities | 220,411 | 119,816 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity (deficit): | ||
Preferred stock ($0.0001 par value, 50,000,000 shares authorized, none issued and outstanding in either year) | 0 | 0 |
Common stock ($0.0001 par value, 450,000,000 shares authorized, 170,719,979 and 66,556,975 shares issued and outstanding) | 17 | 7 |
Additional paid-in capital | 916,482 | 22,768 |
Accumulated deficit | (62,622) | (40,797) |
Total stockholders’ equity (deficit) | 853,877 | (18,022) |
Total liabilities and stockholders’ equity (deficit) | $ 1,074,288 | $ 101,794 |
CONSOLIDATED BALANCE SHEETS (PA
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued (shares) | 0 | 0 |
Preferred shares, outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (shares) | 450,000,000 | 450,000,000 |
Common stock, outstanding (shares) | 170,719,979 | 66,556,975 |
Common stock, issued (shares) | 170,719,979 | 66,556,975 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Product sales (including to related parties) | $ 134,310 | $ 73,411 |
Operating Costs and Expenses [Abstract] | ||
Cost of sales (including to related parties)(excluding depreciation, depletion and amortization) | 63,798 | 61,261 |
Royalty expense to SNR | 2,406 | 1,885 |
General and administrative expenses | 27,008 | 11,104 |
Depreciation, depletion and amortization | 6,931 | 4,687 |
Accretion of asset retirement and environmental obligations | 2,255 | 2,094 |
Settlement charge | 66,615 | 0 |
Total operating costs and expenses | 169,013 | 81,031 |
Operating loss | (34,703) | (7,620) |
Other income, net | 251 | 4,278 |
Interest expense, net | (5,009) | (3,412) |
Loss before income taxes | (39,461) | (6,754) |
Income tax benefit (expense) | 17,636 | (1) |
Net loss | $ (21,825) | $ (6,755) |
Net loss per share: | ||
Basic and diluted (in USD per share) | $ (0.27) | $ (0.10) |
Weighted-average shares outstanding: | ||
Basic and diluted (in shares) | 79,690,821 | 66,556,975 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Preferred Equity | Preferred EquityRetroactive application of recapitalization | Common Equity | Common EquityRetroactive application of recapitalization | Shenghe Warrant | Additional Paid-in Capital | Additional Paid-in CapitalRetroactive application of recapitalization | Accumulated Deficit |
Preferred units, beginning balance (units) at Dec. 31, 2018 | 110.98 | (110.98) | |||||||
Beginning balance (shares) at Dec. 31, 2018 | 0 | 0 | 66,556,975 | ||||||
Beginning balance at Dec. 31, 2018 | $ (11,267) | $ 2,275 | $ (2,275) | $ 20,500 | $ (20,493) | $ 0 | $ 0 | $ 22,768 | $ (34,042) |
Common unit, beginning balance (units) at Dec. 31, 2018 | 1,000 | (1,000) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (6,755) | (6,755) | |||||||
Preferred units, ending balance (units) at Dec. 31, 2019 | 0 | ||||||||
Ending balance (shares) at Dec. 31, 2019 | 0 | 66,556,975 | |||||||
Ending balance at Dec. 31, 2019 | (18,022) | $ 0 | $ 7 | 0 | 22,768 | (40,797) | |||
Common unit, ending balance (units) at Dec. 31, 2019 | 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of Shenghe Warrant | 53,846 | 53,846 | |||||||
Business Combination, including PIPE Financing (shares) | 60,738,714 | ||||||||
Business Combination, including PIPE Financing | 509,275 | $ 6 | (53,846) | 563,115 | |||||
SNR Mineral Rights Acquisition (shares) | 19,999,942 | ||||||||
SNR Mineral Rights Acquisition | 326,649 | $ 2 | 326,647 | ||||||
Common stock issuances (shares) | 21,484,898 | ||||||||
Common stock issuances | 0 | $ 2 | (2) | ||||||
Stock-based compensation (shares) | 2,013,006 | ||||||||
Stock-based compensation | 5,014 | 5,014 | |||||||
Shares used to settle payroll tax withholding (shares) | (69,083) | ||||||||
Shares used to settle payroll tax withholding | (996) | (996) | |||||||
Net loss | (21,825) | (21,825) | |||||||
Other (shares) | (4,473) | ||||||||
Other | (64) | (64) | |||||||
Preferred units, ending balance (units) at Dec. 31, 2020 | 0 | ||||||||
Ending balance (shares) at Dec. 31, 2020 | 0 | 170,719,979 | |||||||
Ending balance at Dec. 31, 2020 | $ 853,877 | $ 0 | $ 17 | $ 0 | $ 916,482 | $ (62,622) | |||
Common unit, ending balance (units) at Dec. 31, 2020 | 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | ||
Net loss | $ (21,825) | $ (6,755) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation, depletion and amortization | 6,931 | 4,687 |
Accretion of asset retirement and environmental obligations | 2,255 | 2,094 |
Loss (gain) on sale of equipment | 101 | (3,375) |
Stock-based compensation expense | 5,014 | 0 |
Accretion of debt discount | 3,146 | 1,001 |
Non-cash settlement charge | 66,615 | 0 |
Revenue recognized in exchange for debt principal reduction | (21,312) | 0 |
Decrease (increase) in operating assets: | ||
Trade accounts receivable (including related parties) | (3,219) | (145) |
Inventories | (9,224) | (9,573) |
Prepaid expenses, other current and non-current assets | 1,794 | (82) |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued liabilities | (3,848) | 6,246 |
Accrued interest | (1,519) | 1,761 |
Refund liability to related party | (2,746) | 162 |
Deferred revenue from related party | 1,933 | 7,061 |
Other current and non-current liabilities | (3,027) | (3,520) |
Deferred income taxes | (17,792) | 1 |
Net cash provided by (used in) operating activities | 3,277 | (437) |
Investing activities: | ||
Additions of property, plant and equipment | (22,370) | (2,274) |
Proceeds from sale of property, plant and equipment | 0 | 7,898 |
Net cash provided by (used in) investing activities | (22,370) | 5,624 |
Financing activities: | ||
Proceeds from long-term debt | 3,364 | 7,236 |
Proceeds from Second Additional Advance | 35,450 | 0 |
Proceeds from Business Combination, including PIPE Financing | 544,712 | 0 |
Principal payments on debt obligations and finance leases | (20,180) | (11,332) |
Payment of underwriting and transaction costs | (40,325) | 0 |
Other | (1,060) | 0 |
Net cash provided by (used in) financing activities | 521,961 | (4,096) |
Net change in cash, cash equivalents and restricted cash | 502,868 | 1,091 |
Cash, cash equivalents and restricted cash beginning balance | 29,572 | 28,481 |
Cash, cash equivalents and restricted cash ending balance | 532,440 | 29,572 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | 519,652 | 2,757 |
Restricted cash, current | 3,688 | 24 |
Restricted cash, non-current | $ 9,100 | $ 26,791 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION We own and operate the Mountain Pass facility, one of the world’s largest integrated rare earth mining and processing facilities and the only major rare earths resource in the Western Hemisphere. Our wholly-owned subsidiary, MP Mine Operations LLC, a Delaware limited liability company (“MPMO”), acquired the Mountain Pass mine and processing facilities in July 2017. Our wholly-owned subsidiary, Secure Natural Resources LLC, a Delaware limited liability company (“SNR”), holds the mineral rights to the Mountain Pass mine and surrounding areas as well as intellectual property rights related to the processing and development of rare earth minerals. The mine achieved commercial operations in July 2019 and we are currently working to restore the remainder of the facility for use in processing separated rare earth products. The Company is headquartered in Las Vegas, Nevada. References herein to the “Company,” “we,” “our,” and “us,” refer to MP Materials Corp. and its subsidiaries. The Business Combination (as defined below) was consummated on November 17, 2020, pursuant to the terms of a merger agreement entered into on July 15, 2020 (the “Merger Agreement”). Pursuant to the Merger Agreement, MPMO and SNR were combined with Fortress Value Acquisition Corp., a special purpose acquisition company (“FVAC”) (the “Business Combination”), and became indirect wholly-owned subsidiaries of FVAC, which was in turn renamed MP Materials Corp. The Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with generally accepted accounting principles in the United States (“GAAP”). The acquisition of SNR (the “SNR Mineral Rights Acquisition”) was treated as an asset acquisition. Furthermore, MPMO was deemed to be the accounting acquirer and FVAC the accounting acquiree, which, for financial reporting purposes, results in MPMO’s historical financial information becoming that of the Company. In addition, the common stock, preferred stock, additional paid-in capital, and earnings (loss) per share amounts presented in the Consolidated Financial Statements and these accompanying notes have been restated to reflect recapitalization. For further discussion, see Note 3, “Business Combination and Reverse Recapitalization.” On May 22, 2017, the Company entered into a set of commercial arrangements with Shenghe Resources (Singapore) International Trading Pte. Ltd. (“Shenghe”), a majority owned subsidiary of Leshan Shenghe Rare Earth Co., Ltd. (“Leshan Shenghe”) whose ultimate parent is Shenghe Resources Holding Co., Ltd., a leading global rare earth company listed on the Shanghai Stock Exchange, to fund the Company’s operations, identify operational efficiencies, and sell products to Shenghe and third parties. Shenghe has significant knowledge of the mining, processing, marketing and distribution of rare earth products, as well as access to customers in the Chinese market for these products. As part of these arrangements, Shenghe (and its controlled affiliates) became both the principal customer and a related party when Leshan Shenghe obtained a 9.99% non-voting preferred interest in MPMO. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” such preferred interest was effectively exchanged into shares of the Company’s common stock with a par value of $0.0001 per share (“Common Stock”). See also Note 4, “Relationship and Agreements with Shenghe,” for additional information. Operating segments are defined as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker views the Company’s operations and manages the business as one reportable segment. The cash flows and profitability of the Company’s operations are significantly affected by the market price of rare earth products. The prices of rare earth products are affected by numerous factors beyond the Company’s control. The products of the Company are sold globally, with a primary focus in the Asian market due to the refining capabilities of the region. Rare earth products are critical inputs in hundreds of existing and emerging clean-tech applications including electric vehicles and wind turbines as well as drones and defense applications. The Consolidated Financial Statements of the Company have been prepared in accordance with GAAP and with the rules and regulations of the U.S. Securities and Exchange Commission. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The Consolidated Financial Statements include the accounts of MP Materials Corp. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Concentration of Risk: As of December 31, 2020, Shenghe accounted for more than 90% of product sales. Shenghe, a related party of the Company, has entered into an arrangement to purchase substantially all of the Company’s production, and has previously purchased the Company’s stockpile inventory. While as with any contract there is risk of nonperformance, we do not believe that it is reasonably possible that the agreement will be terminated in the near term as it would significantly delay Shenghe’s recovery of non-interest-bearing advance payments that are recognized by the Company as debt. See Note 4, “Relationship and Agreements with Shenghe,” for additional information. Furthermore, while revenue is generated in the United States, our principal customer is located in China and may transport and sell products in the Chinese market; therefore, the Company’s gross profit is affected by Shenghe’s ultimate realized prices in China. In addition, there is an ongoing economic conflict between China and the United States that has resulted in tariffs and trade barriers that may negatively affect the Company’s business and results of operations. In December 2019, a novel strain of coronavirus (known as “COVID-19”) began to impact the population of China, where our principal customer is located. The outbreak of COVID-19 has grown both in the United States and globally, and related government and private sector responsive actions have adversely affected the global economy, including significant business and supply chain disruption as well as broad-based changes in supply and demand. In December 2019, a series of emergency quarantine measures taken by the Chinese government disrupted domestic business activities in China during the weeks after the initial outbreak of COVID-19. Since that time, an increasing number of countries, including the United States, have imposed restrictions on travel to and from China and elsewhere, as well as general movement restrictions, business closures and other measures imposed to slow the spread of COVID-19. At the onset of the outbreak, we initially experienced shipping delays due to overseas port slowdowns and container shortages, but we did not experience a reduction in production or sales. However, in the fourth quarter of 2020, we began to again see shipping delays and container shortages from congestion at ports, which has been exacerbated by COVID-19. Congestion at U.S. and international ports could affect the capacity at ports to receive deliveries of products or the loading of shipments onto vessels. As the situation continues to develop, it is impossible to predict the effect and ultimate impact of the COVID-19 pandemic on the Company’s business and results of operations. While the quarantine, social distancing and other regulatory measures instituted or recommended in response to COVID-19 are expected to be temporary, the duration of the business disruptions, and related financial impact, cannot be estimated at this time. Use of Estimates : The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to the recoverability of inventory; the useful lives and recoverability of long-lived assets (such as the effects of mineral reserves and cash flows from operating the mine in determining the life of the mine); uncertain tax positions; the valuation allowance of deferred tax assets; asset retirement and environmental obligations; and determining the fair value of assets and liabilities in acquisitions and financial instruments in connection with transactions that require initial measurement to be at fair value. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ from those estimates. Cash and cash equivalents: Cash and cash equivalents consist of all cash balances and highly liquid investments with a maturity of three months or less when purchased. Restricted cash consists of funds that are contractually restricted as to usage or withdrawal due to legal agreement. The Company determines current or non-current classification based on the expected duration of the restriction. Restricted cash principally relates to cash that is pledged as collateral in connection with surety bonds placed with California state and regional agencies related to closure and reclamation obligations. See also Note 6 , “ Restricted Cash .” Trade Accounts Receivable: Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the need for an allowance for doubtful accounts quarterly based on historical experience with each customer and the specifics of each arrangement. As of December 31, 2020, and 2019, the Company did not have an allowance for doubtful accounts, as principally all of our receivables are from sales to Shenghe and amounts not received in cash would be offset by reductions in the principal balance owed to Shenghe. Inventories: Inventories consist of raw materials and supplies, work in process (referred to as “in-process inventory”), and finished goods. Materials and supplies consist of raw materials, spare parts, reagent chemicals, and packaging materials. In-process inventory primarily consists of stockpiles of mined bastnaesite ore in various stages of the production process. Finished goods primarily consist of packaged bastnaesite concentrate. Raw materials, in-process inventory and finished goods are carried at average actual cost. Supplies are carried at moving average cost. All inventories are carried at the lower of cost or net realizable value, which represents the estimated selling price of the product during the ordinary course of business based on current market conditions. Inventory cost includes all expenses directly attributable to the manufacturing process, including labor and stripping costs, and an appropriate portion of production overhead, including depletion, based on normal operating capacity. Stockpiled ore tonnages are verified by periodic surveys. Management evaluates the carrying amount of inventory on a periodic basis, considering slow-moving items, obsolescence, excess inventory levels, and other factors and recognizes related write-downs in cost of sales. See also Note 7, “Inventories.” Property, Plant and Equipment: Property, plant and equipment are recorded at cost and depreciated over their useful lives. Expenditures for new property, plant and equipment and improvements that extend the useful life or functionality of the assets are recorded at their cost of acquisition or construction. Depreciation on property, plant and equipment is recognized on a straight-line basis over their estimated useful lives, as follows: Years Machinery and equipment 3-10 Buildings 40 Land improvements 25 Assets under construction include costs directly attributable to the construction or development of long-term assets. These costs may include labor and employee benefits associated with the construction of the asset, site preparation, permitting, engineering, installation and assembly, procurement, insurance, legal, commissioning, and interest on borrowings to finance the construction of the assets. Depreciation is not recorded on the related assets until they are placed in service or are ready for their intended use. Repair and maintenance costs that do not extend the useful life of an asset are expensed as incurred. Gains and losses arising from the disposal of property, plant and equipment are determined as the difference between the proceeds from disposal and the carrying amount of the asset and are included in “Other income, net” within our Consolidated Statements of Operations. Property, plant and equipment primarily relate to the Company’s Mountain Pass facility and open-pit mine. In addition to the mine, the facility includes a crusher and mill/flotation plant, mineral recovery and separation plants, tailings processing and storage facilities, on-site evaporation ponds, a combined heat and power plant, water treatment facilities, a Chlor-Alkali plant, as well as laboratory facilities to support research and development activities, offices, warehouses and support infrastructures. See also Note 8, “Property, Plant and Equipment.” Mineral Rights: The Company capitalizes costs for acquiring and leasing mining properties and expenses costs to maintain mineral rights as incurred. Depletion on mineral rights is recognized on a straight-line basis over the estimated useful life of the mine, which is approximately 24 years. In connection with the SNR Mineral Rights Acquisition, the Company recorded the additional cost of acquiring the mineral rights pertaining to the rare earth ores contained in the Mountain Pass mine, which was SNR’s sole operating asset. Prior to the SNR Mineral Rights Acquisition, MPMO and SNR were considered related parties (see Note 18, “Related Party Transactions” ). As discussed in Note 18, “Related Party Transactions,” upon entering into the Royalty Agreement (as defined in Note 18, “Related Party Transactions” ), the Company recognized an asset equal to the present value of minimum royalty payments owed to SNR under the Royalty Agreement as an acquisition cost of the 97.5% working interest. Mineral rights are classified as a component of “Property, plant and equipment” within our Consolidated Balance Sheets. See also Note 8, “Property, Plant and Equipment.” Mine Development Costs: Mine development costs include acquisition costs, drilling costs, and the cost of other development work, all of which are capitalized during the development phase. Production costs are capitalized into inventory or expensed as incurred. At the time of acquiring the 97.5% working interest, the mine had already been in a producing stage, but was idled and in care and maintenance; therefore, costs associated with the return to production were capitalized to inventory as incurred. Additionally, costs incurred above the amount required to return the mine to production, including certain overburden mining activities, were expensed as incurred. Leases: The Company determines if an arrangement is, or contains, a lease at contract inception. In some cases, the Company has determined that its lease arrangements include both lease and non-lease components. The Company has elected to use a practical expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. The Company recognizes lease liabilities and right-of-use (“ROU”) assets upon commencement for all leases with a lease term greater than 12 months. The Company has elected to use a practical expedient to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheets for the majority of its asset classes. These short-term leases are expensed on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatements or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset amortizes on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. See also Note 10, “Lease Obligations.” Impairment of Long-Lived Assets: Long-lived assets, including mineral rights, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. In estimating undiscounted cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of undiscounted cash flows from other asset groups. Management’s estimates of undiscounted cash flows are based on numerous assumptions and it is possible that actual cash flows may differ significantly from estimates, as actual produced reserves, prices, commodity-based and other costs, and closure costs are each subject to significant risks and uncertainties. The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of the Company’s mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average prices. In addition to short- and long-term price assumptions, other assumptions include estimates of production costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates; and estimated future closure costs. If the carrying amount of the long-lived asset or asset groups is not recoverable on an undiscounted cash flows basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, based on the approach the Company believes a market participant would use. An impairment loss, if any, is recorded for the excess of the asset’s (or asset group’s) carrying amount over its fair value, as determined by a valuation technique appropriate to the given circumstances. There were no impairment indicators or impairments recognized for the years ended December 31, 2020 and 2019. Offtake Advances Accounted for as Debt Obligations and Debt Discount: Subsequent to the June 2020 Modification to the Original Offtake Agreement, the Company accounts for net prepayments or other advances received from Shenghe prior to or in connection with the June 2020 Modification as debt. The associated debt discount is amortized to interest expense using the effective interest method over management’s estimated contractual term of the underlying indebtedness. The debt discount reduces the carrying amount of the associated debt. See also, Note 9, “ Debt Obligations. ” Asset Retirement Obligations: The Company recognizes asset retirement obligations (“AROs”) for estimated costs of legally and contractually required closure, dismantlement, and reclamation activities associated with the Mountain Pass mine and processing facility. AROs are initially recognized at their estimated fair value in the period in which the obligation originates. Fair value is based on the expected timing of reclamation activities, cash flows to perform activities, amount and uncertainty associated with the cash flows, including adjustments for a market risk premium, and discounted using a credit-adjusted risk-free rate. The liability is accreted over time through periodic charges to earnings and reduced as reclamation activities occur with differences between estimated and actual amounts recognized as an adjustment to operating expenses. Subsequent increments in expected undiscounted cash flows are measured at their discounted values using updated estimates of the Company’s credit-adjusted risk-free rate applied to the increment only. Subsequent decrements are reduced based on the weighted-average discount rate associated with the obligation. As of December 31, 2020, the credit-adjusted risk-free rate ranged between 7.1% and 8.2% depending on the timing of expected settlement and when the layer or increment was recognized. There were no increments or decrements for the year ended December 31, 2020. Associated asset retirement costs, including the effect of increments and decrements, are recognized as adjustments to the related asset’s carrying amount and depreciated over its remaining useful life. See also Note 11, “Asset Retirement and Environmental Obligations.” Environmental Obligations: The Company has assumed certain environmental remediation obligations that primarily relate to groundwater monitoring activities. Estimated remediation costs are accrued based on management’s best estimate at the end of each reporting period of the costs expected to be incurred at a site to settle the obligation when those amounts are probable and estimable. Such cost estimates may include ongoing care, maintenance and monitoring costs associated with remediation activities. Changes in remediation estimates are reflected in earnings in the period an estimate is revised. Remediation costs included in environmental obligations are discounted to their present value when payments are readily estimable, and are discounted using a risk-free rate, which the Company derives from U.S. Treasury yields. See also N ote 11, “Asset Retirement and Environmental Obligations.” Revenue Recognition: The Company’s revenue comes from sales of rare earth products produced at the Mountain Pass facility. The Company’s sales are primarily to an affiliate of Shenghe. The Company’s performance obligation is to deliver rare earth products to the agreed-upon delivery point, and the Company recognizes revenue at the point in time control of the products transfers to the customer, which is typically when the rare earth products are delivered to the agreed-upon shipping point. At that point, the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the products, and the customer bears the risk of loss. For sales to third parties, the transaction price is agreed to at the time the sale is entered into. For sales entered into with the related party, the transaction price is typically based on an agreed-upon price per metric ton, subject to certain quality adjustments depending on the measured characteristics of the product, with an adjustment for the ultimate market price of the product realized by Shenghe and certain other discounts. These ultimate market prices are forms of variable consideration. The Company typically negotiates with and bills an initial price to Shenghe; such prices are then updated based on final adjustments for quality differences and/or actual sales prices realized by Shenghe. Initial pricing is typically billed upon delivering the product to the agreed-upon shipping point and paid within 30 days or less. Final adjustments to prices may take longer to resolve. When the final price has not been resolved by the end of a reporting period, the Company estimates the expected sales price based on the initial price, current market pricing and known quality measurements, and further constrains such amounts to an amount that is probable not to result in a significant reversal of previously-recognized revenue. Revenue from product sales is recorded net of taxes collected from customers that are remitted to governmental authorities. When appropriate, the Company applies a portfolio approach in estimating a refund obligation. Prior to the June 2020 Modification (as defined in Note 4, “Relationship and Agreements with Shenghe” ), the Company had also received significant prepayments (referred to as “Offtake Advances”) from Shenghe. The Company had determined that the prepayments did not have a significant financing component, based on the uncertainty associated with the timing of delivery and on the relationship of the payment to the other payments required under the Original Offtake Agreement. See Note 4, “Relationship and Agreements with Shenghe,” for further information on the June 2020 Modification as well as the Offtake Advances from Shenghe. See also Note 5, “Revenue Recognition.” Stock-Based Compensation: The cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and the expense is recognized ratably over the requisite service period. The fair value of Stock Awards (as defined in Note 15, “Stock-based Compensation,” ) is equal to the fair value of the Company’s stock on the grant date. Stock Awards with graded vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company accounts for forfeitures in the period in which they occur based on actual amounts. See also Note 15, “Stock-based Compensation.” Earnings (Loss) Per Share: Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as unvested restricted stock awards. See also Note 17, “Earnings (Loss) per Share.” Commitments and 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 can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. See also Note 13, “Commitments and Contingent Liabilities.” Income Taxes: The Company accounts for income taxes using the balance sheet method, recognizing certain temporary differences between the book basis of the liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. Management derives a deferred income tax expense or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See also Note 12, “Income Taxes.” Valuation of Deferred Tax Assets: The Company’s deferred income tax assets include certain future tax benefits. Management records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. In determining the requirement for a valuation allowance, the Company evaluated all available positive and negative evidence. Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. Management looks to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date, recent pretax losses and/or expectations of future pretax losses. Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to: • Earnings history; • Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices; • The duration of statutory carry forward periods; • Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference; • Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and • The sensitivity of future forecasted results to commodity prices and other factors. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, recent cumulative losses are not solely determinative of the need for a valuation allowance. Management also considers all other available positive and negative evidence in its analysis. Recently Issued Accounting Pronouncements: As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”), which sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2021, with early adoption permitted. The provisions of ASU 2016-13 must be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We have elected to adopt ASU 2016-13 effective January 1, 2021, and its impact on our Consolidated Financial Statements is not material. In August 2018, the FASB issued ASU No. 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” (“ASU 2018-15”), which 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. ASU 2018-15 requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. ASU 2018-15 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2021, with early adoption permitted. The provisions of ASU 2018-15 may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have elected to adopt ASU 2018-15 effective January 1, 2021, and its impact on our Consolidated Financial Statements is not material. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC Topic 740, “Income Taxes,” and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the impact that the adoption of ASU 2019-12 will have on our Consolidated Financial Statements. Reclassifications: To conform to the current year presentation, the Company reclassified the balance of its right-of-use assets associated with finance lease in the Consolidated Balance Sheet as of December 31, 2019, from “Property, plant and equipment, net” to “Finance lease right-of-use assets.” This reclassification had no effect on net loss, total assets or accumulated deficit as previously reported. |
BUSINESS COMBINATION AND REVERS
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION | 12 Months Ended |
Dec. 31, 2020 | |
Business Combination And Asset Acquisition [Abstract] | |
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION | BUSINESS COMBINATION AND REVERSE RECAPITALIZATION The Business Combination was consummated on November 17, 2020, pursuant to the Merger Agreement whereby MPMO and SNR, a company that holds the mineral rights to our mine, were combined with FVAC and became indirect wholly-owned subsidiaries of FVAC, which was in turn renamed MP Materials Corp. As of December 31, 2019, and through to the date of the Business Combination, MPMO had 1,000 voting common units with no par value and 110.98 non-voting preferred units with no par value, which were held by Leshan Shenghe, outstanding. In addition, as discussed in Note 4, “Relationship and Agreements with Shenghe,” in connection with the June 2020 Modification, MPMO issued the Shenghe Warrant. Immediately prior to the Business Combination, the Shenghe Warrant was exercised and MPMO issued 89.88 non-voting preferred units with no par value to Leshan Shenghe. As a result, 200.86 non-voting preferred units were outstanding immediately prior to the Business Combination. In connection with the Business Combination and pursuant to the Merger Agreement, the Company issued shares of its Common Stock to unitholders of MPMO at an exchange ratio of approximately 59,908.35 shares of the Company’s Common Stock for each common unit and preferred unit of MPMO, resulting in the issuance of 71,941,538 shares of our Common Stock. In addition, in connection with the SNR Mineral Rights Acquisition, 19,999,942 shares (adjusted for fractional shares) of our Common Stock were issued to SNR unitholders. See below for further discussion of the SNR Mineral Rights Acquisition. Immediately prior to the consummation of the Business Combination and pursuant to the Parent Sponsor Warrant Exchange Agreement, entered into by FVAC and Fortress Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), on July 15, 2020, the Sponsor exchanged all 5,933,333 of its private placement warrants (the “Private Placement Warrants”) for an aggregate of 890,000 shares of FVAC Class F common stock that, upon the consummation of the Business Combination, were converted into Common Stock of the Company (the “Parent Sponsor Warrant Exchange”). In connection with the consummation of the Business Combination, the Company issued, in a private placement transaction, an aggregate of 20,000,000 shares of Common Stock for an aggregate purchase price of $200.0 million, to PIPE investors pursuant to the terms of respective subscription agreements entered into separately between the Company and each PIPE investor, each dated July 15, 2020 (the “PIPE Financing”). After giving effect to the above, shares of our Common Stock issued and outstanding immediately after the closing of the Business Combination were as follows (including restricted stock issued to certain executives upon closing): Shareholder Number of Shares FVAC public stockholders (1) 34,464,151 Private Placement Warrants 890,000 MPMO unitholders (2) 71,941,538 SNR unitholders 19,999,942 PIPE Financing 20,000,000 Restricted stock issued to certain MPMO executives 2,013,006 Total 149,308,637 (1) Represents the outstanding shares held by FVAC’s public stockholders (Class A common stock) which were not redeemed in connection with the Business Combination. The Company received gross proceeds of $344.7 million and net proceeds of $332.6 million after $12.1 million of underwriting commissions in connection with the sale of these shares. (2) Includes 5,384,563 shares issued relating to the Shenghe Warrant, which was issued on June 5, 2020. MPMO’s merger with FVAC was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, FVAC was treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the merger was treated as the equivalent of MPMO issuing stock for the net assets of FVAC, accompanied by a recapitalization. The net assets of FVAC are stated at historical cost, with no goodwill or other intangible assets recorded. Among other factors, MPMO was determined to be the accounting acquirer principally on the basis that its unitholders would hold the greatest voting interest in the combined company, the majority of executive management of MPMO remained with the Company, and MPMO had a significantly larger employee base and substantive operations. Pursuant to the amended and restated letter agreement dated July 15, 2020, and amended and restated on August 26, 2020, by and among FVAC and the holders of FVAC Class F common stock, all of the shares of FVAC Class A common stock issued upon the conversion of FVAC Class F common stock (held by insiders initially purchased prior to the FVAC initial public offering (“IPO”)), were subject to certain vesting and forfeiture provisions (the “Vesting Shares”) based on the achievement of certain volume weighted-average price (“VWAP”) thresholds of the Company’s Common Stock. The holders of MPMO Holding Company, which was a Delaware corporation formed by MPMO pursuant to the Merger Agreement (“MPMO HoldCo”), preferred stock and common stock and SNR Holding Company, LLC, which was a Delaware limited liability company formed by SNR pursuant to the Merger Agreement, common stock immediately prior to the closing of the Business Combination were given the contingent right to receive up to an additional 12,860,000 shares of the Company’s Common Stock (the “Earnout Shares”) based on the achievement of certain VWAP thresholds of the Company’s Common Stock. The Company has determined that the Earnout Shares issued to the Sponsor, holders of MPMO HoldCo preferred stock and common stock, and holders of SNR HoldCo common stock meet the criteria for equity classification under Accounting Standards Codification (“ASC”) Subtopic 815-40, “Contracts in Entity’s Own Equity.” The Company estimated the total fair value of the Earnout Shares at closing of the Business Combination to be $171.2 million, consisting of $134.0 million and $37.2 million ascribed to the MPMO and SNR earnouts, respectively. In December 2020, 8,625,000 Vesting Shares vested and 12,859,898 Earnout Shares (adjusted for fractional shares) were issued after achievement of the aforementioned VWAP thresholds. As of December 31, 2020, the Vesting Shares and the Earnout Shares delivered to the equityholders are recorded as equity with an allocation between common stock at par value and additional paid-in capital, and the Earnout Shares delivered to MPMO equityholders were accounted for as a distribution. Since all Earnout Shares were determined to be equity-classified at initial recognition and through the date of achievement of the thresholds, no remeasurement was required. SNR Mineral Rights Acquisition The acquisition of SNR did not meet the criteria for the acquisition of a business under ASC Topic 805, “Business Combinations” (“ASC 805”), and was accounted for as an asset acquisition since substantially all of the fair value of the assets acquired was concentrated in a single asset. The principal asset acquired in the SNR Mineral Rights Acquisition was the mineral rights for the rare earth ores contained in the Company’s mine, which was SNR’s sole operating asset. MPMO and SNR had a historical relationship prior to the Business Combination, specifically related to the Royalty Agreement and an intellectual property license between MPMO and SNR. The Company considered the provisions of ASC 805 regarding the settlement of pre-existing relationships. Immediately prior to the consummation of the Business Combination, MPMO had a $3.9 million liability related to the minimum royalty, which was effectively settled through intercompany when MPMO and SNR became wholly-owned subsidiaries of the Company. The settlement of the liability is reflected in the cost of the acquisition due to the pre-existing contractual relationship being cancellable without penalty and no gain or loss is recognized. For further information on the Royalty Agreement and the liability related to the minimum royalty, see Note 18, “Related Party Transactions.” The following table summarizes the consideration and assets acquired and liabilities assumed in the SNR Mineral Rights Acquisition: (in thousands) Total cost of acquisition (1) $ 324,125 Assets acquired: Prepaid assets $ 76 Mineral rights 434,707 Deferred tax assets 134 Total assets acquired: 434,917 Liabilities assumed: Accounts payable and accrued liabilities (1,681) Deferred tax liabilities (109,111) Total liabilities assumed (110,792) Total net assets acquired $ 324,125 (1) Includes consideration transferred to SNR of $287.8 million based on the fair value of 20,000,000 shares of Common Stock transferred using a price per share of $14.39, the closing stock price on the date the Business Combination was consummated, transaction costs of $2.0 million, the settlement of the liability related to the minimum royalty of $3.9 million, net of deferred tax impact of $1.0 million, and estimated fair value of the Earnout Shares to be issued to SNR unitholders of $37.2 million upon the achievement of certain stock price milestones during a specified post-merger measurement period, and subject to certain additional terms, as outlined in the Merger Agreement. The Company obtained the fair value based on a Monte Carlo simulation model using certain underlying assumptions such as stock price, volatility, risk-free interest rates and dividend payments. Transaction Costs |
RELATIONSHIP AND AGREEMENTS WIT
RELATIONSHIP AND AGREEMENTS WITH SHENGHE | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATIONSHIP AND AGREEMENTS WITH SHENGHE | RELATIONSHIP AND AGREEMENTS WITH SHENGHE Original Commercial Agreements In connection with the acquisition and development of the Mountain Pass facility, MPMO entered into a set of commercial arrangements with Shenghe. Shenghe and its affiliates primarily engage in the mining, separation, processing and distribution of rare earth products. MPMO also issued to Leshan Shenghe 110.98 MPMO preferred units, which represented all of the issued and outstanding MPMO preferred units at the time. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” in connection with the Business Combination, these MPMO preferred units were exchanged for MPMO HoldCo preferred stock and eventually our Common Stock and the contingent right to receive Earnout Shares. The original commercial arrangements with Shenghe were entered into in May 2017, prior to MPMO’s acquisition of the Mountain Pass facility. These agreements principally consisted of a technical services agreement (the “TSA”), an offtake agreement (the “Original Offtake Agreement”), and a distribution and marketing agreement (the “DMA”). Under the TSA, Shenghe provided technical services, know-how and other assistance to MPMO in order to facilitate the development and operations of Mountain Pass. In addition, both the TSA and the Original Offtake Agreement imposed certain funding obligations on Shenghe. The Original Offtake Agreement required Shenghe to advance an initial $50.0 million (the “Initial Prepayment Amount”) over time to MPMO to fund the restart of operations at the mine and the TSA required Shenghe to fund any additional operating and capital expenditures required to bring the Mountain Pass facility to full operability. Shenghe also agreed to provide additional funding in the amount of $30.0 million to MPMO pursuant to a separate letter agreement dated June 20, 2017 (the “Letter Agreement”) (the “First Additional Advance”), in connection with MPMO’s acquisition of the Mountain Pass facility. In addition to the repayment of the First Additional Advance in cash, pursuant to the Letter Agreement, the Initial Prepayment Amount increased by $30.0 million. We refer to the aggregate prepayments made by Shenghe pursuant to the Original Offtake Agreement and the Framework Agreement (as defined below), as adjusted for Gross Profit Recoupment (as defined below) amounts and any other qualifying repayments to Shenghe, inclusive of the $30.0 million increase to the Initial Prepayment Amount, as the “Prepaid Balance.” As discussed below, the entrance into the Letter Agreement constituted a modification to the Original Offtake Agreement for accounting purposes (referred to as the “June 2017 Modification”), which ultimately resulted in the Shenghe Implied Discount (as defined below). Under the terms of these agreements, the amounts funded by Shenghe constitute prepayments for the rare earth products to be sold to Shenghe historically under the Original Offtake Agreement (and currently under the A&R Offtake Agreement, as defined below). Under the Original Offtake Agreement, upon the mine achieving certain milestones and being deemed commercially operational (which was achieved on July 1, 2019), MPMO sold to Shenghe, and Shenghe purchased on a firm “take or pay” basis, all of the rare earth products produced at the Mountain Pass facility. Shenghe marketed and sold these products to customers, and retained the gross profits earned on subsequent sales. The gross profits were credited against the Prepaid Balance, and provided the means by which MPMO repaid, and Shenghe recovered, such amounts (the “Gross Profit Recoupment”). Under the Original Offtake Agreement, MPMO was obliged to sell all Mountain Pass facility rare earth products to Shenghe until Shenghe had fully recouped all of its prepayments (i.e., the Prepaid Balance is reduced to zero), at which point the Original Offtake Agreement would terminate automatically. As originally entered, the DMA was to become effective upon termination of the Original Offtake Agreement. The DMA provided for a distribution and marketing arrangement between MPMO and Shenghe, subject to certain exceptions. MPMO retained the right to distribute its products directly to certain categories of customers. As compensation for Shenghe’s distribution and marketing services, the DMA entitled Shenghe to 35% of the net profits from the sale of rare earth products produced at the Mountain Pass facility (the “Net Profit-Based Commission”). See below for further discussion of the DMA termination and associated accounting treatment. In order to secure Shenghe’s performance under the Original Offtake Agreement and TSA, Leshan Shenghe issued a parent guaranty to MPMO in May 2017 (the “Shenghe Guaranty”), and entered into an equity pledge agreement (the “Shenghe Pledge Agreement”) in June 2017. Framework Agreement and Restructured Commercial Arrangements In May 2020, we entered into a framework agreement and amendment (the “Framework Agreement”) with Shenghe and Leshan Shenghe that significantly restructured the parties’ commercial arrangements and provided for, among other things, a revised funding amount and schedule to settle Shenghe’s prepayment obligations to MPMO, as well as either the amendment or termination of the various agreements between the parties, as discussed below. Pursuant to the Framework Agreement, we entered into an amended and restated offtake agreement with Shenghe and Leshan Shenghe on May 19, 2020 (the “A&R Offtake Agreement”), which, upon effectiveness, superseded and replaced the Original Offtake Agreement, and MPMO issued to Shenghe a warrant on June 2, 2020 (the “Shenghe Warrant”), exercisable at a nominal price for 89.88 MPMO preferred units, which, at the time, reflected approximately 7.5% of MPMO’s equity on a diluted basis, subject to certain restrictions. Pursuant to the Framework Agreement, Shenghe funded the remaining portion of the Initial Prepayment Amount and agreed to fund an additional $35.5 million advance to us (the “Second Additional Advance” and together with the Initial Prepayment Amount, inclusive of the $30.0 million increase pursuant to the Letter Agreement, the “Offtake Advances”), which amounts were fully funded on June 5, 2020. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” the Shenghe Warrant was exercised in full for MPMO preferred units, which were exchanged for MPMO HoldCo preferred stock and eventually our Common Stock and the contingent right to receive Earnout Shares in connection with the Business Combination. Upon the funding of the remaining obligations on June 5, 2020, (i) the TSA and the DMA were terminated (as described below), (ii) the A&R Offtake Agreement and the Shenghe Warrant became effective, and (iii) the Shenghe Guaranty and the Shenghe Pledge Agreement were terminated (such events are collectively referred to as the “June 2020 Modification”). Thus, at the present time, Leshan Shenghe’s and Shenghe’s involvement with MPMO and the Mountain Pass facility consists of only the A&R Offtake Agreement. The A&R Offtake Agreement maintains the key take-or-pay, amounts owed on actual and deemed advances from Shenghe, and other terms of the Original Offtake Agreement, with the following material changes: (i) modifies the definition of “offtake products” in order to remove from the scope of that definition lanthanum, cerium and other rare earth products that do not meet the specifications agreed to under the A&R Offtake Agreement; (ii) as to the offtake products subject to the A&R Offtake Agreement, provides that if we sell such offtake products to a third party, then, until the Prepaid Balance has been reduced to zero, we will pay an agreed percentage of our revenue from such sale to Shenghe, to be credited against the amounts owed on Offtake Advances; (iii) replaces the Shenghe Sales Discount (as defined in Note 5, “Revenue Recognition” ) under the Original Offtake Agreement with a fixed monthly sales charge; (iv) provides that the purchase price to be paid by Shenghe for our rare earth products (a portion of which reduces the Prepaid Balance rather than being paid in cash) will be based on market prices (net of taxes, tariffs and certain other agreed charges) less applicable discounts, instead of our cash cost of production; (v) obliges us to pay Shenghe, on an annual basis, an amount equal to our annual net income, less any amounts recouped through the Gross Profit Recoupment mechanism over the course of the year, until the Prepaid Balance has been reduced to zero; (vi) obliges us to pay Shenghe the net after-tax profits from certain sales of assets until the Prepaid Balance has been reduced to zero (this obligation was previously contained in the TSA); and (vii) provides for certain changes to the payment, invoicing and delivery terms and procedures for products. The purchase price and other terms applicable to a quantity of offtake products are set forth in monthly purchase agreements between MPMO and Shenghe. As with the Original Offtake Agreement, the A&R Offtake Agreement will terminate when Shenghe has fully recouped all of its prepayment funding. Following that termination, MPMO will have no contractual arrangements with Shenghe for the distribution, marketing or sale of rare earth products. Accounting for the June 2017 Modification As discussed above, pursuant to the Letter Agreement, Shenghe agreed to provide additional funding via a short-term, non-interest-bearing note in the amount of $30.0 million to the Company (defined above as the “First Additional Advance”), which required repayment within one year. Furthermore, under the terms of the Letter Agreement, Shenghe became entitled to an additional $30.0 million recovery through an increase to the Prepaid Balance. Therefore, under the terms of the Letter Agreement, Shenghe would ultimately receive repayment of the short-term debt instrument from the Company, and also be entitled to realize an additional $30.0 million as a part of the contractual Gross Profit Recoupment from ultimate sales to its customers. The Company concluded that the $30.0 million proceeds received from Shenghe should be allocated between (i) the non-interest-bearing debt instrument and (ii) the existing revenue arrangement (under the terms of the Original Offtake Agreement) on a relative fair value basis. As a result of such analysis, the Company determined that the debt instrument had a relative fair value of $26.5 million and the modification to the revenue arrangement had a relative fair value of $3.5 million. As discussed, in Note 5, “Revenue Recognition,” the fair value allocated to the modification of the revenue arrangement was recorded as an increase to “Deferred revenue” in the Company’s Consolidated Balance Sheets. The First Additional Advance was repaid in full by the Company in 2018. Based on the relationship between (i) the deemed proceeds the Company would ultimately receive from the Initial Prepayment Amount (adjusted for (a) the fair value of the preferred interest provided to Shenghe at the time of entering into the aforementioned commercial arrangements of $2.3 million and (b) the fair value allocated to the modification of the revenue arrangement of $3.5 million) and (ii) the contractual amount owed to Shenghe (i.e., the Prepaid Balance, which included the Initial Prepayment Amount and the additional $30.0 million adjustment to the Prepaid Balance in connection with the Letter Agreement) at the time, the June 2017 Modification resulted in an implied discount on the Company’s sales prices to Shenghe under the Original Offtake Agreement, for accounting purposes (the “Shenghe Implied Discount”). The Shenghe Implied Discount is applicable to Shenghe’s gross profit on the sales of rare earth products to its own customers (for sales made between July 2019 and early June 2020). That gross profit is a contractually determined amount based on Shenghe’s realized sales price (net of taxes, tariffs, and certain other adjustments, such as demurrage) compared to the agreed-upon cash cost Shenghe would pay to the Company. The Shenghe Implied Discount amounted to 36% of that contractually determined gross profit amount. The impact on the recorded amount of revenue as a result of the Shenghe Implied Discount is discussed in Note 5, “Revenue Recognition.” Accounting for the June 2020 Modification As noted above, in June 2020, the Company renegotiated various aspects of its relationship with Shenghe and entered into the Framework Agreement to significantly restructure the aforementioned set of arrangements. Prior to the June 2020 Modification, for accounting purposes, the Original Offtake Agreement constituted a deferred revenue arrangement; however, as a result of the June 2020 Modification, the A&R Offtake Agreement constituted a debt obligation as well as provided for the issuance of the Shenghe Warrant. For further discussion of the deferred revenue arrangement, see Note 5, “ Revenue Recognition, ” and for further discussion of the debt obligation, see Note 9, “ Debt Obligations. ” The DMA provided Shenghe with the right of first refusal to be the Company’s distribution and marketing agent for product sales after the expiration of the Original Offtake Agreement and until April 2047 in exchange for the Net Profit-Based Commission. Under the Original Offtake Agreement, Shenghe would also have been responsible for funding additional advance payments toward the next stage of the mine and facility’s development (referred to below as the “Stage II optimization project”). The agency relationship was not to commence until any such additional amount was also recovered under the Original Offtake Agreement. Although it had not yet commenced, the DMA was enforceable, and could only be terminated upon the mutual agreement of the parties involved. At its inception in May 2017, the DMA was determined to be at-market, as it provided an expected commission to Shenghe for its services, and was consistent with the Company’s expectations for a regular sales commission based on its revenue and cost expectations at the time. As part of renegotiating the commercial arrangements in connection with the June 2020 Modification, the Company determined that the existing arrangement within the DMA now provided Shenghe with a favorable, off-market return for the future distribution and marketing services, due in part to (i) favorable changes in expected profitability, driven partially by changes in tariffs, as well as cost performance in Stage I, (ii) favorable estimates of the capital cost of the Stage II optimization project, and (iii) favorable changes in expected production, based on higher than forecast contained rare earth oxides production in Stage I. Taken together, the Company concluded that the above factors would likely result in materially lower per-unit costs (including depreciation) and higher profitability versus its original estimates. Therefore, these changes in circumstances meant that the Net Profit-Based Commission would no longer be commensurate with the value of the service; and therefore, created an off-market feature. These same factors would also result in the Company fulfilling its obligations under the Original Offtake Agreement more quickly, which would in turn result in a longer period of payments under the now-unfavorable terms of the DMA. In addition, as noted above, Shenghe would still have had to provide the additional advances required to complete the Stage II optimization project, which would have created a near-term cash commitment for Shenghe. While these costs were expected to be approximately $200 million, Shenghe would have remained exposed to the potential that actual costs exceed these estimates and remained committed to fund them. Further, these upfront payments were to be non-interest bearing, exposing Shenghe to economic cost from the time value of money. Therefore, as part of the renegotiations, the Company and Shenghe agreed to terminate the DMA. As a result of the June 2020 Modification, specifically the termination of the DMA, the Company recorded a non-cash settlement charge of $66.6 million during the year ended December 31, 2020. Ultimately, the renegotiations resulted in the following exchange, which is also referenced in Note 19, “Supplemental Cash Flow Information,” as a transaction with significant non-cash components: (in thousands) As of June 2020 Modification Deemed proceeds for fair value of debt issuance (1) $ 85,695 Deemed proceeds for fair value of warrant issuance 53,846 Total deemed proceeds 139,541 Derecognition of the existing deferred revenue balance (2) (37,476) Deemed payment to terminate the unfavorable DMA (3) (66,615) Total deemed payments (104,091) Net cash received $ 35,450 (1) See Note 9, “Debt Obligations” (2) See Note 5, “Revenue Recognition” (3) This non-cash charge is included within the Statement of Operations for the year ended December 31, 2020, as “Settlement charge.” Product Sales and Cost of Sales: The Company and Shenghe enter into separate product sales agreements in which Shenghe purchases all newly produced material at specified prices. Product sales from these agreements were $133.7 million and $73.0 million for the years ended December 31, 2020 and 2019, respectively, and are discussed in more detail in Note 5, “Revenue Recognition,” including amounts recognized as deferred revenue and refund liabilities. Cost of sales, which includes shipping and freight, related to these agreements with Shenghe were $63.3 million and $60.9 million for the years ended December 31, 2020 and 2019, respectively. Purchases: The Company purchases reagent products (produced by an unrelated third party manufacturer) used in the flotation process from Shenghe. Total purchases for the years ended December 31, 2020 and 2019, totaled $2.6 million and $3.2 million, respectively. Royalty Agreement: In April 2017, MPMO entered into a 30-year mineral lease and license agreement with SNR (the “Royalty Agreement”) under which MPMO paid royalties to SNR in the amount of 2.5% of the gross proceeds from the sale of rare earth products made from ores extracted from the Mountain Pass mine, subject to a minimum non-refundable royalty of $0.5 million per year. SNR had the right to terminate the Royalty Agreement if MPMO did not expend the following amounts in connection with the reopening and resumption of operations at the Mountain Pass facility: $20.0 million, $35.0 million, and $50.0 million before the 12-month, 24-month, and 36-month anniversary, respectively, of the purchase of the Mountain Pass facility, which occurred in July 2017. MPMO satisfied all such commitments to spend and there were no further commitments as of November 17, 2020, the date of the SNR Mineral Rights Acquisition. At the time of entering into the Royalty Agreement, MPMO and SNR had shareholders common to both entities; however, they were not partners in business nor did they hold any other joint interest. In connection with the Business Combination, MPMO and SNR are both wholly-owned subsidiaries of the Company. Consequently, the intercompany transactions between MPMO and SNR after the date of the SNR Mineral Rights Acquisition and the Business Combination eliminate in consolidation, including the effects of the Royalty Agreement. The present value of the minimum royalty payments under the Royalty Agreement was recognized as an acquisition cost by MPMO of the mineral interest (see Note 8, “Property, Plant and Equipment” ). Remaining payments on the minimum royalty were reflected as an obligation on a discounted basis, with interest imputed at a rate of 12.7%. The liability was effectively settled as a preexisting relationship when MPMO and SNR became wholly-owned subsidiaries of the Company as part of the Business Combination (see Note 3, “Business Combination and Reverse Recapitalization” ). Excluding payments of these minimums (which were treated as a reduction to the obligation), royalty expense was $2.4 million and $1.9 million for the years ended December 31, 2020 and 2019, respectively. During years ended December 31, 2020 and 2019, the Company paid out $4.3 million and $1.2 million, respectively. Accounts Receivable: As of December 31, 2020, $3.5 million of the accounts receivable, as stated on the Consolidated Balance Sheets, were receivable from related parties due to the Company’s sales agreements with Shenghe. All accounts receivable as of December 31, 2019, were receivable from related parties due to the Company’s sales agreements with Shenghe. Services Reimbursed: The Company reimbursed JHL Capital Group Holdings (“JHL”) for travel-related expenses during the years ended December 31, 2020 and 2019 in the amounts of $0.1 million and $0.2 million, respectively. Accrued Liabilities: As of December 31, 2020, the Company had less than $0.1 million in accrued liabilities owed to JHL for travel-related expenses. As of December 31, 2019, the Company had accrued liabilities owed to JHL and SNR in the amount of $0.1 million for travel-related expenses and less than $0.1 million for patent maintenance fees and property taxes, respectively. As of December 31, 2019, accrued liabilities also included $0.3 million of accrued interest owed to Shenghe related to the First Additional Advance. We paid this accrued interest to Shenghe in June 2020. Accounts Payable: There were no accounts payable outstanding to related parties as of December 31, 2020. As of December 31, 2019, the Company had accounts payable to SNR and Shenghe in the amount of $0.5 million and $1.5 million, respectively. Indebtedness: The Company’s related-party debt is described in Note 9, “Debt Obligations.” |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Sales to Shenghe Prior to Achieving Commercial Operations: Prior to achieving commercial operations on July 1, 2019, the Company sold various products, including stockpile inventories, to Shenghe under individual sales agreements, which did not include the Shenghe Implied Discount. Sales to Shenghe Under the Original Offtake Agreement: Beginning in July 2019, and through early June 2020, the Company and Shenghe periodically agreed on a cash sales price for each metric ton of rare earth concentrate delivered by the Company, which was recognized as revenue upon each sale. This sales price was intended to approximate the Company’s cash cost of production. Sales during this period were made under the Original Offtake Agreement and were impacted by the Shenghe Implied Discount, which is discussed in Note 4, “Relationship and Agreements with Shenghe.” The Shenghe Implied Discount amounted to 36% of the difference between Shenghe’s realized price on its sales of rare earth products to its own customers (net of taxes, tariffs, and certain other adjustments, such as demurrage) and the agreed-upon cash cost for those products (i.e., its gross profit). In addition to the revenue we recognized from the cash sales prices, we also realized an amount of deferred revenue applicable to these sales equal to 64% of Shenghe’s gross profit. The full gross profit amount realized by Shenghe on such sales reduced the Prepaid Balance (and consequently, our contractual obligations to Shenghe). In addition, sales to Shenghe under the Original Offtake Agreement between July 2019 and early June 2020 typically provided Shenghe with a discount generally in the amount of between 3% and 6% of the initial cash price of our rare earth products sold in consideration of Shenghe’s sales efforts to resell our rare earth products (the “Shenghe Sales Discount”). The Shenghe Sales Discount was considered a reduction in the transaction price and thus was not recognized as revenue. Additionally, the Shenghe Sales Discount was not applied to reduce the Prepaid Balance; however, it was considered as part of Shenghe’s cost of acquiring our product in the calculation of Shenghe’s gross profit. Sales to Shenghe Under the A&R Original Offtake Agreement: Beginning after the June 2020 Modification, the cash purchase price (and other terms applicable to the quantity of products sold) are set forth in monthly purchase agreements with Shenghe. Furthermore, the June 2020 Modification provided that the cash purchase price to be paid by Shenghe for our rare earth products will be based on market prices (net of taxes, tariffs and certain other agreed charges) less applicable discounts, instead of our cash cost of production, as was the case with sales made under the Original Offtake Agreement. A portion of the sales price to Shenghe is in the form of debt repayment, with the remainder paid in cash. See Note 9, “Debt Obligations,” for further information. As a result of the June 2020 Modification, revenue recognized under the A&R Offtake Agreement after the June 2020 Modification does not include the Shenghe Implied Discount. In addition, rather than adjusting the sales price for the Shenghe Sales Discount, as was the case with sales made under the Original Offtake Agreement, revenue under the A&R Offtake Agreement is reduced by a fixed monthly sales charge (accounted for as a discount). Deferred Revenue: The Original Offtake Agreement was accounted for as a deferred revenue arrangement. As mentioned in Note 4, “Relationship and Agreements with Shenghe,” for accounting purposes, the June 2020 Modification effectively replaced this deferred revenue arrangement with a debt obligation (see Note 9, “Debt Obligations” ). Prior to the June 2020 Modification, Offtake Advances received from Shenghe were accounted for as deferred revenue. Under the Original Offtake Agreement, Shenghe’s gross profit was retained by Shenghe and applied to reduce the Prepaid Balance. In connection with the Original Offtake Agreement, the Company issued a preferred interest to Shenghe, which was treated as consideration paid to the customer and a reduction to the transaction price. The fair value of the preferred interest was determined to be $2.3 million, which reduced the deferred revenue balance. In addition, as discussed in Note 4, “Relationship and Agreements with Shenghe,” in connection with the June 2017 Modification, $3.5 million of the proceeds received from the First Additional Advance was allocated to the deferred revenue arrangement, which increased the deferred revenue balance. Significant activity for the deferred revenue balance (including current portion) was as follows: For the year ended December 31, (in thousands) 2020 2019 Opening balance (1) $ 35,543 $ 28,482 Prepayments received (2) 11,050 10,311 Revenue recognized (3) (9,117) (3,250) Effect of June 2020 Modification (4) (37,476) — Ending balance $ — $ 35,543 (1) Of these amounts, $6.6 million and $3.3 million, respectively, were classified as current based on when such amounts were expected to be realized. (2) The full amount for the year ended December 31, 2020, and $9.2 million for the year ended December 31, 2019, relate to the contractual commitment for Shenghe to provide funds to the Company (the Initial Prepayment Amount). After the amount pertaining to the year ended December 31, 2020, was funded, no further amount was required to be funded by Shenghe under the Initial Prepayment Amount. (3) As discussed above, for sales made to Shenghe during the period from July 2019 through early June 2020, as a result of the Shenghe Implied Discount, we recognized an amount of deferred revenue applicable to such sales equal to 64% of the gross profit realized by Shenghe on sales of this product to its own customers. As discussed below, the amount for the year ended December 31, 2020, included a tariff rebate of $1.4 million received in May 2020; the amounts for the years ended December 31, 2020 and 2019, excluded the tariff rebates realized in August 2020. (4) As discussed in Note 4, “Relationship and Agreements with Shenghe,” the balance of deferred revenue was derecognized in connection with the June 2020 Modification. Tariff-Related Rebates: In May 2020, the government of the People’s Republic of China suspended certain tariffs that had been charged to Shenghe on product sales retroactive to March 2020, which affected the sales price the Company realized. In addition, Shenghe began negotiating for certain tariff rebates from sales prior to March 2020, which affected Shenghe’s realized prices, and thus the contractual Prepaid Balance. These, in turn, affected the Company’s realized prices on prior sales and, as a result, the deferred revenue and the Shenghe Implied Discount on our prior sales. The Company realized $1.4 million of revenue related to these tariff rebates received in May 2020, which included amounts related to prior periods. While additional tariff rebates were possible, the Company did not have insight into Shenghe’s negotiations or their probability of success, and such negotiations were outside of the Company’s control. Thus, the Company fully constrained estimates of any future tariff rebates that may have been realized at that time. In August 2020, the Company received additional information from Shenghe regarding its successful negotiation of additional tariff rebates. Consequently, the Company revised its estimates of variable consideration and recognized $9.3 million of revenue, primarily related to additional tariff credits realized for sales from the pre-modification period. Since this rebate was recognized after the June 2020 Modification, this amount was treated as a reduction to the principal balance of the debt obligation, partially offset by a proportionate reduction in the related debt discount, as discussed in Note 9 , “ Debt Obligations . ” Refund Liability : Prior to the mine reaching commercial operations on July 1, 2019, the Company entered into individual product sales with the same affiliate of Shenghe based on standardized product quality specifications, against which adjustments would be recognized based on actual quality measurements and settlements agreed between the Company and Shenghe. The product quality was expected to be below the standard and would result in quality adjustments for ultimate repayment of the refund liability. As such, in 2018, the Company estimated and recognized a refund liability based on expected differences. In 2019, the Company negotiated with Shenghe to settle all outstanding quality differences for a total of $2.3 million, of which $0.5 million of the refund obligation was paid in 2019 and $1.8 million remained outstanding as of December 31, 2019, and was paid in 2020. In addition, the Company agreed to repay $0.9 million of Offtake Advances based on gross profits |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | RESTRICTED CASH The Company’s restricted cash balances were as follows: December 31, (in thousands) 2020 2019 Restricted cash, current $ 3,688 $ 24 Restricted cash, non-current 9,100 26,791 Total restricted cash $ 12,788 $ 26,815 The current restricted cash, which is included in “Prepaid expenses and other current assets” within the Consolidated Balance Sheets, principally relates to cash held in escrow. The non-current restricted cash is cash collateral posted for closure and post-closure surety bonding for the Mountain Pass site and a trust established with the California Department of Resources Recycling and Recovery, which is the state of California’s recycling and waste management program, for a closed onsite landfill. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES The Company’s inventories consisted of the following: December 31, (in thousands) 2020 2019 Materials and supplies (1) $ 5,124 $ 4,156 In-process (2) 24,524 15,710 Finished goods (3) 2,624 3,182 Total inventory $ 32,272 $ 23,048 (1) Materials and supplies includes raw materials, spare parts, reagent chemicals, and packaging materials used in the production of rare earth products. (2) In-process inventory is primarily comprised of mined ore stockpiles and bastnaesite ore in various stages of the production process that are drawn down based on the demands of our mine production plan. (3) Finished goods is primarily comprised of packaged bastnaesite ore that is ready for sale. It also includes remaining stockpiles of other rare earth products acquired by the Company from the bankruptcy estate. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT The Company capitalized expenditures of $26.2 million and $2.8 million for the years ended December 31, 2020 and 2019, respectively. Most of these expenditures related to vehicles, machinery, equipment, enterprise resource planning (“ERP”) software, and certain other capital projects at the mine. Interest capitalized was $0.2 million for the year ended December 31, 2020. No interest was capitalized for the year ended December 31, 2019. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” in connection with the Business Combination, the Company acquired the mineral rights pertaining to the rare earth ores contained in the Mountain Pass mine, the SNR Mineral Rights Acquisition. The value attributed to the SNR Mineral Rights Acquisition in the Business Combination was $434.7 million. Prior to the SNR Mineral Rights Acquisition, MPMO had already recognized an asset associated with its working interest in the mineral rights under the Royalty Agreement with SNR in the amount of $3.0 million, relating to its acquisition of the 97.5% working interest. As part of the SNR Mineral Rights Acquisition, we acquired the remaining 2.5% royalty interest in the same mineral deposits. The Company’s property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 22,911 $ 18,313 Buildings 2,953 3,152 Land and land improvements 6,534 6,045 Assets under construction 46,814 23,735 Mineral rights 437,654 2,967 Property, plant and equipment 516,866 54,212 Less: Accumulated depreciation and depletion (14,892) (7,826) Property, plant and equipment, net $ 501,974 $ 46,386 Depreciation and depletion expense for the years ended December 31, 2020 and 2019, was $6.7 million and $4.7 million, respectively. |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | DEBT OBLIGATIONS The Company’s current and non-current portions of related-party debt were as follows: December 31, (in thousands) 2020 2019 Long-term debt to related parties Offtake Advances $ 71,843 $ — Promissory note — 5,563 Secured promissory note — 13,594 Less: Unamortized debt discount (5,393) (1,079) Net carrying amount 66,450 18,078 Less: Current installments of long-term debt to related parties (22,070) (4,484) Long-term debt to related parties, net of current portion $ 44,380 $ 13,594 Offtake Advances In connection with the June 2020 Modification, which is discussed in Note 4, “Relationship and Agreements with Shenghe,” Shenghe agreed to fund an additional $35.5 million advance to the Company (previously defined as the “Second Additional Advance”) and the Company issued the Shenghe Warrant. For accounting purposes, the June 2020 Modification effectively replaced the deferred revenue arrangement relating to the Original Offtake Agreement with a debt obligation relating to the A&R Offtake Agreement and the issuance of the Shenghe Warrant. The deemed proceeds from the June 2020 Modification were (i) the deferred revenue balance at the time of the modification, which was $37.5 million, and (ii) the $35.5 million of cash from the Second Additional Advance. As of the date of the June 2020 Modification, the debt obligation and the Shenghe Warrant were recognized at fair value, which were $85.7 million and $53.8 million, respectively. The Company determined that the modified revenue arrangement contained within the A&R Offtake Agreement was at-market, and as such, was not allocated any proceeds as a result of the June 2020 Modification. As discussed in Note 4, “Relationship and Agreements with Shenghe,” the Company recorded a settlement charge in the amount of $66.6 million to terminate the DMA. Under the A&R Offtake Agreement, a portion of the sales prices of products sold to Shenghe is paid in the form of debt reduction, rather than cash. In addition, the Company must pay the following amounts to Shenghe in cash to reduce the debt obligation until repaid in full: (i) an agreed-upon percentage of sales of products that are subject to Shenghe’s exclusivity rights to parties other than Shenghe; (ii) 100% of net profits from sales of assets; and (iii) 100% of net income determined under GAAP, less the tax-effected amount of total non-cash recoupment from sales of products to Shenghe, within five $12.0 million of the sales prices of products sold to Shenghe was paid in the form of debt reduction (see Note 19, “Supplemental Cash Flow Information” ). No amounts were required to be paid based on sales to other parties or asset sales. After consideration of the Second Additional Advance, the outstanding balance on the Offtake Advances, as of the date of the June 2020 Modification, was $94.0 million. Since the debt obligation was recorded at fair value, the result was a debt discount of $8.3 million. The A&R Offtake Agreement does not have a stated rate (and is non-interest-bearing), and repayment is contingent on a number of factors, including market prices realized by Shenghe, the Company’s sales to other parties, asset sales, and the Company’s annual net income. The imputed interest rate is a function of this discount taken together with our expectations about the timing of the anticipated reductions of the principal balance. Based on current forecasts, the Company expects to repay the obligation within the next three years. As of December 31, 2020, $25.7 million of the principal amount was classified as current based on the Company’s expectations of the timing of repayment. The actual amounts repaid may differ in timing and amount from the Company’s estimates and is updated each reporting period to determine the imputed interest rate, which will likely differ from the current estimated rate. The Company has determined that it will recognize adjustments from these estimates following a prospective method. Under the prospective method, the Company will update its estimate of the effective interest rate in future periods based on revised estimates of the timing of remaining principal reductions at that time. The updated rate will be the discount rate that equates the present value of those revised estimates of remaining reductions with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. Under the prospective method, the effective interest rate is not constant and changes are recognized prospectively as an adjustment to the effective yield. The effective rate applicable from the June 5, 2020, inception to December 31, 2020, was between 4.41% and 5.27%. Based on the revised estimates of the timing of the remaining principal reductions as of December 31, 2020, the Company updated its estimate of the effective interest rate to 6.59% to be applied prospectively to future periods. As discussed in Note 5, “Revenue Recognition,” in August 2020, the Company was informed of a $9.7 million tariff rebate Shenghe received, which increased the gross profit earned by Shenghe on certain sales. In addition, after the June 2020 Modification, but relating to sales made prior the June 2020 Modification, Shenghe realized higher gross profit than estimated by the Company in the amount of $0.4 million due to higher market prices. As a result of these events, for the year ended December 31, 2020, the Company recorded reductions in the principal amount of the debt obligation of $10.1 million and the corresponding debt discount of $0.8 million. Promissory Note The Company entered into a 5% callable promissory note in April 2017 with JHL Capital Group Holdings Two LLC; Saratoga Park Ltd.; QVT Family Office Fund LP; QVT Family Office Onshore LP; and Fourth Avenue FF-Series E (the “Promissory Note Lenders”). The initial borrowed amount of $0.2 million was subsequently increased to a total of $5.6 million as of the date of the latest amendment, June 20, 2019. The principal balance and accrued interest were payable in arrears when called by the lenders. No principal repayments were made in 2019. This balance was classified as current as of December 31, 2019, and was repaid in full upon the consummation of the Business Combination. Secured Promissory Note The Company entered into a $15.5 million, 10% secured promissory note in August 2017 with the Promissory Note Lenders. In February 2019, the Company modified the arrangement to add the accrued interest of $2.3 million to the principal balance, and to add $1.9 million to the principal balance, which was treated as a discount, in exchange for the modification. The Company was accreting the discount over the term of the note. Interest on the secured promissory note was accrued on the unpaid principal amount of the loans and such interest was payable at the payment of principal amounts. The Company repaid $3.1 million and $3.0 million of the principal amount in June and July 2019, respectively. This balance was classified as non-current as of December 31, 2019, and was repaid in full upon the consummation of the Business Combination. Paycheck Protection Loan In April 2020, the Company obtained a loan of $3.4 million pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted in March 2020 (the “Paycheck Protection Loan” or the “Loan”). The Paycheck Protection Loan, which was in the form of a note dated April 15, 2020, issued by CIBC Bank USA, matures on April 14, 2022, and bears interest at a rate of 1% per annum, payable monthly commencing on March 15, 2021. Under the terms of the PPP, the Loan may be forgiven if the funds are used for qualifying expenses as described in the CARES Act, which include payroll costs, costs used to continue group health care benefits, rent and utilities. As we have used the entire Loan amount for qualifying expenses, in November 2020, we applied for forgiveness of the entire balance in accordance with the requirements and limitations under the CARES Act and Small Business Administration (“SBA”) regulations and requirements. However, no assurance can be provided that any portion of the Loan will be forgiven. Based on guidance from the U.S. Department of the Treasury, since the proceeds exceeded $2.0 million, our forgiveness application is subject to audit by the SBA. We are currently awaiting a determination on forgiveness of the Paycheck Protection Loan. The current and non-current portions of the Paycheck Protection Loan, which are included within the Consolidated Balance Sheets in “Current installments of long-term debt” and “Long-term debt, net of current portion,” respectively, were as follows: December 31, (in thousands) 2020 2019 Paycheck Protection Loan Current $ 2,403 $ — Non-current 961 — $ 3,364 $ — Equipment Notes The Company has entered into several financing agreements for the purchase of equipment, including trucks, tractors, loaders, graders, and various other machinery. See also Note 21, “ Subsequent Events. ” The current and non-current portions of the equipment notes, which are included within the Consolidated Balance Sheets in “Other current liabilities” and “Other non-current liabilities,” respectively, were as follows: December 31, (in thousands) 2020 2019 Equipment notes Current $ 835 $ 515 Non-current 1,267 1,145 $ 2,102 $ 1,660 The Company’s various equipment notes, which are secured by the purchased equipment, have terms of between 4 to 5 years and interest rates of between 0.0% and 6.5% per annum. Interest expense, net Interest expense, net, was as follows: For the year ended December 31, (in thousands) 2020 2019 Interest expense $ 5,171 $ 3,412 Capitalized interest (162) — Interest expense, net $ 5,009 $ 3,412 Debt Maturities The following is a schedule of debt repayments as of December 31, 2020: (in thousands) Offtake Advances (1) Paycheck Protection Loan Equipment Notes Year ending December 31, 2021 $ 25,710 $ 2,403 $ 835 2022 42,744 961 733 2023 3,389 — 434 2024 — — 100 2025 — — — Thereafter — — — Total minimum payments $ 71,843 $ 3,364 $ 2,102 (1) Amounts for the Offtake Advances are based on management’s expected repayments, considering expected production volumes, forecasted prices and cost projections. Actual amounts may differ from these estimates. As of December 31, 2020, none of the agreements governing our indebtedness contain financial covenants. |
LEASE OBLIGATIONS
LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASE OBLIGATIONS | LEASE OBLIGATIONS The Company has operating and finance leases for certain office space, vehicles and equipment used in its operations, with lease terms ranging from monthly to five years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional one Note 2, “ Significant Accounting Policies, ” for the majority of asset classes, the Company has elected to use a practical expedient to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheets. For these leases, expense is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any termination options or material residual value guarantees, bargain purchase options, or restrictive covenants. The Company does not have any lease arrangements with related parties. Total lease cost included the following components: Location on Consolidated Statements of Operations For the year ended December 31, 2020 2019 Operating lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) $ 2,466 $ 218 Finance lease cost Amortization of right-of-use assets Depreciation, depletion and amortization 268 159 Interest on lease liabilities Interest expense, net 50 42 318 201 Short-term lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) 1,246 913 $ 4,030 $ 1,332 Supplemental cash flow information related to leases was as follows: For the year ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 2,432 $ 223 Operating cash flows related to finance leases $ 50 $ 42 Financing cash flows related to finance leases $ 249 $ 121 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,932 $ 549 Finance leases $ 724 $ 671 Information related to lease terms and discount rates was as follows: December 31, 2020 2019 Weighted-Average Remaining Lease Term Operating leases 1.3 years 2.9 years Finance leases 3.5 years 3.0 years Weighted-Average Discount Rate Operating leases 5.2 % 4.7 % Finance leases 6.7 % 7.7 % As of December 31, 2020, the maturities of the Company’s operating and finance lease liabilities were as follows: (in thousands) Operating Leases Finance Leases Year ending December 31, 2021 $ 790 $ 324 2022 361 253 2023 — 333 2024 — 119 2025 — 95 Thereafter — — Total lease payments 1,151 1,124 Less: Imputed interest (33) (122) Total $ 1,118 $ 1,002 Supplemental disclosure for the Consolidated Balance Sheets related to the Company’s operating and finance leases were as follows: Location on Consolidated Balance Sheets December 31, (in thousands) 2020 2019 Operating Leases: Right-of-use assets Other non-current assets $ 1,090 $ 571 Operating lease liability, current Other current liabilities $ 761 $ 215 Operating lease liability, non-current Other non-current liabilities 357 351 Total operating lease liabilities $ 1,118 $ 566 Finance Leases: Right-of-use assets Finance lease right-of-use assets $ 1,028 $ 586 Finance lease liability, current Current portion of finance lease liabilities $ 266 $ 194 Finance lease liability, non-current Finance lease liabilities, net of current portion 736 399 Total finance lease liabilities $ 1,002 $ 593 |
LEASE OBLIGATIONS | LEASE OBLIGATIONS The Company has operating and finance leases for certain office space, vehicles and equipment used in its operations, with lease terms ranging from monthly to five years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional one Note 2, “ Significant Accounting Policies, ” for the majority of asset classes, the Company has elected to use a practical expedient to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheets. For these leases, expense is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any termination options or material residual value guarantees, bargain purchase options, or restrictive covenants. The Company does not have any lease arrangements with related parties. Total lease cost included the following components: Location on Consolidated Statements of Operations For the year ended December 31, 2020 2019 Operating lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) $ 2,466 $ 218 Finance lease cost Amortization of right-of-use assets Depreciation, depletion and amortization 268 159 Interest on lease liabilities Interest expense, net 50 42 318 201 Short-term lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) 1,246 913 $ 4,030 $ 1,332 Supplemental cash flow information related to leases was as follows: For the year ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 2,432 $ 223 Operating cash flows related to finance leases $ 50 $ 42 Financing cash flows related to finance leases $ 249 $ 121 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,932 $ 549 Finance leases $ 724 $ 671 Information related to lease terms and discount rates was as follows: December 31, 2020 2019 Weighted-Average Remaining Lease Term Operating leases 1.3 years 2.9 years Finance leases 3.5 years 3.0 years Weighted-Average Discount Rate Operating leases 5.2 % 4.7 % Finance leases 6.7 % 7.7 % As of December 31, 2020, the maturities of the Company’s operating and finance lease liabilities were as follows: (in thousands) Operating Leases Finance Leases Year ending December 31, 2021 $ 790 $ 324 2022 361 253 2023 — 333 2024 — 119 2025 — 95 Thereafter — — Total lease payments 1,151 1,124 Less: Imputed interest (33) (122) Total $ 1,118 $ 1,002 Supplemental disclosure for the Consolidated Balance Sheets related to the Company’s operating and finance leases were as follows: Location on Consolidated Balance Sheets December 31, (in thousands) 2020 2019 Operating Leases: Right-of-use assets Other non-current assets $ 1,090 $ 571 Operating lease liability, current Other current liabilities $ 761 $ 215 Operating lease liability, non-current Other non-current liabilities 357 351 Total operating lease liabilities $ 1,118 $ 566 Finance Leases: Right-of-use assets Finance lease right-of-use assets $ 1,028 $ 586 Finance lease liability, current Current portion of finance lease liabilities $ 266 $ 194 Finance lease liability, non-current Finance lease liabilities, net of current portion 736 399 Total finance lease liabilities $ 1,002 $ 593 |
ASSET RETIREMENT AND ENVIRONMEN
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation And Environmental Remediation Obligations [Abstract] | |
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS | ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS Asset Retirement Obligations Management estimated AROs based on the requirements to reclaim its mine asset and related Mountain Pass facility. Minor reclamation activities related to discrete portions of our operations are ongoing. As of December 31, 2020, management estimates a significant portion of the cash outflows for the major reclamation and the retirement of the Mountain Pass facility will be incurred beginning in 2043. The following is a summary of AROs: December 31, (in thousands) 2020 2019 Beginning balance $ 23,966 $ 22,566 Obligations settled (75) (80) Accretion expense 1,755 1,602 Revisions in estimated cash flows — (122) Ending balance $ 25,646 $ 23,966 The balance as of December 31, 2020 and 2019, included current portions of $0.1 million. The total estimated future undiscounted cash flows required to satisfy the AROs were $142.3 million as of both December 31, 2020 and 2019, respectively. The Company is required to provide the applicable government agencies with financial assurances relating to the closure and reclamation obligations. As of December 31, 2020 and 2019, the Company had financial assurance requirements of $38.4 million and $38.3 million, respectively, which were satisfied with surety bonds placed with the California state and regional agencies that are partially secured by restricted cash. The following is a summary of restricted cash for surety bonds: December 31, (in thousands) 2020 2019 Beginning balance $ 26,619 $ 25,516 Refunds (1) (18,054) — Additions 135 1,103 Ending balance $ 8,700 $ 26,619 (1) The reduction during the year ended December 31, 2020, is principally due to the improvement in the Company’s creditworthiness subsequent to the Business Combination. Environmental Obligations The Company assumed certain environmental remediation liabilities related to groundwater contamination of the prior operators. The Company engaged an environmental consultant to develop a remediation plan and remediation cost projections based upon that plan. Utilizing the remediation plan developed by the environmental consultant, management developed an estimate of future cash payments for the remediation plan. As of December 31, 2020, management estimated the cash outflows related to these environmental activities will be incurred annually over the next 27 years. The Company’s environmental remediation liabilities are measured at the expected value of future cash outflows discounted to their present value using a discount rate of 2.93%. The total estimated aggregate undiscounted cost of $28.2 million and $28.6 million as of December 31, 2020 and 2019, respectively, was principally related to water monitoring activities required by state and local agencies. Based on management’s best estimate of the cost and timing and the assumption that payments are considered to be fixed and reliably determinable, the Company has discounted the liability. The balance as of December 31, 2020 and 2019 included current portions of $0.5 million. As of December 31, 2020, the total environmental remediation costs were as follows (in thousands): Year ending December 31, 2021 $ 489 2022 504 2023 520 2024 536 2025 552 Thereafter 25,567 Total 28,168 Effect of discounting (11,077) Total environmental obligations $ 17,091 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES As discussed in Note 3, “Business Combination and Reverse Recapitalization,” the Business Combination was treated as a reverse recapitalization and the SNR Mineral Rights Acquisition was treated as an asset acquisition. Furthermore, MPMO was deemed to be the accounting acquirer and FVAC the accounting acquiree, which, for financial reporting purposes, results in MPMO’s historical financial information becoming that of the Company. For income tax purposes, the Business Combination was treated as a tax-free reorganization whereby the taxable years of MPMO and SNR ended on November 17, 2020, and the Company became the new parent and sole filer of a tax return for the remainder of 2020 as MPMO and SNR became disregarded entities for income tax purposes. Although the SNR Mineral Rights Acquisition was treated as an asset acquisition, the assets, liabilities and other attributes took carryover basis for tax purposes because of the tax-free reorganization nature of the transaction. Income tax benefit (expense) consisted of the following: For the year ended December 31, (in thousands) 2020 2019 Current: Federal $ — $ — State (156) (1) Total current (156) (1) Deferred: Federal 14,088 — State 3,704 — Total deferred 17,792 — Total tax benefit (expense) $ 17,636 $ (1) During the year ended December 31, 2020, the Company recorded $4.7 million related to certain deductible expenditures incurred to “Additional paid-in capital” as a reduction of proceeds at the time of the Business Combination. Loss before income taxes, by tax jurisdiction, was as follows: For the year ended December 31, (in thousands) 2020 2019 United States $ (39,461) $ (6,754) Tax Rate Reconciliation Income taxes differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following: For the year ended December 31, 2020 2019 (in thousands, except tax rates) Percent Amount Percent Amount Computed income tax benefit at the statutory rate 21.0 % $ 8,287 21.0 % $ 1,419 Changes resulting from: State and local income taxes, net of federal benefits 4.3 % 1,729 6.8 % 459 Limitation on officer’s compensation (1.2) % (478) — % — Depletion in excess of basis 1.1 % 425 — % — Effect of other permanent differences (0.3) % (110) (0.5) % (35) Valuation allowance 23.7 % 9,333 (25.5) % (1,720) Other items (3.9) % (1,550) (1.8) % (124) Total effective tax rate and income tax benefit (expense) 44.7 % $ 17,636 — % $ (1) Significant Components of Deferred Taxes The tax effects of temporary differences that gave rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows: December 31, (in thousands) 2020 2019 Deferred tax assets: Asset retirement and environmental obligations $ 10,727 $ 11,359 Other deferred tax assets 860 386 Net operating losses 4,248 3,335 Interest expense carryforward 63 1,020 Inventory 1,667 1,286 Deferred revenue — 1,274 Royalty liability — 1,105 Offtake Advances, net of debt discount 16,665 — Shenghe Warrant 10,087 — Refund liability — 769 Stock-based compensation 536 — Organization costs 943 1,143 Gross deferred tax assets 45,796 21,677 Less: Valuation allowance (2,370) (11,702) Net deferred tax assets 43,426 9,975 Deferred tax liabilities: Property, plant and equipment (7,653) (8,644) Prepaid expenses (273) (204) Deferred revenue (13,260) — Inventory capitalization — (61) Mineral rights (109,174) (742) Other (539) (324) Total deferred tax liabilities (130,899) (9,975) Long-term deferred tax liabilities, net $ (87,473) $ — As of December 31, 2020 and 2019, the Company had net operating loss carryforwards for federal income tax purposes of $16.3 million and $10.7 million, respectively. Of the carryforward amount as of December 31, 2020, $4.6 million can be used to offset taxable income and reduce income taxes payable in future periods until its expiration in 2037, and the remaining balance of $11.7 million can be carried forward indefinitely. As of December 31, 2020, the Company considered the positive and negative evidence to determine the need for a valuation allowance to offset its deferred tax assets and has concluded that it is more likely than not that, with the exception of certain deferred tax assets related to asset retirement and environmental obligations, its deferred tax assets will be realized through future taxable temporary differences, principally resulting from the significant deferred tax liability recorded during the year. A full valuation allowance had previously been established for the year ended December 31, 2019. Management has evaluated the Company’s tax positions for the years ended December 31, 2020 and 2019, and determined that there were no uncertain tax positions requiring recognition in the Consolidated Financial Statements. The Company’s policy, if it were to have uncertain tax positions, is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. The tax years from 2017 onward remain open to examination by the taxing jurisdictions to which the Company is subject. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Estimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred, and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the contingency and estimated range of loss, if determinable, is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. Pending or threatened litigation: In the ordinary course of business, the Company becomes party to lawsuits, administrative proceedings and government investigations, including environmental, regulatory, and other matters. Large, and sometimes unspecified, damages or penalties may be sought in some matters, and certain matters may require years to resolve. In January 2019, a former employee filed a complaint with the California Labor & Workforce Development Agency alleging numerous violations of California labor law, and subsequently filed a representative action against the Company. The Company disputes the plaintiff’s allegations and has retained counsel to represent it in the litigation. The Company is unable to estimate a range of loss, if any, at this time. If an unfavorable outcome were to occur in the case, it is possible that the impact could be material in respect of the Company’s results of operations in the period in which any such outcome becomes probable and reasonably estimable. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Common Stock and Preferred Stock On November 17, 2020, in connection with the consummation of the Business Combination, FVAC amended and restated its first amended and restated certificate of incorporation (the “Second Amended and Restated Certificate of Incorporation”). Pursuant to the terms of the Second Amended and Restated Certificate of Incorporation, the Company increased the number of authorized shares of all classes of capital stock from 221,000,000 shares to 500,000,000, consisting of (i) 450,000,000 shares of common stock (previously defined as “Common Stock”) and (ii) 50,000,000 shares of preferred stock (“Preferred Stock”), each with a par value of $0.0001 per share. As discussed in No te 3, “ Business Comb ination and Reverse Recapitalization, ” there were 149,308,637 shares of the Company’s Common Stock issued and outstanding immediately after the closing of the Business Combination (including restricted stock issued to certain executives upon closing). Furthermore, in December 2020, the criteria for the Vesting Shares and the Earnout Shares were attained, which resulted in the issuance of 8,625,000 and 12,859,898 shares, respectively, of the Company’s Common Stock. Public Warrants Warrants to purchase 11,499,968 shares of the Company’s Common Stock at $11.50 per share were issued during FVAC’s IPO (the “Public Warrants”). The Public Warrants become exercisable 12 months from the closing of FVAC’s IPO, which was May 4, 2020. The Public Warrants expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Once the warrants are exercisable, if the reported last sale price of the Company’s Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending three If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. The warrants will not be adjusted for issuance of Common Stock at a price below its exercise price. The Company will not be required to net cash settle the Public Warrants. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2020 Incentive Plan: In November 2020, the Company’s stockholders approved the MP Materials Corp. 2020 Stock Incentive Plan (the “2020 Incentive Plan”), which permits the Company to issue stock options (incentive and/or non-qualified); stock appreciation rights (“SARs”); restricted stock, restricted stock units (“RSUs”) and other stock awards (“Stock Awards”); and performance awards. The purposes of the 2020 Incentive Plan are (i) to align the interests of the Company’s stockholders and the recipients of awards under this 2020 Incentive Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining non-employee directors, officers, other employees, consultants, independent contractors and agents; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Pursuant to the 2020 Incentive Plan, 9,653,671 shares of Common Stock shall initially be available for issuance. The number of shares of Common Stock available under the 2020 Incentive Plan shall increase annually on the first day of each calendar year, beginning with the calendar year ending December 31, 2021, and continuing until (and including) the calendar year ending December 31, 2030, with such annual increase equal to the lesser of (i) 2% of the number of shares of stock issued and outstanding on December 31 st of the immediately preceding fiscal year and (ii) an amount determined by the Board of Directors. The number of shares of Common Stock that remain available for future grants under the 2020 Incentive Plan shall be reduced by the sum of the aggregate number of shares of Common Stock that become subject to outstanding options, outstanding free-standing SARs, outstanding Stock Awards, and outstanding performance awards denominated in shares of Common Stock, other than substitute awards. As of December 31, 2020, there were 7,238,034 shares available for future grants under the 2020 Incentive Plan. Employment Agreements: Certain of the Company’s executives are subject to employment agreements. Under the terms and conditions of such employment agreements, in connection with the consummation of the Business Combination, 2,013,006 shares of restricted stock were issued, of which 200,000 shares were immediately vested and the remainder of shares vests ratably over the requisite service period of four years. Directors Compensation: RSUs granted to non-employee directors vest into tax-deferred stock units (“DSUs”) upon the earlier of one year after the grant date and the next annual stockholder meeting. The DSUs are settled as shares of Common Stock of the Company upon the earlier of (i) June 15 th of the fifth year after grant, (ii) a change in control of the Company, and (iii) the director’s separation from the Board, unless the director elects to defer settlement until retirement. Upon the consummation of the Business Combination, the Company granted 15,992 shares of RSUs to non-employee directors. In December 2020, the Company adopted a director deferred compensation plan (the “2021 Director Deferred Compensation Plan”). Under the 2021 Director Deferred Compensation Plan, non-employee members of the Board may elect to defer their annual cash retainer (beginning on January 1, 2021) into DSUs, which are settled in the same manner as the RSUs granted to non-employee directors described above. Stock-Based Compensation Expense: During the year ended December 31, 2020, the Company recognized $5.0 million of stock-based compensation expense, which is principally included within the Consolidated Statements of Operations in “General and administrative expenses.” Stock Awards: In addition to the Stock Awards granted pursuant to employment agreements and to non-employee directors, we granted 386,639 RSUs to non-executive employees in connection with the Business Combination. Such RSUs vest ratably over the requisite service period of four years. The grant date fair value of our Stock Awards is based on the closing stock price of the Company’s shares of Common Stock on the date of grant. The following table contains information on our Stock Awards: Number of Shares Weighted-Average Grant Date Fair Value Nonvested as of January 1, 2020 — $ — Granted 2,415,637 $ 14.53 Vested (200,000) $ 14.39 Forfeited — $ — Nonvested as of December 31, 2020 2,215,637 $ 14.54 As of December 31, 2020, the unamortized compensation cost not yet recognized related to Stock Awards totaled $30.1 million and the weighted-average period over which the costs are expected to be recognized was 2.3 years. The total fair value of Stock Awards that vested during the year ended December 31, 2020, was $2.9 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in active markets. Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. The fair value of the Company’s accounts receivable, accounts payable, short-term debt and accrued liabilities approximates the carrying amounts because of the immediate or short-term maturity of these financial instruments. Cash, Cash Equivalents and Restricted Cash The Company’s cash, cash equivalents and restricted cash are classified within Level 1 of the fair value hierarchy. The carrying amounts reported in the Consolidated Balance Sheets approximate the fair value of cash, cash equivalents and restricted cash due to the short-term nature of these assets. Offtake Advances The Company’s Offtake Advances balance is classified within Level 3 of the fair value hierarchy because there are unobservable inputs that follow an imputed interest rate model to calculate the amortization of the embedded debt discount, which is recognized as non-cash interest expense, by estimating the timing of anticipated payments and reductions of the debt principal balance. This model-based valuation technique, for which there are unobservable inputs, was used to estimate the fair value of the liability balance classified within Level 3 of the fair value hierarchy as of December 31, 2020. As previously discussed, the Offtake Advances were not accounted for as debt until the June 2020 Modification. Secured Promissory Note and Equipment Notes The Company’s secured promissory note and equipment notes are classified within Level 2 of the fair value hierarchy because there are inputs that are directly observable for substantially the full term of the liability. Model-based valuation techniques for which all significant inputs are observable in active markets were used to calculate the fair values of liabilities classified within Level 2 of the fair value hierarchy as of December 31, 2020 and 2019. As required by ASC 820, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: December 31, 2020 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 519,652 $ 519,652 $ 519,652 $ — $ — Restricted cash $ 12,788 $ 12,788 $ 12,788 $ — $ — Financial liabilities: Offtake Advances $ 66,450 $ 68,151 $ — $ — $ 68,151 Equipment notes $ 2,102 $ 2,077 $ — $ 2,077 $ — December 31, 2019 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 2,757 $ 2,757 $ 2,757 $ — $ — Restricted cash $ 26,815 $ 26,815 $ 26,815 $ — $ — Financial liabilities: Secured promissory note $ 13,594 $ 14,107 $ — $ 14,107 $ — Equipment notes $ 1,660 $ 1,646 $ — $ 1,646 $ — |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Pursuant to the Second Amended and Restated Certificate of Incorporation and as a result of the Business Combination and reverse recapitalization, the Company has retrospectively adjusted the weighted-average shares outstanding prior to November 17, 2020, to give effect to the exchange ratio used to determine the number of shares of Common Stock into which the MPMO common units and preferred units, which were outstanding prior the Business Combination, converted. Basic net income or loss per share is computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted net income or loss per share is computed based on the weighted-average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. During the periods when there is a net loss, potentially dilutive common stock equivalents have been excluded from the calculation of diluted loss per share as their effect is anti-dilutive. For the year ended December 31, (in thousands, except share and per share data) 2020 2019 Numerator: Net loss $ (21,825) $ (6,755) Denominator: Weighted-average, basic and diluted, shares outstanding 79,690,821 66,556,975 Net loss per share, basic and diluted $ (0.27) $ (0.10) As discussed in N ote 14, “ Stoc kholders ’ Equity , ” warrants to purchase 11,499,968 shares of Common Stock at $11.50 per share were issued during FVAC’s IPO. None of the warrants were exercisable or exercised during the years presented. The public warrants become exercisable 12 months from the closing of FVAC’s IPO, which was May 4, 2020. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding as they would be anti-dilutive: For the year ended December 31, 2020 2019 Public Warrants 11,499,968 — Restricted stock 1,813,006 — RSUs 397,662 — Total 13,710,636 — |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATIONSHIP AND AGREEMENTS WITH SHENGHE Original Commercial Agreements In connection with the acquisition and development of the Mountain Pass facility, MPMO entered into a set of commercial arrangements with Shenghe. Shenghe and its affiliates primarily engage in the mining, separation, processing and distribution of rare earth products. MPMO also issued to Leshan Shenghe 110.98 MPMO preferred units, which represented all of the issued and outstanding MPMO preferred units at the time. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” in connection with the Business Combination, these MPMO preferred units were exchanged for MPMO HoldCo preferred stock and eventually our Common Stock and the contingent right to receive Earnout Shares. The original commercial arrangements with Shenghe were entered into in May 2017, prior to MPMO’s acquisition of the Mountain Pass facility. These agreements principally consisted of a technical services agreement (the “TSA”), an offtake agreement (the “Original Offtake Agreement”), and a distribution and marketing agreement (the “DMA”). Under the TSA, Shenghe provided technical services, know-how and other assistance to MPMO in order to facilitate the development and operations of Mountain Pass. In addition, both the TSA and the Original Offtake Agreement imposed certain funding obligations on Shenghe. The Original Offtake Agreement required Shenghe to advance an initial $50.0 million (the “Initial Prepayment Amount”) over time to MPMO to fund the restart of operations at the mine and the TSA required Shenghe to fund any additional operating and capital expenditures required to bring the Mountain Pass facility to full operability. Shenghe also agreed to provide additional funding in the amount of $30.0 million to MPMO pursuant to a separate letter agreement dated June 20, 2017 (the “Letter Agreement”) (the “First Additional Advance”), in connection with MPMO’s acquisition of the Mountain Pass facility. In addition to the repayment of the First Additional Advance in cash, pursuant to the Letter Agreement, the Initial Prepayment Amount increased by $30.0 million. We refer to the aggregate prepayments made by Shenghe pursuant to the Original Offtake Agreement and the Framework Agreement (as defined below), as adjusted for Gross Profit Recoupment (as defined below) amounts and any other qualifying repayments to Shenghe, inclusive of the $30.0 million increase to the Initial Prepayment Amount, as the “Prepaid Balance.” As discussed below, the entrance into the Letter Agreement constituted a modification to the Original Offtake Agreement for accounting purposes (referred to as the “June 2017 Modification”), which ultimately resulted in the Shenghe Implied Discount (as defined below). Under the terms of these agreements, the amounts funded by Shenghe constitute prepayments for the rare earth products to be sold to Shenghe historically under the Original Offtake Agreement (and currently under the A&R Offtake Agreement, as defined below). Under the Original Offtake Agreement, upon the mine achieving certain milestones and being deemed commercially operational (which was achieved on July 1, 2019), MPMO sold to Shenghe, and Shenghe purchased on a firm “take or pay” basis, all of the rare earth products produced at the Mountain Pass facility. Shenghe marketed and sold these products to customers, and retained the gross profits earned on subsequent sales. The gross profits were credited against the Prepaid Balance, and provided the means by which MPMO repaid, and Shenghe recovered, such amounts (the “Gross Profit Recoupment”). Under the Original Offtake Agreement, MPMO was obliged to sell all Mountain Pass facility rare earth products to Shenghe until Shenghe had fully recouped all of its prepayments (i.e., the Prepaid Balance is reduced to zero), at which point the Original Offtake Agreement would terminate automatically. As originally entered, the DMA was to become effective upon termination of the Original Offtake Agreement. The DMA provided for a distribution and marketing arrangement between MPMO and Shenghe, subject to certain exceptions. MPMO retained the right to distribute its products directly to certain categories of customers. As compensation for Shenghe’s distribution and marketing services, the DMA entitled Shenghe to 35% of the net profits from the sale of rare earth products produced at the Mountain Pass facility (the “Net Profit-Based Commission”). See below for further discussion of the DMA termination and associated accounting treatment. In order to secure Shenghe’s performance under the Original Offtake Agreement and TSA, Leshan Shenghe issued a parent guaranty to MPMO in May 2017 (the “Shenghe Guaranty”), and entered into an equity pledge agreement (the “Shenghe Pledge Agreement”) in June 2017. Framework Agreement and Restructured Commercial Arrangements In May 2020, we entered into a framework agreement and amendment (the “Framework Agreement”) with Shenghe and Leshan Shenghe that significantly restructured the parties’ commercial arrangements and provided for, among other things, a revised funding amount and schedule to settle Shenghe’s prepayment obligations to MPMO, as well as either the amendment or termination of the various agreements between the parties, as discussed below. Pursuant to the Framework Agreement, we entered into an amended and restated offtake agreement with Shenghe and Leshan Shenghe on May 19, 2020 (the “A&R Offtake Agreement”), which, upon effectiveness, superseded and replaced the Original Offtake Agreement, and MPMO issued to Shenghe a warrant on June 2, 2020 (the “Shenghe Warrant”), exercisable at a nominal price for 89.88 MPMO preferred units, which, at the time, reflected approximately 7.5% of MPMO’s equity on a diluted basis, subject to certain restrictions. Pursuant to the Framework Agreement, Shenghe funded the remaining portion of the Initial Prepayment Amount and agreed to fund an additional $35.5 million advance to us (the “Second Additional Advance” and together with the Initial Prepayment Amount, inclusive of the $30.0 million increase pursuant to the Letter Agreement, the “Offtake Advances”), which amounts were fully funded on June 5, 2020. As discussed in Note 3, “Business Combination and Reverse Recapitalization,” the Shenghe Warrant was exercised in full for MPMO preferred units, which were exchanged for MPMO HoldCo preferred stock and eventually our Common Stock and the contingent right to receive Earnout Shares in connection with the Business Combination. Upon the funding of the remaining obligations on June 5, 2020, (i) the TSA and the DMA were terminated (as described below), (ii) the A&R Offtake Agreement and the Shenghe Warrant became effective, and (iii) the Shenghe Guaranty and the Shenghe Pledge Agreement were terminated (such events are collectively referred to as the “June 2020 Modification”). Thus, at the present time, Leshan Shenghe’s and Shenghe’s involvement with MPMO and the Mountain Pass facility consists of only the A&R Offtake Agreement. The A&R Offtake Agreement maintains the key take-or-pay, amounts owed on actual and deemed advances from Shenghe, and other terms of the Original Offtake Agreement, with the following material changes: (i) modifies the definition of “offtake products” in order to remove from the scope of that definition lanthanum, cerium and other rare earth products that do not meet the specifications agreed to under the A&R Offtake Agreement; (ii) as to the offtake products subject to the A&R Offtake Agreement, provides that if we sell such offtake products to a third party, then, until the Prepaid Balance has been reduced to zero, we will pay an agreed percentage of our revenue from such sale to Shenghe, to be credited against the amounts owed on Offtake Advances; (iii) replaces the Shenghe Sales Discount (as defined in Note 5, “Revenue Recognition” ) under the Original Offtake Agreement with a fixed monthly sales charge; (iv) provides that the purchase price to be paid by Shenghe for our rare earth products (a portion of which reduces the Prepaid Balance rather than being paid in cash) will be based on market prices (net of taxes, tariffs and certain other agreed charges) less applicable discounts, instead of our cash cost of production; (v) obliges us to pay Shenghe, on an annual basis, an amount equal to our annual net income, less any amounts recouped through the Gross Profit Recoupment mechanism over the course of the year, until the Prepaid Balance has been reduced to zero; (vi) obliges us to pay Shenghe the net after-tax profits from certain sales of assets until the Prepaid Balance has been reduced to zero (this obligation was previously contained in the TSA); and (vii) provides for certain changes to the payment, invoicing and delivery terms and procedures for products. The purchase price and other terms applicable to a quantity of offtake products are set forth in monthly purchase agreements between MPMO and Shenghe. As with the Original Offtake Agreement, the A&R Offtake Agreement will terminate when Shenghe has fully recouped all of its prepayment funding. Following that termination, MPMO will have no contractual arrangements with Shenghe for the distribution, marketing or sale of rare earth products. Accounting for the June 2017 Modification As discussed above, pursuant to the Letter Agreement, Shenghe agreed to provide additional funding via a short-term, non-interest-bearing note in the amount of $30.0 million to the Company (defined above as the “First Additional Advance”), which required repayment within one year. Furthermore, under the terms of the Letter Agreement, Shenghe became entitled to an additional $30.0 million recovery through an increase to the Prepaid Balance. Therefore, under the terms of the Letter Agreement, Shenghe would ultimately receive repayment of the short-term debt instrument from the Company, and also be entitled to realize an additional $30.0 million as a part of the contractual Gross Profit Recoupment from ultimate sales to its customers. The Company concluded that the $30.0 million proceeds received from Shenghe should be allocated between (i) the non-interest-bearing debt instrument and (ii) the existing revenue arrangement (under the terms of the Original Offtake Agreement) on a relative fair value basis. As a result of such analysis, the Company determined that the debt instrument had a relative fair value of $26.5 million and the modification to the revenue arrangement had a relative fair value of $3.5 million. As discussed, in Note 5, “Revenue Recognition,” the fair value allocated to the modification of the revenue arrangement was recorded as an increase to “Deferred revenue” in the Company’s Consolidated Balance Sheets. The First Additional Advance was repaid in full by the Company in 2018. Based on the relationship between (i) the deemed proceeds the Company would ultimately receive from the Initial Prepayment Amount (adjusted for (a) the fair value of the preferred interest provided to Shenghe at the time of entering into the aforementioned commercial arrangements of $2.3 million and (b) the fair value allocated to the modification of the revenue arrangement of $3.5 million) and (ii) the contractual amount owed to Shenghe (i.e., the Prepaid Balance, which included the Initial Prepayment Amount and the additional $30.0 million adjustment to the Prepaid Balance in connection with the Letter Agreement) at the time, the June 2017 Modification resulted in an implied discount on the Company’s sales prices to Shenghe under the Original Offtake Agreement, for accounting purposes (the “Shenghe Implied Discount”). The Shenghe Implied Discount is applicable to Shenghe’s gross profit on the sales of rare earth products to its own customers (for sales made between July 2019 and early June 2020). That gross profit is a contractually determined amount based on Shenghe’s realized sales price (net of taxes, tariffs, and certain other adjustments, such as demurrage) compared to the agreed-upon cash cost Shenghe would pay to the Company. The Shenghe Implied Discount amounted to 36% of that contractually determined gross profit amount. The impact on the recorded amount of revenue as a result of the Shenghe Implied Discount is discussed in Note 5, “Revenue Recognition.” Accounting for the June 2020 Modification As noted above, in June 2020, the Company renegotiated various aspects of its relationship with Shenghe and entered into the Framework Agreement to significantly restructure the aforementioned set of arrangements. Prior to the June 2020 Modification, for accounting purposes, the Original Offtake Agreement constituted a deferred revenue arrangement; however, as a result of the June 2020 Modification, the A&R Offtake Agreement constituted a debt obligation as well as provided for the issuance of the Shenghe Warrant. For further discussion of the deferred revenue arrangement, see Note 5, “ Revenue Recognition, ” and for further discussion of the debt obligation, see Note 9, “ Debt Obligations. ” The DMA provided Shenghe with the right of first refusal to be the Company’s distribution and marketing agent for product sales after the expiration of the Original Offtake Agreement and until April 2047 in exchange for the Net Profit-Based Commission. Under the Original Offtake Agreement, Shenghe would also have been responsible for funding additional advance payments toward the next stage of the mine and facility’s development (referred to below as the “Stage II optimization project”). The agency relationship was not to commence until any such additional amount was also recovered under the Original Offtake Agreement. Although it had not yet commenced, the DMA was enforceable, and could only be terminated upon the mutual agreement of the parties involved. At its inception in May 2017, the DMA was determined to be at-market, as it provided an expected commission to Shenghe for its services, and was consistent with the Company’s expectations for a regular sales commission based on its revenue and cost expectations at the time. As part of renegotiating the commercial arrangements in connection with the June 2020 Modification, the Company determined that the existing arrangement within the DMA now provided Shenghe with a favorable, off-market return for the future distribution and marketing services, due in part to (i) favorable changes in expected profitability, driven partially by changes in tariffs, as well as cost performance in Stage I, (ii) favorable estimates of the capital cost of the Stage II optimization project, and (iii) favorable changes in expected production, based on higher than forecast contained rare earth oxides production in Stage I. Taken together, the Company concluded that the above factors would likely result in materially lower per-unit costs (including depreciation) and higher profitability versus its original estimates. Therefore, these changes in circumstances meant that the Net Profit-Based Commission would no longer be commensurate with the value of the service; and therefore, created an off-market feature. These same factors would also result in the Company fulfilling its obligations under the Original Offtake Agreement more quickly, which would in turn result in a longer period of payments under the now-unfavorable terms of the DMA. In addition, as noted above, Shenghe would still have had to provide the additional advances required to complete the Stage II optimization project, which would have created a near-term cash commitment for Shenghe. While these costs were expected to be approximately $200 million, Shenghe would have remained exposed to the potential that actual costs exceed these estimates and remained committed to fund them. Further, these upfront payments were to be non-interest bearing, exposing Shenghe to economic cost from the time value of money. Therefore, as part of the renegotiations, the Company and Shenghe agreed to terminate the DMA. As a result of the June 2020 Modification, specifically the termination of the DMA, the Company recorded a non-cash settlement charge of $66.6 million during the year ended December 31, 2020. Ultimately, the renegotiations resulted in the following exchange, which is also referenced in Note 19, “Supplemental Cash Flow Information,” as a transaction with significant non-cash components: (in thousands) As of June 2020 Modification Deemed proceeds for fair value of debt issuance (1) $ 85,695 Deemed proceeds for fair value of warrant issuance 53,846 Total deemed proceeds 139,541 Derecognition of the existing deferred revenue balance (2) (37,476) Deemed payment to terminate the unfavorable DMA (3) (66,615) Total deemed payments (104,091) Net cash received $ 35,450 (1) See Note 9, “Debt Obligations” (2) See Note 5, “Revenue Recognition” (3) This non-cash charge is included within the Statement of Operations for the year ended December 31, 2020, as “Settlement charge.” Product Sales and Cost of Sales: The Company and Shenghe enter into separate product sales agreements in which Shenghe purchases all newly produced material at specified prices. Product sales from these agreements were $133.7 million and $73.0 million for the years ended December 31, 2020 and 2019, respectively, and are discussed in more detail in Note 5, “Revenue Recognition,” including amounts recognized as deferred revenue and refund liabilities. Cost of sales, which includes shipping and freight, related to these agreements with Shenghe were $63.3 million and $60.9 million for the years ended December 31, 2020 and 2019, respectively. Purchases: The Company purchases reagent products (produced by an unrelated third party manufacturer) used in the flotation process from Shenghe. Total purchases for the years ended December 31, 2020 and 2019, totaled $2.6 million and $3.2 million, respectively. Royalty Agreement: In April 2017, MPMO entered into a 30-year mineral lease and license agreement with SNR (the “Royalty Agreement”) under which MPMO paid royalties to SNR in the amount of 2.5% of the gross proceeds from the sale of rare earth products made from ores extracted from the Mountain Pass mine, subject to a minimum non-refundable royalty of $0.5 million per year. SNR had the right to terminate the Royalty Agreement if MPMO did not expend the following amounts in connection with the reopening and resumption of operations at the Mountain Pass facility: $20.0 million, $35.0 million, and $50.0 million before the 12-month, 24-month, and 36-month anniversary, respectively, of the purchase of the Mountain Pass facility, which occurred in July 2017. MPMO satisfied all such commitments to spend and there were no further commitments as of November 17, 2020, the date of the SNR Mineral Rights Acquisition. At the time of entering into the Royalty Agreement, MPMO and SNR had shareholders common to both entities; however, they were not partners in business nor did they hold any other joint interest. In connection with the Business Combination, MPMO and SNR are both wholly-owned subsidiaries of the Company. Consequently, the intercompany transactions between MPMO and SNR after the date of the SNR Mineral Rights Acquisition and the Business Combination eliminate in consolidation, including the effects of the Royalty Agreement. The present value of the minimum royalty payments under the Royalty Agreement was recognized as an acquisition cost by MPMO of the mineral interest (see Note 8, “Property, Plant and Equipment” ). Remaining payments on the minimum royalty were reflected as an obligation on a discounted basis, with interest imputed at a rate of 12.7%. The liability was effectively settled as a preexisting relationship when MPMO and SNR became wholly-owned subsidiaries of the Company as part of the Business Combination (see Note 3, “Business Combination and Reverse Recapitalization” ). Excluding payments of these minimums (which were treated as a reduction to the obligation), royalty expense was $2.4 million and $1.9 million for the years ended December 31, 2020 and 2019, respectively. During years ended December 31, 2020 and 2019, the Company paid out $4.3 million and $1.2 million, respectively. Accounts Receivable: As of December 31, 2020, $3.5 million of the accounts receivable, as stated on the Consolidated Balance Sheets, were receivable from related parties due to the Company’s sales agreements with Shenghe. All accounts receivable as of December 31, 2019, were receivable from related parties due to the Company’s sales agreements with Shenghe. Services Reimbursed: The Company reimbursed JHL Capital Group Holdings (“JHL”) for travel-related expenses during the years ended December 31, 2020 and 2019 in the amounts of $0.1 million and $0.2 million, respectively. Accrued Liabilities: As of December 31, 2020, the Company had less than $0.1 million in accrued liabilities owed to JHL for travel-related expenses. As of December 31, 2019, the Company had accrued liabilities owed to JHL and SNR in the amount of $0.1 million for travel-related expenses and less than $0.1 million for patent maintenance fees and property taxes, respectively. As of December 31, 2019, accrued liabilities also included $0.3 million of accrued interest owed to Shenghe related to the First Additional Advance. We paid this accrued interest to Shenghe in June 2020. Accounts Payable: There were no accounts payable outstanding to related parties as of December 31, 2020. As of December 31, 2019, the Company had accounts payable to SNR and Shenghe in the amount of $0.5 million and $1.5 million, respectively. Indebtedness: The Company’s related-party debt is described in Note 9, “Debt Obligations.” |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION In addition to the non-cash components of the June 2020 Modification, as discussed in Note 4, “Relationship and Agreements with Shenghe,” and the cash flow information pertaining to lease activity, as presented in Note 10, “Lease Obligations,” other supplemental cash flow information and non-cash investing and financing activities were as follows: For the year ended December 31, (in thousands) 2020 2019 Supplemental cash flow information: Cash paid for interest $ 3,089 $ 926 Cash paid for income taxes $ 255 $ 1 Supplemental non-cash investing activities: Property, plant and equipment acquired with seller-financed equipment notes $ 1,216 $ 569 Property, plant and equipment purchased but not yet paid $ 4,054 $ — SNR Mineral Rights Acquisition (1) $ 324,125 $ — Supplemental non-cash financing activities: Revenue recognized in exchange for debt principal reduction (2) $ 21,312 $ — (1) See Note 3, “ Business Combination and R everse Acquisition, ” for further information on the composition of the cost of this acquisition. (2) Of the amount for the year ended December 31, 2020, $12.0 million pertains to sales to Shenghe, as discussed in Note 9, “Debt Obligations,” and $9.3 million pertains to the tariff rebate and changes in estimates of realized prices of prior period sales, as discussed in Note 5, “Revenue Recognition.” |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | OTHER INCOME, NET For the year ended December 31, (in thousands) 2020 2019 Gain (loss) on sale of equipment $ (101) $ 3,785 Interest income 163 461 Environmental incentive credit 130 — Other 59 32 Other income, net $ 251 $ 4,278 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSIn February 2021, we entered into several financing agreements for the purchase of equipment, including trucks and loaders, in the aggregate amount of $9.7 million. These equipment notes, which are secured by the purchased equipment, have terms of 5 years and interest rates of 4.5% per annum with monthly payments commencing in April 2021. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The Consolidated Financial Statements include the accounts of MP Materials Corp. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Concentration of Risk | As of December 31, 2020, Shenghe accounted for more than 90% of product sales. Shenghe, a related party of the Company, has entered into an arrangement to purchase substantially all of the Company’s production, and has previously purchased the Company’s stockpile inventory. While as with any contract there is risk of nonperformance, we do not believe that it is reasonably possible that the agreement will be terminated in the near term as it would significantly delay Shenghe’s recovery of non-interest-bearing advance payments that are recognized by the Company as debt. See Note 4, “Relationship and Agreements with Shenghe,” for additional information. Furthermore, while revenue is generated in the United States, our principal customer is located in China and may transport and sell products in the Chinese market; therefore, the Company’s gross profit is affected by Shenghe’s ultimate realized prices in China. In addition, there is an ongoing economic conflict between China and the United States that has resulted in tariffs and trade barriers that may negatively affect the Company’s business and results of operations. In December 2019, a novel strain of coronavirus (known as “COVID-19”) began to impact the population of China, where our principal customer is located. The outbreak of COVID-19 has grown both in the United States and globally, and related government and private sector responsive actions have adversely affected the global economy, including significant business and supply chain disruption as well as broad-based changes in supply and demand. In December 2019, a series of emergency quarantine measures taken by the Chinese government disrupted domestic business activities in China during the weeks after the initial outbreak of COVID-19. Since that time, an increasing number of countries, including the United States, have imposed restrictions on travel to and from China and elsewhere, as well as general movement restrictions, business closures and other measures imposed to slow the spread of COVID-19. At the onset of the outbreak, we initially experienced shipping delays due to overseas port slowdowns and container shortages, but we did not experience a reduction in production or sales. However, in the fourth quarter of 2020, we began to again see shipping delays and container shortages from congestion at ports, which has been exacerbated by COVID-19. Congestion at U.S. and international ports could affect the capacity at ports to receive deliveries of products or the loading of shipments onto vessels. As the situation continues to develop, it is impossible to predict the effect and ultimate impact of the COVID-19 pandemic on the Company’s business and results of operations. While the quarantine, social distancing and other regulatory measures instituted or recommended in response to COVID-19 are expected to be temporary, the duration of the business disruptions, and related financial impact, cannot be estimated at this time. |
Use of Estimates | The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and (iii) the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to the recoverability of inventory; the useful lives and recoverability of long-lived assets (such as the effects of mineral reserves and cash flows from operating the mine in determining the life of the mine); uncertain tax positions; the valuation allowance of deferred tax assets; asset retirement and environmental obligations; and determining the fair value of assets and liabilities in acquisitions and financial instruments in connection with transactions that require initial measurement to be at fair value. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents consist of all cash balances and highly liquid investments with a maturity of three months or less when purchased.Restricted cash consists of funds that are contractually restricted as to usage or withdrawal due to legal agreement. The Company determines current or non-current classification based on the expected duration of the restriction. Restricted cash principally relates to cash that is pledged as collateral in connection with surety bonds placed with California state and regional agencies related to closure and reclamation obligations. |
Trade Accounts Receivable | Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the need for an allowance for doubtful accounts quarterly based on historical experience with each customer and the specifics of each arrangement. |
Inventories | Inventories consist of raw materials and supplies, work in process (referred to as “in-process inventory”), and finished goods. Materials and supplies consist of raw materials, spare parts, reagent chemicals, and packaging materials. In-process inventory primarily consists of stockpiles of mined bastnaesite ore in various stages of the production process. Finished goods primarily consist of packaged bastnaesite concentrate.Raw materials, in-process inventory and finished goods are carried at average actual cost. Supplies are carried at moving average cost. All inventories are carried at the lower of cost or net realizable value, which represents the estimated selling price of the product during the ordinary course of business based on current market conditions. Inventory cost includes all expenses directly attributable to the manufacturing process, including labor and stripping costs, and an appropriate portion of production overhead, including depletion, based on normal operating capacity.Stockpiled ore tonnages are verified by periodic surveys. Management evaluates the carrying amount of inventory on a periodic basis, considering slow-moving items, obsolescence, excess inventory levels, and other factors and recognizes related write-downs in cost of sales. |
Property, Plant and Equipment | Property, plant and equipment are recorded at cost and depreciated over their useful lives. Expenditures for new property, plant and equipment and improvements that extend the useful life or functionality of the assets are recorded at their cost of acquisition or construction. Depreciation on property, plant and equipment is recognized on a straight-line basis over their estimated useful lives, as follows: Years Machinery and equipment 3-10 Buildings 40 Land improvements 25 Assets under construction include costs directly attributable to the construction or development of long-term assets. These costs may include labor and employee benefits associated with the construction of the asset, site preparation, permitting, engineering, installation and assembly, procurement, insurance, legal, commissioning, and interest on borrowings to finance the construction of the assets. Depreciation is not recorded on the related assets until they are placed in service or are ready for their intended use. Repair and maintenance costs that do not extend the useful life of an asset are expensed as incurred. Gains and losses arising from the disposal of property, plant and equipment are determined as the difference between the proceeds from disposal and the carrying amount of the asset and are included in “Other income, net” within our Consolidated Statements of Operations. |
Mineral Rights | The Company capitalizes costs for acquiring and leasing mining properties and expenses costs to maintain mineral rights as incurred. Depletion on mineral rights is recognized on a straight-line basis over the estimated useful life of the mine, which is approximately 24 years. In connection with the SNR Mineral Rights Acquisition, the Company recorded the additional cost of acquiring the mineral rights pertaining to the rare earth ores contained in the Mountain Pass mine, which was SNR’s sole operating asset. Prior to the SNR Mineral Rights Acquisition, MPMO and SNR were considered related parties (see Note 18, “Related Party Transactions” ). As discussed in Note 18, “Related Party Transactions,” upon entering into the Royalty Agreement (as defined in Note 18, “Related Party Transactions” |
Mine Development Costs | Mine development costs include acquisition costs, drilling costs, and the cost of other development work, all of which are capitalized during the development phase. Production costs are capitalized into inventory or expensed as incurred.At the time of acquiring the 97.5% working interest, the mine had already been in a producing stage, but was idled and in care and maintenance; therefore, costs associated with the return to production were capitalized to inventory as incurred. Additionally, costs incurred above the amount required to return the mine to production, including certain overburden mining activities, were expensed as incurred. |
Leases | The Company determines if an arrangement is, or contains, a lease at contract inception. In some cases, the Company has determined that its lease arrangements include both lease and non-lease components. The Company has elected to use a practical expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes.The Company recognizes lease liabilities and right-of-use (“ROU”) assets upon commencement for all leases with a lease term greater than 12 months. The Company has elected to use a practical expedient to not recognize leases with a lease term of 12 months or less in the Consolidated Balance Sheets for the majority of its asset classes. These short-term leases are expensed on a straight-line basis over the lease term.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date of the lease based on the present value of lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. Lease liabilities are accreted each period and reduced for payments. The ROU asset also includes other adjustments, such as for the effects of escalating rents, rent abatements or initial lease costs. The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the expected lease term. For finance leases, the ROU asset amortizes on a straight-line basis over the shorter of the lease term or useful life of the ROU asset and the lease liability accretes interest based on the interest method using the discount rate determined at lease commencement. |
Impairment of Long-Lived Assets | Long-lived assets, including mineral rights, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. In estimating undiscounted cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of undiscounted cash flows from other asset groups. Management’s estimates of undiscounted cash flows are based on numerous assumptions and it is possible that actual cash flows may differ significantly from estimates, as actual produced reserves, prices, commodity-based and other costs, and closure costs are each subject to significant risks and uncertainties. The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of the Company’s mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average prices. In addition to short- and long-term price assumptions, other assumptions include estimates of production costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates; and estimated future closure costs.If the carrying amount of the long-lived asset or asset groups is not recoverable on an undiscounted cash flows basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, based on the approach the Company believes a market participant would use. An impairment loss, if any, is recorded for the excess of the asset’s (or asset group’s) carrying amount over its fair value, as determined by a valuation technique appropriate to the given circumstances. |
Offtake Advances Accounted for as Debt Obligations and Debt Discount | Subsequent to the June 2020 Modification to the Original Offtake Agreement, the Company accounts for net prepayments or other advances received from Shenghe prior to or in connection with the June 2020 Modification as debt. The associated debt discount is amortized to interest expense using the effective interest method over management’s estimated contractual term of the underlying indebtedness. The debt discount reduces the carrying amount of the associated debt. |
Asset Retirement Obligations | The Company recognizes asset retirement obligations (“AROs”) for estimated costs of legally and contractually required closure, dismantlement, and reclamation activities associated with the Mountain Pass mine and processing facility. AROs are initially recognized at their estimated fair value in the period in which the obligation originates. Fair value is based on the expected timing of reclamation activities, cash flows to perform activities, amount and uncertainty associated with the cash flows, including adjustments for a market risk premium, and discounted using a credit-adjusted risk-free rate. The liability is accreted over time through periodic charges to earnings and reduced as reclamation activities occur with differences between estimated and actual amounts recognized as an adjustment to operating expenses. Subsequent increments in expected undiscounted cash flows are measured at their discounted values using updated estimates of the Company’s credit-adjusted risk-free rate applied to the increment only. Subsequent decrements are reduced based on the weighted-average discount rate associated with the obligation. As of December 31, 2020, the credit-adjusted risk-free rate ranged between 7.1% and 8.2% depending on the timing of expected settlement and when the layer or increment was recognized. There were no increments or decrements for the year ended December 31, 2020.Associated asset retirement costs, including the effect of increments and decrements, are recognized as adjustments to the related asset’s carrying amount and depreciated over its remaining useful life. |
Environmental Obligations | The Company has assumed certain environmental remediation obligations that primarily relate to groundwater monitoring activities. Estimated remediation costs are accrued based on management’s best estimate at the end of each reporting period of the costs expected to be incurred at a site to settle the obligation when those amounts are probable and estimable. Such cost estimates may include ongoing care, maintenance and monitoring costs associated with remediation activities. Changes in remediation estimates are reflected in earnings in the period an estimate is revised.Remediation costs included in environmental obligations are discounted to their present value when payments are readily estimable, and are discounted using a risk-free rate, which the Company derives from U.S. Treasury yields. |
Revenue Recognition | The Company’s revenue comes from sales of rare earth products produced at the Mountain Pass facility. The Company’s sales are primarily to an affiliate of Shenghe. The Company’s performance obligation is to deliver rare earth products to the agreed-upon delivery point, and the Company recognizes revenue at the point in time control of the products transfers to the customer, which is typically when the rare earth products are delivered to the agreed-upon shipping point. At that point, the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the products, and the customer bears the risk of loss. For sales to third parties, the transaction price is agreed to at the time the sale is entered into. For sales entered into with the related party, the transaction price is typically based on an agreed-upon price per metric ton, subject to certain quality adjustments depending on the measured characteristics of the product, with an adjustment for the ultimate market price of the product realized by Shenghe and certain other discounts. These ultimate market prices are forms of variable consideration. The Company typically negotiates with and bills an initial price to Shenghe; such prices are then updated based on final adjustments for quality differences and/or actual sales prices realized by Shenghe. Initial pricing is typically billed upon delivering the product to the agreed-upon shipping point and paid within 30 days or less. Final adjustments to prices may take longer to resolve. When the final price has not been resolved by the end of a reporting period, the Company estimates the expected sales price based on the initial price, current market pricing and known quality measurements, and further constrains such amounts to an amount that is probable not to result in a significant reversal of previously-recognized revenue. Revenue from product sales is recorded net of taxes collected from customers that are remitted to governmental authorities. When appropriate, the Company applies a portfolio approach in estimating a refund obligation. Prior to the June 2020 Modification (as defined in Note 4, “Relationship and Agreements with Shenghe” |
Stock-Based Compensation | The cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and the expense is recognized ratably over the requisite service period. The fair value of Stock Awards (as defined in Note 15, “Stock-based Compensation,” |
Earnings (Loss) Per Share | Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the additional dilution for all potentially-dilutive securities such as unvested restricted stock awards. |
Commitments and 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 can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Income Taxes and Valuation of Deferred Tax Assets | The Company accounts for income taxes using the balance sheet method, recognizing certain temporary differences between the book basis of the liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. Management derives a deferred income tax expense or benefit by recording the change in either the net deferred income tax liability or asset balance for the year.The Company’s deferred income tax assets include certain future tax benefits. Management records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. In determining the requirement for a valuation allowance, the Company evaluated all available positive and negative evidence. Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. Management looks to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date, recent pretax losses and/or expectations of future pretax losses. Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to: • Earnings history; • Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices; • The duration of statutory carry forward periods; • Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference; • Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and • The sensitivity of future forecasted results to commodity prices and other factors. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, recent cumulative losses are not solely determinative of the need for a valuation allowance. Management also considers all other available positive and negative evidence in its analysis. |
Recently Issued Accounting Pronouncements | As an “emerging growth company,” the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”), which sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. ASU 2016-13 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2021, with early adoption permitted. The provisions of ASU 2016-13 must be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We have elected to adopt ASU 2016-13 effective January 1, 2021, and its impact on our Consolidated Financial Statements is not material. In August 2018, the FASB issued ASU No. 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” (“ASU 2018-15”), which 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. ASU 2018-15 requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. ASU 2018-15 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2021, with early adoption permitted. The provisions of ASU 2018-15 may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We have elected to adopt ASU 2018-15 effective January 1, 2021, and its impact on our Consolidated Financial Statements is not material. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes” (“ASU 2019-12”), which is intended to simplify accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC Topic 740, “Income Taxes,” and amends existing guidance to improve consistent application. ASU 2019-12 is effective for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the impact that the adoption of ASU 2019-12 will have on our Consolidated Financial Statements. |
Reclassifications | To conform to the current year presentation, the Company reclassified the balance of its right-of-use assets associated with finance lease in the Consolidated Balance Sheet as of December 31, 2019, from “Property, plant and equipment, net” to “Finance lease right-of-use assets.” This reclassification had no effect on net loss, total assets or accumulated deficit as previously reported. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Property, plant and equipment - estimated useful lives | Depreciation on property, plant and equipment is recognized on a straight-line basis over their estimated useful lives, as follows: Years Machinery and equipment 3-10 Buildings 40 Land improvements 25 The Company’s property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 22,911 $ 18,313 Buildings 2,953 3,152 Land and land improvements 6,534 6,045 Assets under construction 46,814 23,735 Mineral rights 437,654 2,967 Property, plant and equipment 516,866 54,212 Less: Accumulated depreciation and depletion (14,892) (7,826) Property, plant and equipment, net $ 501,974 $ 46,386 |
BUSINESS COMBINATION AND REVE_2
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combination And Asset Acquisition [Abstract] | |
Shares of Common Stock issued and outstanding | After giving effect to the above, shares of our Common Stock issued and outstanding immediately after the closing of the Business Combination were as follows (including restricted stock issued to certain executives upon closing): Shareholder Number of Shares FVAC public stockholders (1) 34,464,151 Private Placement Warrants 890,000 MPMO unitholders (2) 71,941,538 SNR unitholders 19,999,942 PIPE Financing 20,000,000 Restricted stock issued to certain MPMO executives 2,013,006 Total 149,308,637 (1) Represents the outstanding shares held by FVAC’s public stockholders (Class A common stock) which were not redeemed in connection with the Business Combination. The Company received gross proceeds of $344.7 million and net proceeds of $332.6 million after $12.1 million of underwriting commissions in connection with the sale of these shares. (2) Includes 5,384,563 shares issued relating to the Shenghe Warrant, which was issued on June 5, 2020. |
Summary of Acquisition Consideration and Assets Acquired and Liabilities Assumed | The following table summarizes the consideration and assets acquired and liabilities assumed in the SNR Mineral Rights Acquisition: (in thousands) Total cost of acquisition (1) $ 324,125 Assets acquired: Prepaid assets $ 76 Mineral rights 434,707 Deferred tax assets 134 Total assets acquired: 434,917 Liabilities assumed: Accounts payable and accrued liabilities (1,681) Deferred tax liabilities (109,111) Total liabilities assumed (110,792) Total net assets acquired $ 324,125 (1) Includes consideration transferred to SNR of $287.8 million based on the fair value of 20,000,000 shares of Common Stock transferred using a price per share of $14.39, the closing stock price on the date the Business Combination was consummated, transaction costs of $2.0 million, the settlement of the liability related to the minimum royalty of $3.9 million, net of deferred tax impact of $1.0 million, and estimated fair value of the Earnout Shares to be issued to SNR unitholders of $37.2 million upon the achievement of certain stock price milestones during a specified post-merger measurement period, and subject to certain additional terms, as outlined in the Merger Agreement. The Company obtained the fair value based on a Monte Carlo simulation model using certain underlying assumptions such as stock price, volatility, risk-free interest rates and dividend payments. |
RELATIONSHIP AND AGREEMENTS W_2
RELATIONSHIP AND AGREEMENTS WITH SHENGHE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Activity Related to June 2020 Contract Modification | Ultimately, the renegotiations resulted in the following exchange, which is also referenced in Note 19, “Supplemental Cash Flow Information,” as a transaction with significant non-cash components: (in thousands) As of June 2020 Modification Deemed proceeds for fair value of debt issuance (1) $ 85,695 Deemed proceeds for fair value of warrant issuance 53,846 Total deemed proceeds 139,541 Derecognition of the existing deferred revenue balance (2) (37,476) Deemed payment to terminate the unfavorable DMA (3) (66,615) Total deemed payments (104,091) Net cash received $ 35,450 (1) See Note 9, “Debt Obligations” (2) See Note 5, “Revenue Recognition” (3) This non-cash charge is included within the Statement of Operations for the year ended December 31, 2020, as “Settlement charge.” |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract With Customer Liability, Related Party | Significant activity for the deferred revenue balance (including current portion) was as follows: For the year ended December 31, (in thousands) 2020 2019 Opening balance (1) $ 35,543 $ 28,482 Prepayments received (2) 11,050 10,311 Revenue recognized (3) (9,117) (3,250) Effect of June 2020 Modification (4) (37,476) — Ending balance $ — $ 35,543 (1) Of these amounts, $6.6 million and $3.3 million, respectively, were classified as current based on when such amounts were expected to be realized. (2) The full amount for the year ended December 31, 2020, and $9.2 million for the year ended December 31, 2019, relate to the contractual commitment for Shenghe to provide funds to the Company (the Initial Prepayment Amount). After the amount pertaining to the year ended December 31, 2020, was funded, no further amount was required to be funded by Shenghe under the Initial Prepayment Amount. (3) As discussed above, for sales made to Shenghe during the period from July 2019 through early June 2020, as a result of the Shenghe Implied Discount, we recognized an amount of deferred revenue applicable to such sales equal to 64% of the gross profit realized by Shenghe on sales of this product to its own customers. As discussed below, the amount for the year ended December 31, 2020, included a tariff rebate of $1.4 million received in May 2020; the amounts for the years ended December 31, 2020 and 2019, excluded the tariff rebates realized in August 2020. (4) As discussed in Note 4, “Relationship and Agreements with Shenghe,” the balance of deferred revenue was derecognized in connection with the June 2020 Modification. |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Restricted cash balances | The Company’s restricted cash balances were as follows: December 31, (in thousands) 2020 2019 Restricted cash, current $ 3,688 $ 24 Restricted cash, non-current 9,100 26,791 Total restricted cash $ 12,788 $ 26,815 The following is a summary of restricted cash for surety bonds: December 31, (in thousands) 2020 2019 Beginning balance $ 26,619 $ 25,516 Refunds (1) (18,054) — Additions 135 1,103 Ending balance $ 8,700 $ 26,619 (1) The reduction during the year ended December 31, 2020, is principally due to the improvement in the Company’s creditworthiness subsequent to the Business Combination. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The Company’s inventories consisted of the following: December 31, (in thousands) 2020 2019 Materials and supplies (1) $ 5,124 $ 4,156 In-process (2) 24,524 15,710 Finished goods (3) 2,624 3,182 Total inventory $ 32,272 $ 23,048 (1) Materials and supplies includes raw materials, spare parts, reagent chemicals, and packaging materials used in the production of rare earth products. (2) In-process inventory is primarily comprised of mined ore stockpiles and bastnaesite ore in various stages of the production process that are drawn down based on the demands of our mine production plan. (3) Finished goods is primarily comprised of packaged bastnaesite ore that is ready for sale. It also includes remaining stockpiles of other rare earth products acquired by the Company from the bankruptcy estate. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Depreciation on property, plant and equipment is recognized on a straight-line basis over their estimated useful lives, as follows: Years Machinery and equipment 3-10 Buildings 40 Land improvements 25 The Company’s property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Machinery and equipment $ 22,911 $ 18,313 Buildings 2,953 3,152 Land and land improvements 6,534 6,045 Assets under construction 46,814 23,735 Mineral rights 437,654 2,967 Property, plant and equipment 516,866 54,212 Less: Accumulated depreciation and depletion (14,892) (7,826) Property, plant and equipment, net $ 501,974 $ 46,386 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of debt obligations | The Company’s current and non-current portions of related-party debt were as follows: December 31, (in thousands) 2020 2019 Long-term debt to related parties Offtake Advances $ 71,843 $ — Promissory note — 5,563 Secured promissory note — 13,594 Less: Unamortized debt discount (5,393) (1,079) Net carrying amount 66,450 18,078 Less: Current installments of long-term debt to related parties (22,070) (4,484) Long-term debt to related parties, net of current portion $ 44,380 $ 13,594 The current and non-current portions of the Paycheck Protection Loan, which are included within the Consolidated Balance Sheets in “Current installments of long-term debt” and “Long-term debt, net of current portion,” respectively, were as follows: December 31, (in thousands) 2020 2019 Paycheck Protection Loan Current $ 2,403 $ — Non-current 961 — $ 3,364 $ — The current and non-current portions of the equipment notes, which are included within the Consolidated Balance Sheets in “Other current liabilities” and “Other non-current liabilities,” respectively, were as follows: December 31, (in thousands) 2020 2019 Equipment notes Current $ 835 $ 515 Non-current 1,267 1,145 $ 2,102 $ 1,660 |
Interest expense, net | Interest expense, net, was as follows: For the year ended December 31, (in thousands) 2020 2019 Interest expense $ 5,171 $ 3,412 Capitalized interest (162) — Interest expense, net $ 5,009 $ 3,412 |
Debt maturities | The following is a schedule of debt repayments as of December 31, 2020: (in thousands) Offtake Advances (1) Paycheck Protection Loan Equipment Notes Year ending December 31, 2021 $ 25,710 $ 2,403 $ 835 2022 42,744 961 733 2023 3,389 — 434 2024 — — 100 2025 — — — Thereafter — — — Total minimum payments $ 71,843 $ 3,364 $ 2,102 (1) Amounts for the Offtake Advances are based on management’s expected repayments, considering expected production volumes, forecasted prices and cost projections. Actual amounts may differ from these estimates. |
LEASE OBLIGATIONS (Tables)
LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease cost, supplemental cash flow information, and lease terms and discount rates | Total lease cost included the following components: Location on Consolidated Statements of Operations For the year ended December 31, 2020 2019 Operating lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) $ 2,466 $ 218 Finance lease cost Amortization of right-of-use assets Depreciation, depletion and amortization 268 159 Interest on lease liabilities Interest expense, net 50 42 318 201 Short-term lease cost Primarily Cost of sales (including to related parties) (excluding depreciation, depletion and amortization) 1,246 913 $ 4,030 $ 1,332 Supplemental cash flow information related to leases was as follows: For the year ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows related to operating leases $ 2,432 $ 223 Operating cash flows related to finance leases $ 50 $ 42 Financing cash flows related to finance leases $ 249 $ 121 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 2,932 $ 549 Finance leases $ 724 $ 671 Information related to lease terms and discount rates was as follows: December 31, 2020 2019 Weighted-Average Remaining Lease Term Operating leases 1.3 years 2.9 years Finance leases 3.5 years 3.0 years Weighted-Average Discount Rate Operating leases 5.2 % 4.7 % Finance leases 6.7 % 7.7 % |
Maturities of operating lease liability | As of December 31, 2020, the maturities of the Company’s operating and finance lease liabilities were as follows: (in thousands) Operating Leases Finance Leases Year ending December 31, 2021 $ 790 $ 324 2022 361 253 2023 — 333 2024 — 119 2025 — 95 Thereafter — — Total lease payments 1,151 1,124 Less: Imputed interest (33) (122) Total $ 1,118 $ 1,002 |
Maturities of finance lease liability | As of December 31, 2020, the maturities of the Company’s operating and finance lease liabilities were as follows: (in thousands) Operating Leases Finance Leases Year ending December 31, 2021 $ 790 $ 324 2022 361 253 2023 — 333 2024 — 119 2025 — 95 Thereafter — — Total lease payments 1,151 1,124 Less: Imputed interest (33) (122) Total $ 1,118 $ 1,002 |
Supplemental disclosure for the Consolidated Balance Sheets related to operating and finance leases | Supplemental disclosure for the Consolidated Balance Sheets related to the Company’s operating and finance leases were as follows: Location on Consolidated Balance Sheets December 31, (in thousands) 2020 2019 Operating Leases: Right-of-use assets Other non-current assets $ 1,090 $ 571 Operating lease liability, current Other current liabilities $ 761 $ 215 Operating lease liability, non-current Other non-current liabilities 357 351 Total operating lease liabilities $ 1,118 $ 566 Finance Leases: Right-of-use assets Finance lease right-of-use assets $ 1,028 $ 586 Finance lease liability, current Current portion of finance lease liabilities $ 266 $ 194 Finance lease liability, non-current Finance lease liabilities, net of current portion 736 399 Total finance lease liabilities $ 1,002 $ 593 |
ASSET RETIREMENT AND ENVIRONM_2
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation And Environmental Remediation Obligations [Abstract] | |
Schedule of Change in Asset Retirement Obligation | The following is a summary of AROs: December 31, (in thousands) 2020 2019 Beginning balance $ 23,966 $ 22,566 Obligations settled (75) (80) Accretion expense 1,755 1,602 Revisions in estimated cash flows — (122) Ending balance $ 25,646 $ 23,966 |
Summary of Restricted Cash For Surety Bonds | The Company’s restricted cash balances were as follows: December 31, (in thousands) 2020 2019 Restricted cash, current $ 3,688 $ 24 Restricted cash, non-current 9,100 26,791 Total restricted cash $ 12,788 $ 26,815 The following is a summary of restricted cash for surety bonds: December 31, (in thousands) 2020 2019 Beginning balance $ 26,619 $ 25,516 Refunds (1) (18,054) — Additions 135 1,103 Ending balance $ 8,700 $ 26,619 (1) The reduction during the year ended December 31, 2020, is principally due to the improvement in the Company’s creditworthiness subsequent to the Business Combination. |
Schedule Of Environmental Remediation Costs | As of December 31, 2020, the total environmental remediation costs were as follows (in thousands): Year ending December 31, 2021 $ 489 2022 504 2023 520 2024 536 2025 552 Thereafter 25,567 Total 28,168 Effect of discounting (11,077) Total environmental obligations $ 17,091 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Benefit (Expense) | Income tax benefit (expense) consisted of the following: For the year ended December 31, (in thousands) 2020 2019 Current: Federal $ — $ — State (156) (1) Total current (156) (1) Deferred: Federal 14,088 — State 3,704 — Total deferred 17,792 — Total tax benefit (expense) $ 17,636 $ (1) |
Schedule of Loss Before Income Taxes, By Tax Jurisdiction | Loss before income taxes, by tax jurisdiction, was as follows: For the year ended December 31, (in thousands) 2020 2019 United States $ (39,461) $ (6,754) |
Schedule of Effective Income Tax Rate Reconciliation | Income taxes differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pretax loss as a result of the following: For the year ended December 31, 2020 2019 (in thousands, except tax rates) Percent Amount Percent Amount Computed income tax benefit at the statutory rate 21.0 % $ 8,287 21.0 % $ 1,419 Changes resulting from: State and local income taxes, net of federal benefits 4.3 % 1,729 6.8 % 459 Limitation on officer’s compensation (1.2) % (478) — % — Depletion in excess of basis 1.1 % 425 — % — Effect of other permanent differences (0.3) % (110) (0.5) % (35) Valuation allowance 23.7 % 9,333 (25.5) % (1,720) Other items (3.9) % (1,550) (1.8) % (124) Total effective tax rate and income tax benefit (expense) 44.7 % $ 17,636 — % $ (1) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that gave rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows: December 31, (in thousands) 2020 2019 Deferred tax assets: Asset retirement and environmental obligations $ 10,727 $ 11,359 Other deferred tax assets 860 386 Net operating losses 4,248 3,335 Interest expense carryforward 63 1,020 Inventory 1,667 1,286 Deferred revenue — 1,274 Royalty liability — 1,105 Offtake Advances, net of debt discount 16,665 — Shenghe Warrant 10,087 — Refund liability — 769 Stock-based compensation 536 — Organization costs 943 1,143 Gross deferred tax assets 45,796 21,677 Less: Valuation allowance (2,370) (11,702) Net deferred tax assets 43,426 9,975 Deferred tax liabilities: Property, plant and equipment (7,653) (8,644) Prepaid expenses (273) (204) Deferred revenue (13,260) — Inventory capitalization — (61) Mineral rights (109,174) (742) Other (539) (324) Total deferred tax liabilities (130,899) (9,975) Long-term deferred tax liabilities, net $ (87,473) $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Awards Activity | The following table contains information on our Stock Awards: Number of Shares Weighted-Average Grant Date Fair Value Nonvested as of January 1, 2020 — $ — Granted 2,415,637 $ 14.53 Vested (200,000) $ 14.39 Forfeited — $ — Nonvested as of December 31, 2020 2,215,637 $ 14.54 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurements, Carrying Amounts and Estimated Fair Values by Input Level | The carrying amounts and estimated fair values by input level of the Company’s financial instruments were as follows: December 31, 2020 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 519,652 $ 519,652 $ 519,652 $ — $ — Restricted cash $ 12,788 $ 12,788 $ 12,788 $ — $ — Financial liabilities: Offtake Advances $ 66,450 $ 68,151 $ — $ — $ 68,151 Equipment notes $ 2,102 $ 2,077 $ — $ 2,077 $ — December 31, 2019 (in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 2,757 $ 2,757 $ 2,757 $ — $ — Restricted cash $ 26,815 $ 26,815 $ 26,815 $ — $ — Financial liabilities: Secured promissory note $ 13,594 $ 14,107 $ — $ 14,107 $ — Equipment notes $ 1,660 $ 1,646 $ — $ 1,646 $ — |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | For the year ended December 31, (in thousands, except share and per share data) 2020 2019 Numerator: Net loss $ (21,825) $ (6,755) Denominator: Weighted-average, basic and diluted, shares outstanding 79,690,821 66,556,975 Net loss per share, basic and diluted $ (0.27) $ (0.10) |
Potentially dilutive securities | The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding as they would be anti-dilutive: For the year ended December 31, 2020 2019 Public Warrants 11,499,968 — Restricted stock 1,813,006 — RSUs 397,662 — Total 13,710,636 — |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | In addition to the non-cash components of the June 2020 Modification, as discussed in Note 4, “Relationship and Agreements with Shenghe,” and the cash flow information pertaining to lease activity, as presented in Note 10, “Lease Obligations,” other supplemental cash flow information and non-cash investing and financing activities were as follows: For the year ended December 31, (in thousands) 2020 2019 Supplemental cash flow information: Cash paid for interest $ 3,089 $ 926 Cash paid for income taxes $ 255 $ 1 Supplemental non-cash investing activities: Property, plant and equipment acquired with seller-financed equipment notes $ 1,216 $ 569 Property, plant and equipment purchased but not yet paid $ 4,054 $ — SNR Mineral Rights Acquisition (1) $ 324,125 $ — Supplemental non-cash financing activities: Revenue recognized in exchange for debt principal reduction (2) $ 21,312 $ — (1) See Note 3, “ Business Combination and R everse Acquisition, ” for further information on the composition of the cost of this acquisition. (2) Of the amount for the year ended December 31, 2020, $12.0 million pertains to sales to Shenghe, as discussed in Note 9, “Debt Obligations,” and $9.3 million pertains to the tariff rebate and changes in estimates of realized prices of prior period sales, as discussed in Note 5, “Revenue Recognition.” |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other income, net | For the year ended December 31, (in thousands) 2020 2019 Gain (loss) on sale of equipment $ (101) $ 3,785 Interest income 163 461 Environmental incentive credit 130 — Other 59 32 Other income, net $ 251 $ 4,278 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 12 Months Ended | |||
Dec. 31, 2020segment$ / shares | Nov. 17, 2020$ / shares | Dec. 31, 2019$ / shares | May 22, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Preferred interest percentage held by Shenghe | 9.99% | |||
Common stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Number of reportable segments | segment | 1 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 16, 2020 | Apr. 30, 2017 | |
Concentration Risk [Line Items] | ||||
Allowance for doubtful accounts | $ 0 | $ 0 | ||
Property, Plant and Equipment [Line Items] | ||||
Impairment of long-lived assets | $ 0 | $ 0 | ||
Minimum | Discounted cash flow | Credit-adjusted risk-free rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Asset retirement obligation, measurement input | 0.071 | |||
Maximum | Discounted cash flow | Credit-adjusted risk-free rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Asset retirement obligation, measurement input | 0.082 | |||
Mineral rights | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, useful life | 24 years | |||
Mineral rights | MPMO | ||||
Property, Plant and Equipment [Line Items] | ||||
Working interest percentage | 2.50% | 97.50% | ||
Product sales | Customer concentration risk | Shenghe | Shenghe | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 90.00% |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment useful lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 10 years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 40 years |
Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 25 years |
BUSINESS COMBINATION AND REVE_3
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 17, 2020USD ($)shares | Nov. 16, 2020USD ($)$ / sharesshares | Jul. 15, 2020USD ($)shares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Business Acquisition [Line Items] | |||||
Merger exchange ratio | 59,908.35 | ||||
Direct and incremental costs | $ | $ 33,500 | ||||
Costs recorded to additional paid-in capital | $ | 28,200 | ||||
Costs expensed to general and administrative expenses | $ | $ 3,300 | ||||
Earnout Shares | FVAP | |||||
Business Acquisition [Line Items] | |||||
Earnout shares (shares) | 12,860,000 | ||||
Estimated fair value of Earnout Shares | $ | $ 171,200 | ||||
MPMO Earnout Shares | FVAP | |||||
Business Acquisition [Line Items] | |||||
Estimated fair value of Earnout Shares | $ | 134,000 | ||||
SNR Earnout Shares | FVAP | |||||
Business Acquisition [Line Items] | |||||
Estimated fair value of Earnout Shares | $ | $ 37,200 | ||||
SNR | |||||
Business Acquisition [Line Items] | |||||
Stock issued for asset acquisition (shares) | 19,999,942 | ||||
Asset acquisition, transaction costs | $ | $ 2,000 | ||||
MPMO | Conversion of common and preferred units into common stock | |||||
Business Acquisition [Line Items] | |||||
Conversion of stock, shares issued (shares) | 71,941,538 | ||||
Private Placement | |||||
Business Acquisition [Line Items] | |||||
Common stock sold (shares) | 20,000,000 | ||||
Common stock sold, aggregate purchase price | $ | $ 200,000 | ||||
Vesting Shares | |||||
Business Acquisition [Line Items] | |||||
Common stock issuances (shares) | 8,625,000 | ||||
Earnout Shares | |||||
Business Acquisition [Line Items] | |||||
Common stock issuances (shares) | 12,859,898 | ||||
MPMO | |||||
Business Acquisition [Line Items] | |||||
Common unit, outstanding (shares) | 1,000 | ||||
Common units, par value (usd per share) | $ / shares | $ 0 | ||||
Preferred units, outstanding (shares) | 200.86 | 110.98 | |||
Preferred units, par value (usd per share) | $ / shares | $ 0 | $ 0 | |||
Preferred units issued (shares) | 89.88 | ||||
MPMO | SNR | |||||
Business Acquisition [Line Items] | |||||
Liability related to minimum royalty | $ | $ 3,900 | ||||
Sponsor | |||||
Business Acquisition [Line Items] | |||||
Number of warrants exchanged (shares) | 5,933,333 | ||||
Stock issued upon conversion of warrants (shares) | 890,000 |
BUSINESS COMBINATION AND REVE_4
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION - Common Shares Issued and Outstanding (Details) - USD ($) $ in Thousands | Nov. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 149,308,637 | 170,719,979 | 66,556,975 |
Total issued (shares) | 149,308,637 | 170,719,979 | 66,556,975 |
Payment of underwriting and transaction costs | $ 40,325 | $ 0 | |
FVAC public stockholders | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 34,464,151 | ||
Total issued (shares) | 34,464,151 | ||
Gross proceeds sale of shares | $ 344,700 | ||
Net proceeds sale of shares | 332,600 | ||
Payment of underwriting and transaction costs | $ 12,100 | ||
Private Placement Warrants | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 890,000 | ||
Total issued (shares) | 890,000 | ||
MPMO unitholders | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 71,941,538 | ||
Total issued (shares) | 71,941,538 | ||
SNR unitholders | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 19,999,942 | ||
Total issued (shares) | 19,999,942 | ||
PIPE Financing | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 20,000,000 | ||
Total issued (shares) | 20,000,000 | ||
Restricted stock issued to certain MPMO executives | |||
Business Acquisition [Line Items] | |||
Total outstanding (shares) | 2,013,006 | ||
Total issued (shares) | 2,013,006 | ||
Shenghe | |||
Business Acquisition [Line Items] | |||
Shares issued, warrant exercised | 5,384,563 |
BUSINESS COMBINATION AND REVE_5
BUSINESS COMBINATION AND REVERSE RECAPITALIZATION - Acquisition Consideration and Assets Acquired and Liabilities Assumed (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets acquired: | |||
Mineral rights | $ 26,200 | $ 2,800 | |
SNR | |||
Schedule of Asset Acquisition [Line Items] | |||
Total cost of acquisition | $ 324,125 | ||
Assets acquired: | |||
Prepaid assets | 76 | ||
Deferred tax assets | 134 | ||
Total assets acquired: | 434,917 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | (1,681) | ||
Deferred tax liabilities | (109,111) | ||
Total liabilities assumed | (110,792) | ||
Total net assets acquired | 324,125 | ||
Common stock transferred | $ 287,800 | ||
Common stock transferred (shares) | 20,000,000 | ||
Common stock transfer price (usd per share) | $ 14.39 | ||
Asset acquisition, transaction costs | $ 2,000 | ||
Settlement of liability related to minimum royalty | 3,900 | ||
Deferred tax impact related to settlement of liability related to minimum royalty | 1,000 | ||
Estimated fair value of Earnout Shares | 37,200 | ||
SNR | Mineral rights | |||
Assets acquired: | |||
Mineral rights | $ 434,707 |
RELATIONSHIP AND AGREEMENTS W_3
RELATIONSHIP AND AGREEMENTS WITH SHENGHE - Original Commercial Agreements (Details) - USD ($) $ in Millions | Jun. 20, 2017 | May 31, 2017 | Nov. 16, 2020 | Dec. 31, 2019 |
Initial Prepayment Amount | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Advances | $ 50 | |||
Increase in advances | $ 30 | |||
First Additional Advance | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Advances | $ 30 | |||
Distribution And Marketing Agreement | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Net profit-based commission percentage | 35.00% | |||
MPMO | ||||
Related Party Transaction [Line Items] | ||||
Preferred units, outstanding (shares) | 200.86 | 110.98 |
RELATIONSHIP AND AGREEMENTS W_4
RELATIONSHIP AND AGREEMENTS WITH SHENGHE - Framework Agreement and Restructured Commercial Arrangements (Details) - Affiliated Entity - USD ($) $ in Millions | Jun. 05, 2020 | Jun. 02, 2020 | Jun. 20, 2017 | May 31, 2017 | Dec. 31, 2019 |
Original Offtake Agreement, Second Additional Advance | Shenghe | |||||
Related Party Transaction [Line Items] | |||||
Advances | $ 35.5 | ||||
Initial Prepayment Amount | |||||
Related Party Transaction [Line Items] | |||||
Advances | $ 50 | ||||
Increase in advances | $ 30 | ||||
Initial Prepayment Amount | Shenghe | |||||
Related Party Transaction [Line Items] | |||||
Advances | $ 9.2 | ||||
Increase in advances | $ 30 | $ 30 | |||
MPMO | A&R Offtake Agreement | Shenghe Warrant | Shenghe | |||||
Related Party Transaction [Line Items] | |||||
Number of preferred units convertible from warrant exercise | 89.88 | ||||
Percentage of equity on a diluted basis after warrant exercise | 7.50% |
RELATIONSHIP AND AGREEMENTS W_5
RELATIONSHIP AND AGREEMENTS WITH SHENGHE - Accounting for the June 2017 Modification (Details) - Affiliated Entity - USD ($) $ in Millions | Jun. 05, 2020 | Jun. 20, 2017 | May 31, 2017 | Dec. 31, 2019 |
First Additional Advance | ||||
Related Party Transaction [Line Items] | ||||
Advances | $ 30 | |||
First Additional Advance | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Advances | 30 | |||
Debt fair value | 26.5 | |||
Preferred interest, fair value | 2.3 | |||
Deferred revenue arrangement modification fair value | 3.5 | |||
Initial Prepayment Amount, Prepaid Balance | ||||
Related Party Transaction [Line Items] | ||||
Advances | $ 50 | |||
Increase in advances | 30 | |||
Initial Prepayment Amount, Prepaid Balance | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Advances | $ 9.2 | |||
Increase in advances | $ 30 | $ 30 | ||
Shenghe Implied Discount | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Shenghe Implied Discount, percentage of contractual gross profit | 36.00% |
RELATIONSHIP AND AGREEMENTS W_6
RELATIONSHIP AND AGREEMENTS WITH SHENGHE - Accounting for the June 2020 Modification (Details) - USD ($) $ in Thousands | Jun. 05, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Non-cash settlement charge | $ 66,600 | $ 66,615 | $ 0 | |
Affiliated Entity | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Non-cash settlement charge | $ (66,615) | |||
Affiliated Entity | Stage II optimization project | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Expected advances | $ 200,000 |
RELATIONSHIP AND AGREEMENTS W_7
RELATIONSHIP AND AGREEMENTS WITH SHENGHE - Activity Related to June 2020 Modification (Details) - USD ($) $ in Thousands | Jun. 05, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Settlement charge | $ 66,600 | $ 66,615 | $ 0 | |
Affiliated Entity | Shenghe | ||||
Related Party Transaction [Line Items] | ||||
Deemed proceeds for fair value of debt issuance | $ 85,695 | |||
Deemed proceeds for fair value of warrant issuance | 53,846 | |||
Total deemed proceeds | 139,541 | |||
Derecognition of the existing deferred revenue balance | (37,476) | |||
Settlement charge | (66,615) | |||
Total deemed payments | (104,091) | |||
Net cash received | $ 35,450 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands | Jun. 20, 2017 | Aug. 31, 2020 | Jun. 05, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||||||
Prepayments received | $ 11,050 | $ 10,311 | ||||
Affiliated Entity | Shenghe | ||||||
Related Party Transaction [Line Items] | ||||||
Deferred revenue percentage recognized from gross profit | 64.00% | |||||
Tariff rebates | $ 1,400 | |||||
Refund liability | 1,800 | $ 2,300 | ||||
Payments for refund liability | 500 | |||||
Repayment liability for Offtake Advances | $ 900 | |||||
Affiliated Entity | Shenghe | Offtake Advances | ||||||
Related Party Transaction [Line Items] | ||||||
Reduction in principal debt balance due to tariff rebate | $ 9,300 | |||||
Affiliated Entity | Shenghe | First Additional Advance | ||||||
Related Party Transaction [Line Items] | ||||||
Preferred interest, fair value | $ 2,300 | |||||
Prepayments received | $ 3,500 | |||||
Affiliated Entity | Shenghe | Shenghe Implied Discount | ||||||
Related Party Transaction [Line Items] | ||||||
Shenghe Implied Discount, percentage of contractual gross profit | 36.00% | |||||
Affiliated Entity | Shenghe | Minimum | Shenge Sales Discount | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties, sales discount | 3.00% | |||||
Affiliated Entity | Shenghe | Maximum | Shenge Sales Discount | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties, sales discount | 6.00% |
REVENUE RECOGNITION - Significa
REVENUE RECOGNITION - Significant Activity For Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 20, 2017 | May 31, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Contract With Customer, Liability, Related Parties [Rollforward] | |||||
Opening balance | $ 35,543 | $ 28,482 | |||
Prepayments received | 11,050 | 10,311 | |||
Revenue recognized in exchange for debt principal reduction | (9,117) | (3,250) | |||
Effect of June 2020 Modification | (37,476) | 0 | |||
Ending balance | 0 | 35,543 | |||
Deferred revenue—related parties | 0 | 6,609 | $ 3,300 | ||
Affiliated Entity | Shenghe | |||||
Contract With Customer, Liability, Related Parties [Rollforward] | |||||
Deferred revenue percentage recognized from gross profit | 64.00% | ||||
Tariff rebates | $ 1,400 | ||||
Initial Prepayment Amount | Affiliated Entity | |||||
Contract With Customer, Liability, Related Parties [Rollforward] | |||||
Advances | $ 50,000 | ||||
Initial Prepayment Amount | Affiliated Entity | Shenghe | |||||
Contract With Customer, Liability, Related Parties [Rollforward] | |||||
Advances | $ 9,200 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Abstract] | ||
Restricted cash, current | $ 3,688 | $ 24 |
Restricted cash, non-current | 9,100 | 26,791 |
Total restricted cash | $ 12,788 | $ 26,815 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Materials and supplies | $ 5,124 | $ 4,156 |
In-process | 24,524 | 15,710 |
Finished goods | 2,624 | 3,182 |
Total inventory | $ 32,272 | $ 23,048 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) | Nov. 17, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 16, 2020 | Apr. 30, 2017 |
Property, Plant and Equipment [Line Items] | |||||
Capitalized expenditures | $ 26,200,000 | $ 2,800,000 | |||
Interest capitalized | 162,000 | 0 | |||
Property, plant and equipment | 516,866,000 | 54,212,000 | |||
Depreciation and depletion expense | 6,700,000 | 4,700,000 | |||
Mineral rights | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment | $ 437,654,000 | $ 2,967,000 | |||
Mineral rights | SNR | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized expenditures | $ 434,707,000 | ||||
Mineral rights | MPMO | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment | $ 3,000,000 | ||||
Working interest percentage | 2.50% | 97.50% |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT - Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 516,866 | $ 54,212 |
Less: Accumulated depreciation and depletion | (14,892) | (7,826) |
Property, plant and equipment, net | 501,974 | 46,386 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 22,911 | 18,313 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 2,953 | 3,152 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 6,534 | 6,045 |
Assets under construction | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 46,814 | 23,735 |
Mineral rights | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 437,654 | $ 2,967 |
DEBT OBLIGATIONS - Related-Part
DEBT OBLIGATIONS - Related-Party Debt (Details) - Related Party Debt - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Less: Unamortized debt discount | $ (5,393) | $ (1,079) | |
Net carrying amount | 66,450 | 18,078 | |
Less: Current installments of long-term debt to related parties | (22,070) | (4,484) | |
Long-term debt to related parties, net of current portion | 44,380 | 13,594 | |
Offtake Advances | |||
Debt Instrument [Line Items] | |||
Long-term debt to related parties, gross | 71,843 | $ 94,000 | 0 |
Less: Unamortized debt discount | $ (8,300) | ||
Net carrying amount | 71,843 | ||
Less: Current installments of long-term debt to related parties | (25,700) | ||
Promissory note | |||
Debt Instrument [Line Items] | |||
Long-term debt to related parties, gross | 0 | 5,563 | |
Secured promissory note | |||
Debt Instrument [Line Items] | |||
Long-term debt to related parties, gross | $ 0 | $ 13,594 |
DEBT OBLIGATIONS - Offtake Adva
DEBT OBLIGATIONS - Offtake Advances (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 7 Months Ended | 12 Months Ended | |||
Aug. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | |
Debt Instrument [Line Items] | |||||||
Warrant fair value | $ 53,800 | $ 53,800 | |||||
Settlement charge | 66,600 | $ 66,615 | $ 0 | ||||
Shenghe | |||||||
Debt Instrument [Line Items] | |||||||
Rebate income | $ 9,700 | ||||||
Gross profit, higher than estimate | 400 | ||||||
Related Party Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt discount | $ 5,393 | 5,393 | 1,079 | ||||
Current portion of debt | 22,070 | 22,070 | 4,484 | ||||
Offtake Advances | Related Party Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt fair value | $ 85,700 | 85,700 | |||||
Required payments, percent of net profits from sales of assets | 100.00% | ||||||
Required payments, percent of net income | 100.00% | ||||||
Required payments, period from audit completion | 5 days | ||||||
Reduction in debt as a result of sales | 12,000 | ||||||
Outstanding balance, gross | $ 94,000 | 94,000 | 71,843 | $ 71,843 | $ 0 | ||
Debt discount | 8,300 | 8,300 | |||||
Debt term | 3 years | ||||||
Current portion of debt | $ 25,700 | $ 25,700 | |||||
Reduction in debt principal due to change in price estimates | 10,100 | ||||||
Reduction in debt discount due to change in price estimates | $ 800 | ||||||
Offtake Advances | Related Party Debt | Subsequent event | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 6.59% | ||||||
Offtake Advances | Related Party Debt | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 4.41% | 4.41% | |||||
Offtake Advances | Related Party Debt | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Effective interest rate | 5.27% | 5.27% | |||||
Offtake Advances | First Offtake Advance | |||||||
Debt Instrument [Line Items] | |||||||
Advance funded | 37,500 | 37,500 | |||||
Offtake Advances | Second Offtake Advance | |||||||
Debt Instrument [Line Items] | |||||||
Advance funded | $ 35,500 | $ 35,500 |
DEBT OBLIGATIONS - Promissory N
DEBT OBLIGATIONS - Promissory Note (Details) - Promissory note - Related Party Debt - USD ($) $ in Millions | Jun. 20, 2019 | Apr. 30, 2017 |
Debt Instrument [Line Items] | ||
Interest rate | 5.00% | |
Amount borrowed | $ 5.6 | $ 0.2 |
DEBT OBLIGATIONS - Secured Prom
DEBT OBLIGATIONS - Secured Promissory Note (Details) - Secured promissory note - Related Party Debt - USD ($) $ in Millions | 1 Months Ended | |||
Jul. 31, 2019 | Jun. 30, 2019 | Feb. 28, 2019 | Aug. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Advance funded | $ 15.5 | |||
Interest rate | 10.00% | |||
Increase in principal for accrued interest | $ 2.3 | |||
Increase in principal balance for debt modification | $ 1.9 | |||
Repayment of debt principal | $ 3 | $ 3.1 |
DEBT OBLIGATIONS - Paycheck Pro
DEBT OBLIGATIONS - Paycheck Protection Loan (Details) - Note - Paycheck Protection Loan - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Proceeds from debt issuance | $ 3,400 | ||
Paycheck Protection Loan | |||
Current | $ 2,403 | $ 0 | |
Non-current | 961 | 0 | |
Net carrying amount | $ 3,364 | $ 0 |
DEBT OBLIGATIONS - Equipment No
DEBT OBLIGATIONS - Equipment Notes (Details) - Equipment notes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equipment notes | ||
Current | $ 835 | $ 515 |
Long-term debt to related parties, net of current portion | 1,267 | 1,145 |
Net carrying amount | $ 2,102 | $ 1,660 |
Minimum | ||
Equipment notes | ||
Debt term | 4 years | |
Interest rate | 0.00% | |
Maximum | ||
Equipment notes | ||
Debt term | 5 years | |
Interest rate | 6.50% |
DEBT OBLIGATIONS - Interest Exp
DEBT OBLIGATIONS - Interest Expense, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Interest expense | $ 5,171,000 | $ 3,412,000 |
Capitalized interest | (162,000) | 0 |
Interest expense, net | $ 5,009,000 | $ 3,412,000 |
DEBT OBLIGATIONS - Debt Maturit
DEBT OBLIGATIONS - Debt Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Debt | ||
Year ending December 31, | ||
Net carrying amount | $ 66,450 | $ 18,078 |
Offtake Advances | Related Party Debt | ||
Year ending December 31, | ||
2021 | 25,710 | |
2022 | 42,744 | |
2023 | 3,389 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Net carrying amount | 71,843 | |
Note | Paycheck Protection Loan | ||
Year ending December 31, | ||
2021 | 2,403 | |
2022 | 961 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Net carrying amount | 3,364 | 0 |
Equipment notes | ||
Year ending December 31, | ||
2021 | 835 | |
2022 | 733 | |
2023 | 434 | |
2024 | 100 | |
2025 | 0 | |
Thereafter | 0 | |
Net carrying amount | $ 2,102 | $ 1,660 |
LEASE OBLIGATIONS - Additional
LEASE OBLIGATIONS - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 1 month |
Lease renewal terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 5 years |
Lease renewal terms | 5 years |
LEASE OBLIGATIONS - Lease Cost
LEASE OBLIGATIONS - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 2,466 | $ 218 |
Finance lease cost | ||
Amortization of right-of-use assets | 268 | 159 |
Interest on lease liabilities | 50 | 42 |
Finance lease cost | 318 | 201 |
Short-term lease cost | 1,246 | 913 |
Lease cost | $ 4,030 | $ 1,332 |
LEASE OBLIGATIONS - Supplementa
LEASE OBLIGATIONS - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows related to operating leases | $ 2,432 | $ 223 |
Operating cash flows related to finance leases | 50 | 42 |
Financing cash flows related to finance leases | 249 | 121 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 2,932 | 549 |
Finance leases | $ 724 | $ 671 |
LEASE OBLIGATIONS - Lease Terms
LEASE OBLIGATIONS - Lease Terms and Discount Rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted-Average Remaining Lease Term | ||
Operating leases | 1 year 3 months 18 days | 2 years 10 months 24 days |
Finance leases | 3 years 6 months | 3 years |
Weighted-Average Discount Rate | ||
Operating leases | 5.20% | 4.70% |
Finance leases | 6.70% | 7.70% |
LEASE OBLIGATIONS - Maturities
LEASE OBLIGATIONS - Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases | ||
2021 | $ 790 | |
2022 | 361 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
Thereafter | 0 | |
Total lease payments | 1,151 | |
Less: Imputed interest | (33) | |
Total | 1,118 | $ 566 |
Finance Leases | ||
2021 | 324 | |
2022 | 253 | |
2023 | 333 | |
2024 | 119 | |
2025 | 95 | |
Thereafter | 0 | |
Total lease payments | 1,124 | |
Less: Imputed interest | (122) | |
Total | $ 1,002 | $ 593 |
LEASE OBLIGATIONS - Supplemen_2
LEASE OBLIGATIONS - Supplemental Disclosure for the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases: | ||
Right-of-use assets | $ 1,090 | $ 571 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other non-current assets | Other non-current assets |
Operating lease liability, current | $ 761 | $ 215 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Operating lease liability, non-current | $ 357 | $ 351 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other non-current liabilities | Other non-current liabilities |
Total operating lease liabilities | $ 1,118 | $ 566 |
Finance Leases: | ||
Right-of-use assets | 1,028 | 586 |
Finance lease liability, current | 266 | 194 |
Finance lease liability, non-current | 736 | 399 |
Total finance lease liabilities | $ 1,002 | $ 593 |
ASSET RETIREMENT AND ENVIRONM_3
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS - Summary of Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Beginning balance | $ 25,646 | $ 23,966 | $ 22,566 |
Obligations settled | (75) | (80) | |
Accretion expense | 1,755 | 1,602 | |
Revisions in estimated cash flows | 0 | (122) | |
Ending balance | $ 25,646 | $ 23,966 |
ASSET RETIREMENT AND ENVIRONM_4
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation And Environmental Remediation Obligations [Abstract] | ||
Asset retirement obligation, current | $ 100 | $ 100 |
Estimated undiscounted cash flows, to satisfy obligation | 142,300 | 142,300 |
Closure and reclamation obligations, financial assurances | $ 38,400 | 38,300 |
Remediation term | 27 years | |
Discount rate | 2.93% | |
Environmental obligations, undiscounted cost | $ 28,168 | 28,600 |
Environmental obligations, current | $ 500 | $ 500 |
ASSET RETIREMENT AND ENVIRONM_5
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS - Schedule of Restricted Cash for Surety Bonds (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Cash [Roll Forward] | ||
Beginning balance | $ 26,815 | |
Ending balance | 12,788 | $ 26,815 |
Restricted cash for surety bonds | ||
Restricted Cash [Roll Forward] | ||
Beginning balance | 26,619 | 25,516 |
Refunds | (18,054) | 0 |
Additions | 135 | 1,103 |
Ending balance | $ 8,700 | $ 26,619 |
ASSET RETIREMENT AND ENVIRONM_6
ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS - Schedule of Environmental Remediation Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Asset Retirement Obligation And Environmental Remediation Obligations [Abstract] | ||
2021 | $ 489 | |
2022 | 504 | |
2023 | 520 | |
2024 | 536 | |
2025 | 552 | |
Thereafter | 25,567 | |
Total | 28,168 | $ 28,600 |
Effect of discounting | (11,077) | |
Total environmental obligations | $ 17,091 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Benefit (Expense) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | (156) | (1) |
Total current | (156) | (1) |
Deferred: | ||
Federal | 14,088 | 0 |
State | 3,704 | 0 |
Total deferred | 17,792 | 0 |
Income tax benefit (expense) | $ 17,636 | $ (1) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Certain deductible expenditures incurred as a reduction in Business Combination proceeds | $ 4.7 | |
Operating loss carryforwards, subject to expiration | 4.6 | |
Operating loss carryforwards, carried forward indefinitely | 11.7 | |
Federal Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 16.3 | $ 10.7 |
INCOME TAXES - Schedule of In_2
INCOME TAXES - Schedule of Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Loss before income taxes, United States | $ (39,461) | $ (6,754) |
INCOME TAXES - Schedule of In_3
INCOME TAXES - Schedule of Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | ||
Computed income tax benefit at the statutory rate | 21.00% | 21.00% |
State and local income taxes, net of federal benefits | 4.30% | 6.80% |
Limitation on officer’s compensation | (1.20%) | 0.00% |
Depletion in excess of basis | 1.10% | 0.00% |
Effect of other permanent differences | (0.30%) | (0.50%) |
Valuation allowance | 23.70% | (25.50%) |
Other items | (3.90%) | (1.80%) |
Total effective tax rate and income tax benefit (expense) | 44.70% | 0.00% |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Computed income tax benefit at the statutory rate | $ 8,287 | $ 1,419 |
State and local income taxes, net of federal benefits | 1,729 | 459 |
Limitation on officer’s compensation | (478) | 0 |
Depletion in excess of basis | 425 | 0 |
Effect of other permanent differences | (110) | (35) |
Valuation allowance | 9,333 | (1,720) |
Other items | (1,550) | (124) |
Income tax benefit (expense) | $ 17,636 | $ (1) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets, Net [Abstract] | ||
Asset retirement and environmental obligations | $ 10,727 | $ 11,359 |
Other deferred tax assets | 860 | 386 |
Net operating losses | 4,248 | 3,335 |
Interest expense carryforward | 63 | 1,020 |
Inventory | 1,667 | 1,286 |
Deferred revenue | 0 | 1,274 |
Royalty liability | 0 | 1,105 |
Offtake Advances, net of debt discount | 16,665 | 0 |
Shenghe Warrant | 10,087 | 0 |
Refund liability | 0 | 769 |
Stock-based compensation | 536 | 0 |
Organization costs | 943 | 1,143 |
Gross deferred tax assets | 45,796 | 21,677 |
Less: Valuation allowance | (2,370) | (11,702) |
Net deferred tax assets | 43,426 | 9,975 |
Deferred Tax Liabilities, Net [Abstract] | ||
Property, plant and equipment | (7,653) | (8,644) |
Prepaid expenses | (273) | (204) |
Deferred revenue | (13,260) | 0 |
Inventory capitalization | 0 | (61) |
Mineral rights | (109,174) | (742) |
Other | (539) | (324) |
Total deferred tax liabilities | (130,899) | (9,975) |
Long-term deferred tax liabilities, net | $ (87,473) | $ 0 |
STOCKHOLDERS_ EQUITY (Details)
STOCKHOLDERS’ EQUITY (Details) - $ / shares | May 04, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Nov. 17, 2020 | Nov. 16, 2020 | Dec. 31, 2019 |
Class of Warrant or Right [Line Items] | ||||||
Capital stock, authorized (shares) | 500,000,000 | 221,000,000 | ||||
Common stock, authorized (shares) | 450,000,000 | 450,000,000 | 450,000,000 | 450,000,000 | ||
Preferred stock, authorized (shares) | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | ||
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (shares) | 170,719,979 | 170,719,979 | 149,308,637 | 66,556,975 | ||
Common stock, outstanding (shares) | 170,719,979 | 170,719,979 | 149,308,637 | 66,556,975 | ||
Vesting Shares | ||||||
Class of Warrant or Right [Line Items] | ||||||
Common stock issuances (shares) | 8,625,000 | |||||
Earnout Shares | ||||||
Class of Warrant or Right [Line Items] | ||||||
Common stock issuances (shares) | 12,859,898 | |||||
Public Warrant | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of securities called by warrants | 11,499,968 | |||||
Exercise price of warrants (usd per share) | $ 11.50 | |||||
Period after which warrants become exercisable | 12 months | |||||
Warrants expiration period | 5 years | |||||
Warrant redemption requirement, stock price (usd per share) | $ 18 | |||||
Warrant redemption requirement, trading days threshold | 20 days | |||||
Warrant redemption requirement, trading day period | 30 days | |||||
Warrant redemption requirement, days before sending notice of redemption to warrant holders | 3 days | |||||
Warrant redemption price (usd per share) | $ 0.01 | |||||
Redemption period minimum written days' notice | 30 days |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Millions | Nov. 17, 2020 | Dec. 31, 2020 | Nov. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 2,415,637 | ||
Shares vested (in shares) | 200,000 | ||
Stock-based compensation expense | $ 5 | ||
Unamortized compensation cost not yet recognized | $ 30.1 | ||
Unamortized compensation costs not yet recognized, weighted-average recognition period | 2 years 3 months 18 days | ||
Shares vested, fair value | $ 2.9 | ||
RSUs | Non-employee directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 15,992 | ||
RSUs | Non-executive employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 386,639 | ||
Vesting period | 4 years | ||
Requisite service period | 4 years | ||
2020 Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance (shares) | 9,653,671 | ||
Annual increase percentage in shares available for issuance | 2.00% | ||
Shares available for future grants (in shares) | 7,238,034 | ||
Employee Arrangements | Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted (in shares) | 2,013,006 | ||
Shares vested (in shares) | 200,000 | ||
Vesting period | 4 years | ||
Requisite service period | 4 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock Awards Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Beginning balance (in shares) | 0 | |
Granted (in shares) | 2,415,637 | |
Vested (in shares) | (200,000) | |
Forfeited (in shares) | 0 | |
Ending balance (in shares) | 2,215,637 | 0 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (in USD per share) | $ 0 | |
Granted (in USD per share) | $ 14.53 | |
Vested (in USD per share) | 14.39 | |
Forfeited (in USD per share) | 0 | |
Ending balance (in USD per share) | $ 14.54 | $ 0 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Recurring | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents, fair value disclosure | $ 519,652 | $ 2,757 |
Restricted cash, fair value disclosure | 12,788 | 26,815 |
Fair Value, Recurring | Level 2 | ||
Financial assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Restricted cash, fair value disclosure | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Financial assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Restricted cash, fair value disclosure | 0 | 0 |
Offtake Advances | Fair Value, Recurring | Level 1 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Offtake Advances | Fair Value, Recurring | Level 2 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Offtake Advances | Fair Value, Recurring | Level 3 | ||
Financial liabilities: | ||
Debt fair value | 68,151 | |
Equipment notes | Fair Value, Recurring | Level 1 | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Equipment notes | Fair Value, Recurring | Level 2 | ||
Financial liabilities: | ||
Debt fair value | 2,077 | 1,646 |
Equipment notes | Fair Value, Recurring | Level 3 | ||
Financial liabilities: | ||
Debt fair value | 0 | 0 |
Secured promissory note | Fair Value, Recurring | Level 1 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Secured promissory note | Fair Value, Recurring | Level 2 | ||
Financial liabilities: | ||
Debt fair value | 14,107 | |
Secured promissory note | Fair Value, Recurring | Level 3 | ||
Financial liabilities: | ||
Debt fair value | 0 | |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents, fair value disclosure | 519,652 | 2,757 |
Restricted cash, fair value disclosure | 12,788 | 26,815 |
Carrying Amount | Offtake Advances | ||
Financial liabilities: | ||
Debt fair value | 66,450 | |
Carrying Amount | Equipment notes | ||
Financial liabilities: | ||
Debt fair value | 2,102 | 1,660 |
Carrying Amount | Secured promissory note | ||
Financial liabilities: | ||
Debt fair value | 13,594 | |
Fair Value | Fair Value, Recurring | ||
Financial assets: | ||
Cash and cash equivalents, fair value disclosure | 519,652 | 2,757 |
Restricted cash, fair value disclosure | 12,788 | 26,815 |
Fair Value | Offtake Advances | Fair Value, Recurring | ||
Financial liabilities: | ||
Debt fair value | 68,151 | |
Fair Value | Equipment notes | Fair Value, Recurring | ||
Financial liabilities: | ||
Debt fair value | $ 2,077 | 1,646 |
Fair Value | Secured promissory note | Fair Value, Recurring | ||
Financial liabilities: | ||
Debt fair value | $ 14,107 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||
Net loss | $ (21,825) | $ (6,755) |
Weighted-average, basic and diluted, shares outstanding (in shares) | 79,690,821 | 66,556,975 |
Net loss per share, basic and diluted (usd per share) | $ (0.27) | $ (0.10) |
EARNINGS (LOSS) PER SHARE - Pot
EARNINGS (LOSS) PER SHARE - Potentially Dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 13,710,636 | 0 |
Public Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 11,499,968 | 0 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,813,006 | 0 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 397,662 | 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Royalty expense to SNR | $ 2,406 | $ 1,885 | |
Accounts payable, related parties | 0 | ||
Royalty Agreement With SNR | |||
Related Party Transaction [Line Items] | |||
Minimum royalty obligation, imputed interest rate | 12.70% | ||
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 133,700 | 73,000 | |
Purchases from related party | 2,600 | 3,200 | |
Accounts receivable, related parties, current | 3,500 | ||
Affiliated Entity | SNR | |||
Related Party Transaction [Line Items] | |||
Accounts payable, related parties | 500 | ||
Affiliated Entity | Shenghe | |||
Related Party Transaction [Line Items] | |||
Accounts payable, related parties | 1,500 | ||
Affiliated Entity | Shipping And Freight Related Agreements With Shenghe | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 63,300 | 60,900 | |
Affiliated Entity | Travel-Related Expenses | JHL Capital Group Holdings | |||
Related Party Transaction [Line Items] | |||
Expenses from transactions with related party | 100 | 200 | |
Affiliated Entity | Accruals For Travel-Related Expenses | JHL Capital Group Holdings | |||
Related Party Transaction [Line Items] | |||
Accrued liabilities, related parties | 100 | 100 | |
Affiliated Entity | Accruals For Patent Maintenance Fees And Property Taxes | SNR | |||
Related Party Transaction [Line Items] | |||
Accrued liabilities, related parties | 100 | ||
Affiliated Entity | Accruals For Interest Expense, First Additional Advance | |||
Related Party Transaction [Line Items] | |||
Accrued liabilities, related parties | 300 | ||
MPMO | Royalty Agreement With SNR | |||
Related Party Transaction [Line Items] | |||
Royalty Agreement, term | 30 years | ||
Royalty interest percentage | 2.50% | ||
Related party transaction, minimum non-refundable annual royalty payable | $ 500 | ||
Related party transaction, Mountain Pass facility expenditure minimum within 12 months to avoid termination | 20,000 | ||
Related party transaction, Mountain Pass facility expenditure minimum within 24 months to avoid termination | 35,000 | ||
Related party transaction, Mountain Pass facility expenditure minimum within 36 months to avoid termination | $ 50,000 | ||
Royalty expense to SNR | 2,400 | 1,900 | |
Payments for royalties | $ 4,300 | $ 1,200 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 1 Months Ended | 7 Months Ended | 12 Months Ended | |
Aug. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental cash flow information: | ||||
Cash paid for interest | $ 3,089 | $ 926 | ||
Cash paid for income taxes | 255 | 1 | ||
Supplemental non-cash investing activities: | ||||
Property, plant and equipment acquired with seller-financed equipment notes | 1,216 | 569 | ||
Property, plant and equipment purchased but not yet paid | 4,054 | 0 | ||
SNR Mineral Rights Acquisition | 324,125 | 0 | ||
Supplemental non-cash financing activities: | ||||
Revenue recognized in exchange for debt principal reduction | $ 21,312 | $ 0 | ||
Offtake Advances | Related Party Debt | ||||
Supplemental non-cash financing activities: | ||||
Reduction in debt as a result of sales | $ 12,000 | |||
Offtake Advances | Affiliated Entity | Shenghe | ||||
Supplemental non-cash financing activities: | ||||
Reduction in principal debt balance due to tariff rebate | $ 9,300 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Gain (loss) on sale of equipment | $ (101) | $ 3,785 |
Interest income | 163 | 461 |
Environmental incentive credit | 130 | 0 |
Other | 59 | 32 |
Other income, net | $ 251 | $ 4,278 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Equipment notes - Subsequent event - February 2021 Equipment Notes $ in Millions | 1 Months Ended |
Feb. 28, 2021USD ($) | |
Subsequent Event [Line Items] | |
Amount borrowed | $ 9.7 |
Debt term | 5 years |
Interest rate | 4.50% |