COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39688 | |
Entity Registrant Name | Latch, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3087759 | |
Entity Address, Address Line One | 508 West 26th Street | |
Entity Address, Address Line Two | Suite 6G | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
City Area Code | 917 | |
Local Phone Number | 338-3915 | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 142,219,716 | |
Entity Central Index Key | 0001826000 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common stock, par value $0.0001 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | LTCH | |
Security Exchange Name | NASDAQ | |
Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | LTCHW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2020 | ||
Current Assets | |||
Cash and cash equivalents | $ 240,306 | $ 60,529 | |
Marketable securities - current | 88,135 | 0 | |
Accounts receivable, net | 18,648 | 8,227 | |
Inventories, net | 9,976 | 8,293 | |
Prepaid expenses and other current assets | 10,136 | 3,309 | |
Total current assets | 367,201 | 80,358 | |
Property and equipment, net | 1,653 | 753 | |
Marketable securities - non-current | 104,138 | 0 | |
Internally developed software, net | 13,037 | 7,416 | |
Other non-current assets | 1,452 | 1,082 | |
Total assets | 487,481 | 89,609 | |
Current liabilities | |||
Accounts payable | 5,945 | 3,732 | |
Accrued expenses | 12,062 | 5,781 | |
Deferred revenue - current | 4,541 | 2,344 | |
Other current liabilities | 2,724 | 0 | |
Total current liabilities | 25,272 | 11,857 | |
Deferred revenue - non-current | 18,818 | 13,178 | |
Term loan, net | 0 | 5,481 | |
Convertible notes, net | 0 | 51,714 | |
Warrant liability | 17,600 | 0 | |
Other non-current liabilities | 559 | 1,051 | |
Total liabilities | 62,249 | 83,281 | |
Commitments and contingencies (see Note 11) | |||
Redeemable convertible preferred stock | [1] | 0 | 160,605 |
Stockholders’ equity (deficit) | |||
Common stock | [1] | 21 | 0 |
Additional paid-in capital | 699,866 | 7,901 | |
Accumulated other comprehensive income (loss) | (57) | 9 | |
Accumulated deficit | (274,598) | (162,187) | |
Total stockholders’ equity (deficit) | 425,232 | (154,277) | |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ 487,481 | $ 89,609 | |
Shares subject to vesting restrictions (in shares) | 738 | ||
[1] | Shares outstanding for all periods reflect the adjustment for the Exchange Ratio as a result of the Business Combination. Shares issued and outstanding as of September 30, 2021 excludes 738,000 shares subject to vesting requirements. See Note 1, Description of Business . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) $ in Thousands | Dec. 31, 2020USD ($)$ / sharesshares |
Statement of Financial Position [Abstract] | |
Redeemable convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.01000 |
Redeemable convertible preferred stock, authorized (in shares) | 63,877,518 |
Redeemable convertible preferred stock, outstanding (in shares) | 63,756,438 |
Redeemable convertible preferred stock, issued (in shares) | 63,756,438 |
Redeemable convertible preferred stock, liquidation preference | $ | $ 165,562 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Common stock, authorized (in shares) | 1,000,000,000 |
Common stock outstanding (in shares) | 8,168,780 |
Common stock, issued (in shares) | 8,168,780 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenue: | |||||
Total revenue | $ 11,197 | $ 5,095 | $ 26,838 | $ 10,573 | |
Cost of revenue | |||||
Total cost of revenue | [1],[2] | 11,153 | 5,890 | 25,557 | 12,391 |
Operating expenses: | |||||
Research and development | [1] | 11,798 | 6,977 | 28,402 | 19,511 |
Sales and marketing | [1] | 9,797 | 3,161 | 18,602 | 10,416 |
General and administrative | [1] | 11,971 | 4,198 | 39,660 | 13,250 |
Depreciation and amortization | 825 | 321 | 2,167 | 907 | |
Total operating expenses | 34,391 | 14,657 | 88,831 | 44,084 | |
Loss from operations | (34,347) | (15,452) | (87,550) | (45,902) | |
Other income (expense) | |||||
Change in fair value of derivative liabilities | 0 | (15) | (12,588) | (15) | |
Change in fair value of warrant liability | 1,067 | 0 | (3,728) | 0 | |
Loss on extinguishment of debt | 0 | 0 | (1,469) | 0 | |
Interest expense, net | (780) | (458) | (6,971) | (809) | |
Other (expense) income | (89) | 54 | (5) | (72) | |
Total other income (expense) | 198 | (419) | (24,761) | (896) | |
Loss before income taxes | (34,149) | (15,871) | (112,311) | (46,798) | |
Income taxes | 90 | 3 | 100 | 3 | |
Net loss | (34,239) | (15,874) | (112,411) | (46,801) | |
Other comprehensive loss | |||||
Unrealized loss on marketable securities | (60) | 0 | (60) | 0 | |
Foreign currency translation adjustment | (1) | 0 | (6) | 0 | |
Comprehensive loss | $ (34,300) | $ (15,874) | $ (112,477) | $ (46,801) | |
Net loss per common share | |||||
Basic net loss per common share (in dollars per share) | $ (0.24) | $ (2.18) | $ (1.66) | $ (6.55) | |
Diluted net loss per common share (in dollars per share) | $ (0.24) | $ (2.18) | $ (1.66) | $ (6.55) | |
Weighted averages shares outstanding | |||||
Basic weighted average shares outstanding (in shares) | 140,675,490 | 7,270,903 | 67,933,833 | 7,150,235 | |
Diluted weighted average shares outstanding (in shares) | 140,675,490 | 7,270,903 | 67,933,833 | 7,150,235 | |
Accumulated Other Comprehensive Income (Loss) | |||||
Other comprehensive loss | |||||
Unrealized loss on marketable securities | $ (60) | ||||
Foreign currency translation adjustment | (1) | ||||
Hardware and other related revenue | |||||
Revenue: | |||||
Total revenue | 9,047 | $ 4,093 | $ 21,263 | $ 8,050 | |
Cost of revenue | |||||
Total cost of revenue | [1],[2] | 10,952 | 5,824 | 25,049 | 12,206 |
Software revenue | |||||
Revenue: | |||||
Total revenue | 2,150 | 1,002 | 5,575 | 2,523 | |
Cost of revenue | |||||
Total cost of revenue | [1],[2] | $ 201 | $ 66 | $ 508 | $ 185 |
[1] | Stock-based compensation expense included in cost of revenue and operating expenses is as follows: Cost of hardware and other related revenue $ 170 $ 2 $ 200 $ 8 Cost of software revenue 10 — 10 — Research and development 2,707 111 6,804 307 Sales and marketing 1,904 32 2,108 103 General and administrative 2,157 218 12,743 652 Total stock-based compensation $ 6,948 $ 363 $ 21,865 $ 1,070 | ||||
[2] | Exclusive of depreciation and amortization shown in operating expense below. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-based compensation expense | $ 6,948 | $ 363 | $ 21,865 | $ 1,070 |
Cost of hardware and other related revenue | ||||
Stock-based compensation expense | 170 | 2 | 200 | 8 |
Software revenue | ||||
Stock-based compensation expense | 10 | 0 | 10 | 0 |
Research and development | ||||
Stock-based compensation expense | 2,707 | 111 | 6,804 | 307 |
Sales and marketing | ||||
Stock-based compensation expense | 1,904 | 32 | 2,108 | 103 |
General and administrative | ||||
Stock-based compensation expense | $ 2,157 | $ 218 | $ 12,743 | $ 652 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (unaudited) - USD ($) $ in Thousands | Total | Previously Reported | Retroactive application of Exchange Ratio | Common Stock | Common StockPreviously Reported | Common StockRetroactive application of Exchange Ratio | Additional Paid-In Capital | Additional Paid-In CapitalPreviously Reported | Additional Paid-In CapitalRetroactive application of Exchange Ratio | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Previously Reported | Accumulated Other Comprehensive Income (Loss)Retroactive application of Exchange Ratio | Accumulated Deficit | Accumulated DeficitPreviously Reported | Accumulated DeficitRetroactive application of Exchange Ratio | ||
Temporary equity, beginning balance (in shares) at Dec. 31, 2019 | 61,288,000 | 68,318,000 | (7,030,000) | ||||||||||||||
Temporary equity, beginning balance at Dec. 31, 2019 | $ 150,305 | $ 150,305 | $ 0 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
Issuance of Series B-1 Preferred stock for cash, net of issuance costs (in shares) | 2,468,000 | ||||||||||||||||
Issuance of Series B-1 preferred stock for cash, net of issuance costs | $ 10,300 | ||||||||||||||||
Temporary equity, ending balance (in shares) at Mar. 31, 2020 | 63,756,000 | ||||||||||||||||
Temporary equity, ending balance at Mar. 31, 2020 | $ 160,605 | ||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 7,032,000 | 7,839,000 | (807,000) | ||||||||||||||
Beginning balance at Dec. 31, 2019 | (90,469) | $ (90,469) | $ 0 | $ 0 | $ 0 | $ 0 | $ 5,724 | $ 5,724 | $ 0 | $ 0 | $ 0 | $ 0 | $ (96,193) | $ (96,193) | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 55,000 | ||||||||||||||||
Exercises of common stock options | 19 | 19 | |||||||||||||||
Stock-based compensation | 366 | 366 | |||||||||||||||
Net loss | (15,941) | (15,941) | |||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 7,087,000 | ||||||||||||||||
Ending balance at Mar. 31, 2020 | $ (106,025) | $ 0 | 6,109 | 0 | (112,134) | ||||||||||||
Temporary equity, beginning balance (in shares) at Dec. 31, 2019 | 61,288,000 | 68,318,000 | (7,030,000) | ||||||||||||||
Temporary equity, beginning balance at Dec. 31, 2019 | $ 150,305 | $ 150,305 | $ 0 | ||||||||||||||
Temporary equity, ending balance (in shares) at Sep. 30, 2020 | 63,756,000 | ||||||||||||||||
Temporary equity, ending balance at Sep. 30, 2020 | $ 160,605 | ||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 7,032,000 | 7,839,000 | (807,000) | ||||||||||||||
Beginning balance at Dec. 31, 2019 | (90,469) | $ (90,469) | $ 0 | $ 0 | $ 0 | $ 0 | 5,724 | 5,724 | 0 | 0 | 0 | 0 | (96,193) | (96,193) | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Foreign currency translation adjustment | 0 | ||||||||||||||||
Unrealized loss on marketable securities | 0 | ||||||||||||||||
Net loss | (46,801) | ||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 7,297,000 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ (136,014) | $ 0 | 6,980 | 0 | (142,994) | ||||||||||||
Temporary equity, beginning balance (in shares) at Mar. 31, 2020 | 63,756,000 | ||||||||||||||||
Temporary equity, beginning balance at Mar. 31, 2020 | $ 160,605 | ||||||||||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2020 | 63,756,000 | ||||||||||||||||
Temporary equity, ending balance at Jun. 30, 2020 | $ 160,605 | ||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 7,087,000 | ||||||||||||||||
Beginning balance at Mar. 31, 2020 | (106,025) | $ 0 | 6,109 | 0 | (112,134) | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 65,000 | ||||||||||||||||
Exercises of common stock options | 25 | 25 | |||||||||||||||
Stock-based compensation | 359 | 359 | |||||||||||||||
Net loss | (14,986) | (14,986) | |||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 7,152,000 | ||||||||||||||||
Ending balance at Jun. 30, 2020 | $ (120,627) | $ 0 | 6,493 | 0 | (127,120) | ||||||||||||
Temporary equity, ending balance (in shares) at Sep. 30, 2020 | 63,756,000 | ||||||||||||||||
Temporary equity, ending balance at Sep. 30, 2020 | $ 160,605 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 145,000 | ||||||||||||||||
Exercises of common stock options | 47 | 47 | |||||||||||||||
Foreign currency translation adjustment | 0 | ||||||||||||||||
Stock-based compensation | 440 | 440 | |||||||||||||||
Unrealized loss on marketable securities | 0 | ||||||||||||||||
Net loss | (15,874) | (15,874) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 7,297,000 | ||||||||||||||||
Ending balance at Sep. 30, 2020 | $ (136,014) | $ 0 | 6,980 | 0 | (142,994) | ||||||||||||
Temporary equity, beginning balance (in shares) at Dec. 31, 2020 | 63,756,438 | 71,069,000 | (7,313,000) | ||||||||||||||
Temporary equity, beginning balance at Dec. 31, 2020 | $ 160,605 | [1] | $ 160,605 | $ 0 | |||||||||||||
Temporary equity, ending balance (in shares) at Mar. 31, 2021 | 63,756,000 | ||||||||||||||||
Temporary equity, ending balance at Mar. 31, 2021 | $ 160,605 | ||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 8,168,780 | 8,169,000 | 9,106,000 | (937,000) | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ (154,277) | $ (154,277) | $ 0 | $ 0 | $ 0 | $ 0 | 7,901 | 7,901 | 0 | 9 | 9 | 0 | (162,187) | (162,187) | 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 5,428,000 | ||||||||||||||||
Exercises of common stock options | 2,816 | 2,816 | |||||||||||||||
Foreign currency translation adjustment | (7) | (7) | |||||||||||||||
Stock-based compensation | 14,513 | 14,513 | |||||||||||||||
Net loss | (38,101) | (38,101) | |||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 13,597,000 | ||||||||||||||||
Ending balance at Mar. 31, 2021 | $ (175,056) | $ 0 | 25,230 | 2 | (200,288) | ||||||||||||
Temporary equity, beginning balance (in shares) at Dec. 31, 2020 | 63,756,438 | 71,069,000 | (7,313,000) | ||||||||||||||
Temporary equity, beginning balance at Dec. 31, 2020 | $ 160,605 | [1] | $ 160,605 | $ 0 | |||||||||||||
Temporary equity, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||||||||||||
Temporary equity, ending balance at Sep. 30, 2021 | [1] | $ 0 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 8,168,780 | 8,169,000 | 9,106,000 | (937,000) | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ (154,277) | $ (154,277) | $ 0 | $ 0 | $ 0 | $ 0 | 7,901 | $ 7,901 | $ 0 | 9 | $ 9 | $ 0 | (162,187) | $ (162,187) | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 6,008,995 | ||||||||||||||||
Foreign currency translation adjustment | $ (6) | ||||||||||||||||
Unrealized loss on marketable securities | (60) | ||||||||||||||||
Net loss | $ (112,411) | ||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 141,112,920 | 141,113,000 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 425,232 | $ 21 | 699,866 | (57) | (274,598) | ||||||||||||
Temporary equity, beginning balance (in shares) at Mar. 31, 2021 | 63,756,000 | ||||||||||||||||
Temporary equity, beginning balance at Mar. 31, 2021 | $ 160,605 | ||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||
Conversion of redeeemable convertible preferred stock to common shares (in shares) | (63,756,000) | ||||||||||||||||
Conversion of redeemable convertible preferred stock to common shares | $ (160,605) | ||||||||||||||||
Temporary equity, ending balance (in shares) at Jun. 30, 2021 | 0 | ||||||||||||||||
Temporary equity, ending balance at Jun. 30, 2021 | $ 0 | ||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 13,597,000 | ||||||||||||||||
Beginning balance at Mar. 31, 2021 | (175,056) | $ 0 | 25,230 | 2 | (200,288) | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Conversion of Convertible Notes (in shares) | 6,925,000 | ||||||||||||||||
Conversion of Convertible Notes | 69,252 | 69,252 | |||||||||||||||
Conversion of Legacy Latch warrants (in shares) | 233,000 | ||||||||||||||||
Conversion of Legacy Latch warrants | 2,143 | 2,143 | |||||||||||||||
Conversion of redeeemable convertible preferred stock to common shares (in shares) | 63,756,000 | ||||||||||||||||
Conversion of redeemable convertible preferred stock to common shares | 160,605 | $ 1 | 160,604 | ||||||||||||||
Reverse recapitalization, net of transaction costs (in shares) | [2] | 56,011,000 | |||||||||||||||
Reverse recapitalization, net of transaction costs | [2] | 434,926 | $ 14 | 434,912 | |||||||||||||
Foreign currency translation adjustment | 2 | 2 | |||||||||||||||
Stock-based compensation | 459 | 459 | |||||||||||||||
Net loss | (40,071) | (40,071) | |||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 140,522,000 | ||||||||||||||||
Ending balance at Jun. 30, 2021 | $ 452,260 | $ 15 | 692,600 | 4 | (240,359) | ||||||||||||
Temporary equity, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||||||||||||
Temporary equity, ending balance at Sep. 30, 2021 | [1] | $ 0 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Exercises of common stock options (in shares) | 645,000 | ||||||||||||||||
Exercises of common stock options | 224 | $ 6 | 218 | ||||||||||||||
Issuance of common stock upon settlement of restricted stock units (in shares) | 12,000 | ||||||||||||||||
Tax withholdings on settlement of equity awards (in shares) | (66,000) | ||||||||||||||||
Tax withholdings on settlement of equity awards | (394) | (394) | |||||||||||||||
Transaction costs related to reverse recapitalization | (253) | (253) | |||||||||||||||
Foreign currency translation adjustment | (1) | (1) | |||||||||||||||
Stock-based compensation | 7,695 | 7,695 | |||||||||||||||
Unrealized loss on marketable securities | (60) | (60) | |||||||||||||||
Net loss | $ (34,239) | (34,239) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 141,112,920 | 141,113,000 | |||||||||||||||
Ending balance at Sep. 30, 2021 | $ 425,232 | $ 21 | $ 699,866 | $ (57) | $ (274,598) | ||||||||||||
[1] | Shares outstanding for all periods reflect the adjustment for the Exchange Ratio as a result of the Business Combination. Shares issued and outstanding as of September 30, 2021 excludes 738,000 shares subject to vesting requirements. See Note 1, Description of Business . | ||||||||||||||||
[2] | Excludes 738,000 shares subject to vesting requirements. See Note 1, Description of Business . |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (unaudited) (Parenthetical) shares in Thousands | 9 Months Ended |
Sep. 30, 2021shares | |
Statement of Stockholders' Equity [Abstract] | |
Shares subject to vesting restrictions (in shares) | 738 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net loss | $ (112,411) | $ (46,801) |
Adjustments to reconcile net loss to net cash used by operating activities | ||
Depreciation and amortization | 2,167 | 907 |
Non-cash interest expense | 3,527 | 36 |
Change in fair value of derivative liabilities | 12,588 | 15 |
Change in fair value of warrant liability | 3,728 | 0 |
Loss on extinguishment of debt | 1,469 | 0 |
Provision (reversal) for excess and obsolete inventory | (328) | 108 |
Allowance (reversal) for doubtful accounts | 753 | (196) |
Stock-based compensation | 21,865 | 1,138 |
Changes in assets and liabilities | ||
Accounts receivable | (11,174) | (923) |
Inventories | (1,355) | (4,416) |
Prepaid expenses and other current assets | (1,576) | (163) |
Other non-current assets | (431) | (917) |
Accounts payable | 2,150 | 1,374 |
Accrued expenses | 5,969 | 1,076 |
Other current liabilities | 358 | 0 |
Other non-current liabilities | 1,185 | 820 |
Deferred revenue | 7,837 | 7,139 |
Net cash used in operating activities | (63,679) | (40,803) |
Investing activities | ||
Purchase of marketable securities | (193,135) | 0 |
Purchase of convertible promissory note | (4,000) | 0 |
Purchase of property and equipment | (993) | (123) |
Development of internal software | (6,480) | (4,155) |
Purchase of intangible assets | 0 | (207) |
Net cash used in investing activities | (204,608) | (4,485) |
Financing activities | ||
Proceeds from issuance of Series B-1 preferred stock, net of issuance costs | 0 | 10,300 |
Proceeds from issuance of convertible promissory notes, net of issuance costs | 0 | 2,069 |
Proceeds from issuance of term loan, net | 0 | 4,976 |
Proceeds from business combination and private offering, net of issuance costs | 448,035 | 0 |
Repayment of term loan | (5,000) | 0 |
Proceeds from unsecured loan | 0 | 3,441 |
Repayment of unsecured loan | 0 | (3,441) |
Proceeds from issuance of common stock | 3,040 | 90 |
Payments for tax withholding on net settlement of equity awards | (372) | 0 |
Proceeds from revolving credit facility | 3,682 | 0 |
Repayment of revolving credit facility | (1,316) | 0 |
Net cash provided by financing activities | 448,069 | 17,435 |
Effect of exchange rate on cash | (5) | (2) |
Net change in cash and cash equivalents | 179,777 | (27,855) |
Beginning of period | 60,529 | 54,218 |
End of period | 240,306 | 26,363 |
Supplemental disclosure of non-cash investing and financing activities | ||
Capitalization of stock-based compensation to internally developed software | 803 | 27 |
Bifurcation of derivative liabilities component of issuance of convertible promissory notes and term loan | 0 | 624 |
Accrued issuance costs | 0 | 82 |
Accrued fixed assets | 416 | 0 |
Private placement warrants received as part of business combination | 13,872 | 0 |
Prepaid expenses received as part of business combination | 510 | 0 |
Accrued taxes related to net share settlement of equity awards | $ 24 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Latch, Inc. (referred to herein, collectively with its subsidiaries, as “Latch” or the “Company”) is an enterprise technology company focused on revolutionizing the way people experience spaces by making spaces better places to live, work and visit. Latch has created a full-building operating system, LatchOS, that addresses the essential needs of modern buildings by streamlining building operations, enhancing the resident experience and enabling more efficient interactions with service providers. On June 4, 2021 (the “Closing Date”), the Company consummated the previously announced merger pursuant to that certain Agreement and Plan of Merger, dated as of January 24, 2021 (the “Merger Agreement”), by and among the Company (formerly known as TS Innovation Acquisitions Corp. (“TSIA”)), Latch Systems, Inc. (formerly known as Latch, Inc. (“Legacy Latch”)) and Lionet Merger Sub Inc., a wholly owned subsidiary of TSIA (“Merger Sub”), pursuant to which Merger Sub merged with and into Legacy Latch, with Legacy Latch becoming a wholly owned subsidiary of the Company (the “Business Combination” and, collectively with the other transactions described in the Merger Agreement, the “Transactions”). In connection with the closing of the Transactions, the Company changed its name from TS Innovation Acquisitions Corp. to Latch, Inc. The “Post Combination Company” following the Business Combination is Latch, Inc. The Company is located and headquartered in New York, NY. Other offices operated by the Company are in San Francisco, CA and Taipei, Taiwan. In May 2019, the Company incorporated Latch Taiwan, Inc., a wholly owned subsidiary, in the state of Delaware. In October 2020, the Company incorporated Latch Insurance Solutions, LLC, a wholly owned subsidiary, in the state of Delaware. In September 2021, the Company incorporated Latch Systems Ltd., a wholly owned subsidiary, in England and Wales. The Company’s revenues are derived primarily from operations in North America. The Business Combination On January 24, 2021, TSIA entered into the Merger Agreement with Merger Sub and Legacy Latch. Legacy Latch’s board of directors unanimously approved Legacy Latch’s entry into the Merger Agreement. On June 3, 2021, TSIA held a special meeting of its stockholders (the “Special Meeting”), at which the TSIA stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Merger Agreement and (b) approving the other Transactions contemplated by the Merger Agreement. On June 4, 2021, the Company consummated the Business Combination and the other Transactions (the “Closing”). The following occurred upon the Closing: • The mandatory conversion feature upon a business combination was triggered for the Convertible Notes described in Note 9, Debt , causing a conversion of the $50.0 million outstanding principal amount of these Convertible Notes and any unpaid accrued interest into equity securities at a specified price. The noteholders received approximately 6.9 million shares of common stock in the Post Combination Company. Also, the embedded derivative related to the Convertible Notes was extinguished as part of the Closing. • The 71.1 million outstanding shares of redeemable convertible preferred stock described in Note 12, C onvertible Preferred Stock and Equity , were exchanged for 63.8 million shares of common stock in the Post Combination Company. • Repayment in full of the outstanding principal and accrued interest on the term loan, described in Note 9, Debt , in the total amount of $5.0 million. The embedded derivative on the warrants issued in connection with the term loan was extinguished as part of the Closing. • Holders of 5,916 shares of TSIA’s Class A common stock sold in its initial public offering (the “Initial Shares”) properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from TSIA’s initial public offering (the “TSIA IPO”), calculated as of two business days prior to the consummation of the Business Combination, which was approximately $10.00 per share, or $59,160 in the aggregate. • The shares of TSIA Class B common stock held by TS Innovation Acquisitions Sponsor, L.L.C. (“Sponsor”) automatically converted to 7.4 million shares of common stock in the Post Combination Company. Of the 7.4 million shares of common stock held by the Sponsor, 0.7 million are subject to vesting under certain conditions (the “Sponsor Earnout Shares”), including that the volume-weighted average price of the Post Combination Company equals or exceeds $14.00 for any 20 trading days within a 30 trading day period on or prior to the five year anniversary of the Closing. • Pursuant to subscription agreements entered into in connection with the Merger Agreement, certain investors agreed to subscribe for an aggregate of 19.3 million newly-issued shares of common stock at a purchase price of $10.00 per share for an aggregate purchase price of $192.6 million (the “PIPE Investment”). The PIPE Investment included 0.3 million newly issued shares of common stock at a purchase price of $10.00 per share for an aggregate purchase price of $2.6 million that was used to fund a cash election (see Note 14, Stock-Based Compensation ). At the Closing, the Company consummated the PIPE Investment. • After giving effect to the Transactions, the redemption of Initial Shares as described above and the consummation of the PIPE Investment, there were 140.5 million shares of common stock issued and outstanding (excluding the Sponsor Earnout Shares). As noted above, an aggregate of $59,160 was paid from TSIA’s trust account to holders that properly exercised their right to have Initial Shares redeemed, and the remaining balance immediately prior to the Closing of approximately $300.0 million remained in the trust account. The remaining amount in the trust account was used to fund the Business Combination. Latch received approximately $450.0 million in cash proceeds, net of fees and expenses funded in connection with the Closing of the Business Combination, which included approximately $192.6 million from the PIPE Investment mentioned above. The following table reconciles the elements of the Business Combination to the Condensed Consolidated Statement of Cash Flows and the Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the nine months ended September 30, 2021. Cash - TSIA trust and cash, net of redemptions $ 300,122 Cash - PIPE Investment including cash election 192,550 Less: transaction costs and advisory fees paid (36,783) Less: Cash election payment (2,313) Less: issuance and other costs paid (5,541) Net proceeds from Business Combination 448,035 Less: Accrued issuance costs — Less: Private placement warrants received as part of Business Combination (13,872) Plus: Prepaid expenses received as part of Business Combination 510 Reverse recapitalization, net of transaction costs $ 434,673 As a result of the Business Combination, each share of Legacy Latch redeemable convertible preferred stock and common stock was converted into the right to receive approximately 0.8971 shares of the common stock of the Post Combination Company (the “Exchange Ratio”). Based on the following factors, the Company determined under Accounting Standards Codification (“ASC”) 805, Business Combinations , that the Business Combination was a reverse recapitalization. • Legacy Latch stockholders owned approximately 60.0% of the shares in the Post Combination Company, and thus had sufficient voting rights to exert influence over the Post Combination Company. • Legacy Latch appointed a majority of the Post Combination Company’s board of directors and maintained a majority of the composition of management. • Legacy Latch was the larger entity based on historical revenues and business operations and comprised the ongoing operations of the Post Combination Company. • The Post Combination Company assumed the name “Latch, Inc.” The accounting for the transaction was similar to that resulting from a reverse acquisition, except that goodwill or other intangibles were not recognized, and the transaction was followed by a recapitalization. In accordance with guidance applicable to these circumstances, the equity structure has been recast in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy Latch’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Latch redeemable convertible preferred stock and Legacy Latch common stock prior to the Business Combination have been retroactively recast as shares reflecting the Exchange Ratio of 0.8971 established in the Business Combination. Post Combination Company common stock and warrants commenced trading on the Nasdaq Stock Market LLC under the symbols “LTCH” and “LTCHW,” respectively, on June 7, 2021. COVID-19 In March 2020, the outbreak of COVID-19 was declared a pandemic. The COVID-19 pandemic disrupted and may continue to disrupt the Company’s hardware deliveries due to delays in construction timelines at customers’ building sites. In addition, the COVID-19 pandemic resulted in a global slowdown of economic activity and a recession in the United States, and the economic situation remains fluid as parts of the economy appear to be recovering while others continue to struggle. COVID-19 has also affected our supply chain consistent with its effect across many industries, including creating shipping and logistics challenges. We expect these impacts, including potential delayed product availability and higher component and shipping costs, to continue for as long as the global supply chain is experiencing these challenges. We continue to invest in supply chain initiatives to address industry-wide capacity challenges. While the nature of the situation is dynamic, the Company has considered the impact when developing its estimates and assumptions. Actual results and outcomes may differ from management’s estimates and assumptions. In the first quarter of 2020, the Company initiated a restructuring plan as part of its efforts to reduce operating expenses and preserve liquidity due to the uncertainty and challenges stemming from the COVID-19 pandemic. The Company incurred costs in connection with involuntary termination benefits associated with a reduction in force (the “RIF”), which involved an approximate 25% reduction in headcount, including severance and benefits costs for affected employees and other miscellaneous direct costs. As a result of its strong performance in 2020 and 2021, the Company has rehired some of the staff that was terminated at the outset of the pandemic. Restructuring cost of $0.1 million and $1.0 million was recorded for the three and nine months ended September 30, 2020, respectively, principally in research and development, sales and marketing, and general and administrative within the Condensed Consolidated Statements of Operations and Comprehensive Loss based on the department to which the expense relates. All amounts have been paid as of September 30, 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted to provide certain relief in response to the COVID-19 pandemic. The CARES Act includes numerous tax provisions and other stimulus measures (see Note 15, Income Taxes ). Among the various provisions in the CARES Act, the Company is utilizing the payroll tax deferrals. In the second quarter of 2020, the Company received and repaid $3.4 million in loans under the CARES Act. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements for the year ended December 31, 2020, which are included in the Company’s registration statement on Form S-1 filed with the SEC on June 25, 2021. Shares outstanding and earnings per share available for common stockholders prior to the Business Combination have been retroactively restated to reflect the Exchange Ratio and for consistency with the current period presentation. Principles of Consolidation The condensed consolidated financial statements include the accounts of Latch, Inc. and its wholly owned subsidiaries, Latch Systems, Inc., Latch Taiwan, Inc., Latch Insurance Solutions, LLC and Latch Systems Ltd. All intercompany transactions have been eliminated in consolidation. Use of Estimates The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expense during the reporting period. Estimates are used when accounting for revenue recognition, allowance for doubtful accounts, allowance for hardware returns, estimates of excess and obsolete inventory, stock-based compensation, warrants, impairment of fixed assets and capitalized internally developed software. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the condensed consolidated financial statements. Due to the use of estimates inherent in the financial reporting process and given the unknowable duration and effects of the COVID-19 pandemic, actual results could differ from those estimates. The Company’s significant accounting policies for its condensed consolidated financial statements as of September 30, 2021 are summarized below and should be read in conjunction with the Summary of Significant Accounting Policies detailed in the Company’s Consolidated Financial Statements for the year ended December 31, 2020. Marketable Securities The Company classifies its fixed income marketable securities as available-for-sale based on its intentions with regard to these instruments. Accordingly, marketable securities are reported at fair value, with all unrealized holding gains and losses reflected in stockholders’ equity. If it is determined that an investment has an other-than-temporary decline in fair value, the Company recognizes the investment loss in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. The Company periodically evaluates its investments to determine if impairment charges are required. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at net realizable value, net of allowance for doubtful accounts and reserve for wholesale returns (See “—Revenue Recognition – Hardware and other related” below for further information). On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions. A receivable is considered past due if the Company has not received payments based on agreed-upon terms. The Company generally does not require any security or collateral to support its receivables. The allowance for doubtful accounts was $0.8 million and $0.1 million as of September 30, 2021 and December 31, 2020, respectively. Inventories, Net Inventories consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at the lower of cost or net realizable value with cost being determined using the average cost method. The Company periodically assesses the valuation of inventory and will write down the value for estimated excess and obsolete inventory based upon estimates of future demand and market conditions, when necessary. Equity Issuance Costs Costs incurred in connection with the issuance of the Company’s series preferred stock have been recorded as a direct reduction against redeemable convertible preferred stock within the Condensed Consolidated Balance Sheets. Additionally, certain transaction costs incurred in connection with the Merger Agreement that are direct and incremental to the Business Combination (see Note 1, Description of Business ) have been recorded as a component of additional paid in capital within the Condensed Consolidated Balance Sheets. Revenue Recognition The Company adopted Accounting Standards Update (“ASU”) No. 2014-09 and its related amendments (collectively known as ASC 606, Revenue from Contracts with Customers ) effective January 1, 2018, using the full retrospective approach to all contracts. Incremental costs to obtaining customer contracts, primarily sales commissions, were capitalized in accordance with the adoption of ASC 606. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identify contracts with customers; (ii) identify performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in ASC 606. Revenues are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company currently generates its revenues from two primary sources: (1) hardware devices and (2) software products. Hardware and other related The Company generates hardware revenue primarily from the sale of its portfolio of devices for its smart access and smart apartment solutions. The Company sells hardware to building developers directly or through its channel partners who act as the intermediary and installer. The Company recognizes hardware revenue when the hardware is shipped directly to building developers or to its channel partners, which is when control is transferred to the building developer. The Company provides warranties that its hardware will be substantially free from defects in materials and workmanship for a period of one year with respect to electronic components and five years for mechanical components. The Company replaces, repairs or refunds warrantable devices at its sole discretion. The Company determined these warranties are not separate performance obligations as they cannot be purchased separately and do not provide a service in addition to an assurance the hardware will function as expected. The Company records a reserve as a component of cost of hardware revenue based on historical costs of replacement units for returns of defective products. For both the three and nine months ended September 30, 2021, the reserve for hardware warranties was approximately 1% of cost of hardware revenue. For both the three and nine months ended September 30, 2020, the reserve for hardware warranties was approximately 2% of cost of hardware revenue. The Company also provides certain customers a wholesale arrangement with a right of return for non-defective product, which is treated as a reduction of hardware revenue based on the Company’s expectations and historical experience. For the three and nine months ended September 30, 2021, the reserve for wholesale returns against revenue was $(0.3) million and $0.1 million, respectively. For the three and nine months ended September 30, 2020, the reserve for wholesale returns against revenue was $0.01 million and $(0.05) million, respectively. The reserve against accounts receivable as of September 30, 2021 and December 31, 2020 was $0.6 million and $1.8 million, respectively. The Company also generates revenues related to hardware, which includes professional services related to installation and activation of hardware devices sold to building developers. These services are recognized over time on a percentage of completion basis. The Company recognized professional services revenue of $0.6 million and $0.7 million for the three and nine months ended September 30, 2021, respectively. Software The Company generates software revenue primarily through the sale of its software-as-a-service (“SaaS”) to building developers over its cloud-based platform on a subscription-based arrangement. Subscription fees vary depending on the optional features selected by customers as well as the term length. SaaS arrangements generally have term lengths of month-to-month, two-year, five-year and ten-year and include a fixed fee paid upfront except for the month-to-month arrangements. As a result of significant discounts provided on the longer-term software contracts paid upfront, the Company has determined that there is a significant financing component and has therefore broken out the interest component and recorded as a component of interest income (expense), net on the condensed consolidated statements of operations and comprehensive loss. The amount of interest expense related to this component was $0.8 million and $2.2 million for the three and nine months ended September 30, 2021, respectively, and $0.4 million and $1.0 million for the three and nine months ended September 30, 2020, respectively. The services provided by the Company for the subscription-based arrangements are considered stand-ready performance obligations where customers benefit from the services evenly throughout the service period. Revenue is primarily recognized on a ratable basis over the subscription period of the contractual arrangement beginning when or as control of the promised services is available or transferred to the customer. Performance Obligations The Company enters into contracts that contain multiple distinct performance obligations, hardware and software. The hardware performance obligation includes the delivery of hardware, and the software performance obligation allows the customer access to the software during the contracted-use term when the promised service is transferred to the customer. The Company has determined that the hardware and software are individual distinct performance obligations because both can be sold by the Company on a standalone basis, and because other vendors sell similar technologies and services on a standalone basis. For each performance obligation identified, the Company estimates the standalone selling price, which represents the price at which the Company would sell the good or service separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price, taking into account available information such as market conditions, historical pricing data and internal pricing guidelines related to the performance obligations. The Company then allocates the transaction price among those obligations based on the estimation of standalone selling price. For software revenue, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue over the contract term. The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied was $23.4 million as of September 30, 2021. The Company expects to recognize the short-term amount of $4.5 million over the next 12 months and the long-term portion of $18.8 million over the contracted-use term of each agreement. Revenue Disaggregation The Company had total revenue of $11.2 million and $26.8 million for the three and nine months ended September 30, 2021, respectively, and $5.1 million and $10.6 million for the three and nine months ended September 30, 2020, respectively. The Company’s revenues are derived primarily from operations in North America. Deferred Contract Costs The following table represents a roll-forward of the Company’s deferred contract costs: Balance as of January 1, 2021 $ 549 Additions to deferred contract costs 378 Amortization of deferred contract costs (70) Balance as of September 30, 2021 $ 857 Contract Assets and Contract Liabilities (Unbilled Receivables and Deferred Revenue) September 30, 2021 December 31, 2020 Contract assets (unbilled receivables) $ 531 $ — Contract liabilities (deferred revenue) $ 23,359 $ 15,522 The Company enters into contracts with its customers, which may give rise to contract assets (unbilled receivables) and contract liabilities (deferred revenue) due to revenue recognition differing from the timing of payments made by customers. The Company recognizes unbilled receivables when the performance obligation precedes the invoice date. The Company records unbilled receivables within prepaid and other current assets on the condensed consolidated balance sheets. The Company records contract liabilities to deferred revenue when the Company receives customer payments in advance of the performance obligations being satisfied on the Company’s contracts, which is generally the case for the Company’s software revenue. The Company generally invoices its customers monthly, or up to two years, five years or ten years in advance of services being provided. The Company recognized $0.9 million and $2.9 million of prior year deferred software revenue during the three and nine months ended September 30, 2021, respectively. Increase in contract liabilities for the three and nine months ended September 30, 2021 primarily resulted from growth of contracts with new and existing customers. Deferred revenue that will be recognized during the succeeding 12-month period is recorded within current liabilities on the accompanying Condensed Consolidated Balance Sheets. Cost of Revenue Cost of hardware and other related revenue consists primarily of product costs, including manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty costs, assembly costs and warehousing costs, as well as other non-inventoriable costs including personnel-related expenses associated with supply chain logistics and channel partner fees. Cost of software revenue consists primarily of outsourced hosting costs and personnel-related expenses associated with monitoring and managing outsourced hosting service providers. Cost of revenue excludes depreciation and amortization shown in operating expenses. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of September 30, 2021 and December 31, 2020, the Company recorded a full valuation allowance against its deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Stock-Based Compensation The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation. The fair value of restricted stock units (“RSUs”) is determined using the closing trading price on the grant date. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the fair value of stock options. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions to determine the fair value of stock options, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of options granted by using the Black-Scholes option-pricing model with the following assumptions: • Expected Volatility —The Company estimates volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the option’s expected term. • Expected Term —The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint between the stock options’ vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. • Risk-Free Interest Rate —The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date. • Dividend Yield —The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero. Fair Value Measurement Fair value accounting is applied for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis (at least annually). Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance 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 measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 —Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 —Inputs are observable, either directly or indirectly, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 —Inputs are generally unobservable and typically reflect management’s best estimate of assumptions that market participants would use in pricing the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company invests its excess cash in low-risk, highly liquid money market funds with major financial institutions. Significant customers are those which represent more than 10% of the Company’s total revenue or gross accounts receivable balance at each balance sheet date. As of September 30, 2021, the Company had one customer that accounted for $2.5 million, or 13%, of gross accounts receivable. As of December 31, 2020, the Company had one customer that accounted for $1.5 million, or 15%, of gross accounts receivable. For the three and nine months ended September 30, 2021, the Company had one and two customers that accounted for $1.8 million and $5.9 million, or 16% and 22%, of total revenue, respectively. For the three months ended September 30, 2020, the Company had one customer that accounted for $0.9 million, or 17%, of total revenue. The Company had no customers that accounted for more than 10% of total revenue for the nine months ended September 30, 2020. Segment Information The Company has one operating and reportable segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) , which requires lessees to recognize most leases on the balance sheet as a right of use asset and related lease liability. The ASU is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The update also simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance to improve consistent application. The amendment in this update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard effective January 1, 2021. The Company has completed the assessment and determined this ASU does not have a material impact on its condensed consolidated financial statements. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS Marketable Securities The Company’s investments in marketable securities are classified and accounted for as available-for-sale and consist of high quality asset backed securities, commercial paper, corporate bonds and U.S. government agency debt securities. The Company’s marketable securities with remaining effective maturities of 12 months or less from the balance sheet date are classified as current; otherwise, they are classified as non-current on the condensed consolidated balance sheets. Unrealized gains and losses on marketable securities classified as available-for-sale are recognized in other comprehensive income (loss). The Company’s marketable securities by security type are summarized as follows: As of September 30, 2021 Cost Gross Unrealized Loss Estimated Fair Value Asset backed securities $ 11,141 $ (13) $ 11,128 Commercial paper and corporate bonds 176,233 (80) 176,153 U.S. government agency debt securities 4,997 (5) 4,992 Total marketable securities $ 192,371 $ (98) $ 192,273 Convertible Promissory Note In July 2021, the Company purchased a convertible promissory note (the “Note”) from a counterparty for $4.0 million. The outstanding principal of the Note, together with unpaid and accrued interest, is due and payable on September 30, 2022, which can be extended at the option of the Company for a period of one year, unless the debt is converted to equity securities in the counterparty or the Company declares the Note due and payable upon the occurrence of an event of default. The Note also contains certain embedded features, including: acceleration in the event of default; automatic conversion into the equity of the counterparty upon a subsequent equity financing by the counterparty; optional conversion into equity upon the sale of preferred stock by the counterparty; optional acceleration or conversion into equity upon certain corporate transactions by the counterparty; and the Company’s option to extend the maturity date. Interest accrues at 6% per annum and is due upon the earlier of the maturity date or an event of default. The Note meets the definition of a debt security under the provisions of ASC 320, Investments - Debt Securities . The Company classified the Note as trading and categorized within Level 3 of the fair value hierarchy. Subsequent changes in fair value will be reported in earnings. The Company determined that there was no material change in fair value as of September 30, 2021. The Note is recorded in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. Contractual maturities of the Company’s marketable securities and other investments are summarized as follows: As of September 30, 2021 Cost Estimated Fair Value Due in less than one year 92,156 92,135 Due in one to five years 104,215 104,138 Total investments $ 196,371 $ 196,273 As of September 30, 2021, the Company had $0.1 million of gross unrealized losses primarily due to a decrease in the fair value of the corporate bonds. The Company will regularly review its investment portfolio to identify and evaluate investments that have indications of possible impairment. Investments that are impaired are those that are considered to have losses that are other-than-temporary. Factors considered in determining whether a loss is temporary include: • the length of time and extent to which fair value has been lower than the cost basis; • the financial condition, credit quality and near-term prospects of the investee; and • whether it is more likely than not that the Company will be required to sell the security prior to recovery. As of September 30, 2021, the Company had not identified any impairment indicators in the investments. During the three and nine months ended September 30, 2021, the Company recorded no net realized gains or losses from the sale of investments. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are summarized as follows: As of September 30, 2021 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 2,003 $ — $ — $ 2,003 Money market funds 238,303 — — 238,303 Total cash and cash equivalents 240,306 — — 240,306 Asset backed securities — 11,128 — 11,128 Commercial paper and corporate bonds — 176,153 — 176,153 U.S. government agency debt securities — 4,992 — 4,992 Convertible promissory note — — 4,000 4,000 Total assets $ 240,306 $ 192,273 $ 4,000 $ 436,579 Liabilities Warrant liability 17,600 — — 17,600 Total liabilities $ 17,600 $ — $ — $ 17,600 As of December 31, 2020 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 1,244 $ — $ — $ 1,244 Money market funds 59,285 — — 59,285 Total assets $ 60,529 $ — $ — $ 60,529 Liabilities Derivative liabilities — — 13,390 13,390 Total liabilities $ — $ — $ 13,390 $ 13,390 The Company’s investments in money market funds backed by U.S. government securities have been classified as Level 1 as they are valued utilizing quoted prices (unadjusted) in active markets for identical assets. Investments in asset backed securities, commercial paper, corporate bonds and U.S. government agency debt securities have been classified as Level 2 as they are valued using quoted prices in less active markets or other directly or indirectly observable inputs. Fair values of corporate bonds and U.S. government agency debt securities were derived from a consensus or weighted-average price based on input of market prices from multiple sources for the reporting period. With regard to commercial paper, all of the securities had high credit ratings and one year or less to maturity; therefore, fair value was derived from accretion of purchase price to face value over the term of maturity or quoted market prices for similar instruments if available. With respect to the Note, the Company elected to apply the fair value option and account for the hybrid instrument containing the Note and the embedded derivatives at fair value as a single instrument, with any subsequent changes in fair value being reported in earnings. The Company determined that there was no material change in the fair value of the Note as of September 30, 2021. During the three and nine months ended September 30, 2021, there were no transfers of financial assets between Level 1 and Level 2. The Company’s warrant liability includes private placement warrants that were originally issued in connection with the TSIA IPO, but which were transferred to the Company as part of the Closing of the Business Combination (the “Private Placement Warrants”). The Private Placement Warrants are recorded on the Condensed Consolidated Balance Sheets at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the valuation will be adjusted to fair value, with the change in fair value recognized in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Private Placement Warrants are held by a single holder. ASC 820, Fair Value Measurements , indicates that the fair value should be determined “from the perspective of a market participant that holds the identical item” and “use the quoted price in an active market held by another party, if that price is available.” As the only market for the transfer of the Private Placement Warrants is the public market, the Company has determined that the fair value of the Private Placement Warrants at a specific date is determined by the closing price of the Company’s public warrants, traded under the symbol “LTCHW,” and within Level 1 of the fair value hierarchy. The closing price of the public warrants was $2.60 and $3.30 as of June 3, 2021 and September 30, 2021, respectively. The fair value of the Private Placement Warrants was $13.9 million and $17.6 million as of June 3, 2021 and September 30, 2021, respectively. As of December 31, 2020, Level 3 instruments consisted of the Company’s derivative liabilities related to the Convertible Notes and warrants issued in connection with the term loan (see Note 9, Debt ). Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodologies used to determine fair value, and such changes could result in a significant increase or decrease in the fair value. For the Company’s derivatives related to the Convertible Notes categorized within Level 3 of the fair value hierarchy, the Company compared the calculated value of the Convertible Notes with the indicated value of the host instrument, defined as the straight-debt component of the Convertible Notes. The difference between the value of the straight-debt host instrument and the fair value of the Convertible Notes resulted in the value of the derivative instruments. The Convertible Notes were valued using a discounted cash flow analysis. The Company discounted the future payoffs at risk-adjusted rates consistent with market yields. The discount rate was calculated by adding the risk-free rate, an option-adjusted spread and a calibrated risk premium, each as noted below. • The selected risk-free rate was based on observed yields on U.S. Treasury securities. • The selected option-adjusted spread was based on the ICE Bank of America CCC and Lower U.S. High Yield Index (HOA3); and • The calibrated risk premium was calculated as the additional risk premium necessary to reconcile with the original issuance at August 11, 2020. Since the potential payoffs for the Convertible Notes were dependent on the outcome of future equity financing rounds, the discounted cash flow models incorporated management’s estimates for the probabilities and timing of future financing events. Upon the Closing of the Business Combination on June 4, 2021, the Convertible Notes were converted into equity and the derivatives related to the Convertible Notes were extinguished. See Note 9, Debt , and Note 10, Derivatives . The Company’s derivatives related to the warrants issued in connection with the term loan were categorized within Level 3 of the fair value hierarchy. The significant unobservable inputs included the expected term, volatility, risk-free interest rate and dividend yield (see Note 12, Convertible Preferred Stock and Equity ). Upon the Closing of the Business Combination on June 4, 2021, the term loan was repaid in full, and the derivatives related to the warrants were extinguished. The following table provides quantitative information regarding the significant unobservable inputs used by the Company related to the derivative liabilities: December 31, 2020 Term in years 0.3 to 1.3 Calibrated risk premium 11.68% Option adjusted spread 8.03% Risk free rate 0.12% - 0.19% The following table represents the activity of the Level 3 instruments: Convertible Warrants Total Derivative liabilities - December 31, 2020 $ 12,676 $ 714 $ 13,390 Change in fair value of derivative liabilities (1) 11,158 1,430 12,588 Extinguishment of derivatives (23,834) (2,144) (25,978) Derivative liabilities - September 30, 2021 $ — $ — $ — (1) Recorded in other income (expense) within the Condensed Consolidated Statements of Operations and Comprehensive Loss. During the three and nine months ended September 30, 2021, the Company purchased the Note, which is categorized as Level 3 in the fair value hierarchy, for $4.0 million. There were no sales of Level 3 instruments during the three and nine months ended September 30, 2021. There were no transfers of instruments into or out of Level 3 during the three and nine months ended September 30, 2021. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Office furniture $ 86 $ 86 Computers and equipment 3,198 1,789 Property and equipment 3,284 1,875 Less: Accumulated depreciation (1,631) (1,122) Total property and equipment, net $ 1,653 $ 753 |
INTERNALLY DEVELOPED SOFTWARE,
INTERNALLY DEVELOPED SOFTWARE, NET | 9 Months Ended |
Sep. 30, 2021 | |
Research and Development [Abstract] | |
INTERNALLY DEVELOPED SOFTWARE, NET | INTERNALLY DEVELOPED SOFTWARE, NET Internally developed software, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Internally developed software $ 9,422 $ 4,235 Construction in progress 6,481 4,451 Less: Accumulated amortization (2,866) (1,270) Total internally developed software, net $ 13,037 $ 7,416 Capitalized costs associated with construction in progress are not amortized into amortization expense until the related assets are put into service. |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Raw materials $ 3,513 $ 2,242 Finished goods 6,749 6,376 Excess and obsolete reserve $ (286) (325) Total inventories, net $ 9,976 $ 8,293 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Accrued payroll $ 5,663 $ 1,246 Accrued duties 154 204 Accrued warranties 454 284 Accrued purchases 1,498 25 Accrued excess inventory 159 465 Accrued operating expense 3,717 3,505 Other accrued expenses 417 52 Total accrued expenses $ 12,062 $ 5,781 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Revolving Line of Credit and Term Loan In September 2020, Legacy Latch obtained a revolving line of credit as well as a term loan, both of which were secured by a first-perfected security interest in substantially all of the assets of Legacy Latch. In connection with the term loan, Legacy Latch issued warrants to purchase common stock. See Note 12, Convertible Preferred Stock and Equity . The revolving line of credit provided for a credit extension of up to $5.0 million and bore interest at the greater of the prime rate plus 2% or 5.25% per annum, as long as Legacy Latch maintained an Adjusted Quick Ratio (as defined in the credit agreement) of 1.25. Legacy Latch did not draw any amounts on the line of credit, which was cancelled upon the repayment in full of the term loan in connection with the Closing. The available amount under the term loan was an initial $5.0 million, with two additional tranches of $2.5 million each, which Legacy Latch could draw down on in annual increments from closing subject to certain revenue and financing conditions. The term loan bore interest at the greater of the prime rate plus 3% or 6.25% per annum. The term loan was set to mature on December 1, 2024. The term loan was paid off including accrued interest in connection with the Closing (see Note 1, Description of Business ). The Company identified certain embedded derivatives in the warrants issued related to the term loan. These embedded derivatives were extinguished at Closing. Legacy Latch was subject to certain affirmative and negative financial covenants that it was required to meet in order to maintain its credit facilities, including approval required for certain transactions and a minimum bookings amount if Legacy Latch’s cash balance plus the amount available under the revolving line of credit fell below $20.0 million combined. The Company believes that Legacy Latch was in compliance with all debt covenants as of the repayment date of June 4, 2021. Term loan, net was comprised of the following indebtedness as of December 31, 2020: December 31, 2020 Principal $ 5,000 Derivative liability 714 Less: unamortized discounts and fees (127) Less: debt issuance costs (106) Term loan, net $ 5,481 Convertible Notes, Net Between August 11, 2020 and October 23, 2020, Legacy Latch issued a series of convertible promissory notes to various investors pursuant to a Note Purchase Agreement dated August 11, 2020, subsequently amended with a Note Purchase Agreement dated October 23, 2020 (as amended, the “Note Purchase Agreement”), with a maturity date of April 23, 2022 (subject to the holder’s option to extend the maturity date for a period of one year), for an aggregate principal amount of $50.0 million (the “Convertible Notes”). The Convertible Notes accrued interest at a rate of 5% per annum for the first six months, 7% per annum for the following six months and 9% per annum from month 13 until maturity, that was due and payable upon the earlier to occur of the maturity date or an event of default, unless otherwise converted prior to maturity or an event of default. The Company identified certain embedded derivatives related to contingent requirements to repay its Convertible Notes at a substantial premium, which required separate accounting recognition in accordance with ASC 815-15, Embedded Derivatives . The fair value of the embedded derivative was recorded as a derivative liability and combined with the debt host contract within convertible notes, net on the condensed consolidated balance sheets. The embedded derivatives related to the Convertible Notes were extinguished at Closing. The mandatory conversion feature upon a business combination (as detailed in the Note Purchase Agreement) was triggered for the Convertible Notes causing a conversion of the $50.0 million outstanding principal amount of these Convertible Notes and any unpaid accrued interest into equity securities at the specified conversion price upon the Closing of the Business Combination. The noteholders received 6.9 million shares of common stock in the Post Combination Company. The following table summarizes the aggregate values recorded for the Convertible Notes as of December 31, 2020: December 31, 2020 Principal $ 50,000 Derivative liability 12,676 Less: unamortized discounts and fees (10,925) Less: debt issuance costs (37) Net carrying amount $ 51,714 Revolving Credit Facility In January 2021, Legacy Latch signed an agreement for a revolving credit facility (the “revolving facility”) with a freight forwarding and customs brokerage company. The original revolving facility had a credit limit of $1.0 million. On July 1, 2021, the Company executed a new revolving credit facility with a credit limit of $6.0 million replacing the matured facility. The revolving facility is available to finance supply chain commercial invoices, including freight and customs duty charges. The Company authorizes payment of invoices by the lender on the due date and repays the financed amount plus interest 90 days following the initial payment date. An installment plan agreement is executed for each financing request, which includes the interest rate. The interest rate for the installment plan agreements executed during the three and nine months ended September 30, 2021 ranged from 0.87% to 1.25% per month. The new facility has no financial or other covenants. As of September 30, 2021, there was $2.4 million outstanding on the revolving facility, which is reported in other current liabilities on the Condensed Consolidated Balance Sheets. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company identified certain embedded derivatives related to contingent requirements to repay its Convertible Notes at a substantial premium to par, as well as certain derivatives in its warrants in connection with its term loan. These derivatives were carried at estimated fair value on the accompanying Condensed Consolidated Balance Sheets as a portion of convertible notes, net and term loan, net. Changes in the estimated fair value of the derivatives are reported as other income (expense) in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. See Note 4, Fair Value Measurements , for additional information. As described in Note 1, Description of Business , the embedded derivatives were extinguished at Closing. As described in Note 3, Investments , the Company analyzed the acceleration, conversion and other features of the Note under the provisions of ASC 815, Derivatives and Hedging , and determined that these features are embedded derivatives. The Company elected to apply the fair value option and account for the hybrid instrument containing the Note and the embedded derivatives at fair value as a single instrument, with any subsequent changes in fair value being reported in earnings. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments The Company has entered into various operating lease agreements, which are generally for offices and facilities. In January 2020, Legacy Latch signed a one-year sublease agreement for its New York City office space where the landlord was a stockholder of Legacy Latch. In March 2020, Legacy Latch vacated this office space as a result of the transition to a remote work model due to COVID-19 and entered into a one-year lease for a smaller space in New York City, which was renewed for an additional year through March 2022. In August 2020, Legacy Latch terminated the sublease as of September 2020. Leases for additional office spaces are maintained in California and Taiwan. The lease agreements often include escalating lease payments, renewal provisions and other provisions that require the Company to pay costs related to taxes, insurance and maintenance. Rent expense related to all leases for the three and nine months ended September 30, 2021 was $0.2 million and $0.6 million, respectively. Rent expense for the three and nine months ended September 30, 2020 was $0.9 million and $2.6 million, respectively. Rent expense is allocated between cost of hardware and other related revenue, research and development, sales and marketing, and general and administrative depending on headcount and the nature of the underlying lease. Purchase Commitment In January 2021, the Company entered into an arrangement with a supplier that requires future minimum purchases of inventory for an aggregate amount of $3.3 million in scheduled installments starting in August 2021 through December 2022. Future minimum purchases are $0.4 million in 2021 and $2.8 million in 2022. As of September 30, 2021, the Company had made no purchases towards these commitments. Registration Rights Agreement In connection with the execution of the Merger Agreement, the Company and certain stockholders of Legacy Latch and TSIA entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, in June 2021, the Company filed a registration statement on Form S-1 with respect to the registrable securities under the Registration Rights Agreement. Certain Legacy Latch stockholders and TSIA stockholders may each request to sell all or any portion of their registrable securities in an underwritten offering up to two times in any 12-month period, so long as the total offering price is reasonably expected to exceed $75.0 million. The Company also agreed to provide certain demand and “piggyback” registration rights. The Registration Rights Agreement also provides that the Company pays certain expenses relating to such registrations and indemnifies the stockholders against certain liabilities. The Company bears the expenses incurred in connection with the filing of any such registration statements. The Registration Rights Agreement does not provide for any penalties connected with delays in registering the Company’s common stock. Litigation The Company is and may become, from time to time, involved in legal actions in the ordinary course of business, including governmental and administrative investigations, inquiries and proceedings concerning employment, labor, environmental and other claims. Although management is unable to predict with certainty the eventual outcome of any legal action, management believes the ultimate liability arising from such actions, individually and in the aggregate, which existed at September 30, 2021, will not materially affect the Company’s consolidated results of operations, financial position or cash flows. Given the inherent unpredictability of these types of proceedings, however, it is possible that future adverse outcomes could have a material effect on the Company’s financial results. |
CONVERTIBLE PREFERRED STOCK AND
CONVERTIBLE PREFERRED STOCK AND EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
CONVERTIBLE PREFERRED STOCK AND EQUITY | CONVERTIBLE PREFERRED STOCK AND EQUITY The Company’s second amended and restated certificate of incorporation designates and authorizes the Company to issue 1.1 billion shares, consisting of (i) 1.0 billion shares of common stock, par value $0.0001 per share; and (ii) 100.0 million shares of preferred stock, par value $0.0001 per share. Preferred stock as of December 31, 2020 consisted of the following (in thousands, except per share amounts): Issuance Start Shares Shares Issuance Carrying Liquidation Series Seed July 14, 2014 3,971 3,971 $ 0.60 $ 1,768 $ 4,978 Series Seed April 29, 2015 4,000 4,000 0.63 2,479 5,101 Series A January 19, 2016 15,231 15,231 0.75 11,110 11,367 Series A-1 May 5, 2017 8,464 8,464 1.18 9,737 10,000 Series B July 30, 2018 15,983 15,983 3.13 50,000 50,000 Series B - 2019 Convertible Notes conversion at 10% discount July 30, 2018 2,753 2,753 2.82 8,601 7,752 Series B-1 May 20, 2019 18,112 17,977 3.74 66,842 67,300 Series B-2 May 20, 2019 2,690 2,690 3.37 10,068 9,064 Total 71,204 71,069 $ 160,605 $ 165,562 Upon the Closing of the Business Combination, the 71.1 million outstanding shares of preferred stock were converted into 63.8 million shares of common stock of the Post Combination Company at the Exchange Ratio of 0.8971. Common Stock Reserved for Future Issuance Legacy Latch had reserved shares of common stock for future issuance as of December 31, 2020 as follows (in thousands and as adjusted for the Exchange Ratio): December 31, 2020 Conversion of outstanding redeemable convertible preferred stock 63,756 Stock options issued and outstanding 21,691 Warrants issued and outstanding 318 Remaining shares available for future issuance 900 Total 86,665 The reserved shares for future issuance as of September 30, 2021 include the following (in thousands and as adjusted for the Exchange Ratio): September 30, 2021 Stock options issued and outstanding 15,430 Restricted stock units issued and outstanding 5,546 Public warrants outstanding 10,000 Private placement warrants outstanding 5,333 2021 Incentive Award Plan available shares 17,737 Total 54,046 Warrants In January 2021, warrants to purchase 64,591 shares of Legacy Latch common stock were converted into common stock (as adjusted based on the Exchange Ratio). As part of the Closing of the Business Combination, 10.0 million public warrants sold during the TSIA IPO converted into 10.0 million public warrants to purchase up to 10.0 million shares of common stock of the Post Combination Company, which are exercisable at $11.50 per share. The Company accounts for warrants as required under ASC 815 and has concluded that equity classification would be met for the public warrants as the Company has a single class of equity, and thus all holders vote 100% on all matters submitted to the Company’s stockholders and receive the same form of consideration in the event of a change of control (thus qualifying for the exception to the net cash settlement model), and the other conditions of equity classification would be met. Fair Valuation Methodology - Legacy Latch Legacy Latch historically issued warrants that were classified and accounted for as either liabilities or equity instruments on the balance sheet depending on the nature of the issuance. Legacy Latch’s warrants were initially measured at fair market value. Legacy Latch employed the Black-Scholes pricing model to calculate and record the value of the warrants. The inputs utilized by management were highly subjective, and changes in the inputs and estimates could result in a material change to the calculated value. One of the key inputs used by management in calculating the value of these awards was the common stock price. Management and the board of directors considered various objective and subjective factors to determine the fair value of Legacy Latch’s common stock price at various grant dates, including the value determined by a third-party valuation firm. These factors included, among other things, financial performance, capital structure, forecasted operating results and market performance analyses of companies in a similar industry. The assumptions used in calculating the fair value of warrants represented Legacy Latch’s best estimates, but these estimates involved inherent uncertainties and the application of management judgment. These warrants were measured at fair value using significant unobservable inputs (Level 3) and amounted to approximately $0.6 million as of December 31, 2020. Warrants were also issued in connection with Legacy Latch’s 2020 sublease and were recorded within equity and allocated between research and development, sales and marketing, and general and administrative on the condensed consolidated statements of operations and comprehensive loss, depending on headcount, as the issued warrants were in return for rental of office space. The warrants were converted to common stock at Closing. The warrants issued in connection with the term loan and the Convertible Notes were recorded as derivative liabilities, and included within term loan, net and convertible notes, net on the condensed consolidated balance sheets. The debt discount was amortized over the life of the debt. The derivative liabilities for the term loan and Convertible Notes were extinguished upon the repayment of the term loan and the conversion of the Convertible Notes at Closing. Key inputs to calculate the fair value of the warrants outstanding as of December 31, 2020 using the Black-Scholes pricing model were as follows: December 31, 2020 Expected term 10 - 12 years Volatility 55.0 - 61.0% Risk-free interest rate 0.68 - 0.93% Dividend yield 0 % Fair Valuation Methodology - Private Placement Warrants The private placement warrants, which Legacy Latch assumed as part of the Closing of the Business Combination, are recorded as warrant liabilities. See Note 4, Fair Value Measurements . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted net income per share for common stock and preferred stock: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Numerator for basic and diluted net loss per share - net loss $ (34,239) $ (15,874) $ (112,411) $ (46,801) Denominator: Denominator for basic net loss per share - weighted-average common shares 140,675,490 7,270,903 67,933,833 7,150,235 Effect of dilutive securities — — — — Denominator for diluted net loss - adjusted weighted-average common shares 140,675,490 7,270,903 67,933,833 7,150,235 Basic and diluted net loss per share $ (0.24) $ (2.18) $ (1.66) $ (6.55) Potential common shares of 34.1 million and 65.2 million underlying outstanding common stock options and common stock warrants were excluded from diluted net loss per share for the three and nine months ended September 30, 2021, respectively, as the Company had net losses, and their inclusion would be anti-dilutive. Potential common shares of 84.6 million and 83.3 million underlying outstanding preferred stock, common stock options and common stock warrants were excluded from diluted net loss per share for the three and nine months ended September 30, 2020, respectively, as Legacy Latch had net losses, and their inclusion would be anti-dilutive (see Note 12, Convertible Preferred Stock and Equity , and Note 14, Stock-Based Compensation ). |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION For the three and nine months ended September 30, 2021 and 2020, the components of stock-based compensation expense were as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Stock options $ 449 $ 372 $ 15,421 $ 1,097 Restricted stock units 7,247 — 7,247 — Capitalized costs (1) (747) (9) (803) (27) Total stock-based compensation $ 6,948 $ 363 $ 21,865 $ 1,070 (1) Included in internally developed software on the Condensed Consolidated Balance Sheets. All stock-based compensation expense is included in cost of hardware and other related revenue, cost of software revenue, research and development, sales and marketing, and general and administrative on the condensed consolidated statements of operations and comprehensive loss. Stock Incentive Plans In January 2016, Legacy Latch adopted the Latch, Inc. 2016 Stock Plan (the “2016 Plan” and, together with the Latchable, Inc. 2014 Stock Incentive Plan, the “Prior Plans”) pursuant to which Legacy Latch’s board of directors was authorized (i) to grant either incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”) to purchase shares of our common stock to our employees and (ii) to grant NSOs to outside directors and consultants. 25,412,947 shares had been authorized for issuance under the 2016 Plan at the time the 2021 Plan (defined below) became effective. Stock options under the 2016 Plan were granted with an exercise price equal to the stock’s fair market value at the date of grant. Stock options outstanding under the 2016 Plan generally have ten-year terms and vest over a four-year period starting from the date specified in each award agreement. From and after the effectiveness of the 2021 Plan, no additional awards will be granted under the 2016 Plan. Upon the effectiveness of the Business Combination, all outstanding stock options under the Prior Plans, whether vested or unvested, were converted into options to purchase a number of shares of common stock of the Post Combination Company based on the Exchange Ratio. Awards previously granted under the Prior Plans will continue to be subject to the provisions thereof. On June 3, 2021, the Latch, Inc. 2021 Incentive Award Plan (the “2021 Plan”) was approved by the TSIA stockholders at the Special Meeting and became effective upon the Closing of the Business Combination. The 2021 Plan provides for the grant of stock options, including ISOs and NSOs, stock appreciation rights, restricted stock, restricted stock units and other stock-based and cash-based awards. The 2021 Plan has a term of ten years. The aggregate number of shares of the Company’s common stock available for issuance under the 2021 Plan is equal to (i) 22,500,611 shares plus (ii) an annual increase for ten years on the first day of each calendar year beginning on January 1, 2022, equal to the lesser of (A) 5% of the aggregate number of shares of the Company’s common stock outstanding on the last day of the immediately preceding calendar year and (B) such smaller amount of shares as determined by the Company’s board of directors. As of September 30, 2021, 5.7 million shares had been granted under the 2021 Plan. Stock Options A summary of the status of the employee and non-employee stock options as of September 30, 2021 and changes during 2021 is presented below (the number of options represents ordinary shares exercisable in respect thereof): Options Outstanding (1) Weighted Average Exercise Price (1) Aggregate Balance at December 31, 2020 21,651,225 $ 0.63 Options forfeited (738,207) $ 1.52 Options expired (262,296) $ 0.93 Options exercised (6,008,995) $ 0.57 Options granted 788,045 $ 3.92 Balance at September 30, 2021 15,429,772 $ 0.78 $ 161,900 Exercisable at September 30, 2021 9,920,280 $ 0.58 $ 106,003 (1) Options outstanding and weighted average exercise price have been retroactively adjusted to give effect to the Exchange Ratio. The weighted-average grant date fair value of options granted during the nine months ended September 30, 2021 was $1.60. No options were granted during the three months ended September 30, 2021. The Company records stock-based compensation expense on a straight-line basis over the vesting period. As of September 30, 2021, total compensation expense not yet recognized related to unvested stock options was $2.7 million, which is expected to be recognized over a weighted-average period of 1.9 years. Additionally, the Company records forfeitures as they occur. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires estimates of highly subjective assumptions, which affect the fair value of each stock option. The assumptions used to estimate the fair value of stock options granted during the nine months ended September 30, 2021 are as follows: Expected term 6 years Volatility 49.01% - 49.29% Risk-free interest rate 0.50% - 0.63% Dividend yield 0% Since the Company’s common stock became publicly traded on June 7, 2021, the expected volatility is based on the historical and implied volatility of similar companies whose stock or option prices are publicly available, after considering the industry, stage of life cycle, size, market capitalization and financial leverage of the other companies. The risk-free interest rate assumption is based on observed U.S. Treasury yield curve interest rates in effect at the time of grant appropriate for the expected term of the stock options granted. As permitted under authoritative guidance, due to the limited amount of option exercises, the Company used the simplified method to compute the expected term for options granted in the nine months ended September 30, 2021. Restricted Stock Units On August 9, 2021, the Company granted an aggregate of approximately 4.0 million RSUs under the 2021 Plan to certain employees and consultants at a grant date fair value of $13.19 per unit. The RSUs primarily vest over three years. On August 20, 2021, the Company granted an aggregate of approximately 0.2 million RSUs to the non-employee directors at a grant date fair value of $10.01 per unit. The RSUs vest within one year. On September 13, 2021, the Company granted an aggregate of approximately 1.5 million RSUs to certain executive officers and senior management at a grant date fair value of $13.49 per unit. The RSUs vest over three years. Number of RSUs Weighted Average Grant Date Fair Value (per unit) Balance at December 31, 2020 — $ — Granted 5,682,586 $ 13.14 Vested (14,412) $ 11.52 Forfeited (121,684) $ 13.19 Balance at September 30, 2021 5,546,490 $ 13.14 Stock-based compensation expense is recognized on a straight-line basis through the vesting date of the RSUs. The unrecognized stock-based compensation expense related to the unvested RSUs was $65.9 million as of September 30, 2021 and will be expensed over a weighted-average period of 2.7 years. Secondary Purchase On January 19, 2021, one of Legacy Latch’s existing equity holders acquired an additional 2.8 million shares (as adjusted based on the Exchange Ratio) of Legacy Latch’s common stock from certain employees and nonemployee service providers at a price per share of $9.92 (as adjusted based on the Exchange Ratio). This price was determined based on the pre-money equity valuation ascribed to the Post Combination Company by TSIA and the estimated conversion ratio at the time of the sales. The foregoing sales were consummated directly among the equity holders to satisfy the acquiring equity holder’s demand for additional shares of Legacy Latch’s common stock without increasing the size of the PIPE Investment and causing incremental dilution to investors in the Post Combination Company. Legacy Latch determined that the price per share paid by the equity holder was in excess of fair value. The Company recorded $13.8 million in stock-based compensation expense related to the transaction allocated to research and development, sales and marketing, and general and administrative in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Cash Election Prior to the Business Combination, Legacy Latch’s holders of vested stock options were given an election to cancel up to 25% of the vested stock options in exchange for $10.00 per share less the exercise price applicable to each share. An aggregate amount of 0.3 million options were cancelled (adjusted for the Exchange Ratio). Payment for the cash election in the amount of $2.6 million was funded as part of the PIPE Investment and 0.3 million of newly issued shares of common stock were granted (see Note 1, Description of Business ). |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The income tax provision for the three and nine months ended September 30, 2021 was $0.09 million and $0.1 million, respectively. There was a $0.003 million income tax provision for both the three and nine months ended September 30, 2020. For the three and nine months ended September 30, 2021 and 2020, the Company’s effective tax rate was different from the U.S. federal statutory rate. This difference is primarily attributable to the effect of state and local income taxes and permanent differences between expenses deductible for financial reporting purposes offset by the valuation allowances placed on the Company’s deferred tax assets. As of September 30, 2021, no liability for unrecognized tax benefits was required to be recorded by the Company. Management does not expect any significant changes in its unrecognized tax benefits in the next 12 months. To date, the Company has incurred cumulative net losses and maintains a full valuation allowance on its net deferred tax assets as the Company has determined that it is more than likely than not that these assets will not be fully realized. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | RELATED-PARTY TRANSACTIONS Throughout the Company’s history, the Company has obtained equity funding from strategic partners with whom the Company transacts through the ordinary course of business. As such, the Company has customers who are also stockholders and directors, or affiliates thereof, in the Company. The Company charges market rates for products and services that are offered to these customers. As of September 30, 2021 and December 31, 2020, the Company had $0.4 million and $1.4 million, respectively, of receivables due from these customers, which are included within accounts receivable on the Condensed Consolidated Balance Sheets. For the three and nine months ended September 30, 2021, the Company had $0.1 million and $0.1 million, respectively, of hardware revenue from these customers, and $0.1 million and $0.4 million, respectively, of software revenue from these customers, which was included within the Condensed Consolidated Statements of Operations and Comprehensive Loss. For the three and nine months ended September 30, 2020, the Company had $0.4 million and $0.4 million, respectively, of hardware revenue from these customers, and $0.1 million and $0.2 million, respectively, of software revenue from these customers, which was included within the Condensed Consolidated Statements of Operations and Comprehensive Loss. In January 2021, one of the Company’s existing equity holders acquired shares of Legacy Latch’s common stock from certain employees and non-employee service providers. See Note 14, Stock-Based Compensation . |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements and related notes of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial reporting. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements for the year ended December 31, 2020, which are included in the Company’s registration statement on Form S-1 filed with the SEC on June 25, 2021. Shares outstanding and earnings per share available for common stockholders prior to the Business Combination have been retroactively restated to reflect the Exchange Ratio and for consistency with the current period presentation. |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of Latch, Inc. and its wholly owned subsidiaries, Latch Systems, Inc., Latch Taiwan, Inc., Latch Insurance Solutions, LLC and Latch Systems Ltd. All intercompany transactions have been eliminated in consolidation. |
Use of Estimates | The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expense during the reporting period. Estimates are used when accounting for revenue recognition, allowance for doubtful accounts, allowance for hardware returns, estimates of excess and obsolete inventory, stock-based compensation, warrants, impairment of fixed assets and capitalized internally developed software. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. These estimates are based on information available as of the date of the condensed consolidated financial statements. Due to the use of estimates inherent in the financial reporting process and given the unknowable duration and effects of the COVID-19 pandemic, actual results could differ from those estimates. The Company’s significant accounting policies for its condensed consolidated financial statements as of September 30, 2021 are summarized below and should be read in conjunction with the Summary of Significant Accounting Policies detailed in the Company’s Consolidated Financial Statements for the year ended December 31, 2020. |
Marketable Securities | The Company classifies its fixed income marketable securities as available-for-sale based on its intentions with regard to these instruments. Accordingly, marketable securities are reported at fair value, with all unrealized holding gains and losses reflected in stockholders’ equity. If it is determined that an investment has an other-than-temporary decline in fair value, the Company recognizes the investment loss in other income (expense) in the condensed consolidated statements of operations and comprehensive loss. The Company periodically evaluates its investments to determine if impairment charges are required.The Company’s investments in marketable securities are classified and accounted for as available-for-sale and consist of high quality asset backed securities, commercial paper, corporate bonds and U.S. government agency debt securities. The Company’s marketable securities with remaining effective maturities of 12 months or less from the balance sheet date are classified as current; otherwise, they are classified as non-current on the condensed consolidated balance sheets. Unrealized gains and losses on marketable securities classified as available-for-sale are recognized in other comprehensive income (loss). |
Accounts receivable and allowance for doubtful accounts | Accounts receivable are stated at net realizable value, net of allowance for doubtful accounts and reserve for wholesale returns (See “—Revenue Recognition – Hardware and other related” below for further information). On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions. A receivable is considered past due if the Company has not received payments based on agreed-upon terms.The Company generally does not require any security or collateral to support its receivables. |
Inventories, Net | Inventories consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at the lower of cost or net realizable value with cost being determined using the average cost method. The Company periodically assesses the valuation of inventory and will write down the value for estimated excess and obsolete inventory based upon estimates of future demand and market conditions, when necessary. |
Equity Issuance Costs | Costs incurred in connection with the issuance of the Company’s series preferred stock have been recorded as a direct reduction against redeemable convertible preferred stock within the Condensed Consolidated Balance Sheets. Additionally, certain transaction costs incurred in connection with the Merger Agreement that are direct and incremental to the Business Combination (see Note 1, Description of Business ) have been recorded as a component of additional paid in capital within the Condensed Consolidated Balance Sheets. |
Revenue Recognition | The Company adopted Accounting Standards Update (“ASU”) No. 2014-09 and its related amendments (collectively known as ASC 606, Revenue from Contracts with Customers ) effective January 1, 2018, using the full retrospective approach to all contracts. Incremental costs to obtaining customer contracts, primarily sales commissions, were capitalized in accordance with the adoption of ASC 606. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identify contracts with customers; (ii) identify performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; and (v) recognize revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in ASC 606. Revenues are recognized when control of the promised goods or services are transferred to a customer in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company currently generates its revenues from two primary sources: (1) hardware devices and (2) software products. Hardware and other related The Company generates hardware revenue primarily from the sale of its portfolio of devices for its smart access and smart apartment solutions. The Company sells hardware to building developers directly or through its channel partners who act as the intermediary and installer. The Company recognizes hardware revenue when the hardware is shipped directly to building developers or to its channel partners, which is when control is transferred to the building developer. The Company provides warranties that its hardware will be substantially free from defects in materials and workmanship for a period of one year with respect to electronic components and five years for mechanical components. The Company replaces, repairs or refunds warrantable devices at its sole discretion. The Company determined these warranties are not separate performance obligations as they cannot be purchased separately and do not provide a service in addition to an assurance the hardware will function as expected. The Company records a reserve as a component of cost of hardware revenue based on historical costs of replacement units for returns of defective products. For both the three and nine months ended September 30, 2021, the reserve for hardware warranties was approximately 1% of cost of hardware revenue. For both the three and nine months ended September 30, 2020, the reserve for hardware warranties was approximately 2% of cost of hardware revenue. The Company also provides certain customers a wholesale arrangement with a right of return for non-defective product, which is treated as a reduction of hardware revenue based on the Company’s expectations and historical experience. For the three and nine months ended September 30, 2021, the reserve for wholesale returns against revenue was $(0.3) million and $0.1 million, respectively. For the three and nine months ended September 30, 2020, the reserve for wholesale returns against revenue was $0.01 million and $(0.05) million, respectively. The reserve against accounts receivable as of September 30, 2021 and December 31, 2020 was $0.6 million and $1.8 million, respectively. The Company also generates revenues related to hardware, which includes professional services related to installation and activation of hardware devices sold to building developers. These services are recognized over time on a percentage of completion basis. The Company recognized professional services revenue of $0.6 million and $0.7 million for the three and nine months ended September 30, 2021, respectively. Software The Company generates software revenue primarily through the sale of its software-as-a-service (“SaaS”) to building developers over its cloud-based platform on a subscription-based arrangement. Subscription fees vary depending on the optional features selected by customers as well as the term length. SaaS arrangements generally have term lengths of month-to-month, two-year, five-year and ten-year and include a fixed fee paid upfront except for the month-to-month arrangements. As a result of significant discounts provided on the longer-term software contracts paid upfront, the Company has determined that there is a significant financing component and has therefore broken out the interest component and recorded as a component of interest income (expense), net on the condensed consolidated statements of operations and comprehensive loss. The amount of interest expense related to this component was $0.8 million and $2.2 million for the three and nine months ended September 30, 2021, respectively, and $0.4 million and $1.0 million for the three and nine months ended September 30, 2020, respectively. The services provided by the Company for the subscription-based arrangements are considered stand-ready performance obligations where customers benefit from the services evenly throughout the service period. Revenue is primarily recognized on a ratable basis over the subscription period of the contractual arrangement beginning when or as control of the promised services is available or transferred to the customer. Performance Obligations The Company enters into contracts that contain multiple distinct performance obligations, hardware and software. The hardware performance obligation includes the delivery of hardware, and the software performance obligation allows the customer access to the software during the contracted-use term when the promised service is transferred to the customer. The Company has determined that the hardware and software are individual distinct performance obligations because both can be sold by the Company on a standalone basis, and because other vendors sell similar technologies and services on a standalone basis. For each performance obligation identified, the Company estimates the standalone selling price, which represents the price at which the Company would sell the good or service separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price, taking into account available information such as market conditions, historical pricing data and internal pricing guidelines related to the performance obligations. The Company then allocates the transaction price among those obligations based on the estimation of standalone selling price. For software revenue, the Company estimates the transaction price, including variable consideration, at the commencement of the contract and recognizes revenue over the contract term. The aggregate amount of the transaction price allocated to performance obligations that were unsatisfied was $23.4 million as of September 30, 2021. The Company expects to recognize the short-term amount of $4.5 million over the next 12 months and the long-term portion of $18.8 million over the contracted-use term of each agreement. Revenue Disaggregation The Company had total revenue of $11.2 million and $26.8 million for the three and nine months ended September 30, 2021, respectively, and $5.1 million and $10.6 million for the three and nine months ended September 30, 2020, respectively. The Company’s revenues are derived primarily from operations in North America. The Company enters into contracts with its customers, which may give rise to contract assets (unbilled receivables) and contract liabilities (deferred revenue) due to revenue recognition differing from the timing of payments made by customers. The Company recognizes unbilled receivables when the performance obligation precedes the invoice date. The Company records unbilled receivables within prepaid and other current assets on the condensed consolidated balance sheets. The Company records contract liabilities to deferred revenue when the Company receives customer payments in advance of the performance obligations being satisfied on the Company’s contracts, which is generally the case for the Company’s software revenue. The Company generally invoices its customers monthly, or up to two years, five years or ten years in advance of services being provided. The Company recognized $0.9 million and $2.9 million of prior year deferred software revenue during the three and nine months ended September 30, 2021, respectively. Increase in contract liabilities for the three and nine months ended September 30, 2021 primarily resulted from growth of contracts with new and existing customers. Deferred revenue that will be recognized during the succeeding 12-month period is recorded within current liabilities on the accompanying Condensed Consolidated Balance Sheets. Cost of Revenue Cost of hardware and other related revenue consists primarily of product costs, including manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty costs, assembly costs and warehousing costs, as well as other non-inventoriable costs including personnel-related expenses associated with supply chain logistics and channel partner fees. Cost of software revenue consists primarily of outsourced hosting costs and personnel-related expenses associated with monitoring and managing outsourced hosting service providers. Cost of revenue excludes depreciation and amortization shown in operating expenses. |
Income Taxes | Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of September 30, 2021 and December 31, 2020, the Company recorded a full valuation allowance against its deferred tax assets. The Company recognizes the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. |
Stock-Based Compensation | The Company measures and records the expense related to stock-based payment awards based on the fair value of those awards as determined on the date of grant. The Company recognizes stock-based compensation expense over the requisite service period of the individual grant, generally equal to the vesting period, and uses the straight-line method to recognize stock-based compensation. The fair value of restricted stock units (“RSUs”) is determined using the closing trading price on the grant date. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option-pricing model to determine the fair value of stock options. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions to determine the fair value of stock options, including the option’s expected term and the price volatility of the underlying stock. The Company calculates the fair value of options granted by using the Black-Scholes option-pricing model with the following assumptions: • Expected Volatility —The Company estimates volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the option’s expected term. • Expected Term —The expected term of the Company’s options represents the period that the stock-based awards are expected to be outstanding. The Company has elected to use the midpoint between the stock options’ vesting term and contractual expiration period to compute the expected term, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. • Risk-Free Interest Rate —The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues with a term that is equal to the options’ expected term at the grant date. • Dividend Yield —The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero. |
Fair Value Measurements | Fair value accounting is applied for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis (at least annually). Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance 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 measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 —Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 —Inputs are observable, either directly or indirectly, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Level 3 —Inputs are generally unobservable and typically reflect management’s best estimate of assumptions that market participants would use in pricing the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company invests its excess cash in low-risk, highly liquid money market funds with major financial institutions. Significant customers are those which represent more than 10% of the Company’s total revenue or gross accounts receivable balance at each balance sheet date. As of September 30, 2021, the Company had one customer that accounted for $2.5 million, or 13%, of gross accounts receivable. As of December 31, 2020, the Company had one customer that accounted for $1.5 million, or 15%, of gross accounts receivable. For the three and nine months ended September 30, 2021, the Company had one and two customers that accounted for $1.8 million and $5.9 million, or 16% and 22%, of total revenue, respectively. For the three months ended September 30, 2020, the Company had one customer that accounted for $0.9 million, or 17%, of total revenue. The Company had no customers that accounted for more than 10% of total revenue for the nine months ended September 30, 2020. |
Segment Information | The Company has one operating and reportable segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) , which requires lessees to recognize most leases on the balance sheet as a right of use asset and related lease liability. The ASU is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which, together with subsequent amendments, amends the requirement on the measurement and recognition of expected credit losses for financial assets held. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this ASU on its condensed consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The update also simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance to improve consistent application. The amendment in this update is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted this standard effective January 1, 2021. The Company has completed the assessment and determined this ASU does not have a material impact on its condensed consolidated financial statements. |
DESCRIPTION OF BUSINESS (Tables
DESCRIPTION OF BUSINESS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule Of Reverse Recapitalization | The following table reconciles the elements of the Business Combination to the Condensed Consolidated Statement of Cash Flows and the Condensed Consolidated Statement of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the nine months ended September 30, 2021. Cash - TSIA trust and cash, net of redemptions $ 300,122 Cash - PIPE Investment including cash election 192,550 Less: transaction costs and advisory fees paid (36,783) Less: Cash election payment (2,313) Less: issuance and other costs paid (5,541) Net proceeds from Business Combination 448,035 Less: Accrued issuance costs — Less: Private placement warrants received as part of Business Combination (13,872) Plus: Prepaid expenses received as part of Business Combination 510 Reverse recapitalization, net of transaction costs $ 434,673 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Deferred Contract Cost | The following table represents a roll-forward of the Company’s deferred contract costs: Balance as of January 1, 2021 $ 549 Additions to deferred contract costs 378 Amortization of deferred contract costs (70) Balance as of September 30, 2021 $ 857 |
Schedule of Contract Assets and Contract Liabilities | Contract Assets and Contract Liabilities (Unbilled Receivables and Deferred Revenue) September 30, 2021 December 31, 2020 Contract assets (unbilled receivables) $ 531 $ — Contract liabilities (deferred revenue) $ 23,359 $ 15,522 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Debt Securities, Available-for-sale | The Company’s marketable securities by security type are summarized as follows: As of September 30, 2021 Cost Gross Unrealized Loss Estimated Fair Value Asset backed securities $ 11,141 $ (13) $ 11,128 Commercial paper and corporate bonds 176,233 (80) 176,153 U.S. government agency debt securities 4,997 (5) 4,992 Total marketable securities $ 192,371 $ (98) $ 192,273 Contractual maturities of the Company’s marketable securities and other investments are summarized as follows: As of September 30, 2021 Cost Estimated Fair Value Due in less than one year 92,156 92,135 Due in one to five years 104,215 104,138 Total investments $ 196,371 $ 196,273 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are summarized as follows: As of September 30, 2021 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 2,003 $ — $ — $ 2,003 Money market funds 238,303 — — 238,303 Total cash and cash equivalents 240,306 — — 240,306 Asset backed securities — 11,128 — 11,128 Commercial paper and corporate bonds — 176,153 — 176,153 U.S. government agency debt securities — 4,992 — 4,992 Convertible promissory note — — 4,000 4,000 Total assets $ 240,306 $ 192,273 $ 4,000 $ 436,579 Liabilities Warrant liability 17,600 — — 17,600 Total liabilities $ 17,600 $ — $ — $ 17,600 As of December 31, 2020 Fair Value Measurements Using Level 1 Level 2 Level 3 Total Assets Cash $ 1,244 $ — $ — $ 1,244 Money market funds 59,285 — — 59,285 Total assets $ 60,529 $ — $ — $ 60,529 Liabilities Derivative liabilities — — 13,390 13,390 Total liabilities $ — $ — $ 13,390 $ 13,390 |
Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding the significant unobservable inputs used by the Company related to the derivative liabilities: December 31, 2020 Term in years 0.3 to 1.3 Calibrated risk premium 11.68% Option adjusted spread 8.03% Risk free rate 0.12% - 0.19% Key inputs to calculate the fair value of the warrants outstanding as of December 31, 2020 using the Black-Scholes pricing model were as follows: December 31, 2020 Expected term 10 - 12 years Volatility 55.0 - 61.0% Risk-free interest rate 0.68 - 0.93% Dividend yield 0 % |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table represents the activity of the Level 3 instruments: Convertible Warrants Total Derivative liabilities - December 31, 2020 $ 12,676 $ 714 $ 13,390 Change in fair value of derivative liabilities (1) 11,158 1,430 12,588 Extinguishment of derivatives (23,834) (2,144) (25,978) Derivative liabilities - September 30, 2021 $ — $ — $ — (1) Recorded in other income (expense) within the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Office furniture $ 86 $ 86 Computers and equipment 3,198 1,789 Property and equipment 3,284 1,875 Less: Accumulated depreciation (1,631) (1,122) Total property and equipment, net $ 1,653 $ 753 |
INTERNALLY DEVELOPED SOFTWARE_2
INTERNALLY DEVELOPED SOFTWARE, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Research and Development [Abstract] | |
Schedule Of Internally Developed Software, Net | Internally developed software, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Internally developed software $ 9,422 $ 4,235 Construction in progress 6,481 4,451 Less: Accumulated amortization (2,866) (1,270) Total internally developed software, net $ 13,037 $ 7,416 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Raw materials $ 3,513 $ 2,242 Finished goods 6,749 6,376 Excess and obsolete reserve $ (286) (325) Total inventories, net $ 9,976 $ 8,293 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of September 30, 2021 and December 31, 2020: September 30, 2021 December 31, 2020 Accrued payroll $ 5,663 $ 1,246 Accrued duties 154 204 Accrued warranties 454 284 Accrued purchases 1,498 25 Accrued excess inventory 159 465 Accrued operating expense 3,717 3,505 Other accrued expenses 417 52 Total accrued expenses $ 12,062 $ 5,781 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Term loan, net was comprised of the following indebtedness as of December 31, 2020: December 31, 2020 Principal $ 5,000 Derivative liability 714 Less: unamortized discounts and fees (127) Less: debt issuance costs (106) Term loan, net $ 5,481 The following table summarizes the aggregate values recorded for the Convertible Notes as of December 31, 2020: December 31, 2020 Principal $ 50,000 Derivative liability 12,676 Less: unamortized discounts and fees (10,925) Less: debt issuance costs (37) Net carrying amount $ 51,714 |
CONVERTIBLE PREFERRED STOCK A_2
CONVERTIBLE PREFERRED STOCK AND EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Temporary Equity | Preferred stock as of December 31, 2020 consisted of the following (in thousands, except per share amounts): Issuance Start Shares Shares Issuance Carrying Liquidation Series Seed July 14, 2014 3,971 3,971 $ 0.60 $ 1,768 $ 4,978 Series Seed April 29, 2015 4,000 4,000 0.63 2,479 5,101 Series A January 19, 2016 15,231 15,231 0.75 11,110 11,367 Series A-1 May 5, 2017 8,464 8,464 1.18 9,737 10,000 Series B July 30, 2018 15,983 15,983 3.13 50,000 50,000 Series B - 2019 Convertible Notes conversion at 10% discount July 30, 2018 2,753 2,753 2.82 8,601 7,752 Series B-1 May 20, 2019 18,112 17,977 3.74 66,842 67,300 Series B-2 May 20, 2019 2,690 2,690 3.37 10,068 9,064 Total 71,204 71,069 $ 160,605 $ 165,562 |
Schedule of Stock by Class | Legacy Latch had reserved shares of common stock for future issuance as of December 31, 2020 as follows (in thousands and as adjusted for the Exchange Ratio): December 31, 2020 Conversion of outstanding redeemable convertible preferred stock 63,756 Stock options issued and outstanding 21,691 Warrants issued and outstanding 318 Remaining shares available for future issuance 900 Total 86,665 The reserved shares for future issuance as of September 30, 2021 include the following (in thousands and as adjusted for the Exchange Ratio): September 30, 2021 Stock options issued and outstanding 15,430 Restricted stock units issued and outstanding 5,546 Public warrants outstanding 10,000 Private placement warrants outstanding 5,333 2021 Incentive Award Plan available shares 17,737 Total 54,046 |
Fair Value Measurement Inputs and Valuation Techniques | The following table provides quantitative information regarding the significant unobservable inputs used by the Company related to the derivative liabilities: December 31, 2020 Term in years 0.3 to 1.3 Calibrated risk premium 11.68% Option adjusted spread 8.03% Risk free rate 0.12% - 0.19% Key inputs to calculate the fair value of the warrants outstanding as of December 31, 2020 using the Black-Scholes pricing model were as follows: December 31, 2020 Expected term 10 - 12 years Volatility 55.0 - 61.0% Risk-free interest rate 0.68 - 0.93% Dividend yield 0 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income per share for common stock and preferred stock: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Numerator for basic and diluted net loss per share - net loss $ (34,239) $ (15,874) $ (112,411) $ (46,801) Denominator: Denominator for basic net loss per share - weighted-average common shares 140,675,490 7,270,903 67,933,833 7,150,235 Effect of dilutive securities — — — — Denominator for diluted net loss - adjusted weighted-average common shares 140,675,490 7,270,903 67,933,833 7,150,235 Basic and diluted net loss per share $ (0.24) $ (2.18) $ (1.66) $ (6.55) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of components of stock-based compensation expense | For the three and nine months ended September 30, 2021 and 2020, the components of stock-based compensation expense were as follows: Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 Stock options $ 449 $ 372 $ 15,421 $ 1,097 Restricted stock units 7,247 — 7,247 — Capitalized costs (1) (747) (9) (803) (27) Total stock-based compensation $ 6,948 $ 363 $ 21,865 $ 1,070 |
Schedule of the Employee and Nonemployee Stock Options | A summary of the status of the employee and non-employee stock options as of September 30, 2021 and changes during 2021 is presented below (the number of options represents ordinary shares exercisable in respect thereof): Options Outstanding (1) Weighted Average Exercise Price (1) Aggregate Balance at December 31, 2020 21,651,225 $ 0.63 Options forfeited (738,207) $ 1.52 Options expired (262,296) $ 0.93 Options exercised (6,008,995) $ 0.57 Options granted 788,045 $ 3.92 Balance at September 30, 2021 15,429,772 $ 0.78 $ 161,900 Exercisable at September 30, 2021 9,920,280 $ 0.58 $ 106,003 (1) Options outstanding and weighted average exercise price have been retroactively adjusted to give effect to the Exchange Ratio. |
Schedule of the Assumptions Used to Estimate the Fair Value of Stock Options Granted | The assumptions used to estimate the fair value of stock options granted during the nine months ended September 30, 2021 are as follows: Expected term 6 years Volatility 49.01% - 49.29% Risk-free interest rate 0.50% - 0.63% Dividend yield 0% |
Schedule of Restricted Stock Unit, Activity | Number of RSUs Weighted Average Grant Date Fair Value (per unit) Balance at December 31, 2020 — $ — Granted 5,682,586 $ 13.14 Vested (14,412) $ 11.52 Forfeited (121,684) $ 13.19 Balance at September 30, 2021 5,546,490 $ 13.14 |
DESCRIPTION OF BUSINESS - Narra
DESCRIPTION OF BUSINESS - Narrative (Details) | Jun. 04, 2021USD ($)day$ / sharesshares | Jun. 30, 2021shares | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020 | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020$ / sharesshares |
Business Acquisition [Line Items] | ||||||||
Stock issued during period, conversion of convertible securities (in shares) | 6,900,000 | |||||||
Temporary equity, shares, conversion of convertible securities (in shares) | 71,100,000 | 63,756,000 | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 19,300,000 | |||||||
Shares subject to vesting restrictions (in shares) | 738,000 | |||||||
Number of shares issued in transaction, used to fund cash election (in shares) | 300,000 | |||||||
Sale of stock, price Per share. used to fund cash election (in dollars per share) | $ / shares | $ 10 | |||||||
Consideration received on transaction, used to fund cash election | $ | $ 2,600,000 | |||||||
Common stock, issued (in shares) | 140,500,000 | 141,112,920 | 8,168,780 | |||||
Common stock outstanding (in shares) | 140,500,000 | 141,112,920 | 8,168,780 | |||||
Net proceeds from business combination | $ | $ 450,000,000 | $ 448,035,000 | ||||||
Proceeds from issuance of private placement | $ | $ 192,600,000 | $ 192,550,000 | ||||||
Recapitalization exchange ratio | 0.8971 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Reduction in headcount, percentage | 25.00% | |||||||
Restructuring charges | $ | $ 100,000 | $ 1,000,000 | ||||||
TSIA | ||||||||
Business Acquisition [Line Items] | ||||||||
Assets held-in-trust | $ | $ 300,000,000 | |||||||
Legacy Latch Stockholders | Latch, Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling interest, ownership percentage by parent | 60.00% | |||||||
Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued during period, conversion of convertible securities (in shares) | 63,800,000 | |||||||
Common Stock | PIPE Investment | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10 | |||||||
Sale of stock, consideration received on transaction | $ | $ 192,600,000 | |||||||
Common Class A | IPO | TSIA | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of stock, number of shares issued in transaction (in shares) | 5,916 | |||||||
Sale of stock, number of business days prior to business combination in which calculation occurred | day | 2 | |||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10 | |||||||
Sale of stock, consideration received on transaction | $ | $ 59,160 | |||||||
Common Class B | TSIA | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock issued during period, conversion of convertible securities (in shares) | 7,400,000 | |||||||
Shares subject to vesting restrictions (in shares) | 700,000 | |||||||
Vesting conditions, volume-weighted average price per share (in dollars per share) | $ / shares | $ 14 | |||||||
Vesting conditions, number of trading days within trading day period | 20 days | |||||||
Vesting conditions, trading day period | 30 days | |||||||
Vesting conditions, anniversary period | 5 years | |||||||
Paycheck Protection Program, CARES Act Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Repayments of debt | $ | $ 3,400,000 | |||||||
Convertible Notes | ||||||||
Business Acquisition [Line Items] | ||||||||
Debt conversion, converted instrument, amount | $ | $ 50,000,000 | |||||||
Secured Debt | Term Loan | ||||||||
Business Acquisition [Line Items] | ||||||||
Repayments of long-term debt | $ | $ 5,000,000 |
DESCRIPTION OF BUSINESS - Rever
DESCRIPTION OF BUSINESS - Reverse Recapitalization (Details) - USD ($) $ in Thousands | Jun. 04, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash - TSIA trust and cash, net of redemptions | $ 300,122 | ||
Cash - PIPE Investment including cash election | $ 192,600 | 192,550 | |
Less: transaction costs and advisory fees paid | (36,783) | ||
Less: Cash election payment | (2,313) | ||
Less: issuance and other costs paid | (5,541) | ||
Net proceeds from Business Combination | $ 450,000 | 448,035 | |
Less: Accrued issuance costs | 0 | ||
Less: Private placement warrants received as part of Business Combination | (13,872) | ||
Plus: Prepaid expenses received as part of Business Combination | 510 | $ 0 | |
Reverse recapitalization, net of transaction costs | $ 434,673 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |||||
Allowance for doubtful accounts | $ 800 | $ 800 | $ 100 | ||
Revenue | 11,197 | $ 5,095 | 26,838 | $ 10,573 | |
Revenue, remaining performance obligation, amount | 23,400 | 23,400 | |||
Deferred revenue, revenue recognized | 900 | $ 2,900 | |||
Number of operating segments | segment | 1 | ||||
Number of reportable segments | segment | 1 | ||||
Accounts Receivable | Customer Concentration Risk | One Customer | |||||
Loss Contingencies [Line Items] | |||||
Accounts receivable, gross | 2,500 | $ 2,500 | $ 1,500 | ||
Concentration risk, percentage | 13.00% | 15.00% | |||
Revenue Benchmark | Customer Concentration Risk | One Customer | |||||
Loss Contingencies [Line Items] | |||||
Revenue | $ 1,800 | $ 900 | |||
Concentration risk, percentage | 16.00% | 17.00% | |||
Revenue Benchmark | Customer Concentration Risk | Two Large Customers | |||||
Loss Contingencies [Line Items] | |||||
Revenue | $ 5,900 | ||||
Concentration risk, percentage | 22.00% | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Deferred revenue, invoice in advance period | 2 years | ||||
Median | |||||
Loss Contingencies [Line Items] | |||||
Deferred revenue, invoice in advance period | 5 years | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Deferred revenue, invoice in advance period | 10 years | ||||
Hardware and other related revenue | |||||
Loss Contingencies [Line Items] | |||||
Allowance for doubtful accounts | $ 600 | $ 600 | $ 1,800 | ||
Reserve for returns of defective products, percentage | 1.00% | 2.00% | 1.00% | 2.00% | |
Reserve for returns of defective products | $ (300) | $ 10 | $ 100 | $ (50) | |
Revenue | 9,047 | 4,093 | $ 21,263 | 8,050 | |
Hardware Device, Electrical Components | |||||
Loss Contingencies [Line Items] | |||||
Standard product warranty, return period | 1 year | ||||
Hardware Device, Mechanical Components | |||||
Loss Contingencies [Line Items] | |||||
Standard product warranty, return period | 5 years | ||||
Professional Service Revenue | |||||
Loss Contingencies [Line Items] | |||||
Revenue | 600 | $ 700 | |||
Software revenue | |||||
Loss Contingencies [Line Items] | |||||
Revenue | 2,150 | 1,002 | 5,575 | 2,523 | |
Interest expense | $ 800 | $ 400 | $ 2,200 | $ 1,000 | |
Software revenue | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Revenue recognition, customer contract period | 2 years | ||||
Software revenue | Median | |||||
Loss Contingencies [Line Items] | |||||
Revenue recognition, customer contract period | 5 years | ||||
Software revenue | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Revenue recognition, customer contract period | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Performance Obligations (Details) $ in Millions | Sep. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 23.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 4.5 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 18.8 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred Contract Costs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Movement In Capitalized Contract Costs, Net [Roll Forward] | |
Balance as of January 1, 2021 | $ 549 |
Additions to deferred contract costs | 378 |
Amortization of deferred contract costs | (70) |
Balance as of June 30, 2021 | $ 857 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Contract assets (unbilled receivables) | $ 531 | $ 0 |
Contract liabilities (deferred revenue) | $ 23,359 | $ 15,522 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Securities, Available-for-sale [Line Items] | |||
Payments to acquire convertible promissory note | $ 4,000 | $ 0 | |
Gross unrealized loss | $ (98) | ||
Convertible promissory note | |||
Debt Securities, Available-for-sale [Line Items] | |||
Payments to acquire convertible promissory note | $ 4,000 | ||
Debt security, extension period | 1 year | ||
Interest rate | 6.00% |
INVESTMENTS - Marketable Securi
INVESTMENTS - Marketable Securities by Security Type Summarized (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
Cost | $ 192,371 |
Gross Unrealized Loss | (98) |
Estimated Fair Value | 192,273 |
Asset backed securities | |
Debt Securities, Available-for-sale [Line Items] | |
Cost | 11,141 |
Gross Unrealized Loss | (13) |
Estimated Fair Value | 11,128 |
Commercial paper and corporate bonds | |
Debt Securities, Available-for-sale [Line Items] | |
Cost | 176,233 |
Gross Unrealized Loss | (80) |
Estimated Fair Value | 176,153 |
U.S. government agency debt securities | |
Debt Securities, Available-for-sale [Line Items] | |
Cost | 4,997 |
Gross Unrealized Loss | (5) |
Estimated Fair Value | $ 4,992 |
INVESTMENTS - Contractual Matur
INVESTMENTS - Contractual Maturities of Marketable Securities (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Cost | |
Marketable securities, due in less than one year | $ 92,156 |
Marketable securities, due in one to five years | 104,215 |
Total investments | 196,371 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Fair Value [Abstract] | |
Marketable securities, due in less than one year | 92,135 |
Marketable securities, due in one to five years | 104,138 |
Total investments | $ 196,273 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial assets and liabilities that are measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Debt securities, available-for-sale, fair value | $ 192,273 | |
Liabilities | ||
Warrant liability | 17,600 | $ 0 |
Asset backed securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 11,128 | |
Commercial paper and corporate bonds | ||
Assets | ||
Debt securities, available-for-sale, fair value | 176,153 | |
U.S. government agency debt securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 4,992 | |
Fair Value, Recurring | ||
Assets | ||
Total cash and cash equivalents | 240,306 | |
Total assets | 436,579 | 60,529 |
Liabilities | ||
Warrant liability | 17,600 | |
Derivative liabilities | 13,390 | |
Total liabilities | 17,600 | 13,390 |
Fair Value, Recurring | Asset backed securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 11,128 | |
Fair Value, Recurring | Commercial paper and corporate bonds | ||
Assets | ||
Debt securities, available-for-sale, fair value | 176,153 | |
Fair Value, Recurring | U.S. government agency debt securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 4,992 | |
Fair Value, Recurring | Convertible promissory note | ||
Assets | ||
Debt securities, available-for-sale, fair value | 4,000 | |
Fair Value, Recurring | Cash | ||
Assets | ||
Total cash and cash equivalents | 2,003 | 1,244 |
Fair Value, Recurring | Money market funds | ||
Assets | ||
Total cash and cash equivalents | 238,303 | 59,285 |
Level 1 | Fair Value, Recurring | ||
Assets | ||
Total cash and cash equivalents | 240,306 | |
Total assets | 240,306 | 60,529 |
Liabilities | ||
Warrant liability | 17,600 | |
Derivative liabilities | 0 | |
Total liabilities | 17,600 | 0 |
Level 1 | Fair Value, Recurring | Asset backed securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 1 | Fair Value, Recurring | Commercial paper and corporate bonds | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 1 | Fair Value, Recurring | U.S. government agency debt securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 1 | Fair Value, Recurring | Convertible promissory note | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 1 | Fair Value, Recurring | Cash | ||
Assets | ||
Total cash and cash equivalents | 2,003 | 1,244 |
Level 1 | Fair Value, Recurring | Money market funds | ||
Assets | ||
Total cash and cash equivalents | 238,303 | 59,285 |
Level 2 | Fair Value, Recurring | ||
Assets | ||
Total cash and cash equivalents | 0 | |
Total assets | 192,273 | 0 |
Liabilities | ||
Warrant liability | 0 | |
Derivative liabilities | 0 | |
Total liabilities | 0 | 0 |
Level 2 | Fair Value, Recurring | Asset backed securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 11,128 | |
Level 2 | Fair Value, Recurring | Commercial paper and corporate bonds | ||
Assets | ||
Debt securities, available-for-sale, fair value | 176,153 | |
Level 2 | Fair Value, Recurring | U.S. government agency debt securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 4,992 | |
Level 2 | Fair Value, Recurring | Convertible promissory note | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 2 | Fair Value, Recurring | Cash | ||
Assets | ||
Total cash and cash equivalents | 0 | 0 |
Level 2 | Fair Value, Recurring | Money market funds | ||
Assets | ||
Total cash and cash equivalents | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Assets | ||
Total cash and cash equivalents | 0 | |
Total assets | 4,000 | 0 |
Liabilities | ||
Warrant liability | 0 | |
Derivative liabilities | 13,390 | |
Total liabilities | 0 | 13,390 |
Level 3 | Fair Value, Recurring | Asset backed securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 3 | Fair Value, Recurring | Commercial paper and corporate bonds | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 3 | Fair Value, Recurring | U.S. government agency debt securities | ||
Assets | ||
Debt securities, available-for-sale, fair value | 0 | |
Level 3 | Fair Value, Recurring | Convertible promissory note | ||
Assets | ||
Debt securities, available-for-sale, fair value | 4,000 | |
Level 3 | Fair Value, Recurring | Cash | ||
Assets | ||
Total cash and cash equivalents | 0 | 0 |
Level 3 | Fair Value, Recurring | Money market funds | ||
Assets | ||
Total cash and cash equivalents | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 03, 2021 | Dec. 31, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrant liability | $ 17,600,000 | $ 17,600,000 | $ 0 | |||
Sales issues | 0 | 0 | ||||
Transfers into or out of Level 3 | 0 | 0 | ||||
Payments to acquire convertible promissory note | 4,000,000 | $ 0 | ||||
Convertible promissory note | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Payments to acquire convertible promissory note | $ 4,000,000 | |||||
Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrant liability | 17,600,000 | 17,600,000 | ||||
Level 3 | Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrant liability | 0 | 0 | ||||
Level 3 | Fair Value, Recurring | Convertible promissory note | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Payments to acquire convertible promissory note | $ 4,000,000 | $ 4,000,000 | ||||
Public Warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Share price (in dollars per share) | $ 3.30 | $ 3.30 | $ 2.60 | |||
Private Placement Warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Warrant liability | $ 17,600,000 | $ 17,600,000 | $ 13,900,000 |
FAIR VALUE MEASUREMENTS - Quant
FAIR VALUE MEASUREMENTS - Quantitative information regarding the significant unobservable inputs for derivative liabilities (Details) - Level 3 | Dec. 31, 2020 |
Term in years | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 0.3 |
Term in years | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 1.3 |
Calibrated risk premium | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 0.1168 |
Option adjusted spread | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 0.0803 |
Risk free rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 0.0012 |
Risk free rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Embedded derivative liability, measurement input | 0.0019 |
FAIR VALUE MEASUREMENTS - Activ
FAIR VALUE MEASUREMENTS - Activity of the Level 3 instruments (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Beginning balance | $ 13,390 |
Change in fair value of derivative liabilities | 12,588 |
Extinguishment of derivatives | (25,978) |
Ending balance | 0 |
Convertible Notes | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Beginning balance | 12,676 |
Change in fair value of derivative liabilities | 11,158 |
Extinguishment of derivatives | (23,834) |
Ending balance | 0 |
Warrants | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |
Beginning balance | 714 |
Change in fair value of derivative liabilities | 1,430 |
Extinguishment of derivatives | (2,144) |
Ending balance | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 3,284 | $ 1,875 |
Less: Accumulated depreciation | (1,631) | (1,122) |
Total property and equipment, net | 1,653 | 753 |
Office furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 86 | 86 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 3,198 | $ 1,789 |
INTERNALLY DEVELOPED SOFTWARE_3
INTERNALLY DEVELOPED SOFTWARE, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Research and Development [Abstract] | ||
Internally developed software | $ 9,422 | $ 4,235 |
Construction in progress | 6,481 | 4,451 |
Less: Accumulated amortization | (2,866) | (1,270) |
Total internally developed software, net | $ 13,037 | $ 7,416 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,513 | $ 2,242 |
Finished goods | 6,749 | 6,376 |
Excess and obsolete reserve | (286) | (325) |
Total inventories, net | $ 9,976 | $ 8,293 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 5,663 | $ 1,246 |
Accrued duties | 154 | 204 |
Accrued warranties | 454 | 284 |
Accrued purchases | 1,498 | 25 |
Accrued excess inventory | 159 | 465 |
Accrued operating expense | 3,717 | 3,505 |
Other accrued expenses | 417 | 52 |
Total accrued expenses | $ 12,062 | $ 5,781 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) shares in Millions, $ in Millions | Jun. 04, 2021USD ($)shares | Oct. 23, 2020USD ($) | Sep. 30, 2020USD ($) | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Jul. 01, 2021USD ($) | Dec. 31, 2020USD ($)tranche |
Debt Instrument [Line Items] | ||||||||
Stock issued during period, conversion of convertible securities (in shares) | shares | 6.9 | |||||||
Convertible Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Option to extend maturity date, period | 1 year | |||||||
Debt instrument, face amount | $ 50 | |||||||
Debt conversion, converted instrument, amount | $ 50 | |||||||
Convertible Notes | Interest Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 5.00% | 5.00% | ||||||
Convertible Notes | Interest Period Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 7.00% | 7.00% | ||||||
Convertible Notes | Interest Period Three | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate | 9.00% | 9.00% | ||||||
Secured Debt | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 5 | |||||||
Number Of tranches | tranche | 2 | |||||||
Draw down amount per tranche | $ 2.5 | |||||||
Secured Debt | Prime Rate | Minimum | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 3.00% | |||||||
Secured Debt | Prime Rate | Maximum | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 6.25% | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, capacity available for trade purchases | $ 1 | $ 6 | ||||||
Debt instrument, payment period after initial payment date | 90 days | |||||||
Line of credit, current | $ 2.4 | $ 2.4 | ||||||
Revolving Credit Facility | Minimum | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, interest rate | 0.87% | 0.87% | ||||||
Revolving Credit Facility | Maximum | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, interest rate | 1.25% | 1.25% | ||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 5 | |||||||
Adjusted quick ratio | 1.25 | |||||||
Threshold for cash balance and revolving line of credit | $ 20 | |||||||
Revolving Credit Facility | Line of Credit | Prime Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.00% | |||||||
Revolving Credit Facility | Line of Credit | Prime Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 5.25% |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |
Net carrying amount | $ 5,481 |
Secured Debt | Term Loan | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 5,000 |
Derivative liability | 714 |
Less: unamortized discounts and fees | (127) |
Less: debt issuance costs | (106) |
Convertible Notes | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 50,000 |
Derivative liability | 12,676 |
Less: unamortized discounts and fees | (10,925) |
Less: debt issuance costs | (37) |
Net carrying amount | $ 51,714 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2021USD ($)tranche | Jan. 31, 2020 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jan. 31, 2021USD ($) | Mar. 31, 2020 | |
Operating Leased Assets [Line Items] | ||||||||
Rent expense | $ 0.2 | $ 0.9 | $ 0.6 | $ 2.6 | ||||
Purchase commitments | $ 3.3 | |||||||
Future minimum purchases in 2021 | 0.4 | 0.4 | ||||||
Future minimum purchases in 2022 | $ 2.8 | $ 2.8 | ||||||
Registration Rights Agreement | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Number of times stockholders may each request to sell all or any portion of their registrable securities in an underwritten offering (up to) | tranche | 2 | |||||||
Stockholders may each request to sell all or any portion of their registrable securities in an underwritten offering, period | 12 months | |||||||
Sale of stock, expected consideration received on transaction | $ 75 | |||||||
Legacy Latch | ||||||||
Operating Leased Assets [Line Items] | ||||||||
Operating lease, sublease agreement term | 1 year | |||||||
Operating lease, term of contract | 1 year |
CONVERTIBLE PREFERRED STOCK A_3
CONVERTIBLE PREFERRED STOCK AND EQUITY - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 04, 2021$ / sharesshares | Jun. 30, 2021shares | Sep. 30, 2021USD ($)$ / sharesshares | Jan. 31, 2021shares | Dec. 31, 2020USD ($)$ / sharesshares |
Equity, Class of Treasury Stock [Line Items] | |||||
Shares, authorized (in shares) | 1,100,000,000 | ||||
Common stock, authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized (in shares) | 100,000,000 | ||||
Preferred stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.0001 | ||||
Temporary equity, shares, conversion of convertible securities (in shares) | 71,100,000 | 63,756,000 | |||
Stock issued during period, conversion of convertible securities (in shares) | 6,900,000 | ||||
Recapitalization exchange ratio | 0.8971 | ||||
Number of securities called by warrants or rights (in shares) | 64,591 | ||||
Warrant liability | $ | $ 17,600 | $ 0 | |||
Legacy Latch | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Warrant liability | $ | $ 600 | ||||
Public Warrants, TSIA IPO | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Class of warrant or right, conversion of securities (in shares) | 10,000,000 | ||||
Public Warrants, Post Combination Company | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Number of securities called by warrants or rights (in shares) | 10,000,000 | ||||
Class of warrant or right, outstanding (in shares) | 10,000,000 | ||||
Class of warrant or right, exercise price of warrants or rights (in dollars per share) | $ / shares | $ 11.50 | ||||
Common Stock | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock issued during period, conversion of convertible securities (in shares) | 63,800,000 |
CONVERTIBLE PREFERRED STOCK A_4
CONVERTIBLE PREFERRED STOCK AND EQUITY - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 63,877,518 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 63,756,438 | 0 | 0 | 63,756,000 | 63,756,000 | 63,756,000 | 63,756,000 | 61,288,000 | ||
Redeemable convertible preferred stock, issued (in shares) | 63,756,438 | |||||||||
Redeemable convertible preferred stock | $ 160,605 | [1] | $ 0 | [1] | $ 0 | $ 160,605 | $ 160,605 | $ 160,605 | $ 160,605 | $ 150,305 |
Redeemable convertible preferred stock, liquidation preference | $ 165,562 | |||||||||
Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 71,204,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 71,069,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 71,069,000 | |||||||||
Redeemable convertible preferred stock | $ 160,605 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 165,562 | |||||||||
Series Seed | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 3,971,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 3,971,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 3,971,000 | |||||||||
Issuance price per share (in dollars per share) | $ 0.60 | |||||||||
Redeemable convertible preferred stock | $ 1,768 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 4,978 | |||||||||
Series Seed | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 4,000,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 4,000,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 4,000,000 | |||||||||
Issuance price per share (in dollars per share) | $ 0.63 | |||||||||
Redeemable convertible preferred stock | $ 2,479 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 5,101 | |||||||||
Series A | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 15,231,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 15,231,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 15,231,000 | |||||||||
Issuance price per share (in dollars per share) | $ 0.75 | |||||||||
Redeemable convertible preferred stock | $ 11,110 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 11,367 | |||||||||
Series A-1 | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 8,464,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 8,464,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 8,464,000 | |||||||||
Issuance price per share (in dollars per share) | $ 1.18 | |||||||||
Redeemable convertible preferred stock | $ 9,737 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 10,000 | |||||||||
Series B | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 15,983,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 15,983,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 15,983,000 | |||||||||
Issuance price per share (in dollars per share) | $ 3.13 | |||||||||
Redeemable convertible preferred stock | $ 50,000 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 50,000 | |||||||||
Series B - 2019 Convertible Notes conversion at 10% discount | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 2,753,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 2,753,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 2,753,000 | |||||||||
Issuance price per share (in dollars per share) | $ 2.82 | |||||||||
Redeemable convertible preferred stock | $ 8,601 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 7,752 | |||||||||
Debt conversion, converted instrument, discount rate | 10.00% | |||||||||
Series B-1 | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 18,112,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 17,977,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 17,977,000 | |||||||||
Issuance price per share (in dollars per share) | $ 3.74 | |||||||||
Redeemable convertible preferred stock | $ 66,842 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 67,300 | |||||||||
Series B-2 | Legacy Latch | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redeemable convertible preferred stock, authorized (in shares) | 2,690,000 | |||||||||
Redeemable convertible preferred stock, outstanding (in shares) | 2,690,000 | |||||||||
Redeemable convertible preferred stock, issued (in shares) | 2,690,000 | |||||||||
Issuance price per share (in dollars per share) | $ 3.37 | |||||||||
Redeemable convertible preferred stock | $ 10,068 | |||||||||
Redeemable convertible preferred stock, liquidation preference | $ 9,064 | |||||||||
[1] | Shares outstanding for all periods reflect the adjustment for the Exchange Ratio as a result of the Business Combination. Shares issued and outstanding as of September 30, 2021 excludes 738,000 shares subject to vesting requirements. See Note 1, Description of Business . |
CONVERTIBLE PREFERRED STOCK A_5
CONVERTIBLE PREFERRED STOCK AND EQUITY - Common Stock Shares Reserved For Future Issuance (Details) - shares shares in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 54,046 | 86,665 |
Conversion of outstanding redeemable convertible preferred stock | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 63,756 | |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 15,430 | 21,691 |
Warrants issued and outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 318 | |
Remaining shares available for future issuance | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 900 | |
Restricted stock units issued and outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 5,546 | |
Public warrants outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 10,000 | |
Private placement warrants outstanding | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 5,333 | |
2021 Incentive Award Plan available shares | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock for future issuance (in shares) | 17,737 |
CONVERTIBLE PREFERRED STOCK A_6
CONVERTIBLE PREFERRED STOCK AND EQUITY - Key inputs to calculate the fair value of the warrants (Details) - Level 3 | Dec. 31, 2020 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0 |
Minimum | Term in years | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 10 |
Minimum | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.550 |
Minimum | Risk free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.0068 |
Maximum | Term in years | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 12 |
Maximum | Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.610 |
Maximum | Risk free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0.0093 |
EARNINGS PER SHARE - Computatio
EARNINGS PER SHARE - Computation of basic and diluted net income per share for common stock and preferred stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Numerator for basic net loss per share - net loss | $ (34,239) | $ (15,874) | $ (112,411) | $ (46,801) |
Numerator for diluted net loss per share - net loss | $ (34,239) | $ (15,874) | $ (112,411) | $ (46,801) |
Denominator: | ||||
Basic net loss - adjusted weighted-average common shares (in shares) | 140,675,490 | 7,270,903 | 67,933,833 | 7,150,235 |
Effect of dilutive securities | 0 | 0 | 0 | 0 |
Diluted net loss - adjusted weighted-average common shares (in shares) | 140,675,490 | 7,270,903 | 67,933,833 | 7,150,235 |
Earnings Per Share, Basic and Diluted | ||||
Basic net loss per share (in dollars per share) | $ (0.24) | $ (2.18) | $ (1.66) | $ (6.55) |
Diluted net loss per share (in dollars per share) | $ (0.24) | $ (2.18) | $ (1.66) | $ (6.55) |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 34.1 | 84.6 | 65.2 | 83.3 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-based Compensation Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 6,948 | $ 363 | $ 21,865 | $ 1,070 |
Capitalized costs | (747) | (9) | (803) | (27) |
Total stock-based compensation | 6,948 | 363 | 21,865 | 1,070 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 449 | 372 | 15,421 | 1,097 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 7,247 | $ 0 | $ 7,247 | $ 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 13, 2021 | Aug. 20, 2021 | Aug. 09, 2021 | Jun. 04, 2021 | Jan. 19, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 03, 2021 | Jan. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Grants in period, weighted average grant date fair value (in dollars per share) | $ 1.60 | ||||||||||
Options granted (in shares) | 0 | 788,045 | |||||||||
Compensation cost not yet recognized related to unvested stock options | $ 2,700 | $ 2,700 | |||||||||
Stock-based compensation expense | 6,948 | $ 363 | 21,865 | $ 1,070 | |||||||
Sale of stock, number of shares issued in transaction (in shares) | 19,300,000 | ||||||||||
Options, canceled, percent (up to) | 25.00% | ||||||||||
Options, canceled in period (in dollars per share) | $ 10 | ||||||||||
Options, canceled in period (in shares) | 300,000 | ||||||||||
Number of shares issued in transaction, used to fund cash election (in shares) | 300,000 | ||||||||||
Consideration received on transaction, used to fund cash election | $ 2,600 | ||||||||||
Secondary Purchase | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock-based compensation expense | $ 13,800 | ||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 2,800,000 | ||||||||||
Sale of stock, price per share (in dollars per share) | $ 9.92 | ||||||||||
Stock options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Compensation cost not yet recognized related to unvested stock options, period for recognition | 1 year 10 months 24 days | ||||||||||
Stock-based compensation expense | 449 | 372 | $ 15,421 | 1,097 | |||||||
Restricted stock units | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 3 years | 1 year | 3 years | ||||||||
Grants in period (in shares) | 1,500,000 | 200,000 | 4,000,000 | 5,682,586 | |||||||
Compensation cost not yet recognized related to unvested stock options, period for recognition | 2 years 8 months 12 days | ||||||||||
Grants in period, weighted average grant date fair value (in dollars per share) | $ 13.49 | $ 10.01 | $ 13.19 | $ 13.14 | |||||||
Compensation cost not yet recognized | 65,900 | $ 65,900 | |||||||||
Stock-based compensation expense | $ 7,247 | $ 0 | $ 7,247 | $ 0 | |||||||
2016 Stock Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized (in shares) | 25,412,947 | ||||||||||
Expiration period | 10 years | ||||||||||
Vesting period | 4 years | ||||||||||
2021 Plan | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Expiration period | 10 years | ||||||||||
Number of shares available for grant (in shares) | 22,500,611 | ||||||||||
Period for annual increase for common stock available for issuance | 10 years | ||||||||||
Percentage of aggregate common stock shares outstanding | 5.00% | ||||||||||
Grants in period (in shares) | 5,700,000 |
STOCK-BASED COMPENSATION - St_2
STOCK-BASED COMPENSATION - Stock Options Activity (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | |
Options Outstanding | ||
Options, outstanding, beginning balance (in shares) | shares | 21,651,225 | |
Options forfeited (in shares) | shares | (738,207) | |
Options expired (in shares) | shares | (262,296) | |
Options exercised (in shares) | shares | (6,008,995) | |
Options granted (in shares) | shares | 0 | 788,045 |
Options, outstanding, ending balance (in shares) | shares | 15,429,772 | 15,429,772 |
Weighted Average Exercise Price | ||
Options, outstanding, weighted average exercise price, beginning balance (in dollars per share) | $ / shares | $ 0.63 | |
Options, forfeited (in dollars per share) | $ / shares | 1.52 | |
Options expired (in dollars per share) | $ / shares | 0.93 | |
Options, exercised (in dollars per share) | $ / shares | 0.57 | |
Options granted (in dollars per share) | $ / shares | 3.92 | |
Options, outstanding, weighted average exercise price, ending balance (in dollars per share) | $ / shares | $ 0.78 | $ 0.78 |
Aggregate Intrinsic Value | ||
Options outstanding, aggregate intrinsic value | $ | $ 161,900,000 | $ 161,900,000 |
Options, exercisable (in shares) | shares | 9,920,280 | 9,920,280 |
Options, exercisable (in dollars per share) | $ / shares | $ 0.58 | $ 0.58 |
Options, exercisable, aggregate intrinsic value | $ | $ 106,003,000 | $ 106,003,000 |
STOCK-BASED COMPENSATION - St_3
STOCK-BASED COMPENSATION - Stock Options Fair Value Assumptions (Details) - Stock options | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term | 6 years |
Expected volatility rate, minimum | 49.01% |
Expected volatility rate, maximum | 49.29% |
Risk free interest rate, minimum | 0.50% |
Risk free interest rate, maximum | 0.63% |
Dividend yield | 0.00% |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Units Activity (Details) - Restricted stock units - $ / shares | Sep. 13, 2021 | Aug. 20, 2021 | Aug. 09, 2021 | Sep. 30, 2021 |
Number of RSUs | ||||
Beginning balance (in shares) | 0 | |||
Grants in period (in shares) | 1,500,000 | 200,000 | 4,000,000 | 5,682,586 |
Vested in period (in shares) | (14,412) | |||
Forfeited (in shares) | (121,684) | |||
Ending balance (in shares) | 5,546,490 | |||
Weighted Average Grant Date Fair Value (per unit) | ||||
Beginning balance, weighted average grant date fair value (in dollars per share) | $ 0 | |||
Grants in period, weighted average grant date fair value (in dollars per share) | $ 13.49 | $ 10.01 | $ 13.19 | 13.14 |
Vested in period, weighted average grant date fair value (in dollars per share) | 11.52 | |||
Forfeited in period, weighted average grant date fair value (in dollars per share) | 13.19 | |||
Ending balance, weighted average grant date fair value (in dollars per share) | $ 13.14 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 90 | $ 3 | $ 100 | $ 3 |
Unrecognized tax benefits | $ 0 | $ 0 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Accounts receivable, related parties | $ 400 | $ 400 | $ 1,400 | ||
Hardware and other related revenue | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 100 | $ 400 | 100 | $ 400 | |
Software revenue | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | $ 100 | $ 100 | $ 400 | $ 200 |