RELATED PARTIES |
12 Months Ended |
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Dec. 31, 2022 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTIES | CONTRACT MANUFACTURING SERVICES AND INVESTMENT IN TROPOS
The Company has a minority ownership in Tropos Technologies, Inc. (“Tropos”) with a value of $10.0 million as of December 31, 2022. The minority ownership was obtained pursuant to the transaction with Tropos as described below.
On August 8, 2022, the Company entered into an Assembly Services Agreement (the “Assembly Agreement”) with Tropos. Under the Assembly Agreement, the Company will provide services required to assemble a minimum annual quantity of 2,000 vehicles in 2023, 2,000 vehicles in 2024, and 250 vehicles in 2025 for a total of 4,250 vehicles during the term of the agreement at our Union City, Indiana manufacturing facility. In exchange for the assembly services, the Company will receive a service fee from Tropos.
On August 23, 2022, the Company entered into a Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”) with Tropos. Under the Stock Purchase Agreement, the Company received 605,811 shares of Series B Preferred Stock in Tropos with an option to purchase an additional 424,068 shares of Series B Preferred Stock for an exercise price of $16.51 per share in exchange for a cash payment of $5.0 million, and a $5.0 million contribution of non-cash consideration representing a deposit from Tropos for future assembly services.
During the fourth quarter of 2022, the Company received $0.5 million cash payment from Tropos for additional assembly services. See Note 6, Revenue, of the Consolidated Financial Statements for treatment of the $5.0 million of non-cash consideration and $0.5 million of cash received as of December 31, 2022.
The Company utilized the measurement alternative allowed under GAAP to record the investment of the Series B Preferred Stock at cost, less any impairment, as of December 31, 2022. RELATED PARTIESWe obtain our general liability, property and casualty, and directors and officers liability insurance through AssuredPartners NL, LLC (“Assured”). Gerald Budde, a Director of the Company, is currently the Chief Financial Officer of Accretive Insurance Solutions Inc. ("Accretive"). Assured and Accretive are both subsidiaries of AssuredPartners Capital, Inc. The placement of insurance was completed by an Assured agent and Mr. Budde did not participate in any decisions about insurance, nor was he paid any portion of the brokerage fee. Assured earned brokerage fees of approximately $0.3 million, $0.2 million and $0.1 million for the years ended December 31, 2022, 2021 and 2020, respectively.
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