As described in the Explanatory Note above and in Note 2 of "Notes to the Condensed Consolidated Financial Statements" included elsewhere in this Quarterly Report on Form 10-Q, we have restated our unaudited quarterly financial statements for the three and nine months endedSeptember 30, 2020 and we have restated our condensed consolidated balance sheet as ofDecember 31, 2020 . This Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, reflects the restatement of the previously reported financial information for these periods, including but not limited to, information within the Results of Operations section. The following management's discussion and analysis is provided in addition to the accompanying condensed consolidated financial statements and notes, and for a full understanding of View's results of operations and financial condition should be read in conjunction with the condensed consolidated financial statements and notes included in this Quarterly Report on Form 10-Q included in Part I, Item 1, "Financial Statements (Unaudited)."
Aperçu
Notre affaire
View est une plate-forme et une entreprise technologique de premier plan pour les bâtiments intelligents qui transforme les bâtiments pour améliorer la santé et l’expérience humaines, réduire la consommation d’énergie et les émissions de carbone et générer des revenus supplémentaires pour les propriétaires de bâtiments.
Our innovative products are designed to enable people to lead healthier and more productive lives by increasing access to daylight and views, while minimizing associated glare and heat from the sun and keeping occupants comfortable. These products also simultaneously reduce energy consumption from lighting and HVAC, thus reducing carbon emissions. To achieve these benefits, we design, manufacture, and provide electrochromic or smart glass panels to which we add a 1 micrometer (~1/100th the thickness of human hair) proprietary electrochromic coating. These smart glass panels, in combination with our proprietary network infrastructure, software and algorithms, intelligently adjust in response to the sun by tinting from clear to dark states, and vice versa, to minimize heat and glare without ever blocking the view. In addition, we offer a suite of fully integrated, cloud-connected smart-building products that are designed to enable us to further optimize the human experience within buildings, improve cybersecurity, further reduce energy usage and carbon footprint, reduce real estate operating costs, provide real estate owners greater visibility into and control over the utilization of their assets, and provide a platform on which to integrate and deploy new technologies into buildings. View's earlier generation products are described best as "smart glass," which are primarily composed of three components that all work together to produce a solution:
•le vitrage isolant ; qui est à double ou triple vitrage avec un revêtement semi-conducteur micrométrique (ou électrochromique).
•l’infrastructure réseau ; qui est composé des contrôleurs, des connecteurs, des capteurs et du câblage.
•le logiciel : qui comprend les algorithmes prédictifs, l’intelligence artificielle, les outils de gestion à distance et les applications iOS et Android destinées à l’utilisateur, pour contrôler la teinte du verre.
After the Company completed installations in a few hundred buildings, it identified an opportunity to use its network infrastructure and cabling as the backbone on which different smart and connected devices in a typical building could operate. We believe customers using View Smart Glass can leverage View's network as their building's operations technology infrastructure to reduce duplicative labor costs, reduce materials usage, provide better cyber security, improve visibility and management of connected devices, and future-proof the building through easy upgradability. Recognizing the opportunity to significantly improve the human experience, energy performance and carbon footprint in buildings, and real estate operating costs through adoption of technology, View began selling aSmart Building Platform, which is a fully integrated smart window platform, to building owners starting in 2021. Concurrent with the commencement of the sales efforts, View also began hiring an extensive team of construction managers, project managers, and building specialists to enable the Company to work towards delivering the fully installed and integrated SmartBuilding Platform , which had historically been the responsibility of the general contractor's glazing and low-voltage electricians ("LVE") subcontractors.
L’intelligent
•To optimize the design, aesthetics, energy performance and cost of the entire
smart façade (or digital skin) of the building, rather than just one component
(smart glass), thus benefiting both customers and View.
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• Pour élever la sélection de fenêtres et la décision d’achat à un client et un décideur qui a une vue plus globale du projet et est dans une bien meilleure position pour prendre une décision éclairée concernant tous les avantages fournis par View’s Smart
•Accélérer l’intégration des nouvelles technologies dans le tissu du bâtiment. Aujourd’hui, cela inclut l’intégration de capteurs de qualité environnementale et d’écrans immersifs, transparents et haute définition dans des fenêtres intelligentes. Il est important de noter que notre conception de façade intelligente permet de futures mises à niveau matérielles et logicielles dans l’infrastructure du bâtiment.
•We believe delivering a digital, connected façade and smart building platform will enable future business opportunities and pricing models as buildings, both existing and new, incorporate additional technology and connected products. View's next generation, smart building network is designed as a scalable and open infrastructure in which the smart window is now another node of the network; in addition, the network is now equipped to host other connected devices and applications, from both View and third parties, as additional nodes on the network. The network has its own 48v direct current power and power-over-ethernet ports to incorporate other connected devices on a standard protocol. Also integrated into the network throughout the building is gigabit speed linear ethernet coaxial cable, as well as optical fiber. Computer processing is also built into the backbone of the network with x86 and ARM processing cores. The network also includes an operating system with capabilities to run third party applications and services, security protocol to protect buildings from cyberattacks, and several elements of a digital twin of the building. View's smart building network also hosts artificial intelligence and machine learning engines, which View developed, and also provides access to artificial intelligence and machine learning engines that are in the cloud. The exterior of the building is the largest in surface area. With the smart building network, the entire exterior of the building can be digitized. Activating the exterior through digitization creates multiple opportunities for building owners and occupants. View's SmartBuilding Platform enables other devices and smart building applications to be built and connected to the View smart building network. A few applications View has already built and deployed on its next generation network include: Transparent Displays: View Immersive Display. Integrated into the smart window and connected to the same network as the glass, Immersive Display allows users to turn their windows into the equivalent of an iPad or tablet - an interactive digital display that allows users a new way to digest multi-media content. Immersive Displays are large-format (55 inches and larger), digital, high-definition, interactive canvases that can be used to broadcast content, host video calls and display information and digital art to large groups of people, while maintaining a view of the outdoors through the window on which it is integrated.Personalized Health : View Sense. An integrated, enterprise-grade, secure, sensor module that monitors multiple environmental variables (e.g., CO2, Temperature, Volatile Organic Compounds, Humidity, Dust, Light, and Noise) to provide illustrative data and information to building management teams in order to improve building performance and enhance human health and comfort. View's R&D continues to focus on not only improving the smart glass product but also on continually bringing more smart building applications and capabilities to market, as well as collaborating with other industry partners to integrate their devices and applications with View's smart building network, with the aim of making building occupants more comfortable, healthier, and more productive, making buildings more sustainable, and providing better information to building owners to streamline operations and reduce operating costs. In terms of the value propositions to View's customers, its earlier generation smart glass product focused primarily on improving occupant experience and reducing energy costs through adjustments of the glass tint. The current generation of the product focuses not only on improving energy savings and user experience through smart glass, it also focuses on increasing occupant productivity, creating healthier buildings, and using data from other devices to develop broader insights that further improve building operations and reduce energy usage. Current scientific research supports that cognitive function and in turn, productivity goes up when building occupants are exposed to more natural light and comfortable workspaces; they sleep better, and they experience less eye strain, fewer headaches, and lower stress. In a study published in theInternational Journal of Environmental Health and Public Health in 2020, researchers at theUniversity of Illinois andSUNY Upstate Medical University found that employees working next to View Smart Glass during the day slept 37 minutes longer each night, experienced half as many headaches, and performed 42% better on cognitive tests. The research was sponsored in part by View. View also recognized that the new SmartBuilding Platform offering would potentially enable the company to move 'up' the supply chain of the construction industry. Whereas the Company's traditional offering placed it in the role of a supplier to subcontractors of the General Contractor ("GC"), the level of integration and oversight needed to ensure a quality installation and integration of the complete smart building platform is designed to incentivize building owners and GCs to engage directly with View, engaging View to assume the role of the prime contractor for the platform rather than supplier of subcomponent materials. This would also better position View to upsell additional goods and services to the building owners in the future, which could be more efficiently integrated into the smart building platform than with the traditional offering. 50 -------------------------------------------------------------------------------- Table of Contents Today, View's Smart Glass products are installed into approximately 40 million square feet of buildings, including offices, hospitals, airports, educational facilities, hotels, and multi-family residences. In addition to our SmartBuilding Platform , View continues to sell smart windows through our Smart Glass offering and several individual smart building products through our Smart Building Technologies offerings. To date, we have devoted our efforts and resources towards the development, manufacture, and sale of our product platforms, which we believe have begun to show strong market traction. We have also devoted significant resources to enable our View SmartBuilding Platform , a new offering beginning in 2021. For the three months endedSeptember 30, 2021 andSeptember 30, 2020 , our revenue was$18.9 million and$8.5 million , respectively, representing period-over-period growth of 122.1%. For the nine months endedSeptember 30, 2021 andSeptember 30, 2020 , our revenue was$45.6 million and$23.2 million , respectively, representing period-over-period growth of 96.6%.
Principaux facteurs affectant les résultats d’exploitation
Exécution des stratégies de croissance
We believe that we are just beginning to address our market opportunity, which
we expect to be driven by four multi-decade, secular trends: (i) climate change,
Environmental, Social and Governance ("ESG") and sustainability, (ii) a growing
focus on human health inside buildings, (iii) an increased desire for better
human experiences in buildings, and (iv) a growing demand for smart and
connected buildings.
To capitalize on these trends and our market opportunity, we must execute on
multiple growth initiatives, the success of which may depend on our ability to
develop mainstream acceptance of our products, including (i) increasing
awareness of our products and their benefits across major markets in North
America and internationally, (ii) increasing recurring sales, (iii) expanding
our product portfolio, (iv) expanding our sales channels to include real estate
brokers, (v) continuing to develop strong relationships with ecosystem partners
such as building owners, developers, tenants, architects, contractors, low
voltage electricians and glaziers, and (vi) expanding outside North America into
international markets.
The above growth strategies depend upon our ability to continue as a going
concern. As of the date of the filing of this Form 10-Q, the Company has
determined that there is substantial doubt about its ability to continue as a
going concern, as the Company does not currently have adequate financial
resources to fund its forecasted operating costs and meet its obligations for at
least twelve months from the filing of this Form 10-Q. The Company's continued
existence is dependent upon its ability to obtain additional financing, enter
into profitable sales contracts and generate sufficient cash flow to meet its
obligations on a timely basis. The Company's business will require significant
amounts of capital to sustain operations and the Company will need to make the
investments it needs to execute these long-term business plans.
Innovation technologique
With approximately 1,300 patents and patent filings and 14 years of research and
development experience, we have a history of technological innovation. We have a
strong research and development team, including employees with expertise in all
aspects of the development process, including materials science, electronics,
networking, hardware, software, and human factors research. As we have since
inception, we intend to continue making significant investments in research and
development and hiring top technical and engineering talent to improve our
existing products and develop new products, which will increase our
differentiation in the market. In 2021 and 2020, we introduced a new suite of
products to complement our market-leading smart glass and optimize the human
experience while making buildings more intelligent, which include the following:
•View Net. Our next generation controls, software and services ("CSS"), a
cloud-connected, network infrastructure offering that powers View's smart glass
products and can incorporate and power other smart building devices from View
and other companies. This high bandwidth data and low voltage power network
serves as the backbone to an intelligent building platform and provides
future-proofing by enabling the addition of new capabilities during a building's
lifetime.
•View Immersive Experiences. Our transparent, digital, interactive surface
product that incorporates see-through, high definition displays directly onto
the smart window.
• Voir Sens. Des modules qui permettent de mesurer et d’optimiser la lumière, l’humidité, la température, la qualité de l’air, la poussière et le bruit pour améliorer le bien-être des occupants.
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•View Secure Edge. Our plug-and-play edge-to-cloud solution that enables IT and digital innovation teams to securely connect new and existing buildings to the cloud; centrally manage building networks, systems, and data in the cloud; and deploy edge applications for real-time processing, insights, and optimizations. •View Remote Access. Our secure access portal that enables IT teams to reduce the cost and cybersecurity risks of maintaining smart buildings by providing vendors and technicians with secure, auditable, time-bound remote access to building networks and devices.
Nous nous attendons à ce que nos dépenses de recherche et développement augmentent en dollars absolus au fil du temps afin de maintenir notre différenciation sur le marché.
Concurrence
We compete in the commercial window industry and the electrochromic glass industry, as well as within the larger smart building products industry, each of which is highly competitive and continually evolving as participants strive to distinguish themselves within their markets, including through product improvement, addition of new features, and price. We believe that our main sources of competition are existing commercial window manufacturers, electrochromic glass manufacturers, and companies developing smart building products and intrusion detection solution technologies. We believe the primary competitive factors in our markets are:
•Innovation technologique;
•Capacité à intégrer plusieurs systèmes de manière efficace et efficiente ;
•Performance du produit ;
•Qualité, durabilité et prix du produit ;
• Historique d’exécution ; et
•Efficacité de fabrication.
Capacité
View currently manufactures the insulating glass units ("IGUs") included in the
View Smart Glass and View Smart Building Platform product offerings at our
production facility located in Olive Branch, Mississippi . We operate a
sophisticated manufacturing facility designed for performance, scale,
durability, and repeatability. Our manufacturing combines talent, equipment, and
processes from the semiconductor, flat panel display, solar and glass processing
industries. Our proprietary manufacturing facility has been in use since 2010.
We currently operate one production line in our facility with a name-plate
capacity of approximately 5 million square feet of smart glass per year. In
addition, we have partially completed the construction of a second production
line at our Olive Branch facility. Once operational, we expect our facility's
name-plate capacity to increase by an additional 7.5 million square feet of
smart glass per year, bringing our total name-plate capacity of our facility to
12.5 million square feet per year. We believe our facility, including the second
production line expected to be in operation by the end of 2022, will enable us
to achieve economies of scale, meet future demand, and achieve profitability.
As of September 30, 2021 , we have invested approximately $400 million in capital
expenditures primarily in our factory. We expect to incur additional factory
capital expenditure of up to approximately $90 million over the next four years
with respect to facility automation and completion of the second production line
to support the expected growth in demand for our products. This will require
additional financing in order to make these additional investments. Refer to the
Liquidity and Capital resources section below for further discussion.
Impact de la COVID-19
The COVID-19 pandemic has impacted health and economic conditions throughoutthe United States , including the construction industry. The COVID-19 pandemic continues to be dynamic and evolving, and the extent to which COVID-19 impacts our operations will depend on future developments that cannot be predicted with certainty, including the duration of the 52
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outbreak, resurgences of COVID-19 infections, the availability and efficacy of vaccines, new information that may emerge concerning the severity of COVID-19 and the governmental measures to contain or treat its impact, among others. COVID-19's disruptions to the construction industry may reduce or delay new construction projects or result in cancellations or delays of existing planned construction. Supply of certain materials used by the Company in the manufacturing of its products that are sourced from a limited number of suppliers may also be disrupted. For example, we utilize semiconductor chips in certain products that we manufacture and semiconductor chips have been recently subject to an ongoing global shortage. This shortage can cause possible delays in our production and increase the cost to obtain semiconductor chips and components that use semiconductor chips. Any one or a combination of such events could have a material adverse effect on the Company's financial results. To address these conditions, the Company established protocols to continue business operations as an essential industry, insulate its supply chain from delays and disruptions, and assessed its business operations and financial plans as a result of COVID-19. The Company optimized its financial plan by focusing on sales growth and by reducing and delaying incremental spending on operating and capital expenditures compared with the pre-COVID business plan. In particular, in the second quarter of 2020, the Company began reducing operating costs in absolute dollars through headcount reductions and reduction of operating expenditures for third party contractors. During 2021, these cost reduction efforts were relaxed and headcount increased in order to respond to increased demand for our product and services. The long-term effects of COVID-19 on one of our key markets, office space, cannot be accurately predicted as employers continue to design their long-term work-from-home policies. Conversely, we expect to see an accelerated interest in the renovation market, potential increased spending on public buildings and infrastructure, movement to suburban office spaces, and increased investment in life sciences and laboratory buildings. We also expect to see changes in the market in response to COVID-19, including increased aversion to blinds that collect dirt and dust. Finally, we have seen COVID-19 accelerate societal perspective on the importance of the environment on personal health, which could drive adoption of our sensor products that measure and monitor health aspects in buildings.
Composantes des résultats d’exploitation
Revenu
Voir le verre intelligent
We have historically generated revenue as a materials provider from (i) the
manufacturing and sale of View Smart Glass IGUs that are coated on the inside
with our proprietary technology and are designed, programmed, and built to
customer specifications that include sizes for specific windows, skylights, and
doors in specified or designated areas of a building and (ii) selling the View
Smart Glass CSS, which includes sky sensors, window controllers and control
panels with embedded software, cables and connectors, that, when combined with
the IGUs enable the IGUs to tint. Also included in CSS is a system design
service, in which a design document is prepared to lay out the IGUs and CSS
hardware for the building, as well as a commissioning service, in which the
installed IGUs and CSS components are tested and tinting configurations are set
by the Company. The glaziers and LVEs subcontracted by the end user are
responsible for ensuring satisfactory adherence to the design document as the
products are installed.
Our View Smart Glass revenue primarily relies on securing design wins with end
users of our products and services, which typically are the owners, tenants or
developers of buildings. We start the selling process by pitching the View Smart
Glass benefits and business outcomes to the building owners, tenants, or
developers. The pricing for a project is primarily driven by the make-up, size,
shape, total units of the IGU, and associated CSS. The design win is typically
secured through a non-binding agreement with the owners, tenants or developers
of the buildings. Once a design win is secured, we negotiate and enter into
legally binding agreements with our Smart Glass customers (typically glaziers
for the IGUs and LVEs or general contractors for CSS) to deliver the Smart Glass
products and services.
Our IGUs are custom-built and sold to customers through legally binding
contracts. Each contract to provide IGUs includes multiple distinct IGUs. We
recognize revenue from our IGU contracts over time as the IGU manufacturing work
progresses.
Our contracts to provide the CSS network infrastructure include the sale of
electrical connections schema, sky sensors, window controllers and control
panels with embedded software, cables and connectors, and professional services
to provide a system design and commission the installed products. The Company
recognizes revenue at a point in time upon shipment of the control
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panels and electrical components, and upon customer acceptance for the design and commissioning services, both of which have a relatively short period of time over which the services are provided. In limited circumstances, we contract to provide extended or enhanced warranties of our products outside of the terms of its standard assurance warranty, which are recognized as revenue over the respective term of the warranty period.
Afficher intelligent
During 2021, we entered into and commenced work on the first contract under our new offering, View SmartBuilding Platform , a complete interrelated and integrated platform that combines our smart glass IGUs, the fabrication, unitization and installation of the framing of those IGUs, any combination of View Smart Building Technologies, and installation of the completed smart glass windows and CSS components into a fully installed SmartBuilding Platform . We enter into contracts to provide our View SmartBuilding Platform with our customers, which typically are the owners, tenants or developers of buildings, or with the general contractor acting on behalf of our customers. In contrast to the View Smart Glass product delivery method, View is the principal party responsible for delivering the fully integratedSmart Building Platform. In doing so, View takes responsibility for all activities needed to fulfill its single performance obligation of transferring control to the customer of a fully operational SmartBuilding Platform deliverable; from design, fabrication, installation, integration, commissioning, and testing. Underlying these activities is View's responsibility for performing an essential and significant service of integrating each of the inputs of its completed solution. These inputs include View's smart network infrastructure and IGUs, both of which are integrated into the window glazing system, which is fabricated by an unrelated subcontractor contracted by View to work on its behalf, as well as designing how the entire SmartBuilding Platform will be integrated and installed into the customer's architectural specifications for the building that is being constructed or retrofitted. View's integration services also include the activities of installing, commissioning and testing theSmart Building Platform to enable the transfer of a complete and operational system. The Company also uses subcontractors it selects and hires for portions of the installation labor. Given that View is responsible for providing the service of integrating each of the inputs into a single combined output, View controls that output before it is transferred to the customer and accordingly, View is the principal in the arrangement and will recognize the entire arrangement fee as its revenue, with any fees that View pays to its subcontractors recognized in its cost of revenue. The pricing for a SmartBuilding Platform project is primarily driven by the make-up, size, shape, total units of the IGU, associated CSS, and costs associated with the management and performance of system design, fabrication, unitization and installation efforts. View assumes the risk of delivery and performance of the SmartBuilding Platform to its customer, and manages this through three key elements to ensure a pleasant end-user experience: 1) View has a contractual right and obligation to direct the activities of the subcontractors; 2) View performs quality inspections; and 3) View engages qualified personnel to protect the company's interest and direct the actions of the subcontractors. The end product to the customer is a single-solution SmartBuilding Platform that uses artificial intelligence to adjust the building environment to improve occupant health and productivity, as well as reduce building energy usage and carbon footprint. We recognize View SmartBuilding Platform revenue over time as services are performed using a cost-to-cost input method where progress on the performance obligation is measured by the proportion of actual costs incurred to the total costs expected to complete the contract. In the course of providing the View SmartBuilding Platform , the Company routinely engages subcontractors it selects for fabricating and unitizing the specific smart glass products and for installation of the framed IGUs and smart building infrastructure components, and incurs other direct costs. View is responsible for the performance of the entire contract, including subcontracted work. Thus, View may be subject to increased costs associated with the failure of one or more subcontractors to perform as anticipated.
Contrats pour View Smart Building Technologies
The Company's View Smart Building Technologies includes a suite of products that can be either integrated into the View SmartBuilding Platform , added-on to View Smart Glass contracts or sold separately. Our customers are typically the owners or tenants of buildings. Revenue generated from these products has not been material to date.
Certains de nos contrats View Smart Building Technologies proposent un logiciel en tant que tarification de service, qui comprend l’utilisation de nos applications logicielles, en tant que service, généralement facturé sur une base mensuelle ou annuelle. Les contrats de la Société associés à ces produits, y compris la mise en œuvre, le support et d’autres services, représentent une promesse unique de fournir un accès continu à
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Coût des revenus
Cost of revenue consists primarily of the costs to manufacture and source our products, including the costs of materials, customer support, outside services, shipping, personnel expenses, including salaries and related personnel expenses and stock-based compensation expense, equipment and facility expenses including depreciation of manufacturing equipment, rent and utilities, and insurance and taxes, warranty costs, and inventory valuation provisions. The primary factor that impacts our cost of revenue as a percentage of revenues is the significant base operating costs that we incur as a result of our investment in manufacturing capacity to provide for future demand. At current production volume, these significant base operating costs result in higher costs to manufacture each IGU when compared to the sales price per IGU. As demand for our products increases and we achieve higher production yields, our cost of revenue as a percentage of revenue will decrease. Additional factors that impact our cost of revenue as a percentage of revenues include manufacturing efficiencies, cost of material, and mix of products. We expect to continue to incur significant base operating costs that will be absorbed over larger volumes of production as we scale our business. Beginning in 2021 with our new View SmartBuilding Platform offering, cost of revenues also includes the cost of subcontractors engaged to fabricate and unitize the specific smart glass products.and for installation of IGUs and smart building infrastructure components. Further, and in contrast to View Smart Glass contracts in which losses associated with IGUs are recognized over time, our cost of revenue for our SmartBuilding Platform contracts includes the recognition of contract losses recorded upfront at contract execution within an initial loss accrual when the total current estimated costs for these contracts exceeds total contracted revenue. Revenue for these contracts is recognized as progress is made toward fulfillment of the performance obligation and cost of revenue is recognized equal to the revenue recognized. Actual costs incurred in excess of the revenue recognized are recorded against the initial loss accrual, which is then reduced. Given the growing nature of our business, we incur significant base operating costs attributable to our IGU production costs, which is a significant factor to the losses on these contracts. As we continue to ramp up our manufacturing volumes, we expect to absorb these base operating costs over larger volumes of production; therefore, we expect that the contract loss for individual contracts will decrease over time as a percentage of the total contract value. These economies of production have not been realized to date and the total amount of contract losses may not decrease in the near term as we continue to grow this business.
Frais de recherche et développement
Research and development expenses consist primarily of costs related to research, design, maintenance, and enhancements of our products, including software, that are expensed as incurred. Research and development expenses consist primarily of costs incurred for salaries and related personnel expenses, including stock-based compensation expense, for personnel related to the development of improvements and expanded features for our products, materials and supplies used in development and testing, payments to consultants, outside manufacturers, patent related legal costs, facility costs and depreciation. We expect that our research and development expenses will increase in absolute dollars as our business grows, particularly as we incur additional costs related to continued investments in the development of new products and offerings. However, we expect that our research and development expenses will decrease as a percentage of our revenue over time.
Frais de vente, frais généraux et administratifs
Selling, general, and administrative expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, costs related to sales and marketing, finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, advertising and promotional expenses and general corporate expenses, including facilities and information technology expenses. We expect our selling, general, and administrative expenses to increase in absolute dollars for the foreseeable future as we scale headcount to grow our presence in key geographies to support our customers and growing business, and as a result of operating as a public company, including compliance with the rules and regulations of theSEC and Nasdaq, legal, audit, higher expenses for directors and officer insurance, investor relations activities, and other administrative and professional services. Over time, we expect our selling, general and administrative expenses to decline as a percentage of revenue.
Le revenu d’intérêts
Les intérêts créditeurs se composent principalement des intérêts reçus ou gagnés sur nos soldes de trésorerie et d’équivalents de trésorerie.
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Frais d’intérêts
Les intérêts débiteurs se composent principalement des intérêts payés sur nos facilités de crédit et de l’amortissement des escomptes sur la dette et des frais d’émission.
Autres dépenses, nettes
Les autres charges, nettes, comprennent principalement les pénalités que nous prévoyons encourir pour le règlement d’une question environnementale en 2021, les gains et pertes de change et les gains et pertes réalisés sur la vente de placements à court terme.
Gain sur variation de la juste valeur, net
Our Sponsor Earn-out Shares, Private Warrants and redeemable convertible preferred stock warrants are or were subject to remeasurement to fair value at each balance sheet date. Changes in fair value as a result of the remeasurement are recognized in gain (loss) on fair value change, net in the condensed consolidated statements of operations. The redeemable convertible preferred stock warrants were converted to common stock as a result of the Merger. We will continue to adjust the remaining outstanding instruments for changes in fair value until the Earn-Out Triggering Events are met, the earlier of the exercise or expiration of the Warrants.
Perte sur extinction de dette
La perte sur l’extinction de la dette comprend une perte découlant de l’extinction de la dette à la suite du remboursement intégral de notre facilité de crédit renouvelable au cours de l’exercice 2021.
Provision pour impôts sur le revenu
Our provision for income taxes consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in tax law. Due to the level of historical losses, we maintain a valuation allowance againstU.S. federal and state deferred tax assets as we have concluded it is more likely than not that these deferred tax assets will not be realized. 56
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Résultats d’exploitation
Le tableau suivant présente nos résultats d’exploitation historiques pour les périodes indiquées (en milliers, sauf les pourcentages) :
Three Months Ended September 30 ,
Période de neuf mois terminée
2020 2020
2021 (As Restated) Change ($) Change (%) 2021 (As Restated) Change ($) Change (%)
Revenue $ 18,884 $ 8,502 $ 10,382 122.1 % $ 45,579 $ 23,181 $ 22,398 96.6 %
Costs and expenses:
Cost of revenue 51,828 22,950 28,878 125.8 % 137,617 95,247 42,370 44.5 %
Research and development 36,314 15,373 20,941 136.2 % 73,924 51,822 22,102 42.6 %
Selling, general, and
administrative 38,210 16,872 21,338 126.5 % 94,543 54,832 39,711 72.4 %
Total costs and expenses 126,352 55,195 71,157 128.9 % 306,084 201,901 104,183 51.6 %
Loss from operations (107,468) (46,693) (60,775) 130.2 % (260,505) (178,720) (81,785) 45.8 %
Interest and other income
(expense), net:
Interest income 25 15 10 66.7 % 45 501 (456) (91.0) %
Interest expense (312) (7,760) 7,448 (96.0) % (5,951) (19,191) 13,240 (69.0) %
Other expense, net 100 (4) 104 (2,600.0) % (6,320) (109) (6,211) 5,698.2 %
Gain (loss) on fair value
change, net 13,078 (3,656) 16,734 (457.7) % 18,426 (2,296) 20,722 (902.5) %
Loss on extinguishment of
debt - - - * (10,018) - (10,018) *
Interest and other income
(expense), net 12,891 (11,405) 24,296 (213.0) % (3,818) (21,095) 17,277 (81.9) %
Loss before benefit
(provision) of income taxes (94,577) (58,098) (36,479) 62.8 % (264,323) (199,815) (64,508) 32.3 %
Benefit (provision) for
income taxes 425 (34) 459 (1,350.0) % 416 (137) 553 (403.6) %
Net and comprehensive loss $ (94,152) $ (58,132) $ (36,020) 62.0 % $ (263,907) $ (199,952) $ (63,955) 32.0 %
*not meaningful
57
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Le tableau suivant présente nos revenus par offre de produits majeure (en milliers, sauf pourcentages) :
Three Months Ended September 30, Nine Months Ended September 30,
Change Change
2021 2020 Change ($) (%) 2021 2020 Change ($) (%)
Smart Glass $ 8,410 $ 8,502 $ (92) (1.1) % $ 28,205 $ 23,181 $ 5,024 21.7 %
Percentage of total revenue 44.5 % 100.0 % 61.9 % 100.0 %
Smart Building Platform 9,876 - 9,876 100.0 % 15,012 - 15,012 100.0 %
Percentage of total revenue 52.3 % - % 32.9 % - %
Smart Building Technologies 598 - 598 100.0 % 2,362 - 2,362 100.0 %
Percentage of total revenue 3.2 % - % 5.2 % - %
Total $18,884 $8,502 $10,382 122.1 % $45,579 $23,181 $22,398 96.6 %
Le tableau suivant présente nos revenus par zone géographique et est basé sur l’adresse de livraison des clients (en milliers, sauf pourcentages) :
Three Months Ended September 30, Nine Months Ended September 30,
Change Change
2021 2020 Change ($) (%) 2021 2020 Change ($) (%)
United States $ 15,682 $ 7,856 $ 7,826 99.6 % $ 37,400 $ 21,865 $ 15,535 71.0 %
Percentage of total revenue 83.0 % 92.4 % 82.1 % 94.3 %
Canada 2,968 574 2,394 417.1 % 7,475 1,194 6,281 526.0 %
Percentage of total revenue 15.7 % 6.8 % 16.4 % 5.2 %
Other 234 72 162 225.0 % 704 122 582 477.0 %
Percentage of total revenue 1.2 % 0.8 % 1.5 % 0.5 %
Total $ 18,884 $ 8,502 $ 10,382 122.1 % $ 45,579 $ 23,181 $ 22,398 96.6 %
Our total revenue increased during the three and nine months ended September 30,
2021 compared to the same periods in the prior year. This increase was primarily
driven by higher volumes due to increased customer demand for Smart Glass,
expanded revenues associated with the new View Smart Building Platform offering,
and revenue from new Smart Building Technologies products, including the IoTium
products acquired in July 2021 . The increased demand is attributable to a
continued increase in market awareness of our products and stronger
relationships with our ecosystem partners.
Costs and Expenses
Cost of Revenue
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 Change ($) Change (%) 2021 2020
Change ($) Change (%) Cost of revenue$ 51,828 $ 22,950 $ 28,878 125.8 %$ 137,617 $ 95,247 $ 42,370 44.5 % Cost of revenue increased during the three and nine months endedSeptember 30, 2021 compared to the same period in the prior year, mainly due to contract losses associated with View SmartBuilding Platform contracts, where total estimated costs exceeded total contracted revenue at the time of contract execution and an upfront loss was recognized as cost of revenue within an initial loss accrual prior to any costs actually being incurred on the contract. The balance of estimated contract losses for work that had not yet been completed totaled as of$17.0 million September 30, 2021 In addition to the contract loss accruals, our cost of sales were driven by higher volume of IGU production and CSS shipments associated with the increased customer demand for Smart Glass and SmartBuilding Platform products. Additionally, subcontractor costs related to framing, unitization and installation were incurred during the quarter endedSeptember 30, 2021 , consistent with the recognition of revenue for the new View SmartBuilding Platform . 58
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Cost of revenue for the three months endedSeptember 30, 2021 andSeptember 30, 2020 included$1.3 million and$0.5 million of stock-based compensation expense, respectively. Cost of revenue for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 included$3.5 million and$1.6 million of stock-based compensation expense, respectively. Research and Development Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 Change ($) Change (%) 2021 2020 Change ($) Change (%)
Recherche et développement
20,941 136.2 %$ 73,924 $ 51,822 $ 22,102 42.6 % Research and development expenses increased during the three and nine months endedSeptember 30, 2021 compared to the same period in 2020. The increase was primarily related to an increase in depreciation expense of$16.7 million , of which$14.4 million relates to accelerated depreciation on abandoned and written-off assets. In 2021, the Company determined that additional production space was required to meet future expected demand. Accordingly, the Company evaluated the space availability in its manufacturing facility and determined that certain assets used for research and development purposes would be disassembled to make room for additional production capacity. Consequently, the Company made the decision to abandon and shorten the life of these assets to coincide with their removal date, resulting in accelerated depreciation of$14.4 million included in research and development expenses. The remaining increase was due to higher headcount and materials spending for the enhancement of existing products and development of new products, as well as higher levels of stock-based compensation expense resulting from the Officer RSUs and Officer Options granted as part of the Merger. Research and development expenses for the three months endedSeptember 30, 2021 andSeptember 30, 2020 included$2.7 million and$0.5 million of stock-based compensation expense, respectively. Research and development expenses for the nine months endedSeptember 30, 2021 andSeptember 30, 2020 included$6.2 million and$4.0 million of stock-based compensation expense, respectively.
Frais de vente, généraux et administratifs
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 Change ($) Change (%) 2021 2020 Change ($) Change (%)
Selling, general and
administrative $ 38,210 $ 16,872 $ 21,338 126.5 % $ 94,543 $ 54,832 $ 39,711 72.4 %
Selling, general, and administrative expenses increased during the three and
nine months ended September 30, 2021 compared to the same period in the prior
year primarily due to an increase in stock-based compensation resulting from the
CEO Option Awards, Officer RSUs and Officer Options granted as part of the
Merger. The Company also incurred legal and accounting expenses during the third
quarter of 2021 to assist in the Investigation, as described in Note 2 of "Notes
to the Condensed Consolidated Financial Statements."
Frais de vente, généraux et administratifs pour les trois mois clos
Intérêts et autres charges, nets
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 Change ($) Change (%) 2021 2020
Change ($) Change (%) Interest income$ 25 $ 15 $ 10 66.7 % $ 45$ 501 $ (456) (91.0) % Interest expense (312) (7,760) 7,448 (96.0) % (5,951) (19,191) 13,240 (69.0) % Other expense, net 100 (4) 104 (2,600.0) % (6,320) (109) (6,211) 5,698.2 % Gain (loss) on fair value change, net 13,078 (3,656) 16,734 (457.7) % 18,426 (2,296) 20,722 (902.5) % Loss on extinguishment of debt $ - $ - $ - *$ (10,018) $ -$ (10,018) * *not meaningful 59
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Le revenu d’intérêts
Le revenu d’intérêts n’a pas fluctué de façon importante au cours des périodes de trois et neuf mois terminées
Frais d’intérêts
Interest expense decreased during the three and nine months endedSeptember 30, 2021 compared to the same periods in the prior year primarily due to the full repayment of the revolving debt facility at Closing, resulting in lower interest expense. Other Expense, Net Other expense, net did not fluctuate materially during the three months endedSeptember 30, 2021 compared to the same period in the prior year. Other expense, net increased during the nine months endedSeptember 30, 2021 compared to the same period in the prior year primarily due to$5.0 million of penalties incurred in conjunction with a settlement between View andthe United States government to resolve claims and charges against View relating to its discharges of water into publicly owned treatment works without first obtaining a pretreatment permit. See Note 6 of the "Notes to the Condensed Consolidated Financial Statements" included in Part I, Item 1. "Financial Statements (Unaudited)" for further discussion of this matter.
Gain (perte) sur variation de la juste valeur, net
The gain on fair value change, net during the three and nine months endedSeptember 30, 2021 was primarily related to changes in the fair value of our sponsor earn-out liability. The loss on fair value change, net during the three and nine months endedSeptember 30, 2020 was primarily related to changes in the fair value of our redeemable convertible preferred stock warrants prior to conversion to common stock.
Perte sur extinction de dette
Au cours des neuf mois terminés
Provision pour impôts sur le revenu
Pour les trois et neuf mois terminés
Liquidités et ressources en capital
As ofSeptember 30, 2021 , we had$373.1 million in cash and cash equivalents and$331.2 million in working capital. The Company's accumulated deficit totaled$2,178.3 million as ofSeptember 30, 2021 . For the nine months endedSeptember 30, 2021 , we had a net loss of approximately 263.9 million and negative cash flows from operations of approximately$188.7 million . In addition, for the nine months endedSeptember 31, 2020 , we had a net loss of approximately$200.0 million and negative cash flows from operations of approximately$123.7 million . The Company has determined that there is substantial doubt about its ability to continue as a going concern, as the Company does not currently have adequate financial resources to fund its forecasted operating costs and meet its obligations for at least twelve months from the filing of this Quarterly Report on Form 10-Q. While the Company intends to raise additional capital, there can be no assurance the necessary financing will be available on terms acceptable to the Company, or at all. If the Company raises funds by issuing equity securities, dilution to stockholders will occur and may be substantial. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of common stock. If we raise funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of preferred and common stockholders. The terms of debt securities or borrowings could impose significant restrictions on our operations and will increase the cost of capital due to interest payment requirements. The capital markets have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing. In addition, recent and anticipated future increases in federal fund rates set by theFederal Reserve , which serve as a benchmark for rates on borrowing, will impact the cost of debt financing. If we are unable to obtain adequate capital resources to fund operations, we would not be able to continue to operate our business pursuant to our current business plan, which would require us to modify our operations to reduce spending to a sustainable level by, among other things, delaying, scaling back or eliminating some or all of our ongoing or planned investments in corporate infrastructure, business development, sales and marketing, research and development and other 60 -------------------------------------------------------------------------------- Table of Contents activities, which could have a material adverse impact on our operations and our ability to increase revenues, or we may be forced to discontinue our operations entirely. Our principal uses of cash in recent periods have been funding operations and investing in capital expenditures. Our future capital requirements will depend on many factors, including revenue growth rate, achieving profitability on our revenue contracts, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support research and development efforts, capital expenditures associated with our capacity expansion, the introduction of new products and the continuing market adoption of our products. Our total current liabilities as ofSeptember 30, 2021 are$82.6 million , including$12.5 million accrued as estimated loss on our SmartBuilding Platform contracts. Our long term liabilities as ofSeptember 30, 2021 that will come due during the next 12 months from the date of the issuance of this Quarterly Report on Form 10-Q include$3.6 million in operating and capital lease payments,$4.2 million in estimated settlements of warranty liabilities and$0.7 million for the next semi-annual payment on our Term Loan. In addition, as disclosed in Note 6 of the "Notes to the Condensed Consolidated Financial Statements" included in Part I, Item 1, we have an agreement with one customer that could result in the issuance of cash for a promissory note in the amount of up to$10 million over the next 12 months. As a result of the Merger inMarch 2021 , we raised gross proceeds of$815.2 million including the contribution of$374.1 million of cash held in CF II's trust account from its initial public offering, net of redemption of CF II Class A Common Stock held by CF II's public stockholders of$125.9 million ,$260.8 million of private investment in public equity ("PIPE") at$10.00 per share of CF II's Class A Common Stock, and$180.3 million of additional PIPE at$11.25 per share of CF II's Class A Common Stock. In conjunction with the Merger, we repaid in full our revolving debt facility of$276.8 million , including accrued interest and future interest through maturity of the notes of$26.8 million . InApril 2021 , the Company terminated an industry facility operating lease withIDIG Crossroads I, LLC . The total future rental payments related to this terminated lease was$19.5 million . Both the repayment of the debt facility and lease termination discussed above decreased our contractual obligations sinceDecember 31, 2020 . The Company has historically financed its operations through the issuance and sale of redeemable convertible preferred stock, the issuance of debt financing, the gross proceeds associated with the Merger and revenue generation from product sales. The Company's continued existence is dependent upon its ability to obtain additional financing, achieve production volumes such that our significant base operating costs are better absorbed, thus allowing for negotiation of profitable sales contracts, and generate sufficient cash flow to meet its obligations on a timely basis. The Company's business will require significant amounts of capital to sustain operations and the Company will need to make the investments it needs to execute its long-term business plans.
Dette
Prêt à terme
As ofSeptember 30, 2021 , we had$15.4 million outstanding under our term loan debt arrangement. OnOctober 22, 2020 , we entered into an amended and restated debt arrangement with the lender, which temporarily suspended the payments untilJune 30, 2022 . StartingJune 30, 2022 , we are required to make semi-annual payments of$0.7 million throughJune 30, 2032 . As ofSeptember 30, 2021 ,$0.7 million of the outstanding amount under this arrangement has been classified as a current liability, and the remaining$14.7 million has been classified as a long term liability. The debt arrangement required us to invest certain amounts in land, building and equipment and create a certain number of jobs. As ofSeptember 30, 2021 , we had met the requirements. The debt arrangement, as amended, has customary affirmative and negative covenants. As ofSeptember 30, 2021 , we were in compliance with all covenants.
Flux de trésorerie
Le tableau suivant présente un résumé des données de flux de trésorerie (en milliers) :
Nine Months Ended
2021
2020
Net cash used in operating activities$ (188,744) $ (123,680) Net cash used in investing activities (20,357)
(1 845)
Net cash provided by financing activities 515,958
97 390
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Flux de trésorerie liés aux activités d’exploitation
Net cash used in operating activities was$188.7 million for the nine months endedSeptember 30, 2021 . The most significant component of our cash used during this period was a net loss of$263.9 million adjusted for non-cash charges of$55.2 million related to stock-based compensation,$35.2 million related to depreciation and amortization, loss on extinguishment of debt of$10.0 million , partially offset by$18.4 million non-cash gain related to change in fair value of our Sponsor Earn-Out liability and other derivative liabilities. This loss was increased by net cash outflows of$8.4 million from changes in operating assets and liabilities. The net cash outflows from changes in operating assets and liabilities were primarily due to a$7.7 million increase in prepaid and other operating assets as a result of increases in contract assets with customers for the new View SmartBuilding Platform offering, an increase of$6.7 million in accounts receivable as a result of increased revenue and timing of collections, a$3.3 million increase in inventory and a$2.2 million decrease in accounts payable due to timing of payments to our suppliers. These increases to cash outflows were offset by a$10.6 million increase in accrued compensation, expenses and other liabilities as a result of an increase in accruals for expenses also consistent with the growth of operations and a$1.0 million increase in deferred revenue due to timing of satisfaction of our performance obligations relating to our revenue generating contracts with customers. Net cash used in operating activities was$123.7 million for the nine months endedSeptember 30, 2020 . The most significant component of our cash used during this period was a net loss of$200.0 million adjusted for non-cash charges of$22.6 million related to stock-based compensation,$18.9 million related to depreciation and amortization and$2.3 million non-cash loss related to change in fair value of our redeemable convertible preferred stock warrant liability. This was offset by net cash inflows of$30.7 million from changes in operating assets and liabilities. The net cash inflows from changes in operating assets and liabilities were primarily due to a$22.2 million decrease in prepaid and other assets driven by$22.5 million cash collected on a malpractice legal settlement from one of our former attorneys, a decrease of$4.7 million in accounts receivable due to timing of collections, a decrease of$1.0 million in inventories and an increase of$6.7 million due to reduction in accrued compensation, expenses and other liabilities, partially offset by a$3.2 million decrease in accounts payable due to timing of payments and$0.4 million decrease in deferred revenue due to timing of satisfaction of our performance obligations relating to our revenue generating contracts with customers.
Flux de trésorerie provenant des activités d’investissement
La trésorerie nette affectée aux activités d’investissement a été
La trésorerie nette provenant des activités d’investissement a été
Flux de trésorerie provenant des activités de financement
Net cash provided by financing activities was$516.0 million for the nine months endedSeptember 30, 2021 , which was primarily due to proceeds related to the reverse recapitalization and PIPE offering of$773.5 million , net of transaction costs, partially offset by repayment in full of our revolving debt facility of$257.5 million . Net cash used in financing activities was$97.4 million for the nine months endedSeptember 30, 2020 , which was primarily due to proceeds from draws related to revolving debt facility of$206.7 million as reduced by repayments of$108.4 million under the same facility and other debt and payment of capital lease obligations of$1.1 million .
Arrangements hors bilan
During the periods presented, we did not have any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Principales conventions comptables et estimations
The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles inthe United States of America ("U.S. GAAP") requires us to make judgments, assumptions, and estimates that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Note 1 of Notes to Consolidated 62
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Financial Statements in View's 2021 Annual Report on Form 10-K filed onJune 15, 2022 describes the significant accounting policies and methods used in the preparation of these financial statements. The accounting policies described below are significantly affected by critical accounting estimates. Such accounting policies require significant judgments, assumptions, and estimates used in the preparation of the condensed consolidated financial statements, and actual results could differ materially from the amounts reported based on these policies. The inputs into certain of our judgments, assumptions and estimates considered the economic implications of the COVID-19 pandemic on our critical and significant accounting estimates. The COVID-19 pandemic did not have a material impact on our significant judgments, assumptions and estimates that are reflected in our results for the three and nine months endedSeptember 30, 2021 . As the COVID-19 pandemic continues to develop, many of our estimates could require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve our estimates may change materially in future periods. We believe the following accounting estimates to be most critical to aid in fully understanding and evaluating our reported financial results, and they require management's most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. Revenue Recognition View Smart Glass We have historically generated revenue as a materials provider from (i) the manufacturing and sale of View Smart Glass IGUs that are coated on the inside with our proprietary technology and are designed, programmed, and built to customer specifications that include sizes for specific windows, skylights, and doors in specified or designated areas of a building and (ii) selling the View Smart Glass controls, software and services ("CSS"), which includes sky sensors, window controllers and control panels with embedded software, cables and connectors, that when combined with the IGUs enable the IGUs to tint. Also included in CSS is a system design service, in which a design document is prepared to lay out the IGUs and CSS hardware for the building, as well as a commissioning service, in which the installed IGUs and CSS components are tested and tinting configurations are set by the Company. Our contracts to deliver IGUs contain multiple performance obligations for each customized IGU. Revenue is recognized over time as each IGU is manufactured. While management judgment is required in estimating the future costs necessary to complete each IGU, the amount of work in process at the end of any financial reporting period has historically been insignificant. The Company therefore does not consider this a significant estimate. Our contracts to deliver CSS contain multiple performance obligations for each promise in the CSS arrangement. Transaction price is allocated among the performance obligations in a manner that reflects the consideration that we expect to be entitled to for the promised goods or services based on standalone selling prices ("SSP"). Management judgment is required in determining SSP for contracts that contain products and services for which revenue is recognized both over time and at a point in time, and where such revenue recognition transcends multiple financial reporting periods due to the timing of delivery of such products and services. SSP is estimated based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, we apply judgment to estimate it taking into account available information, such as internally approved pricing guidelines with respect to geographies, customer type, internal costs, and gross margin objectives, for the related performance obligations. We recognize revenue upon transfer of control of promised goods or services in a contract with a customer in an amount that reflects the consideration we expect to receive in exchange for those products or services. The allocation of transaction price for CSS contracts with performance obligations that cross multiple periods has not historically risen to a level that could have a material impact to reported revenues. The Company therefore does not consider this a significant estimate.
Afficher intelligent
During 2021, we entered into and commenced work on the first contract under our new offering, View SmartBuilding Platform , a complete interrelated and integrated platform that combines our smart glass IGUs, the fabrication, unitization and installation of the framing of those IGUs, and installation of the completed smart glass windows and CSS components into a fully functional SmartBuilding Platform . We enter into contracts to provide our View SmartBuilding Platform with our 63
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clients, qui sont généralement les propriétaires, les locataires ou les promoteurs de bâtiments, ou l’entrepreneur général agissant pour le compte de nos clients.
In contrast to the View Smart Glass product delivery method, View is the principal party responsible for delivering the fully integratedSmart Building Platform. In doing so, View takes responsibility for all activities needed to fulfill its single performance obligation of transferring control to the customer of a fully operational SmartBuilding Platform deliverable; from design, fabrication, installation, integration, commissioning, and testing. Underlying these activities is View's responsibility for performing an essential and significant service of integrating each of the inputs of its completed solution. These inputs include View's smart network infrastructure and IGUs, both of which are integrated into the window glazing system, which is fabricated by an unrelated subcontractor contracted by View to work on its behalf, as well as designing how the entire SmartBuilding Platform will be integrated and installed into the customer's architectural specifications for the building that is being constructed or retrofitted. View's integration services also include the activities of installing, commissioning and testing theSmart Building Platform to enable the transfer of a complete and operational system. The Company also uses subcontractors it selects and hires for portions of the installation labor. Given that View is responsible for providing the service of integrating each of the inputs into a single combined output, View controls that output before it is transferred to the customer and accordingly, View is the principal in the arrangement and will recognize the entire arrangement fee as its revenue, with any fees that View pays to its subcontractors recognized in its cost of revenue. The pricing for a SmartBuilding Platform project is primarily driven by the make-up, size, shape, total units of the IGU, associated CSS, and costs associated with the management and performance of system design, fabrication, unitization and installation efforts. View assumes the risk of delivery and performance of the SmartBuilding Platform to its customer, and manages this through three key elements to ensure a pleasant end-user experience: 1) View has a contractual right and obligation to direct the activities of the subcontractors; 2) View performs quality inspections; and 3) View engages qualified personnel to protect the company's interest and direct the actions of the subcontractors. The end product to the customer is a single-solution SmartBuilding Platform that uses artificial intelligence to adjust the building environment to improve occupant health and productivity, as well as reduce building energy usage and carbon footprint. Our View SmartBuilding Platform contracts to deliver a fully installed and functioning smart window curtain wall platform are typically considered one performance obligation that is satisfied as construction progresses. We recognize revenue over time as we provide services to satisfy our performance obligation. These contracts are typically long-term in nature and services are provided over an extended period transcending multiple financial reporting periods. We generally use a cost-to-cost input method to measure progress as it best depicts how control transfers to our customers. The estimates used in the cost-to-cost input method are based on a comparison of the contract expenditures incurred to the estimated final costs. We believe the cost-to-cost input method is a faithful depiction of the transfer of goods and services as changes in job performance and estimated profitability, which result in revisions to costs and income, are recognized in the period in which the revisions are determined. When estimates of total costs to be incurred on a contract exceed total estimates of the transaction price, a provision for the entire loss is determined at the contract level and is recorded in the period in which we enter into the contract and adjusted periodically as estimates are revised. The estimated future costs associated with the View SmartBuilding Platform contracts are a critical estimate when determining timing and amount of revenue recognition. Such costs are primarily related to the future cost to manufacture and source the smart glass IGUs and CSS components, future subcontractor costs associated with the fabrication, unitization and installation of the framing of the IGUs, future subcontractor costs to install the completed smart glass windows and CSS components, and future personnel costs associated with construction management. The costs to manufacture the smart glass IGUs are based on future production costs for IGUs, which take into consideration the Company's expectations regarding future reductions in the total cost due to planned cost savings, as well as fixed cost absorption as production increases. In addition, the impacts of delays of the contract, change orders and supply chain issues may impact the total future costs incurred for each project. Actual total costs incurred to date are subject to review by the customer or one of its representatives, which assists management in validating these actual costs used in the determination of timing and amount of revenue recognition. If actual costs differ substantially from the Company's estimates, revisions to the estimated loss associated with the project is recognized in the period incurred,and could also result in changes to the estimated contract loss accrual. The total change in estimated costs from initial estimates was not material for the nine months endedSeptember 30, 2021 . There were no SmartBuilding Platform contracts during the nine months endedSeptember 30, 2020 . If there were a 10% change in future estimated costs for allSmart Building Platform contracts as ofSeptember 30, 2021 , the impact to Cost of revenue would be approximately$5.3 million . 64
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Garanties des produits
In 2019, the Company identified a quality issue with certain material purchased from one of its suppliers utilized in the manufacturing of certain IGUs. The Company stopped using the affected materials upon identification in 2019. The Company has replaced and expects to continue to replace the affected IGUs related to this quality issue for the remainder of the period covered by the warranty. The Company developed a statistical model to analyze the risk of failure of the affected IGUs and predict the potential number of future failures that may occur during the remaining warranty period, as well as the timing of the expected failures. Management judgment is necessary to determine the distribution fit and covariates utilized in the statistical model, as well as the relative tolerance to declare convergence. The statistical model considers the volume, data patterns, and other characteristics associated with the failed IGUs as well as the IGUs that had not yet failed as of each financial reporting period. These characteristics include, but are not limited to, time to failure, manufacture date, location of installation, and environmental factors (i.e., heat and humidity factors at installed location). Based on this analysis, the Company has recorded a specific warranty liability using the estimated number of affected IGUs expected to fail in the remaining warranty period and applying estimated costs the Company expects to incur to replace the IGUs based on warranty contractual terms and its customary business practices. The Company monitors the cost to fulfill warranty obligations and may make revisions to its warranty liabilities if actual costs of product repair and replacement are significantly higher or lower than estimated. This warranty liability is based on estimates of failure rates and future replacement costs that are updated periodically, taking into consideration inputs such as changes in the number of failures compared with the Company's historical experience, and changes in the cost of servicing warranty claims. Management judgment is necessary to estimate the future cost of servicing warranty claims. This estimated cost includes the Company's expectations regarding future total cost of replacement, as well as fixed cost absorption as production increases. If estimated future costs are 10% higher than projected, the Company's warranty liability associated with these affected IGUs would be approximately$3.9 million higher than that recorded as ofSeptember 30, 2021 . There is uncertainty inherent in the failure rate analysis and the projected costs to replace the defective products in future years, as such we evaluate warranty accruals on an ongoing basis and account for the effect of changes in estimates prospectively.
Compte tenu de l’incertitude inhérente à l’analyse des défaillances, y compris le moment réel des défaillances et le nombre d’UGI défectueuses, ainsi que l’incertitude concernant les coûts futurs de la chaîne d’approvisionnement et les volumes de production qui pourraient avoir une incidence sur les coûts projetés pour remplacer les IGU défectueuses dans les années à venir, il est raisonnablement possible que le montant des coûts à engager pour remplacer les UGT défectueuses soit sensiblement différent de l’estimation.
Dépréciation des actifs à long terme
We regularly review our long-lived assets for triggering events or other circumstances that could indicate impairment. If such events arise, we compare the carrying amount of the asset group comprising the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the asset group. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the asset group, an impairment charge is recorded as the amount by which the carrying amount of the asset group exceeds the fair value of the assets, as based on the expected discounted future cash flows attributable to those assets. The amount and timing of any impairment charges requires the estimation of future cash flows based on management's best estimates and projections of certain key factors, including future selling prices and volumes, operating and material costs, various other projected operating economic factors and other intended uses of the assets. As ofSeptember 30, 2021 , no triggering events or other circumstances were identified.
Rémunération à base d’actions – Options des employés et des non-employés
We measure stock-based awards, including stock options, granted to employees and
nonemployees based on the estimated fair value as of the grant date. The fair
value of stock options are estimated using the Black-Scholes option pricing
model, which requires the input of highly subjective assumptions, including the
fair value of the underlying common stock, the expected term of the stock
option, the expected volatility of the price of our common stock, risk-free
interest rates, and the expected dividend yield of our common stock. Changes in
the assumptions can materially affect the fair value and ultimately how much
stock-based compensation expense is recognized. These inputs are subjective and
generally require significant analysis and judgment to develop.
Compensation expense for stock awards only subject to service vesting conditions
is recognized on a straight-line basis over the requisite service period of the
awards. Stock-based compensation expense is based on the value of the portion of
stock-based
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awards that is ultimately expected to vest. As such, our stock-based
compensation for these awards is reduced for the estimated forfeitures at the
date of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates.
Compensation cost for stock awards subject to service and market-based vesting
conditions is recognized for each vesting tranche of an award with a market
condition using the accelerated attribution method over the longer of the
requisite service period and derived service period, irrespective of whether the
market condition is satisfied. If a recipient of these awards terminates
employment before completion of the requisite service period, any compensation
cost previously recognized is reversed unless the market condition has been
satisfied prior to termination. If the market condition has been satisfied
during the vesting period, the remaining unrecognized compensation cost is
accelerated.
The following table summarizes the assumptions used in estimating the fair value
of employee and nonemployee stock options granted during each of the periods
presented:
Nine Months Ended September 30,
2021 2020
Expected volatility 53.0% 70%
Expected terms (in years) 6.0 5.4-10.0
Expected dividends 0% 0%
Risk-free rate 1.07% 0.4%-1.6%
Expected volatility: As our common stock only recently became publicly traded,
the expected volatility for our stock options was determined by using an average
of historical volatilities of selected industry peers deemed to be comparable to
our business corresponding to the expected term of the awards.
Expected term: The expected term represents the period these stock awards are
expected to remain outstanding and is based on historical experience of similar
awards, giving consideration to the contractual terms of the stock-based awards,
vesting schedules, and expectations of future employee behavior.
Rendement de dividende attendu : Le taux de dividende attendu est de zéro, car nous n’avons actuellement aucun historique ni aucune attente de déclaration de dividendes sur nos actions ordinaires dans un avenir prévisible.
Taux d’intérêt sans risque : Le taux d’intérêt sans risque est basé sur le
Évaluation des actions ordinaires
Prior to our common stock being publicly traded, the fair value of our common stock was historically determined by our board of directors with the assistance of management. In the absence of a public trading market for our common stock, on each grant date, we developed an estimate of the fair value of our common stock based on the information known on the date of grant, upon a review of any recent events and their potential impact on the estimated fair value per share of our, and in part on input from third-party valuations. The fair value of our common stock was determined in accordance with the guidelines outlined in theAmerican Institute of Certified Public Accountants Practice Aid , Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The assumptions used to determine the estimated fair value of our common stock are based on numerous objective and subjective factors, combined with management's judgment, including:
•les valorisations de nos actions ordinaires réalisées par des tiers spécialistes indépendants ;
•les prix, droits, préférences et privilèges de nos actions privilégiées convertibles par rapport à ceux de nos actions ordinaires ;
•les prix payés pour les actions privilégiées ordinaires ou convertibles que nous vendons à des investisseurs tiers ;
•pour les actions que nous avons rachetées dans des conditions normales de concurrence ;
•le manque de négociabilité inhérent à nos actions ordinaires ;
•notre performance opérationnelle et financière réelle ;
•notre conjoncture économique actuelle et nos prévisions ;
•l’embauche de personnel clé et l’expérience de notre direction;
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•l’histoire de l’entreprise et l’introduction de nouveaux produits ;
•notre stade de développement ;
•la probabilité de réalisation d’un événement de liquidité, tel qu’une offre publique initiale (IPO), une fusion ou une acquisition de notre société donnée ;
•les conditions de marché en vigueur ;
•la performance opérationnelle et financière de sociétés comparables cotées en bourse ; et
•la
In valuing our common stock, the fair value of our business was determined using various valuation methods, including combinations of income and market approaches with input from management. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate that is derived from an analysis of the cost of capital of comparable publicly traded companies in our industry or similar business operations as of each valuation date and is adjusted to reflect the risks inherent in our cash flows. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company's financial forecasts to estimate the value of the subject company. The valuation methodology also considers both actual transactions of the convertible preferred stock and expected liquidity values where appropriate.
Rémunération en actions – attribution d’options du chef de la direction et UAR des dirigeants
We measure the fair value of our market condition-based CEO Option Award and Officer RSUs using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, expected term, risk free rate that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. Application of these approaches and methodologies involves the use of estimates, judgments, and assumptions that are highly complex and subjective, such as determining the expected volatility of our common stock. Due to the limited history of trading of our common stock, we determined expected volatility based on a peer group of publicly traded companies. Changes in any or all of these estimates and assumptions or the relationships between those assumptions could have a material impact on the valuation of these awards and the related stock-based compensation expense.
Le tableau suivant résume les hypothèses utilisées pour estimer la juste valeur de l’attribution d’options du chef de la direction et des UAR des dirigeants :
CEO Option
Award Officer RSUs
Expected stock price $9.19 $9.19
Expected volatility 54.0% 56.0%
Risk-free rate 1.59% 0.60%
Expected terms (in years) 10.0 4.0
Expected dividends 0% 0%
Discount for lack of marketability 20% n/a
Following the completion of the Merger, the fair value of our common stock is
now based on the closing price as reported on the date of grant on the primary
stock exchange on which our common stock is traded.
Responsabilité relative aux compléments de prix du sponsor
We account for Sponsor Earn-Out shares as liability classified instruments
because the earn-out triggering events that determine the number of
Sponsor Earn-Out shares to be earned back by the Sponsor include events that are
not solely indexed to the common stock of the Company. The fair value of this
liability is determined using a Monte Carlo simulation model that utilizes
significant assumptions, including volatility, expected term, risk free rate
that determine the probability of achieving the earn-out conditions to calculate
the fair value.
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Table des matières
Le tableau suivant résume les hypothèses utilisées pour estimer la juste valeur du Sponsor
September 30, 2021 March 8, 2021 (Closing Date)
Stock price $5.42 $9.19
Expected volatility 48.40% 29.20%
Risk free rate 0.87% 0.86%
Expected term (in years) 4.4 5.0
Expected dividends 0% 0%
Prises de position comptables récentes
For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our condensed consolidated financial statements, see Part I, Item 1, Note 1, "Organization and Summary of Significant Accounting Policies," in our notes to condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
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