tuSimple(TSP) - 2022 Q4 - Annual Report

Part I Business Overview TuSimple develops L4 autonomous driving technology and an Autonomous Freight Network (AFN) for the U.S. and APAC regions, targeting the $4 trillion global truck freight market - TuSimple is a global autonomous driving technology company, founded in 2015, headquartered in San Diego, California, with operations in the U.S. and APAC, developing full-stack L4 autonomous driving technology and an Autonomous Freight Network (AFN) to revolutionize the $4 trillion global truck freight market[22][24][26] - The company operates approximately 70 L4 autonomous semi-trucks (35 in the U.S. and 35 in APAC) with a safety driver and engineer, de-emphasizing revenue-generating freight services in Q4 2022 due to operating losses, with no significant revenue planned for 2023[32][35][38][39] - TuSimple achieved fully 'Driver Out' (no human present in the cockpit) test runs in the U.S. (80+ mile route in Arizona, over 550 miles driven, zero disengagements) and APAC (40+ mile route in Shanghai, including Yangshan Port, during heavy traffic, zero disengagements)[41][42][45] Autonomous Freight Market Size | Market | Addressable Market | | :----- | :----------------- | | Global | $4 trillion | | U.S. | $800 billion | | APAC | $1.6 trillion | - The company's L4 autonomous technology is specifically designed for semi-trucks, focusing on 'middle mile' routes to address industry challenges such as driver shortages, safety (94% of serious crashes caused by human error), efficiency, and carbon footprint[48][49][54][55][56] - Regulatory environments are supportive: 44 U.S. states allow autonomous semi-truck testing (29 for commercial deployment), Shanghai, China, became the first city to allow L4 fully driverless testing, with TuSimple receiving a license, and Japan targets L4 commercial operation by 2026[59][61][64] - TuSimple's commercialization roadmap prioritizes the 'TuSimple Capacity' model (owned/leased retrofitted trucks) for accelerated scaling, followed by purpose-built L4 trucks from OEMs, with the AFN aiming to provide a comprehensive autonomous freight solution with HD mapped routes and terminals[26][62][65][71] - Core technologies include a camera-centric L4 ADS with a 1,000-meter perception range, multi-modal sensor fusion (LiDAR, radar, GPS, ultrasonic), and offboard capabilities (HD maps, ML, simulation, fleet operations), with the TuSimple Domain Controller (TDC) being developed with NVIDIA[29][72][76][78][81][83][84][85] - The company passed an independent 3rd party (TÜV SÜD) safety audit to SAE standard J3018 and AV testing best practices with zero nonconformities in 2022[88] Intellectual Property Portfolio (as of June 30, 2023) | Metric | Count | | :--------------------- | :---- | | Issued Patents Globally | 590 | | Pending Patent Applications | 1,170 | - TuSimple's autonomous solutions are estimated to deliver over 10% better fuel efficiency than traditional trucking, contributing to a reduction in fuel consumption and greenhouse gas emissions[107] Global Full-Time Employees | Date | FTEs (Global) | | :------------- | :------------ | | Dec 31, 2022 | ~1,450 | | June 30, 2023 | ~1,058 | | June 30, 2023 (Excl. WARN) | ~810 | Risk Factors The company faces material risks across strategic transactions, technology development, operational execution, financial stability, and regulatory compliance - The company faces risks related to its exploration of strategic alternatives for its U.S. business, including potential failure to complete transactions, diversion of management resources, and adverse effects on business, financial condition, and stock price[119][120][121][122] - Failure to timely file periodic reports with the SEC (e.g., 2022 10-K, Q1/Q2 2023 10-Q) could result in the delisting of its Class A common stock from Nasdaq, making it difficult for stockholders to sell shares and negatively impacting the stock price[11][123][124][125] - Autonomous driving is an emerging technology with significant risks, including reliance on internally-developed software and third-party OEM/Tier 1 partners, potential defects in components, and challenges in achieving necessary reliability for L4 autonomy at commercial scale, especially in extreme weather or with non-compliant driving behavior[127][128][140] - The company has a limited operating history in a new market, with its AFN still in early stages of development and commercialization, and it expects to incur significant expenses and continuing losses for the foreseeable future[129][135][173][174] - Unfavorable media coverage and publicity, including past incidents related to technology safety, senior management turnover, and regulatory actions, have negatively affected the company's reputation and business relationships[133][143][147][150] - The company is susceptible to product liability or warranty claims due to the inherent risks of autonomous driving technology, which could result in significant costs, reputational harm, increased insurance premiums, or the need for self-insurance[148][149][150][152] - Reliance on relationships with OEMs, business partners, and third-party suppliers for development and integration of products and services poses risks, including potential termination of partnerships (e.g., Navistar), supply shortages, long lead times, and increased costs[162][163][166][169][171] - The company has identified material weaknesses in its internal control over financial reporting, specifically regarding the disclosure of related party transactions and the impact of board changes on oversight, with remediation efforts ongoing[196][198][199][200] - The company's intellectual property (IP) is essential, but it faces risks of IP infringement claims, challenges to its patents, and unauthorized use of its proprietary technology and trade secrets, which could lead to loss of competitive advantage and significant costs[202][205][206][207][215][216][218] - The company is subject to various claims, lawsuits, and regulatory investigations, including securities class actions and shareholder derivative actions related to alleged false statements and related-party transactions (Hydron), as well as inquiries from CFIUS and the SEC regarding NSA compliance and internal investigation findings[231][232][233] - Operations in China are subject to significant government regulation and legal, political, and economic risks, including restrictions on cross-border data transfer and potential adverse changes in laws or their interpretation and enforcement[244][246][249] - The dual-class stock structure concentrates voting control with certain stockholders, particularly the Founders (Mo Chen and Xiaodi Hou), limiting other stockholders' ability to influence important transactions and potentially affecting the trading market for Class A common stock[269][270][271][274] Unresolved Staff Comments There are no unresolved staff comments from the SEC - None[304] Properties TuSimple's corporate headquarters is in San Diego, California, with 100,000 square feet of office space, and it leases other facilities globally - TuSimple's corporate headquarters is in San Diego, California, with approximately 100,000 square feet of office space, including 20,000 square feet subleased or offered for sublease, with leases expiring in September 2027[305] - The company also leases facilities in the U.S. and internationally for its U.S. and APAC segments, believing current space is adequate and additional space can be obtained if needed[305] Legal Proceedings TuSimple is involved in shareholder class actions, derivative suits, and regulatory investigations by CFIUS and the SEC, with potential material losses - Two shareholder securities class actions (August 2022 and November 2022) were consolidated in July 2023, alleging materially false or misleading statements regarding autonomous driving technology and undisclosed related-party transactions with Hydron Inc., and the company is unable to estimate the potential loss[307][309][310][311] - Three shareholder derivative actions were consolidated in May 2023, alleging breaches of fiduciary duties related to the Hydron transaction and board restructuring, with the consolidated action stayed until February 9, 2024, pending an investigation by a special litigation committee, and the company is unable to estimate the potential loss[312][313][314][315][316][317] - TuSimple is cooperating with a CFIUS inquiry regarding compliance with the National Security Agreement (NSA) related to information shared with TuSimple China, Hydron, and Hydron's partners, and a civil penalty may be imposed if violations are found[319][320] - The company is also cooperating with an SEC investigation, having received subpoenas for documents related to the Audit Committee's internal investigation into the Hydron related-party transaction, and the potential loss cannot be estimated[321][322] Mine Safety Disclosures This item is not applicable to TuSimple Holdings Inc - Not applicable[323] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities TuSimple's Class A Common Stock is listed on Nasdaq, has 13 Class A and 2 Class B holders, and the company retains earnings for growth, never paying dividends - TuSimple's Class A Common Stock has been listed on the Nasdaq Global Select Market under the symbol "TSP" since April 15, 2021[326] Common Stock Holders (as of August 31, 2023) | Class of Stock | Holders of Record | | :------------- | :---------------- | | Class A Common Stock | 13 | | Class B Common Stock | 2 | - The company has never declared or paid cash dividends and intends to retain all available funds and future earnings to fund business growth, with current debt instruments also restricting the ability to pay dividends[328] Equity Compensation Plans (as of December 31, 2022) | Plan Category | Securities to be Issued Upon Exercise () | Weighted Average Exercise Price ($) | Securities Remaining Available for Future Issuance () | | :------------ | :---------------------------------------- | :---------------------------------- | :----------------------------------------------------- | | Approved by Stockholders | 20,602,012 | 15.16 | 18,041,005 | | Not Approved by Stockholders | — | — | — | | Total | 20,602,012 | 15.16 | 18,041,005 | - There has been no material change in the planned use of proceeds from the IPO from that described in the prospectus filed on April 16, 2021[331] Reserved This item is reserved and contains no information - Item 6 is reserved[335] Management's Discussion and Analysis of Financial Condition and Results of Operations This section reviews TuSimple's financial condition and operations, highlighting L4 autonomous driving, recent board changes, workforce reductions, increasing net losses, and negative Adjusted EBITDA - TuSimple is a global autonomous driving technology company developing L4 autonomous driving solutions and an Autonomous Freight Network (AFN) in the U.S. and APAC regions, with independent development strategies for each segment[339][340][341][342][343] - The company underwent significant board and management changes in late 2022 and early 2023, including the termination of Dr. Xiaodi Hou as CEO, the re-appointment of Cheng Lu as CEO, and multiple director changes, with restructuring plans in December 2022 and May 2023 resulting in global workforce reductions of 25% and 30%, respectively[347][348][349][350][351][653] - TuSimple is evaluating strategic alternatives for its U.S.-based business, engaging Perella Weinberg Partners as a financial advisor[351][656] Operational Highlights (Year Ended December 31) | Metric | 2021 | 2022 | % Change | | :------------------------- | :-------- | :-------- | :------- | | R&D Full Time Employees | ~1,100 | ~1,100 | —% | | Global FTEs (pre-restructuring) | ~1,400 | ~1,450 | 4% | | Patents Issued | 387 | 519 | 34% | | Cumulative Road Miles (in thousands) | ~6,300 | ~10,000 | 59% | | Total Truck Reservations (EOY) | ~6,975 | ~5,585 | (20)% | | Total Mapped Miles (EOY) | ~11,200 | ~11,400 | 2% | | Revenue Miles (in thousands) | ~3,446 | ~4,276 | 24% | - The company de-emphasized revenue-generating freight services in Q4 2022 due to operating losses and does not plan to generate significant revenue in 2023, shifting focus to testing and R&D[346][356][373] Key Financial Position (as of December 31, 2022) | Metric | Amount (in thousands) | | :--------------------- | :-------------------- | | Cash and cash equivalents | $615,386 | | Short-term investments | $377,312 | Consolidated Results of Operations (in thousands) | Metric | 2020 | 2021 | 2022 | | :------------------------- | :---------- | :---------- | :---------- | | Revenue | $1,843 | $6,261 | $9,369 | | Cost of revenue | $5,293 | $12,369 | $19,780 | | Gross loss | $(3,450) | $(6,108) | $(10,411) | | Research and development | $132,001 | $287,167 | $351,599 | | Selling, general and administrative | $38,613 | $118,076 | $127,053 | | Loss from operations | $(174,064) | $(411,351) | $(489,063) | | Net loss | $(177,870) | $(732,673) | $(472,045) | | Net loss attributable to common stockholders | $(198,829) | $(736,808) | $(472,045) | Revenue Growth (Year Ended December 31) | Year | Revenue ($ thousands) | % Change YoY | | :--- | :-------------------- | :----------- | | 2020 | 1,843 | - | | 2021 | 6,261 | 240% | | 2022 | 9,369 | 50% | Cost of Revenue and Gross Loss Margin (Year Ended December 31) | Year | Cost of Revenue ($ thousands) | % Change YoY | Gross Loss Margin | | :--- | :---------------------------- | :----------- | :---------------- | | 2020 | 5,293 | - | 187% | | 2021 | 12,369 | 134% | 98% | | 2022 | 19,780 | 60% | 111% | - Restructuring charges of $26.9 million were incurred in 2022, recorded in SG&A and R&D, related to a 25% workforce reduction and asset impairment[376] Research and Development Expenses by Segment (in thousands) | Segment | 2020 | 2021 | 2022 | 2020 to 2021 % Change | 2021 to 2022 % Change | | :------ | :------- | :-------- | :-------- | :-------------------- | :-------------------- | | U.S. | $105,118 | $214,754 | $257,011 | 104% | 20% | | APAC | $26,883 | $72,413 | $94,588 | 169% | 31% | | Total | $132,001 | $287,167 | $351,599 | 118% | 22% | Selling, General and Administrative Expenses by Segment (in thousands) | Segment | 2020 | 2021 | 2022 | 2020 to 2021 % Change | 2021 to 2022 % Change | | :------ | :------ | :------- | :------- | :-------------------- | :-------------------- | | U.S. | $31,788 | $87,898 | $102,780 | 177% | 17% |\ | APAC | $6,825 | $30,178 | $24,273 | 342% | (20)% |\ | Total | $38,613 | $118,076 | $127,053 | 206% | 8% | Adjusted EBITDA (in thousands) | Year | Adjusted EBITDA | | :--- | :-------------- | | 2020 | $(153,285) | | 2021 | $(278,887) | | 2022 | $(348,653) | Segment Adjusted EBITDA (in thousands) | Segment | 2020 | 2021 | 2022 | 2020 to 2021 % Change | 2021 to 2022 % Change | | :------ | :---------- | :---------- | :---------- | :-------------------- | :-------------------- | | U.S. | $(124,314) | $(220,370) | $(259,109) | 77% | 18% | | APAC | $(28,971) | $(58,517) | $(89,544) | 102% | 53% | | Total | $(153,285) | $(278,887) | $(348,653) | | | Cash Flows Summary (in thousands) | Activity | 2020 | 2021 | 2022 | | :----------------- | :---------- | :------------ | :---------- | | Operating activities | $(103,848) | $(259,033) | $(329,865) | | Investing activities | $(4,412) | $(13,637) | $(392,173) | | Financing activities | $356,495 | $1,299,151 | $1,394 | Material Cash Requirements (as of December 31, 2022) | Type of Lease | Future Minimum Lease Payments (in thousands) | | :------------ | :----------------------------------------- | | Finance Leases | $4,126 | | Operating Leases | $59,275 | Quantitative and Qualitative Disclosures About Market Risk TuSimple faces market risks from foreign currency and interest rate fluctuations, with immaterial historical impact and an insensitive short-term investment portfolio - The company's results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, but the effect has not been material historically, and no hedging strategies are currently employed[423] - TuSimple is exposed to interest rate risk related to its investment portfolio, which includes cash, cash equivalents ($615.4 million), and short-term investments ($377.3 million) as of December 31, 2022, and due to the short-term nature of these investments, the portfolio is relatively insensitive to interest rate fluctuations, and a hypothetical 100 basis point increase would not have a material impact[424][425] Financial Statements and Supplementary Data This section presents TuSimple's audited consolidated financial statements for 2020-2022, with UHY LLP issuing an unqualified opinion on financials but an adverse opinion on internal control due to material weaknesses - UHY LLP, the independent registered public accounting firm, issued an unqualified opinion on the consolidated financial statements for the three-year period ended December 31, 2022[431] - UHY LLP expressed an adverse opinion on the company's internal control over financial reporting as of December 31, 2022, due to identified material weaknesses related to the disclosure of related party transactions and the impact of board changes on internal control oversight[432][441][442] Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2021 | Dec 31, 2022 | | :------------------------- | :----------- | :----------- | | Cash and cash equivalents | $1,337,586 | $615,386 | | Short-term investments | — | $377,312 | | Total current assets | $1,353,180 | $1,007,552 | | Property and equipment, net | $36,053 | $17,083 | | Operating lease right-of-use assets | — | $44,952 | | Total assets | $1,396,323 | $1,074,279 | | Total current liabilities | $55,926 | $71,520 | | Total liabilities | $69,345 | $119,798 | | Total stockholders' equity | $1,326,978 | $954,481 | Consolidated Statements of Operations Highlights (in thousands) | Metric | 2020 | 2021 | 2022 | | :------------------------- | :---------- | :---------- | :---------- | | Revenue | $1,843 | $6,261 | $9,369 | | Gross loss | $(3,450) | $(6,108) | $(10,411) | | Total operating expenses | $170,614 | $405,243 | $478,652 | | Loss from operations | $(174,064) | $(411,351) | $(489,063) | | Net loss | $(177,870) | $(732,673) | $(472,045) | | Net loss per share (basic and diluted) | $(3.37) | $(4.36) | $(2.11) | Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | 2020 | 2021 | 2022 | | :----------------- | :---------- | :------------ | :---------- | | Operating activities | $(103,848) | $(259,033) | $(329,865) | | Investing activities | $(4,412) | $(13,637) | $(392,173) | | Financing activities | $356,495 | $1,299,151 | $1,394 | - The company adopted ASC 842 (Leases) and ASC 326 (Financial Instruments-Credit Losses) as of January 1, 2022, with the lease standard impacting the balance sheet by recognizing ROU assets of $32.9 million and lease liabilities of $35.1 million[433][497] Stock-Based Compensation Expense (in thousands) | Expense Category | 2020 | 2021 | 2022 | | :---------------------------- | :------ | :------- | :------ | | Research and development | $917 | $71,201 | $75,260 | | Selling, general and administrative | $11,846 | $51,395 | $23,407 | | Total | $12,763 | $122,596 | $98,667 | - As of December 31, 2022, the company had accumulated federal and state net operating loss carryforwards of $659.3 million and $249.3 million, respectively, and a U.S. federal and state R&D tax credit carryforward of $44.9 million, with a full valuation allowance maintained due to a lack of earnings history[630][631][632] Changes in and Disagreements With Accountants on Accounting and Financial Disclosures Information regarding changes in and disagreements with accountants was previously reported in the company's Current Reports on Form 8-K filed on November 21, 2022, and May 11, 2023 - The information required by this item was previously reported in the Company's Current Reports on Form 8-K filed on November 21, 2022, and May 11, 2023[657] Controls and Procedures Management concluded TuSimple's disclosure controls were ineffective as of December 31, 2022, due to material weaknesses, but asserts financial statements are fairly presented, with remediation efforts underway - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were not effective as of December 31, 2022, due to material weaknesses in internal control over financial reporting[658] - Despite the material weaknesses, management concluded that the consolidated financial statements for the periods covered by this report fairly present the financial position, results of operations, and cash flows in conformity with GAAP[658] - Material weaknesses identified include: (i) ineffective controls over related party transaction disclosure due to a lack of understanding among personnel, and (ii) impaired oversight and monitoring of internal controls due to the unexpected removal of all independent directors and dissolution of the Audit Committee in November 2022[661] - Remediation plans include appointing independent directors, reconstituting the Audit Committee, resuming board and committee meetings, providing targeted training on related party transactions, and developing/refining identification and reporting processes[662] Other Information This item states that there is no other information to report - None[666] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to TuSimple Holdings Inc - Not applicable[667] Part III Directors, Executive Officers and Corporate Governance This section details TuSimple's directors, executive officers, and corporate governance, highlighting Mo Chen's concentrated voting control, board diversity, and the functions of its key committees Current Directors and Executive Officers | Name | Age | Position(s) with TuSimple | | :--------------- | :-- | :-------------------------------------- | | Mo Chen | 39 | Executive Chairman of the Board | | Cheng Lu | 40 | Chief Executive Officer and Director | | Eric Tapia | 46 | Chief Financial Officer | | Wendy Hayes | 53 | Director | | James Lu | 41 | Director | | Michael Mosier | 50 | Director | | Tyler McGaughey | 44 | Director | | Zhen Tao | 42 | Director | - Mo Chen, the Executive Chairman, beneficially holds approximately 58% of the total voting power of the outstanding common stock due to a proxy and voting agreement, concentrating voting control[269][672][698][836] - All Section 16(a) filing requirements for executive officers, directors, and greater than 10% stockholders were in compliance during 2022[684] - The company's corporate governance features include an annually re-elected Board, 5 out of 7 (71%) independent directors, a clawback provision, prohibitions on short sales and hedging of securities, and restrictions on pledging securities[687][697] Board Diversity Matrix (as of August 8, 2023) | Category | Number of Directors | | :------------------- | :------------------ | | Gender Identity | | | Female | 2 | | Male | 5 | | Demographic Background | | | Asian | 5 | | White | 2 | | Total Number of Directors | 7 | - The Board met fourteen times in 2022, with all directors attending at least 75% of the total number of Board and committee meetings[696] - TuSimple is a "controlled company" under Nasdaq Listing Rules due to Mo Chen's majority voting power, allowing it to elect exemptions from certain corporate governance requirements, such as having a majority independent board and fully independent compensation and nominating committees[271][698][699] Board Committee Membership (as of August 2023) | Board Member | Audit | Compensation | Nominating and Corporate Governance | Government Security | | :---------------- | :---- | :----------- | :---------------------------------- | :------------------ | | Mo Chen (Chair) | | X | | | | Cheng Lu | | | | | | James Lu | X | Chair | Chair | | | Wendy Hayes | Chair | | X | X | | Michael Mosier | | | | X | | J. Tyler McGaughey | | | | Chair and Security Director | | Zhen Tao | X | | | | - The Audit Committee, composed of three independent directors (Wendy Hayes as chair), oversees financial statements, compliance, and the independent auditor, and met fifteen times in 2022[707][708][709] - The Government Security Committee (GSC), chaired by J. Tyler McGaughey (Security Director), oversees compliance with the National Security Agreement (NSA) and met four times in 2022[715] Executive Compensation This section details TuSimple's executive compensation philosophy and structure for NEOs, aiming to attract and retain talent through base salary, bonuses, and equity, with the Compensation Committee overseeing decisions and severance agreements - The Named Executive Officers (NEOs) for 2022 included Cheng Lu (CEO), Eric Tapia (CFO), and former executives Xiaodi Hou, Ersin Yumer, Patrick Dillon, and James Mullen, with significant changes in roles and departures during the year[718] - The compensation philosophy aims to attract and retain talented executives, motivate them to achieve corporate objectives, align their interests with stockholders, and maximize long-term growth through competitive, fair, and performance-driven pay[719][722] - The Compensation Committee (CC) is responsible for establishing and overseeing executive compensation, reviewing it annually based on job responsibilities, experience, performance, competitive market data (from independent consultant FW Cook), and CEO recommendations (excluding his own)[720][723][724][725][727] NEO Base Salary (2021 vs. 2022) | Name | 2022 Base Salary ($) | 2021 Base Salary ($) | | :---------- | :------------------- | :------------------- | | Cheng Lu | 197,115 | 450,000 | | Xiaodi Hou | 439,038 | 325,000 | | Eric Tapia | 332,713 | 265,000 | | Ersin Yumer | 415,301 | 426,000 | | Patrick Dillon | 247,821 | 350,000 | | James Mullen | 347,011 | 350,000 | - Annual incentive bonuses are tied to corporate performance and individual assessments, with discretionary bonuses approved in 2022, including a guaranteed $400,000 bonus for Cheng Lu and $97,200 for Eric Tapia[736][737][740][743] - One-time $500,000 special cash bonuses were awarded to Patrick Dillon and James Mullen in April 2022 for retention, with repayment waived upon their resignations[741][742] - Equity compensation, primarily time-vested Restricted Stock Units (RSUs), is a critical long-term incentive, with Cheng Lu receiving performance-based RSUs in 2022 with market and service-based vesting requirements, including stock price hurdles[745][746][747] - Severance and Change in Control (CIC) agreements provide benefits upon qualifying terminations, including base salary continuation, COBRA coverage, and accelerated equity vesting, designed to attract and retain executives[749][782][783][784][785] - Cheng Lu's current employment agreement includes an annual base salary of $450,000, a guaranteed annual bonus of $400,000 for 2022, a monthly housing allowance of $9,000, and 6,850,000 restricted stock units (50% service-based, 50% market/service-based)[779] 2022 Summary Compensation Table (in thousands) | Name | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | | :---------- | :--- | :--------- | :-------- | :--------------- | :---------------- | :------------------------- | :----------- | | Cheng Lu | 2022 | 197 | 400 | 9,076 | — | 451 | 10,125 | | | 2021 | 450 | 305 | — | 65,999 | 15 | 66,769 | | | 2020 | 388 | 60 | 8,241 | 7,786 | 1,076 | 17,551 | | Xiaodi Hou | 2022 | 439 | — | — | — | — | 439 | | | 2021 | 325 | 187 | 14,110 | 9,160 | 551 | 24,334 | | | 2020 | 280 | 1 | 45 | — | 74 | 400 | | Ersin Yumer | 2022 | 415 | — | 617 | — | 365 | 1,397 | | Eric Tapia | 2022 | 333 | 97 | 1,311 | — | 57 | 1,798 | | Patrick Dillon | 2022 | 248 | — | 3,477 | — | 512 | 4,238 | | | 2021 | 350 | 350 | 706 | 458 | 34 | 1,898 | | | 2020 | 9 | 50 | 494 | 1,529 | — | 2,083 | | James Mullen | 2022 | 347 | — | 3,477 | — | 614 | 4,438 | | | 2021 | 350 | 179 | 8,819 | — | 16 | 9,364 | | | 2020 | 75 | 55 | 330 | 1,020 | — | 1,480 | 2022 Director Compensation (in thousands) | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) | | :--------------- | :------------------------------ | :--------------- | :-------- | | Mo Chen | — | — | — | | Wendy Hayes | 4 | 250 | 254 | | Michael Mosier | 15 | — | 15 | | James Lu | 6 | 250 | 256 | | Brad Buss | 82 | 188 | 270 | | Charles Chao | — | — | — | | Karen C. Francis | 64 | 188 | 253 | | Michelle Sterling | 74 | 188 | 262 | | Reed Werner | 193 | — | 193 | | Bonnie Yi Zhang | 19 | — | 19 | - Non-employee directors receive annual cash retainers for Board and committee service, and Security Directors are compensated with a $250,000 cash payment instead of equity, as requested by CFIUS[817][820] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters This section details TuSimple's equity compensation plans and beneficial ownership, with over 20 million securities authorized and Executive Chairman Mo Chen holding approximately 58.4% of total voting power via Class B Common Stock Securities Authorized for Issuance Under Equity Compensation Plans (as of December 31, 2022) | Plan Category | Securities to be Issued Upon Exercise () | Weighted Average Exercise Price ($) | Securities Remaining Available for Future Issuance () | | :------------ | :---------------------------------------- | :---------------------------------- | :----------------------------------------------------- | | Approved by Stockholders | 20,602,012 | 15.16 | 18,041,005 | | Not Approved by Stockholders | — | — | — | | Total | 20,602,012 | 15.16 | 18,041,005 | Security Ownership of Certain Beneficial Owners and Management (as of August 8, 2023) | Name of Beneficial Owner | Number of Shares of Class A Common Stock | % of Class A Common Stock | Number of Shares of Class B Common Stock | % of Class B Common Stock | % of Total Voting Power | | :----------------------- | :--------------------------------------- | :------------------------ | :--------------------------------------- | :------------------------ | :---------------------- | | Cheng Lu, CEO | 2,619,578 | 1.3% | — | — | * | | Eric Tapia, CFO | 114,574 | * | — | — | * | | Xiaodi Hou, former CEO | 13,442,314 | 6.6% | 12,000,000 | 50% | 30.0% | | Ersin Yumer, former CEO | 39,248 | * | — | — | * | | Patrick Dillon, former CFO | 195,219 | * | — | — | * | | James Mullen, former CALO | 295,947 | * | — | — | * | | Mo Chen, Executive Chairman | 19,734,628 | 9.6% | 24,000,000 | 100% | 58.4% | | All Executive Officers and Directors as a Group (8 persons) | 22,468,780 | 11.0% | 24,000,000 | 100% | 59.0% | | Sun Dream Inc. | 24,676,708 | 12.0% | — | — | 5.5% | | TRATON SE | 15,782,220 | 7.7% | — | — | 3.6% | | The Vanguard Group | 12,816,129 | 6.3% | — | — | 2.9% | | BlackRock, Inc. | 11,646,102 | 5.7% | — | — | 2.6% | - The percentage ownership is based on 205,095,521 Class A shares and 24,000,000 Class B shares outstanding as of August 8, 2023, with Class A shares having one vote per share, while Class B shares have ten votes per share[826] Certain Relationships and Related Transactions, and Director Independence TuSimple requires Audit Committee approval for related-party transactions over $120,000, and an investigation found confidential information was shared with Hydron Inc. (Mo Chen's company) without proper board approval - The company has a written related party transaction policy requiring prior consent from the Audit Committee, or other independent board members, for transactions exceeding $120,000 involving executive officers, directors, or significant stockholders[839] - Indemnification agreements are in place with each director, executive officer, and certain other key employees, providing for indemnification to the fullest extent permitted by Delaware law[841][842] - The Joint Development Agreement (JDA) with Navistar, Inc. (a TRATON SE subsidiary) to develop a purpose-built L4 autonomous semi-truck ended on December 5, 2022[847] - An ongoing Audit Committee investigation found that confidential information was shared with Hydron Inc. (where Mo Chen is a founder, director, and CEO) without proper approval, though the information was not source code and was consistent with normal vendor sharing, and no current partnership exists with Hydron[848][849] Principal Accountant Fees and Services This section details fees paid to KPMG LLP for audit and tax services in 2021-2022, with UHY LLP appointed as the new independent auditor on May 10, 2023, and the Audit Committee pre-approving all services Principal Accountant Fees (in thousands) | Fee Type | 2021 ($) | 2022 ($) | | :--------------- | :------- | :------- | | Audit Fees | 930 | 1,198 | | Audit-Related Fees | — | — | | Tax Fees | 93 | 119 | | All Other Fees | — | — | | Total Fees | 1,023 | 1,317 | - UHY LLP was appointed as the company's new independent registered public accounting firm on May 10, 2023, with no consultations regarding accounting matters held with UHY prior to their appointment[852] - The Audit Committee is responsible for the appointment, compensation, and oversight of the independent registered public accounting firm, and generally pre-approves all audit and permissible non-audit services[854] Part IV Exhibits and Financial Statement Schedules This section lists the documents filed with the report, including financial statements, omitted schedules, and a comprehensive list of exhibits covering corporate governance and various agreements - The report includes financial statements and a list of exhibits, with Financial statement schedules are omitted because the required information is presented in the financial statements or related notes[857] - Exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, Indemnification Agreements, various Share Purchase Agreements, Equity Incentive Plans, Employment and Severance Agreements, and certifications[858] Form 10-K Summary This item indicates that no Form 10-K summary is provided in the report - None[861] Signatures This section contains the required signatures of TuSimple Holdings Inc.'s authorized officers and directors, including the CEO, CFO, and Executive Chairman, confirming the Form 10-K filing - The report is signed by authorized officers and directors, including Cheng Lu (Chief Executive Officer), Eric Tapia (Chief Financial Officer), and Mo Chen (Director, Co-Founder and Executive Chairman), confirming compliance with Sections 13 or 15(d) of the Securities Exchange Act of 1934[864][865][868]