Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39733 | |
Entity Registrant Name | Redwire Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1550429 | |
Entity Address, Address Line One | 8226 Philips Highway | |
Entity Address, Address Line Two | Suite 101 | |
Entity Address, City or Town | Jacksonville | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32256 | |
City Area Code | 650 | |
Local Phone Number | 701-7722 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 63,852,690 | |
Entity Central Index Key | 0001819810 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | RDW | |
Security Exchange Name | NYSE | |
Warrant liabilities | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each to purchase one share of Common Stock | |
Trading Symbol | RDW WS | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 7,031 | $ 20,523 |
Accounts receivable, net | 16,521 | 16,262 |
Contract assets | 16,319 | 11,748 |
Inventory | 2,029 | 688 |
Income tax receivable | 688 | 688 |
Prepaid insurance | 3,046 | 2,819 |
Prepaid expenses and other current assets | 3,725 | 2,488 |
Total current assets | 49,359 | 55,216 |
Property, plant and equipment, net | 6,697 | 19,384 |
Right-of-use assets | 14,783 | 0 |
Intangible assets, net | 56,207 | 90,842 |
Goodwill | 56,710 | 96,314 |
Other non-current assets | 616 | 0 |
Total assets | 184,372 | 261,756 |
Current liabilities: | ||
Accounts payable | 17,595 | 13,131 |
Notes payable to sellers | 1,000 | 1,000 |
Short-term debt, including current portion of long-term debt | 3,476 | 2,684 |
Short-term lease liabilities | 3,484 | 0 |
Accrued expenses | 18,909 | 17,118 |
Deferred revenue | 17,373 | 15,734 |
Other current liabilities | 1,786 | 1,571 |
Total current liabilities | 63,623 | 51,238 |
Long-term debt | 89,512 | 74,867 |
Long-term lease liabilities | 11,379 | 0 |
Warrant liabilities | 3,093 | 19,098 |
Deferred tax liabilities | 1,637 | 8,601 |
Other non-current liabilities | 325 | 730 |
Total liabilities | 169,569 | 154,534 |
Commitments and contingencies (Note M) | ||
Shareholders’ Equity: | ||
Preferred stock, $0.0001 par value, 100,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.0001 par value, 500,000,000 shares authorized; 63,852,690 and 62,690,869 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 6 | 6 |
Additional paid-in capital | 196,012 | 183,024 |
Accumulated deficit | (180,655) | (75,911) |
Accumulated other comprehensive income (loss) | (560) | 103 |
Shareholders’ equity | 14,803 | 107,222 |
Total liabilities and shareholders’ equity | $ 184,372 | $ 261,756 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Shareholders’ Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 63,852,690 | 62,690,869 |
Common stock, shares outstanding (in shares) | 63,852,690 | 62,690,869 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Income Statement [Abstract] | |||||
Revenues | $ 37,249 | $ 32,680 | $ 106,844 | $ 96,526 | |
Cost of sales | 29,300 | 26,786 | 86,742 | 74,418 | |
Gross margin | 7,949 | 5,894 | 20,102 | 22,108 | |
Operating expenses: | |||||
Selling, general and administrative expenses | 15,312 | 34,333 | 53,825 | 57,855 | |
Contingent earnout expense | 0 | 113 | 0 | 11,227 | |
Transaction expenses | 1,819 | 1,128 | 1,913 | 3,547 | |
Impairment expense | [1] | 0 | 0 | 80,462 | 0 |
Research and development | 1,133 | 1,371 | 4,565 | 3,326 | |
Operating income (loss) | (10,315) | (31,051) | (120,663) | (53,847) | |
Interest expense, net | 2,401 | 1,740 | 5,523 | 4,931 | |
Other (income) expense, net | (158) | (2,957) | (14,493) | (2,980) | |
Income (loss) before income taxes | (12,558) | (29,834) | (111,693) | (55,798) | |
Income tax expense (benefit) | (2,135) | (5,582) | (6,949) | (7,971) | |
Net income (loss) | $ (10,423) | $ (24,252) | $ (104,744) | $ (47,827) | |
Net income (loss) per share, basic (in dollars per share) | $ (0.16) | $ (0.55) | $ (1.66) | $ (1.21) | |
Net income (loss) per share, diluted (in dollars per share) | $ (0.16) | $ (0.55) | $ (1.66) | $ (1.21) | |
Weighted-average shares outstanding: | |||||
Basic (in shares) | 63,460,527 | 44,036,040 | 63,050,769 | 39,503,720 | |
Diluted (in shares) | 63,460,527 | 44,036,040 | 63,050,769 | 39,503,720 | |
Comprehensive income (loss): | |||||
Net income (loss) | $ (10,423) | $ (24,252) | $ (104,744) | $ (47,827) | |
Foreign currency translation gain (loss), net of tax | (177) | (119) | (663) | (298) | |
Total other comprehensive income (loss), net of tax | (177) | (119) | (663) | (298) | |
Total comprehensive income (loss) | $ (10,600) | $ (24,371) | $ (105,407) | $ (48,125) | |
[1]Please refer to Note G, Note H, and Note I for additional information. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | |
Beginning balance (in shares) at Dec. 31, 2020 | [1] | 37,200,000 | ||||
Beginning balance at Dec. 31, 2020 | [1] | $ 39,195 | $ 4 | $ 53,059 | $ (14,374) | $ 506 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
GPAC shares net of redemptions, including PIPE, warrant liability, and Merger costs (in shares) | 22,461,273 | |||||
GPAC shares net of redemptions, including PIPE, warrant liability, and Merger costs | 52,921 | $ 2 | 52,919 | |||
Parent’s contributions | 2,110 | 2,110 | ||||
Earnout settlement in holding's and parent's equity | 9,288 | 9,288 | ||||
Equity-based compensation expense | 22,919 | 22,919 | ||||
Foreign currency translation, net of tax | (298) | (298) | ||||
Net income (loss) | (47,827) | (47,827) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 59,661,273 | |||||
Ending balance at Sep. 30, 2021 | 78,308 | $ 6 | 140,295 | (62,201) | 208 | |
Beginning balance (in shares) at Jun. 30, 2021 | [1] | 37,200,000 | ||||
Beginning balance at Jun. 30, 2021 | [1] | 17,551 | $ 4 | 55,169 | (37,949) | 327 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
GPAC shares net of redemptions, including PIPE, warrant liability, and Merger costs (in shares) | 22,461,273 | |||||
GPAC shares net of redemptions, including PIPE, warrant liability, and Merger costs | 52,921 | $ 2 | 52,919 | |||
Earnout settlement in holding's and parent's equity | 9,288 | 9,288 | ||||
Equity-based compensation expense | 22,919 | 22,919 | ||||
Foreign currency translation, net of tax | (119) | (119) | ||||
Net income (loss) | (24,252) | (24,252) | ||||
Ending balance (in shares) at Sep. 30, 2021 | 59,661,273 | |||||
Ending balance at Sep. 30, 2021 | 78,308 | $ 6 | 140,295 | (62,201) | 208 | |
Beginning balance (in shares) at Dec. 31, 2021 | 62,690,869 | |||||
Beginning balance at Dec. 31, 2021 | 107,222 | $ 6 | 183,024 | (75,911) | 103 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation expense | 8,672 | 8,672 | ||||
Common stock issued under the committed equity facility (in shares) | 909,669 | |||||
Common stock issued under the committed equity facility | 3,047 | 3,047 | ||||
Committed equity facility fee settled in common stock (in shares) | 127,751 | |||||
Committed equity facility fee settled in common stock | 756 | 756 | ||||
Foreign currency translation, net of tax | (663) | (663) | ||||
Net income (loss) | (104,744) | (104,744) | ||||
Other (in shares) | 124,401 | |||||
Other | 513 | 513 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 63,852,690 | |||||
Ending balance at Sep. 30, 2022 | 14,803 | $ 6 | 196,012 | (180,655) | (560) | |
Beginning balance (in shares) at Jun. 30, 2022 | 63,253,836 | |||||
Beginning balance at Jun. 30, 2022 | 21,098 | $ 6 | 191,707 | (170,232) | (383) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Equity-based compensation expense | 2,518 | 2,518 | ||||
Common stock issued under the committed equity facility (in shares) | 598,854 | |||||
Common stock issued under the committed equity facility | 1,787 | 1,787 | ||||
Foreign currency translation, net of tax | (177) | (177) | ||||
Net income (loss) | (10,423) | (10,423) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 63,852,690 | |||||
Ending balance at Sep. 30, 2022 | $ 14,803 | $ 6 | $ 196,012 | $ (180,655) | $ (560) | |
[1]The units of the Company prior to the Merger (as defined in Note A) have been retroactively restated to reflect the exchange ratio established in the Merger (computed as 37,200,000 shares of common stock to 100 Company units). |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Parenthetical) - shares | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 02, 2021 | Sep. 01, 2021 |
Units outstanding (in shares) | 63,852,690 | 62,690,869 | 59,661,273 | |
Genesis Park Acquisition Corp | ||||
Units outstanding (in shares) | 13,961,273 | |||
Cosmos Intermediate, LLC | ||||
Units outstanding (in shares) | 37,200,000 | |||
Cosmos Intermediate, LLC | Genesis Park Acquisition Corp | ||||
Units issued (in shares) | 100 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ (104,744) | $ (47,827) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization expense | 8,836 | 7,508 | |
Amortization of debt issuance costs and discount | 345 | 218 | |
Equity-based compensation expense | 8,672 | 22,919 | |
Contingent earnout expense not yet settled | 0 | 338 | |
Earnout settlement in Holdings’ equity | 0 | 9,288 | |
Discount on common stock issued under the committed equity facility | 231 | 0 | |
Change in fair value of warrants | (16,005) | (2,938) | |
Deferred provision (benefit) for income taxes | (6,964) | (8,078) | |
Impairment expense | [1] | 80,462 | 0 |
Non-cash lease expense | 229 | 0 | |
Non-cash interest expense | 270 | 0 | |
Other | 143 | 65 | |
Changes in assets and liabilities: | |||
(Increase) decrease in accounts receivable | (283) | (1,244) | |
(Increase) decrease in contract assets | (4,590) | (3,537) | |
(Increase) decrease in inventory | (1,362) | (234) | |
(Increase) decrease in prepaid insurance | (227) | (3,806) | |
(Increase) decrease in prepaid expenses and other assets | (803) | (126) | |
Increase (decrease) in accounts payable and accrued expenses | 6,793 | 983 | |
Increase (decrease) in deferred revenue | 1,714 | (7,584) | |
Increase (decrease) in other liabilities | 454 | 338 | |
Increase (decrease) in notes payable to seller | 0 | (608) | |
Net cash provided by (used in) by operating activities | (26,829) | (34,325) | |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | 0 | (38,735) | |
Purchases of property, plant and equipment, net | (2,793) | (1,840) | |
Purchase of intangible assets | (639) | (389) | |
Settlement of related party receivable | 0 | 4,874 | |
Net cash provided by (used in) investing activities | (3,432) | (36,090) | |
Cash flows from financing activities: | |||
Repayments of debt | (4,489) | (47,465) | |
Payment of debt issuance fees to third parties | (1,147) | (62) | |
Proceeds received from debt | 19,696 | 49,017 | |
Proceeds from issuance of common stock | 2,956 | 0 | |
Payment of committed equity facility transaction costs | (161) | 0 | |
Payments for the Merger transaction costs | 0 | (35,935) | |
Proceeds from the Merger | 0 | 110,583 | |
Payment of contingent earnout | 0 | (600) | |
Net cash provided by (used in) financing activities | 16,855 | 75,538 | |
Effect of foreign currency rate changes on cash and cash equivalents | (86) | 59 | |
Net increase (decrease) in cash and cash equivalents | (13,492) | 5,182 | |
Cash and cash equivalents at beginning of period | 20,523 | 22,076 | |
Cash and cash equivalents at end of period | 7,031 | 27,258 | |
Cash paid (received) during the period for: | |||
Interest | 4,421 | 4,613 | |
Income taxes | 0 | 0 | |
Earnout settlement | 0 | 1,602 | |
Supplemental Schedule of Non-Cash Investing and Financing Activities: | |||
Holdings’ contribution for acquisition of businesses | 0 | 2,110 | |
Initial fair value of warrants at closing of Merger | 0 | 21,727 | |
Capital expenditures not yet paid | 1,242 | 44 | |
Committed equity facility transaction costs not yet paid | $ 571 | $ 0 | |
[1]Please refer to Note G, Note H, and Note I for additional information. |
Description of the Business
Description of the Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Note A – Description of the Business Redwire Corporation develops and manufactures mission critical space solutions and high reliability components for the next generation space economy. With decades of flight heritage combined with the agile and innovative culture of a commercial space platform, Redwire Corporation is uniquely positioned to assist our customers in solving the complex challenges of future space missions. AE Industrial Partners Fund II, LP (“AEI”), a private equity firm specializing in aerospace, defense, and government services, formed a series of acquisition vehicles on February 10, 2020, which included Cosmos Parent, LLC, Cosmos Intermediate, LLC, Cosmos Finance, LLC and Cosmos Acquisition, LLC, with Cosmos Parent, LLC being the top holding company. Cosmos Parent, LLC owned 100% of the equity in Cosmos Intermediate, LLC; Cosmos Intermediate, LLC owned 100% of the equity in Cosmos Finance, LLC; Cosmos Finance, LLC owned 100% of the equity in Cosmos Acquisition, LLC. Upon the formation of these acquisition vehicles, Cosmos Intermediate, LLC (“Successor”) effected a number of acquisitions through its wholly owned subsidiary, Cosmos Acquisition, LLC. Following the acquisitions, the Successor became a wholly owned subsidiary of AE Red Holdings, LLC formerly known as Redwire, LLC (“Holdings”). Strategic acquisitions that augment our technology and product offerings are a key part of our growth strategy. From March 2020 through September 30, 2022, the Company has completed eight acquisitions, which collectively have provided a wide variety of complementary technologies and solutions to serve the Company’s target markets and customers. As of December 31, 2021, these acquisitions included: Adcole Space, LLC (“Adcole”), Deep Space Systems, Inc. (“DSS”), In Space Group, Inc. and its subsidiaries (collectively, “MIS” or “Predecessor”), Roccor, LLC (“Roccor”), and LoadPath, LLC (“LoadPath”), Oakman Aerospace, Inc. (“Oakman”), Deployable Space Systems, Inc. (“DPSS”) and Techshot, Inc. (“Techshot”). On October 31, 2022, the Company completed the acquisition of QinetiQ Space NV (“Space NV”) as described in Note T. On September 2, 2021, the previously announced merger (the “Merger”) with Genesis Park Acquisition Corp. (“GPAC”) was consummated pursuant to the Agreement and Plan of Merger dated March 25, 2021 by and among GPAC, Shepard Merger Sub Corporation, a Delaware corporation and direct, wholly owned subsidiary of GPAC, Cosmos Intermediate, LLC and Holdings. Upon the closing of the Merger, GPAC was renamed to Redwire Corporation (“Redwire” or the “Company”), the SEC registrant. As a result of the Merger, the Company received aggregate gross proceeds of $110.6 million from the trust account of GPAC and PIPE proceeds. Proceeds from the Merger were partially used to repay the $41.6 million outstanding under the Silicon Valley Bank (“SVB”) Loan, including interest of $0.1 million, and Merger transaction costs and other costs paid through the funds flow of $38.7 million, consisting of marketing, legal and other professional fees. The Merger was accounted for as a reverse recapitalization in which GPAC was treated as the acquired company. A reverse recapitalization does not result in a new basis of accounting, and the consolidated financial statements of the combined entity represent the continuation of the consolidated financial statements of Cosmos Intermediate, LLC in many respects. Immediately prior to the closing of the Merger, but following the consummation of the Company’s domestication to a Delaware corporation, the authorized capital stock of the Company consisted of 600,000,000 shares of capital stock, including (i) 500,000,000 shares of Redwire common stock with a par value $0.0001 per share and (ii) 100,000,000 shares of Redwire preferred stock. At the effective time of the Merger, the 100 company units of Cosmos Intermediate, LLC were cancelled and automatically deemed for all purposes to represent Holdings’ right to receive, in the aggregate, $75.0 million of cash, 37,200,000 shares of common stock and 2,000,000 warrants to purchase one share of common stock per warrant (with such amount of warrants corresponding to the forfeiture of certain private placement warrants acquired by Genesis Park Holdings (the “Sponsor”) and Jefferies LLC (“Jefferies”) in connection with GPAC’s initial public offering). The exchanged 37,200,000 shares of common stock consideration to Holdings, the GPAC common stock shares outstanding at the time of closing of 13,961,273, and the PIPE financing shares issued at closing of 8,500,000 made up the total of the 59,661,273 shares of common stock outstanding as of September 2, 2021. The 100 units of the Company prior to the Merger were retroactively restated to reflect the exchange ratio established in the Merger (computed as 37,200,000 shares of common stock to 100 Company units). Impact of Macroeconomic Environment and COVID-19 Adverse macroeconomic conditions including, among others, heightened inflation, rising interest rates, volatility in capital markets, supply chain disruptions, labor shortages, regulatory challenges, and the ongoing impact of the COVID-19 pandemic have affected the Company’s cost of capital, financial condition and results of operations. Decreases in the availability, cost and delivery of supplies have caused shortages and delays for the procurement of raw materials, components and other supplies required to fulfill the Company’s performance obligations. The long-term impacts of macroeconomic conditions and COVID-19 on government budgets and other funding priorities are difficult to predict and could continue to adversely affect the Company’s operations and financial results. There can be no assurances that actions or responsive measures taken on the part of the Company or governmental authorities will be successful in mitigating increased risks associated with macroeconomic conditions and COVID-19. Committed Equity Facility On April 14, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with B. Riley Principal Capital, LLC (“B. Riley”). Pursuant to the Purchase Agreement, the Company has the right to sell to B. Riley up to $80.0 million of newly issued shares of the Company’s common stock, subject to certain conditions and limitations. The Purchase Agreement governs a committed equity facility that will be used to further support its growth strategy through initiatives such as accretive acquisitions and internal investments, to bolster working capital, and/or for general corporate purposes. Please refer to Note D and Note N for additional information. Chief Financial Officer Transition On June 1, 2022 (the “Effective Date”), William Read stepped down from the position of Chief Financial Officer (CFO) and entered into a separation and release agreement (“Separation and Release Agreement”) which ended his employment with the Company as of the Effective Date. On the same date, Jonathan E. Baliff, a member of the Company’s board of directors (the “Board”), assumed the role of CFO of the Company. Mr. Baliff stepped down from his service on the Board’s Audit Committee and Nominating and Corporate Governance Committee as of the Effective Date, but remains a member of the Board. Please refer to Note P for additional information. Convertible Preferred Stock Offering On October 28, 2022, the Company filed a Certificate of Designation describing the terms and conditions of newly issued Series A convertible preferred stock of the Company, par value $0.0001 (the “Convertible Preferred Stock”), with 88,000 total shares constituting the series. On the same date, the Company entered into (i) an investment agreement (the “AEI Investment Agreement”) with AE Industrial Partners Fund II, LP (“AEI Fund II”) and AE Industrial Partners Structured Solutions I, LP (“AEI Structured Solutions”, and together with AEI Fund II, (“AEI”), and (ii) an investment agreement (the “Bain Capital Investment Agreement,” and together with the AEI Investment Agreement, the “Investment Agreements”) with BCC Redwire Aggregator, LP (“Bain Capital”). Pursuant to the Investment Agreements, the Company sold an aggregate of 80,000 shares (the “Purchased Shares”) of the Convertible Preferred Stock to AEI and Bain Capital, for an aggregate purchase price of $80.0 million. The Company used a portion of the proceeds from the sale of the Purchased Shares to finance the acquisition of Space NV. In addition, the Company intends to use the remaining proceeds for certain corporate purposes, which may include (i) investing in current capabilities which the Company believes will assist in meeting customer demand and in expanding current Company offerings; (ii) expanding and diversifying the Company’s global infrastructure offerings; and (iii) increasing the total available liquidity of the Company. Please refer to Note T for additional information. In addition, on November 7 and 8, 2022, we entered into additional investment agreements (the “Additional Investment Agreements”) with various investors (collectively, the “Additional Investors,” and together with AEI and Bain Capital, the “Investors”) pursuant to which the Company issued and sold a total of 1,250 shares of the Convertible Preferred Stock to the Additional Investors for an aggregate purchase price of $1.25 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note B – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statement information and the rules of the SEC. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2021 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of adjustments associated with acquisition accounting and normal recurring adjustments, necessary for the fair statement of such financial statements. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the information contained in the Company’s 2021 Annual Report on Form 10-K. Interim results are not necessarily indicative of the results that may be expected for a full year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management has prepared the estimates using the most current and best available information that are considered reasonable under the circumstances. However, actual results could differ materially from those estimates. Accounting policies subject to estimates include, but are not limited to, valuation of goodwill and intangible assets, contingent consideration, revenue recognition, income taxes, and warrant liabilities. Business Combinations The Company utilizes the acquisition method of accounting in Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) , for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets acquired and liabilities assumed and to establish the acquisition date fair value as of the measurement date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business combination date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is identified. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. Contingent consideration is classified as a liability or as equity on the basis of the definitions of a financial liability and an equity instrument; contingent consideration payable in cash is classified as a liability. The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs (as defined in the Fair Value of Financial Instruments policy below). When reported, any changes in the fair value of these contingent consideration payments are included in contingent earnout expense on the condensed consolidated statements of operations and comprehensive income (loss). Revenue Recognition Based on the specific analysis of its contracts, the Company has determined that its contracts are subject to revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Recognition under the ASC 606 five-step model involves (i) identification of the contract, (ii) identification of performance obligations in the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the previously identified performance obligations, and (v) revenue recognition as the performance obligations are satisfied. During step one of the five step model, the Company considers whether contracts should be combined or separated, and based on this assessment, the Company combines closely related contracts when all the applicable criteria are met. The combination of two or more contracts requires judgment in determining whether the intent of entering into the contracts was effectively to enter into a single contract, which should be combined to reflect an overall profit rate. Similarly, the Company may separate an arrangement, which may consist of a single contract or group of contracts, with varying rates of profitability, only if the applicable criteria are met. Judgment is involved in determining whether a group of contracts may be combined or separated based on how the arrangement and the related performance criteria were negotiated. The conclusion to combine a group of contracts or separate a contract could change the amount of revenue and gross profit recorded in a given period. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied. The Company’s contracts with customers generally do not include a right of return relative to delivered products. In certain cases, contracts are modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are accounted for as part of the existing contract. Certain contracts with customers have options for the customer to acquire additional goods or services. In most cases, the pricing of these options are reflective of the standalone selling price of the good or service. These options do not provide the customer with a material right and are accounted for only when the customer exercises the option to purchase the additional goods or services. If the option on the customer contract was not indicative of the standalone selling price of the good or service, the material right would be accounted for as a separate performance obligation. The Company’s revenues are derived from the design and sales of components for spacecraft and satellites and the performance of engineering, modeling and simulation services related to spacecraft design and mission execution. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606, if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then applied for the bundled performance obligation. The Company has concluded that its service contracts generally contain a single performance obligation given the interrelated nature of the activities which are significantly customized and not distinct within the context of the contract. Once the Company identifies the performance obligations, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company’s contracts generally do not contain penalties, credits, price concessions, or other types of potential variable consideration. Prices are fixed at contract inception and are not contingent on performance or any other criteria. The Company engages in long-term contracts for production and service activities and recognizes revenue for performance obligations over time. These long-term contracts involve the design, development, manufacture, or modification of components for spacecraft and satellites. Revenue is recognized over time (versus point in time recognition), as the Company’s performance creates an asset with no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, and the customer receives the benefit as the Company builds the asset. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. These contracts include both fixed-price and cost reimbursable contracts. The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material (“T&M”) contracts. For long-term contracts, the Company typically recognizes revenue using the input method, using a cost-to-cost measure of progress. The Company believes that this method represents the most faithful depiction of the Company’s performance because it directly measures value transferred to the customer. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, but are not limited to, the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed; the cost and availability of materials; the availability of subcontractor services and materials; and the availability and timing of funding from the customer. The Company bears the risk of changes in estimates to complete on a fixed-price contract, which may cause profit levels to vary from period to period. For cost reimbursable contracts, the Company is reimbursed periodically for allowable costs and is paid a portion of the fee based on contract progress. In the limited instances where the Company enters into T&M contracts, revenue recognized reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other direct billable costs. For T&M contracts, the Company recognizes revenue in the amount for which the Company has a right to invoice the customer based on the control transferred to the customer. For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. Accounting for long-term contracts requires significant judgment relative to estimating total contract revenues and costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. On long-term contracts, the portion of the payments retained by the customer is not considered a significant financing component. At contract inception, the Company also expects that the lag period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will not constitute a significant financing component. Many of the Company’s long-term contracts have milestone payments, which align the payment schedule with the progress towards completion on the performance obligation. On some contracts, the Company may be entitled to receive an advance payment, which is not considered a significant financing component because it is used to facilitate inventory demands at the onset of a contract and to safeguard the Company from the failure of the other party to abide by some or all of their obligations under the contract. Contract Balances Contract balances result from the timing of revenue recognized, billings and cash collections, and the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not solely subject to the passage of time. Contract liabilities are presented as deferred revenue on the Company’s condensed consolidated balance sheets and consist of deferred product revenue, billings in excess of revenues, deferred service revenue, and customer advances. Deferred product revenue represents amounts that have been invoiced to customers but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represent milestone billing contracts where the billings of the contract exceed recognized revenues. Remaining Performance Obligations The Company includes in its computation of remaining performance obligations customer orders for which it has accepted signed sales orders. The definition of remaining performance obligations excludes those contracts accounted for under the “right to invoice” practical expedient. Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, cash balances with banks and similar institutions and all highly liquid investments with an original maturity of three months or less. Fair Value of Financial Instruments The Company measures certain financial assets and liabilities, including, but not limited to, contingent consideration, at fair value. ASC 820, Fair Value Measurement and Disclosures (“ASC 820”), specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy: Level 1: Quoted prices for identical instruments in active markets; Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, certificates of deposit, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high-credit quality. At times, such amounts may exceed federally insured limits. Cash and cash equivalents on deposit or invested with financial and lending institutions was $7.0 million and $20.5 million, as of September 30, 2022 and December 31, 2021, respectively. The Company provides credit to customers in the normal course of business. The carrying amount of current accounts receivable is stated at cost, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be fully collected. The allowance is based on the assessment of the following factors: customer creditworthiness, historical payment experience, age of outstanding accounts receivable and any applicable collateral. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is calculated on a first-in, first-out (“FIFO”) basis. Inventory may consist of raw materials, work-in-process, and finished goods. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable that inventory values exceed their net realizable value. Changes in these estimates are included in cost of sales in the condensed consolidated statements of operations and comprehensive income (loss). Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has concluded that it operates in one operating segment and one reportable segment, space infrastructure, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Goodwill and Intangible Assets Goodwill is the amount by which the purchase price exceeded the fair value of the net identifiable assets acquired and liabilities assumed in a business combination on the date of acquisition. The Company tests goodwill for impairment annually as of October 1 st or when events and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company has three reporting units, Mission Solutions, Space Components, and Engineering Services, which were determined based on similar economic characteristics, financial metrics and product and servicing offerings. The Company assesses impairment first on a qualitative basis to determine if a quantitative assessment is necessary. In circumstances where the qualitative analysis indicates that it is more likely than not that the fair value of a reporting unit does not exceed its carrying value, the Company would perform a quantitative analysis and the goodwill impairment loss, if any, is measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. During the second quarter of 2022, the Company identified certain triggering events and performed an interim goodwill impairment assessment for all reporting units. Please refer to Note I for additional information regarding the results of this assessment. Intangible assets include those acquired from the Company’s various business combinations as well as licensed software for internal-use. Licensed software is acquired solely to meet the Company’s internal needs which provides the right to take possession of the software and is hosted on the Company’s specific hardware components as well as the capitalization of qualifying costs during the application development stage. Indefinite-lived intangible assets include tradenames and in-process research and development (“IPR&D”). Finite-lived intangible assets include customer relationships, technology, trademarks, and internal-use software. Finite-lived intangible assets are reported at cost, net of accumulated amortization, and are either amortized on a straight-line basis over their estimated useful lives or over the period the economic benefits of the intangible assets are consumed. IPR&D is recognized as an indefinite-lived intangible asset until completion or abandonment of the related project, then reclassified as a finite-lived intangible asset and amortized over the remaining useful life. All indefinite-lived assets are reviewed for impairment annually, and as necessary if indicators of impairment are present. Similar to goodwill, the Company identified certain triggering events and performed an interim impairment assessment during the second quarter of 2022 for all indefinite-lived intangible assets. Please refer to Note H for additional information regarding the results of this assessment. Property, Plant and Equipment Property, plant and equipment are the long-lived, physical assets of the Company, acquired for use in the Company’s normal business operations and not intended for resale by the Company. These assets are recorded at cost. Renewals and betterments that increase the useful lives of the assets are capitalized. Repair and maintenance expenditures that increase the efficiency of the assets are expensed as incurred. Depreciation is based on the estimated useful lives of the assets using the straight-line method and is included in selling, general and administrative expenses or cost of sales based upon the asset; depreciation and amortization expense includes the amortization of assets under finance leases. Expected useful lives for property, plant and equipment are reviewed at least annually. Estimated useful lives are as follows: Estimated useful Computer equipment 3 Furniture and fixtures 7 Laboratory equipment 3-10 Software 3-5 Leasehold improvements 5 or lease term As assets are retired or sold, the related cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). Leases The Company is obligated under certain operating leases for its facilities and office equipment. The Company assesses whether an arrangement is a lease or contains a lease at inception of the arrangement. For arrangements considered leases, the Company records a right-of-use (ROU) asset and lease liability as of the commencement date. The Company uses the date of initial possession as the lease commencement date, which is generally when the underlying asset becomes available for the Company’s specific use. ROU assets represent the Company’s right to use the underlying asset for the lease term and are depreciated over the shorter of the useful life of the asset and the lease term. Lease liabilities represent the present value of the Company’s obligations to make payments arising over the lease term. The present value of the lease payments is calculated using the incremental borrowing rate as of the lease commencement date, which reflects the fixed rate the Company would have to pay to borrow an amount equal to the future minimum lease payments over a similar term. The lease term includes renewal options which are reasonably certain to be exercised. Lease and non-lease related components, such as common area maintenance costs, obligations to return the underlying asset to its original condition, or costs to dismantle and remove the underlying asset at the end of the term, are accounted for separately. Certain leasing arrangements contain predetermined fixed escalation of minimum rents and/or require variable payments, such as insurance and tax payments. Variable lease payments which depend on an index or other rate are excluded from lease payments in the measurement of the ROU asset and lease liability and are recognized as expense in the period in which the payment occurs. The Company does not have any material restrictions or covenants in its lease agreements, sale leaseback transactions or residual value guarantees. Leases with an initial term of twelve months or less are not recorded on the Company’s condensed consolidated balance sheets and are recognized as lease expense on a straight-line basis in the condensed consolidated statements of operations and comprehensive income (loss). Long-Lived Assets The Company regularly evaluates its property, plant and equipment and finite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable, in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”) and ASC 350, Intangibles—Goodwill and Other (“ASC 350”). If the Company determines that the carrying amount of an asset or asset group is not recoverable based upon the undiscounted expected future cash flows of the asset or asset group, the Company records an impairment loss equal to the excess of carrying amount over the estimated fair value of the asset or asset group. During the second quarter of 2022, the Company identified triggering events and performed an impairment assessment on its long-lived asset groups. As a result, the Company determined that the estimated fair value of certain long-lived asset groups was lower than their carrying value as of September 30, 2022. Please refer to Note G and Note H for additional information regarding the results of this assessment. Income Taxes The Company accounts for income taxes under ASC 740, Income Taxes (“ASC 740”). The Company computes its provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are calculated based on the basis difference for financial reporting and tax basis of assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse. All deferred income taxes are classified as non-current in the Company’s condensed consolidated balance sheets. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Research and Development Costs Research and development costs are primarily made up of labor charges, prototype material, and development expenses. Research and development costs are expensed in the period incurred. Advertising Costs All advertising, promotional and marketing costs are expensed when incurred and are included in Selling, general and administrative expenses within the condensed consolidated statements of operations and comprehensive income (loss). Equity-based Compensation The Company’s equity-based compensation plans are classified as equity plans and compensation expense is generally recognized over the vesting period of stock awards. The Company issues stock awards in the form of incentive units, non-qualified stock options and restricted stock units. The fair value of incentive units and stock options are calculated on the grant date using the Black-Scholes Option Pricing Model (“OPM”). Given the absence of adequate historical data, the Company uses the Simplified Method to estimate the term of stock options granted to employees. The fair value of the restricted stock units are calculated based on the closing market price of the Company’s common stock on the grant date. The vesting of the incentive units is contingent on service-based, performance-based, and market conditions and, as such, the recognition of compensation expense is deferred until it is probable the performance conditions will be satisfied. Once it is probable that the performance conditions will be satisfied, unrecognized compensation expense is recognized based on the portion of the requisite service period that has been rendered. If the requisite period is complete, compensation expense is recognized regardless of market conditions being met and recognizes forfeitures as they occur. For non-qualified stock options and restricted stock units, the Company recognizes the grant date fair value as compensation expense on a straight-line method over the vesting period (typically three years) and recognizes forfeitures as they occur. Derivative Financial Instruments The Company evaluates its convertible instruments, options, warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815 Derivatives and Hedging . The classification of derivative instruments, including whether such instruments should be recorded as assets, liabilities, or equity, is reassessed at the end of each reporting period. For equity-linked financial instruments, the Company must determine whether the underlying instrument is indexed to its own common stock in order to classify the derivative instrument as equity. Otherwise, the derivative asset or liability is recognized at fair value with subsequent changes in fair value recognized in the condensed consolidated statements of operations and comprehensive income (loss). Committed Equity Facility During the second quarter of 2022, the Company evaluated the Purchase Agreement with B. Riley and determined that the committed equity facility was not indexed to the Company’s own common stock. As a result, it was recognized as a derivative asset with changes in fair value recognized as other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). Please refer to Note D and Note N for additional information. Warrants As part of the Merger, public warrants were established as equity and private warrants were established as a liability. Classification of the public warrants as equity instruments and the private warrants as liability instruments is based on management’s analysis of the guidance in ASC 815 and in a statement issued by the Staff of the SEC regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies.” Management determined that while the public warrants meet the definition of a derivative, they meet the equity scope exception in ASC 815-10-15-74(a) to be classified in stockholders’ equity and are not subject to remeasurement provided that the Company continues to meet the criteria for equity classification. Management considered whether the private warrants display the three characteristics of a derivative under ASC 815, and concluded that the private warrants meet the definition of a derivative. However, the private warrants fail to meet the equity scope exception in ASC 815-10-15-74(a) and thus are classified as a liability measured at fair value, subject to remeasurement at each reporting period. The Company measured the private warrant liability at fair value at the closing of the Merger and then at each reporting period with changes in fair value recognized as other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). Foreign Currency Translation The Company’s consolidated financial statements are presented in United States dollars (“USD”), which is the functional currency of the Company. The local currency of our operations in Luxembourg, the euro, is considered to be the functional currency of that operation. Assets and liabilities of the Company's foreign subsidiaries, where the functional currency is the local currency, are translated into USD at exchange rates effective as of the balance sheet date. Revenues and expenses are translated using average exchange rates in effect for the periods presented. Balance sheet translation adjustments are reported in accumulated other comprehensive income (loss). Realized gains and losses on foreign currency transactions are included in other (income) expense, net on the condensed consolidated statements of operations and comprehensive income (loss). Emerging Growth Company Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until privat |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Note C – Business Combinations Oakman Acquisition On January 15, 2021, the Company acquired 100% of the equity interest of Oakman for cash and 1,000,000 units of Holdings’ equity. This acquisition supports the Company’s growth in its offering of engineering solutions. The fair value of assets acquired and liabilities assumed as of the acquisition date was $10.0 million and $4.5 million, respectively, for total purchase consideration, after certain adjustments, of $14.3 million, comprised of $12.2 million cash paid and $2.1 million common stock issued. The acquisition was accounted for as a business combination, whereby the excess of the consideration paid over the fair value of identifiable net assets was allocated to goodwill. The amount of goodwill for Oakman as of September 30, 2022 and December 31, 2021 was $8.8 million. DPSS Acquisition On February 17, 2021, the Company acquired 100% of the equity interest of DPSS in exchange for cash. The acquisition supports the Company’s growth in its offering of deployable technology. The fair value of assets acquired and liabilities assumed as of the acquisition date was $28.7 million and $12.7 million, respectively, for total purchase consideration, after certain adjustments, of $27.3 million. The acquisition was accounted for as a business combination, whereby the excess of the consideration paid over the fair value of identifiable net assets was allocated to goodwill. The amount of goodwill for DPSS as of September 30, 2022 and December 31, 2021 was $11.3 million. Techshot Acquisition On November 1, 2021, the Company acquired 100% of the equity interest of Techshot in exchange for cash and 3,029,596 shares of common stock. The acquisition supports the Company’s growth in its offering of mission solutions. The following table summarizes the fair value of the consideration transferred and the estimated fair values of the major classes of assets acquired and liabilities assumed as of the acquisition date. November 1, 2021 Cash paid $ 2,228 Common stock issued 38,493 Purchase consideration $ 40,721 Assets: Cash $ 406 Accounts receivable and other receivable 287 Contract assets 926 Inventory 120 Prepaid expenses and other current assets 86 Property, plant and equipment 14,818 Intangible assets 4,120 Total assets 20,763 Liabilities: Accounts payable 39 Accrued expenses 293 Deferred revenue 675 Other current liabilities 35 Deferred tax liabilities 5,521 Total liabilities 6,563 Fair value of net identifiable assets acquired 14,200 Goodwill $ 26,521 The following table summarizes the intangible assets acquired by class: November 1, 2021 Weighted average Trademark $ 240 3 Technology 1,800 10 Customer relationships 1,400 9 IPR&D 680 Total intangible assets $ 4,120 The fair value of the acquired trademark, technology, and IPR&D was estimated using the relief from royalty (“RFR”) method. The fair value of the acquired customer relationships was estimated using the excess earnings method. The acquisition was accounted for as a business combination, whereby the excess of the consideration paid over the fair value of identifiable net assets was allocated to goodwill. The goodwill reflects the potential synergies and expansion of the Company’s offerings across product lines and markets complementary to its existing products and markets. For tax purposes, the goodwill is not deductible. Pro Forma Financial Data (Unaudited) The table below presents the pro forma combined results of operations for the business combinations for the three and nine months ended September 30, 2021 as though the acquisitions of Oakman, DPSS, and Techshot (the “2021 Business Combinations”) had been completed as of January 1, 2020. Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Revenues $ 34,947 $ 107,256 Net income (loss) (23,645) (46,260) The amounts included in the pro forma information are based on the historical results and do not necessarily represent what would have occurred if the 2021 business combinations had taken place as of January 1, 2020, nor do they represent the results that may occur in the future. Accordingly, the pro forma financial information should not be relied upon as being indicative of the results that would have been realized had the business combination occurred as of the date indicated or that may be achieved in the future. The Company incurred $21 thousand and $0.1 million of costs related to completed acquisitions during the three and nine months ended September 30, 2022, respectively, and zero and $2.4 million during the three and nine months ended September 30, 2021, |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note D – Fair Value of Financial Instruments Cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable, salaries and benefits payable, accrued interest, other accrued expenses and current liabilities are reflected on the condensed consolidated balance sheets at amounts that approximate fair value because of the short-term nature of these financial assets and liabilities. The fair value of the Company’s debt approximates its carrying value and is classified as Level 2 within the fair value hierarchy as it is based on discounted cash flows using a current borrowing rate. Contingent Consideration As of September 30, 2022 and December 31, 2021, contingent consideration consisted of estimated future payments related to the Company’s acquisition of Roccor. As certain inputs are not observable in the market, contingent consideration payments are classified as Level 3 instruments and included in notes payable to seller on the condensed consolidated balance sheets. Significant changes in the significant unobservable inputs used in the Black-Scholes OPM to determine the fair value of contingent consideration would result in a significantly lower or higher fair value measurement. The Company adjusts the previous fair value estimate of contingent consideration at each reporting period based on changes in forecasted financial performance and overall risk as well as the period of time elapsed. The purchase agreement with the sellers of Roccor awarded such sellers with a contingent right to an earnout payment from the Company upon the achievement of certain revenue milestones for the year ended December 31, 2021. The fair value of the Roccor contingent earnout was estimated using the Black-Scholes OPM. The assumptions used in the Black-Scholes OPM were as follows: Roccor Black-Scholes OPM Assumptions Risk-free interest rate 0.1 % Revenue discount rate 7.0 % Revenue volatility 30.0 % Earnout payment discount rate 4.0 % As of September 30, 2022, the Company expects to pay the Roccor contingent earnout during the second half of 2022 in accordance with the acquisition agreement. Committed Equity Facility During the second quarter of 2022, the Company evaluated the Purchase Agreement with B. Riley and determined that the committed equity facility should be accounted for in accordance with ASC 815. Accordingly, the Company recorded a derivative asset with an initial fair value of $0.8 million based on the 127,751 shares of common stock issued to B. Riley as consideration for its irrevocable commitment to purchase up to $80.0 million in shares of the Company’s common stock. Subsequent changes in the fair value of the derivative asset are dependent upon, among other things, changes in the closing share price of the Company’s common stock, the quantity and purchase price of shares purchased by B. Riley during the reporting period, the unused capacity under the committed equity facility as of the balance sheet date and the cost of raising other forms of capital. The Company adjusts the previous fair value estimate of the committed equity facility at each reporting period based on changes in the weighted average purchase price of shares purchased by B. Riley during the period, the unused capacity available under the committed equity facility, expected stock price volatility and other macroeconomic factors which impact the cost of raising comparable forms of capital. The changes in the fair value of the committed equity facility were a decrease of $0.1 million for the three and nine months ended September 30, 2022, which are included in other (income) expense, net on the condensed consolidated statements of operations and comprehensive income (loss). Pursuant to the Purchase Agreement, the purchase price for each share of common stock is equal to 97% of the volume weighted average price (“VWAP”) on the applicable purchase date, which results in a 3% fee on the purchase of the Company’s common stock. During the three months ended September 30, 2022, the VWAP of shares purchased by B. Riley ranged from $2.73 to $4.29 per share. Based on the September 30, 2022 closing price of $2.38 per share and registered shares available for purchase under the committed equity facility of 8,090,331, the Company had $19.3 million of unused capacity under the committed equity facility as of September 30, 2022. Please refer to Note N for additional information. Private Warrants The private warrants were valued using a modified Black-Scholes OPM, which is classified as Level 3 within the fair value hierarchy. The following table presents the fair value per warrant and the valuation assumptions under the Black-Scholes OPM as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Fair value $ 0.40 $ 2.47 Exercise price $ 11.50 $ 11.50 Common stock price $ 2.38 $ 6.75 Expected option term (years) 3.92 years 4.67 years Expected volatility 66.30 % 60.50 % Risk-free rate of return 4.12 % 1.21 % Expected annual dividend yield — % — % The changes in the fair value of the private warrant liability were a decrease of $0.9 million and $16.0 million for the three and nine months ended September 30, 2022, respectively, which are included in other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). The following table presents information about the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 Balance Sheet Level 1 Level 2 Level 3 Total Assets: Committed equity facility Other non-current assets $ — $ — $ 616 $ 616 Total assets $ — $ — $ 616 $ 616 Liabilities: Private warrants Warrant liabilities $ — $ — $ 3,093 $ 3,093 Contingent consideration Notes payable to sellers — — 1,000 1,000 Total liabilities $ — $ — $ 4,093 $ 4,093 December 31, 2021 Balance Sheet Level 1 Level 2 Level 3 Total Liabilities: Private warrants Warrant liabilities $ — $ — $ 19,098 $ 19,098 Contingent consideration Notes payable to sellers — — 1,000 1,000 Total liabilities $ — $ — $ 20,098 $ 20,098 Changes in the fair value of Level 3 financial assets and liabilities during the nine months ended September 30, 2022 were as follows: Assets: Committed Equity Facility Total December 31, 2021 $ — $ — Additions 756 756 Changes in fair value (140) (140) Settlements — — September 30, 2022 $ 616 $ 616 Liabilities: Contingent Consideration Private Total December 31, 2021 $ 1,000 $ 19,098 $ 20,098 Additions — — — Changes in fair value — (16,005) (16,005) Settlements — — — September 30, 2022 $ 1,000 $ 3,093 $ 4,093 |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Accounts Receivable, net | Note E – Accounts Receivable, net The accounts receivable, net balance was as follows: September 30, December 31, Billed receivables $ 16,175 $ 14,820 Unbilled receivables 346 1,442 Total accounts receivable, net $ 16,521 $ 16,262 Accounts receivable are recorded for amounts to which the Company is entitled and has invoiced to the customer. Unbilled receivables consist of unbilled amounts as of September 30, 2022 under T&M contracts where billing and payment is subject solely to the passage of time. There was no allowance for doubtful accounts as of September 30, 2022 and December 31, 2021. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note F – Inventory The inventory balance was as follows: September 30, December 31, Raw materials $ 1,239 $ 414 Work in process 638 117 Finished goods 152 157 Inventory $ 2,029 $ 688 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note G – Property, Plant & Equipment Property, plant and equipment were as follows: September 30, December 31, Computer equipment $ 1,383 $ 1,380 Furniture and fixtures 1,012 783 Laboratory equipment 3,863 16,856 Leasehold improvements 1,997 2,205 Construction in process 1,240 415 Property, plant and equipment, gross 9,495 21,639 Less: accumulated depreciation (2,798) (2,255) Total property, plant and equipment, net $ 6,697 $ 19,384 During the second quarter of 2022, there was a significant and prolonged decline in the Company’s market capitalization driven by general economic conditions, including heightened inflation, rising interest rates and volatility in the capital markets, which indicated that recorded finite-lived assets may be impaired. As a result, the Company performed a quantitative impairment test in accordance with ASC 360 and determined that the carrying value of two asset groups within the Mission Solutions reporting unit were not recoverable based on entity-specific, undiscounted net cash flows. Accordingly, impairment expense was measured as the amount by which the carrying value of the asset groups exceeded their fair value as of June 30, 2022. The fair value of the two asset groups was determined using an income approach based on a discounted cash flow model. Fair value estimates result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by measurement as of the measurement date. |
Intangible Assets, net
Intangible Assets, net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net | Note H – Intangible Assets, net The intangible asset gross carrying amount and accumulated amortization were as follows: September 30, 2022 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 33,165 $ (3,654) $ 29,511 19 Technology 27,348 (4,659) 22,689 14 Trademarks 3,498 (1,275) 2,223 7 Internal-use software licenses 2,158 (740) 1,418 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 66 — 66 Total intangible assets $ 66,535 $ (10,328) $ 56,207 December 31, 2021 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 48,612 $ (3,592) $ 45,020 19 Technology 43,339 (5,894) 37,445 14 Trademarks 6,807 (1,572) 5,235 7 Internal-use software licenses 2,292 (385) 1,907 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 935 — 935 Total intangible assets $ 102,285 $ (11,443) $ 90,842 During the second quarter of 2022, there was a significant and prolonged decline in the Company’s market capitalization driven by general economic conditions, including heightened inflation, rising interest rates and volatility in the capital markets, which indicated that recorded intangible assets may be impaired. As a result, the Company performed a quantitative impairment test of indefinite-lived intangible assets and definite-lived intangible assets in accordance with ASC 350 and ASC 360, respectively. Under ASC 350, the fair value of the Company’s indefinite-lived intangible assets was determined using the relief from royalty method, which assumes that the asset’s fair value is the present value of license fees avoided by owning it. Under ASC 360, the Company determined that the carrying value of two asset groups within the Mission Solutions reporting unit were not recoverable based on entity-specific, undiscounted net cash flows. Accordingly, the Company determined the fair value of these two asset groups using an income approach based on a discounted cash flow model. Fair value estimates result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by measurement as of the measurement date. Impairment expense was measured as the amount by which the carrying value of the intangible assets exceeded their fair value as of June 30, 2022. Based on the results of the quantitative impairment test, the Company recognized impairment expense related to customer relationships, technology, trademarks, internal-use software licenses and IPR&D of $28.2 million during the nine months ended September 30, 2022. Please refer to Note I for additional information related to the drivers of the decline in estimated future cash flows for the Mission Solutions reporting unit. Subsequent to the second quarter of 2022, the Company concluded that there were no indicators of impairment requiring further impairment testing. The table below presents the future amortization expense on intangible assets as of September 30, 2022: Year Total Remainder of 2022 $ 1,402 2023 5,607 2024 5,295 2025 4,721 2026 4,450 Thereafter 34,366 Total future amortization expense on intangible assets $ 55,841 |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note I – Goodwill The changes in the carrying amount of goodwill were as follows: September 30, 2022 Balance of goodwill as of December 31, 2021 $ 96,314 Change arising from impact of foreign currency (296) Impairment expense (39,308) Balance of goodwill as of September 30, 2022 $ 56,710 During the second quarter of 2022, there was a significant and prolonged decline in the Company’s market capitalization driven by general economic conditions, including heightened inflation, rising interest rates and volatility in the capital markets, which indicated that recorded goodwill may be impaired. As a result, the Company performed an interim quantitative goodwill impairment test in accordance with ASC 350 for all reporting units. The fair value of the Company’s reporting units was determined using a combination of an income approach based on a discounted cash flow model as well as two market approaches based on (i) guideline public company revenues and earnings before interest, tax, depreciation and amortization multiples and (ii) guideline transactions, whereby consideration is given to prices paid in market comparable transactions. Fair value estimates result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions that have been deemed reasonable by management as of the measurement date. Based on the interim impairment test, the Company determined that the estimated fair value of the Mission Solutions reporting unit was lower than its carrying value as of June 30, 2022. Accordingly, the Company recorded a non-cash, pre-tax and post-tax impairment charge of $39.3 million, which reduced the reporting unit’s goodwill balance to $10.7 million during the second quarter of 2022. The impairment of goodwill on the Mission Solutions reporting unit was primarily attributable to a significant decline in discounted future cash flows, primarily attributable to a decrease in forecasted revenues as well as increased production costs and subcontractor delays that have extended the timeline for fulfillment of existing performance obligations and deferred pipeline realization. Subsequent to the second quarter of 2022, the Company concluded that there were no indicators of impairment requiring further impairment testing. As of September 30, 2022, the Company’s gross goodwill balance and accumulated impairment was $96.0 million and $39.3 million, respectively. In comparison, the Company’s goodwill balance was $96.3 million with no accumulated impairment as of December 31, 2021. Impairment activities during the second quarter of 2022 did not have any impact on the Company’s compliance with the Adams Street Credit Agreement or other contract related covenants. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note J – Debt The table below presents details of the Company’s debt as of the following periods including the effective interest rate as of September 30, 2022: Effective interest rate September 30, December 31, Adams Street Term Loan 9.50 % $ 30,547 $ 30,690 Adams Street Revolving Credit Facility 11.38 15,044 — Adams Street Delayed Draw Term Loan 9.49 14,781 14,850 Adams Street Incremental Term Loan 9.53 31,613 31,760 D&O Financing Loans 1.92 2,696 1,904 Total debt 94,681 79,204 Less: unamortized discounts and issuance costs 1,693 1,653 Total debt, net 92,988 77,551 Less: Short-term debt, including current portion of long-term debt 3,476 2,684 Total long-term debt, net $ 89,512 $ 74,867 Adams Street Capital Credit Agreement On October 28, 2020, the Company entered into a credit agreement with Adams Street Capital (the “Adams Street Credit Agreement”). The Adams Street Credit Agreement originally included a $31.0 million term loan commitment, $5.0 million revolving credit facility commitment, and $15.0 million delayed draw term loan, all of which mature on October 28, 2026. On January 15, 2021, the Company drew $15.0 million on the delayed draw term loan to finance the Oakman acquisition. On February 17, 2021 , the Adams Street Capital Credit Agreement was amended to increase the principal amount of the Adams Street Term Loan by an additional $32.0 million, which was incurred to finance the DPSS acquisition. The Company had $15.0 million outstanding under the revolving credit facility as of September 30, 2022, whereas there were no borrowings outstanding as of December 31, 2021. On September 2, 2021, the Adams Street Credit Agreement was amended to provide that the consolidated total net leverage ratio not exceed 6.50:1.00 on the last day of any quarter (“the Financial Covenant”), to remove the cap on the amount of unrestricted cash which may be netted for purposes of the Financial Covenant, to redefine “Consolidated EBITDA”, and to reset the call protection terms. In December 2021, the Company entered into a Consent to Credit Agreement whereby Adams Street Capital agreed to an extension of the delivery of periodic financial statements required under the Adams Street Credit Agreement. On March 25, 2022, the Company entered into a Third Amendment (the “Third Amendment”) to the Adams Street Capital Credit Agreement to, among other things, increase commitments under the revolving credit facility from $5.0 million to $25.0 million. The Third Amendment also modified certain negative covenants and increased the per annum interest rate (i) with respect to revolving loans in an aggregate principal amount of $5.0 million or less, to 6.00% for Eurocurrency rate loans and 5.00% for Base Rate Loans, and (ii) with respect to revolving loans in an aggregate principal amount in excess of $5.0 million, to 7.50% for Eurocurrency rate loans and 6.50% for Base Rate Loans. In connection with the entry into the Third Amendment, AEI and certain of its affiliates (the “AEI Guarantors”), provided a limited guarantee for the payment of outstanding revolving loans in excess of $10.0 million, with a $15.0 million cap in the aggregate. In the event that the AEI Guarantors are required to make payments to the lenders under the Adams Street Capital Credit Agreement pursuant to the terms of the limited guarantee, each AEI Guarantor would be subrogated to the rights of the lenders. In connection with the limited guarantee, the Lead Borrower agreed to pay to the AEI Guarantors, a fee equal to 2% of any amount actually paid by such guarantors under the limited guarantee. The fee is waivable by the AEI Guarantors at their discretion. On August 8, 2022, the Company entered into the Fourth Amendment (the “Fourth Amendment”) to the Adams Street Capital Credit Agreement. The Fourth Amendment, among other things, suspends the requirement to comply with the consolidated total net leverage ratio, commencing with the quarter ended June 30, 2022 through June 30, 2023, and resuming with the first test period ending September 30, 2023. The Company is required to maintain a minimum liquidity covenant of $5.0 million measured on the last day of each fiscal month c ommencing with the month ending September 30, 2022 through September 30, 2023. In addition, the Fourth Amendment increased the per annum interest rate with respect to the initial term loans, delayed draw term loans, incremental term loans and revolving loans by 2.00%, which interest shall accrue and be paid in kind, until the Company is in compliance with the consolidated total net leverage ratio. Accrued interest to be paid in kind is added to the outstanding principal balance for the respective debt instruments. During the three and nine months ended September 30, 2022, total accrued interest to be paid in kind on the Adams Street Credit Agreement was $0.3 million. In connection with the execution of the Fourth Amendment, the AEI Guarantors provided a limited guarantee for the payment of outstanding term loans of up to $7.5 million. In the event that the AEI Guarantors are required to make payments to the lenders under the Adams Street Capital Credit Agreement the terms pursuant to the limited guarantee follow the same terms and conditions as those of the guarantee to the Third Amendment described above. On October 28, 2022, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Adams Street Capital Credit Agreement, which among other things, further suspended certain covenant compliance requirements through September 30, 2023 with such compliance resuming with the fiscal quarter ending December 30, 2023. Pursuant to the Fifth Amendment, the limited guarantees by the AEI Guarantors are no longer effective. Please refer to Note T for additional information. The Adams Street Capital Credit Agreement, as amended, contains certain customary representations and warranties, affirmative and other covenants and events of default, including among other things, payment defaults, breach of representations and warranties, and covenant defaults. As of September 30, 2022 and December 31, 2021, the Company was in compliance with its covenant requirements, as amended by the Fourth Amendment. Silicon Valley Bank Loan Agreement On August 31, 2020, the Company entered into a $45.4 million loan agreement with Silicon Valley Bank, which was subsequently modified to increase the principal to $51.1 million on October 28, 2020 (the “SVB Loan”). On April 2, 2021, the Company amended the SVB Loan Agreement to extend the term from August 2021 to September 30, 2022. On September 2, 2021, the Company repaid the full outstanding principal and interest on the SVB Loan. Paycheck Protection Program (“PPP”) Loan On May 1, 2020, prior to its acquisition, DSS received a PPP Loan for $1.1 million (the “DSS PPP Loan”). Under the terms of the DSS PPP Loan, DSS could apply for forgiveness under the PPP regulations if DSS used the proceeds of the loan for its payroll costs and other expenses in accordance with the requirements of the PPP. Proceeds from the DSS PPP loan, including interest calculated at a nominal and effective interest rate of 1.00% per annum, were included in a DSS savings account as of the DSS acquisition date. Any amount of the DSS PPP Loan forgiven and proportionate interest amount will be released to the seller of DSS. The Company did not use any of the DSS PPP Loan funds assumed as part of the DSS acquisition. On June 18, 2021, $0.6 million of the DSS PPP Loan was forgiven and as a result was reclassified as a note payable to the seller of DSS. During the year ended December 31, 2021, the Company repaid the $0.6 million note payable to the seller of DSS and the remaining outstanding principal and interest of $0.5 million on the DSS PPP loan. D&O Financing Loan On September 3, 2021, the Company entered into a $3.0 million loan (the “2021 D&O Financing Loan”) with BankDirect Capital Finance to finance the Company’s directors and officers insurance premium. The 2021 D&O Financing Loan has an interest rate of 1.74% per annum and a maturity date of May 3, 2022. In May 2022, the Company repaid the full outstanding principal and interest on the 2021 D&O Financing Loan. On September 3, 2022, the Company entered into a $2.7 million loan with ACFO Credit Corporation (the “2022 D&O Financing Loan”) to finance the Company’s directors and officers insurance premium. The 2022 D&O Financing Loan has an interest rate of 4.59% per annum and a maturity date of June 3, 2023. The maturities of the Company’s long-term debt outstanding as of September 30, 2022 are as follows: Remainder of 2022 2023 2024 2025 2026 Thereafter Total Adams Street Term Loan $ 78 $ 310 $ 310 $ 310 $ 29,539 $ — $ 30,547 Adams Street Delayed Draw Term Loan 38 150 150 150 14,293 — 14,781 Adams Street Incremental Term Loan 80 320 320 320 30,573 — 31,613 Adams Street Revolving Credit Facility — — — — 15,044 — 15,044 2022 D&O Financing Loan 899 1,797 — — — — 2,696 Total long-term debt maturities $ 1,095 $ 2,577 $ 780 $ 780 $ 89,449 $ — $ 94,681 The table below presents the interest expense on debt, including the amortization of discounts and issuance costs for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Interest expense on debt $ 2,402 $ 1,740 $ 5,523 $ 4,933 Liquidity Risks and Uncertainties The Company’s primary sources of liquidity are cash flows provided by operations, access to existing credit facilities and proceeds from the B. Riley Purchase Agreement (discussed in Note N). Liquidity risk refers to the risk that the Company will be unable to finance its operations due to a loss of access to existing sources of liquidity and the Company’s ability to meet its financial obligations as they become due. Since its inception, the Company has incurred net losses and negative operating cash flows, in addition to other cash uses associated with capital expenditures, costs associated with the Company’s acquisitions, and costs associated with the Merger, among other uses. While some of these cash outflows have been non-recurring in nature, the Company has continued to experience net cash outflows from operating activities. While the Company believes its continued growth and cash flow management will result in improvements in cash flow usage from operating activities going forward, there can be no assurance these improvements will be achieved. As of September 30, 2022, total available liquidity was $17.0 million, comprised of $7.0 million in cash and cash equivalents and $10.0 million in available borrowings from our existing credit facilities. The Company believes that existing sources of liquidity will be sufficient to meet its working capital needs and comply with its debt covenants for at least the next twelve months from the date on which the condensed consolidated financial statements were issued. As part of the Company’s debt management strategy, management continuously evaluates opportunities to further strengthen the Company’s financial position including the issuance of additional equity or debt securities, refinance or otherwise restructure the existing credit facilities, or enter into new financing arrangements. In addition, the Company is executing on certain cost reduction actions including, among others, integration-related workforce rationalizations, real estate synergies, business unit optimization initiatives, and cost savings associated with certain Corporate level employment costs. There can be no assurances that any of these actions will be sufficient to allow the Company to service its debt obligations, meet its debt covenants, or that such actions will not result in an adverse impact on our business. The Company’s total available liquidity was materially improved by events occurring subsequent to September 30, 2022. Please refer to Note T for additional information. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Note K – Leases The Company is obligated under certain operating leases for its facilities and office equipment. Certain facility leases contain predetermined fixed escalation of minimum rents at stated rates ranging from 1.96% to 4.00% per annum and one lease with annual escalations based on the Consumer Price Index (“CPI”). In addition, certain facility leases include renewal options that could extend the lease term for up to an additional nine years. The office equipment lease contains a renewal option that could extend the lease to consecutive 60-day terms and a purchase option. Total Lease Costs The following table summarizes total lease costs for the period. As the Company adopted ASC 842 as of January 1, 2022, rent expense recognized in accordance with ASC 840 is reported as operating lease cost for the comparative period in 2021. Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease costs $ 874 $ 867 $ 2,350 $ 2,452 Variable lease costs — — — — Short-term lease costs 55 — 227 — Total lease costs $ 929 $ 867 $ 2,577 $ 2,452 Total lease costs are included in selling, general and administrative expenses and cost of sales on the condensed consolidated statements of operations and comprehensive income (loss). Supplemental Balance Sheet Information The following table presents supplemental balance sheet information related to the Company’s operating leases: September 30, December 31, Right-of-use assets $ 14,783 $ — Short-term lease liabilities $ 3,484 $ — Long-term lease liabilities 11,379 — Total lease liabilities $ 14,863 $ — Other Supplemental Information The following table presents other supplemental information related to the Company’s operating leases: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Cash paid for operating lease liabilities $ 825 $ 2,112 Right-of-use assets obtained in exchange for new lease liabilities 3,739 7,368 Weighted average remaining lease term (in years) 2.9 2.9 Weighted average discount rate 5.2 % 5.2 % Future Lease Obligations As of December 31, 2021, the remaining lease obligation for operating leases under ASC 840 was $26.3 million. As of September 30, 2022, the future annual minimum lease payments for operating lease liabilities under ASC 842 are as follows: Year Total Remainder of 2022 $ 818 2023 3,713 2024 3,516 2025 2,958 2026 2,339 Thereafter 4,551 Total lease payments $ 17,895 Less: imputed interest 3,032 Present value of operating lease liabilities $ 14,863 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note L – Income Taxes A reconciliation of the U.S. federal statutory income tax expense to actual income tax expense is as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Effective tax rate 17.0 % 18.7 % 6.2 % 14.3 % The effective tax rate for the nine months ended September 30, 2022 differs from the U.S. federal income tax rate of 21.0% primarily due to nondeductible compensation costs on the Class P Unit Incentive plan, the valuation of warrants, nondeductible impairment, and a valuation allowance on the realization of the deferred tax assets. The effective tax rate for the nine months ended September 30, 2021 differs from the U.S. federal income tax rate of 21.0% primarily due to nondeductible compensation costs on the Class P Unit Incentive plan, contingent earnout payments from the MIS acquisition, and state income tax expense. The Company assesses the deferred tax assets for recoverability on a quarterly basis. In assessing the realizability of deferred income tax assets, the Company considers whether it is more-likely-than-not that some or all of the deferred income tax assets will not be realized. The ultimate realization of the deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the net operating loss (“NOL”) carryforwards are available. For the nine months ended September 30, 2022, the Company concluded that a portion of its deferred tax assets would more-likely-than-not be realized, whereas the Company concluded that substantially all of the deferred tax assets are more-likely-than-not realizable for the nine months ended September 30, 2021. The change from the nine months ended September 30, 2021 to the nine months ended September 30, 2022 was driven by the additional amount of deferred tax assets expected to be generated on taxable losses in 2022, which resulted in an increase to the valuation allowance of $3.6 million recognized through income tax expense (benefit) on the condensed consolidated statements of operations and comprehensive income (loss). The effective tax rate was 6.2% compared to 14.3% for the nine months ended September 30, 2022 and September 30, 2021, respectively. The difference in effective tax rate between periods was primarily related to the nondeductible impairment and valuation of warrants during the nine months ended September 30, 2022. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note M – Commitments and Contingencies Contingencies in the Normal Course of Business Under certain contracts with the U.S. government and certain governmental entities, contract costs, including indirect costs, are subject to audit by and adjustment through negotiation with governmental representatives. Revenue is recorded in amounts expected to be realized on final settlement of any such audits. Legal Proceedings The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. Excluding pending matters disclosed below, the outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s condensed consolidated financial statements. On November 5, 2021, the Company was notified of potential accounting issues with a business unit by an employee in connection with his resignation. Management promptly informed the independent Audit Committee and its independent registered public accounting firm. The Audit Committee promptly engaged independent, external legal and accounting firms to complete an independent investigation. After completing its investigation, the Audit Committee concluded that the potential issues raised by the former employee did not require a restatement or adjustment of the Company’s previously issued consolidated financial statements relating to any prior periods. However, the results of the investigation confirmed the existence of previously identified internal control deficiencies as well as identified certain additional internal control deficiencies. The Company self-reported this matter to the SEC on November 8, 2021 and intends to continue to cooperate with any requests from the SEC. On December 17, 2021, the Company, our CEO, Peter Cannito, and our former CFO, William Read, were named as defendants in a putative class action complaint filed in the United States District Court for the Middle District of Florida. That litigation is captioned Lemen v. Redwire Corp. et al., Case No. 3:21-cv-01254-TJC-PDB (M.D. Fla.). On March 7, 2022, the Court appointed a lead plaintiff. On June 17, 2022, the lead plaintiff filed an amended complaint. In the amended complaint, the lead plaintiff alleges that the Company and certain of its directors and officers made misleading statements and/or failed to disclose material facts about the Company’s business, operations, and prospects, allegedly in violation of Section 10(b) (and Rule 10b-5 promulgated thereunder) and Section 20(a) of the Securities Exchange Act of 1934. As relief, the plaintiffs are seeking, among other things, compensatory damages. The defendants believe the allegations are without merit and intend to defend the suit vigorously. On August 16, 2022, the defendants moved to dismiss the complaint in its entirety, and briefing on that motion is ongoing. Given the early stage of the proceedings, a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. On May 25, 2022, a plaintiff commenced derivative litigation in the United States District Court for the District of Delaware on behalf of the Company against Peter Cannito, Les Daniels, Reggie Brothers, Joanne Isham, Kirk Konert, Jonathan Baliff, and John S. Bolton. That litigation is captioned Yingling v. Cannito, et al., Case No. 1:22-cv-00684-MN (D. Del.). The complaint’s allegations are similar to those of the class action lawsuit filed in December 2021, namely, that statements about Redwire’s business and operations were misleading due to alleged material weaknesses in the Company’s financial reporting internal controls. The plaintiff alleges the defendants violated Section 10(b) (and Rule 10b-5 promulgated thereunder) and Section 20(a) of the Securities Exchange Act of 1934, breached their fiduciary duty by allowing misleading disclosures to be made, and caused the Company to overpay compensation and bonuses tied to the Company’s financial performance. As relief, the plaintiffs are seeking, among other things, compensatory and punitive damages. This litigation has been stayed pending the outcome of the motion to dismiss in the Lemen class action. The defendants believe the allegations are without merit and intend to defend the lawsuit vigorously. However, given the early stage of the proceedings, a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. Business Combinations The Company has acquired and plans to continue to acquire businesses with prior operating histories. These acquisitions may have unknown or contingent liabilities, which the Company may become responsible for and could have a material impact on the Company’s future operating results and cash flows. In addition, the Company may incur acquisition costs, regardless of whether or not the acquisition is ultimately completed, which may be material to future periods. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Note N – Shareholders’ Equity Committed Equity Facility with B. Riley Principal Capital, LLC On April 14, 2022, the Company entered into the Purchase Agreement and a Registration Rights Agreement with B. Riley. Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to direct B. Riley to purchase a specified amount of shares (each, a “Purchase”) over the 24-month period from Commencement (as defined in the Purchase Agreement). Shares issued to B. Riley under the Purchase Agreement cannot exceed 19.99% of the shares outstanding prior to the execution of the Purchase Agreement. In addition, the number of shares eligible to be purchased by B. Riley in a single Purchase may not exceed the lesser of (i) 50% of the Purchase Volume Reference Amount, defined as the total aggregate volume of the Company’s shares traded on the NYSE during ten Pursuant to a Registration Rights Agreement entered into with B. Riley, the Company filed a registration statement on Form S-1 with the SEC on April 22, 2022, which registered an initial 9,000,000 shares of common stock to permit the subsequent resale of shares purchased under the committed equity facility. The Company controls the timing and amount of any sales to B. Riley, which depend on a variety of factors including, among other things, market conditions, the trading price of the Company’s common stock, and determinations by the Company as to appropriate sources of funding for its business and operations. However, B. Riley’s obligation to purchase shares is subject to certain conditions. In all instances, the Company may not sell shares of its common stock under the Purchase Agreement if it would result in B. Riley beneficially owning more than 4.99% of its common stock at any one point in time. The Company incurred costs associated with the committed equity facility, of which $0.8 million represented consideration to B. Riley for its irrevocable commitment to purchase shares under the Purchase Agreement and was recorded as a derivative asset. Refer to Note D for information on the fair value of the derivative asset. Third-party costs of $0.7 million were included in other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended September 30, 2022. During the three and nine months ended September 30, 2022, the Company sold a total of 598,854 and 909,669 shares of the Company’s common stock, respectively, for proceeds of $1.7 million and $3.0 million, respectively, pursuant to the Purchase Agreement. Based on the September 30, 2022 closing price of $2.38 per share and registered shares available for purchase under the committed equity facility of 8,090,331, the Company had $19.3 million of unused capacity under the committed equity facility as of September 30, 2022. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Warrants | Note O – Warrants Public Warrants Each public warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire on September 2, 2026, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company may call the public warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days prior written notice of redemption; and (4) only if the last reported closing price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the 3 rd trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the public warrants for redemption, management will have the option to require all holders that wish to exercise the Company public warrants to do so on a “cashless basis.” The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including a consolidation, combination, reverse stock split or reclassification of shares of the Company’s common stock or other similar event. In no event will the Company be required to net cash settle the warrant shares. As of September 30, 2022, there were 8,188,811 public warrants issued and outstanding . Private Warrants The terms and provisions of the public warrants above also apply to the private warrants. If the private warrants are held by holders other than Sponsor, Jefferies, Holdings or their respective permitted transferees, the private warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants. The Sponsor, Jefferies, Holdings and their respective permitted transferees have the option to exercise the private placement warrants on a cashless basis. As of September 30, 2022, there were 7,732,168 private warrants issued and outstanding . Refer to Note D for information on the Level 3 inputs used to value the private warrants. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Note P – Equity-Based Compensation The Company has three equity-based compensation plans, which are described below. Holdings, the Company’s former parent adopted a written compensatory benefit plan (the “Class P Unit Incentive Plan”) to provide incentives to existing or new employees, officers, managers, directors, or other service providers of the Company or its subsidiaries in the form of Holdings’ Class P Units (“Incentive Units”). Incentive Units have a participation threshold of $1.00 and are divided into three tranches (“Tranche I,” “Tranche II,” and “Tranche III”): Tranche I, Tranche II, and Tranche III Incentive Units were subject to performance-based, service-based, and market-based conditions. On September 2, 2021, the Company’s board of directors adopted the Redwire Corporation 2021 Omnibus Incentive Plan (the “Plan”) which authorizes the grant of stock options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, and other cash or share-based awards to employees, officers, non-employee directors and consultants of the Company. The Company initially reserved an aggregate of 7,936,136 shares (subject to annual increases on January 1 of each year beginning in 2022 and ending with a final increase on January 1, 2031) of the Company’s common stock for grants under the Plan. Shares of the Company’s stock reserved for grants under the Plan were 9,189,953 and 7,936,136 as of September 30, 2022 and December 31, 2021, respectively. Incentive stock options may only be granted to employees and officers employed by the Company. The Plan appoints the board of directors, the compensation committee or such other committee consisting of two or more individuals (the “Committee”) appointed by the board to administer the Plan. Awards under the Plan will contain such terms and conditions not inconsistent with the Plan as the Committee in its discretion approves. The Committee has discretion to administer the Plan in the manner which it determines, from time to time, is in the best interest of the Company. On September 2, 2021, the Company’s board of directors adopted the Redwire Corporation 2021 Employee Stock Purchase Plan (the “ESPP”) which authorizes the grant of rights to purchase common stock of the Company to employees, officers and directors (if they are otherwise employees) of the Company. The Company initially reserved an aggregate of 755,822 shares (subject to annual increases on January 1 of each year beginning in 2022 for a period of up to ten years) of the Company’s common stock for grants under the ESPP. Shares of the Company’s stock reserved for grants under the ESPP were 1,382,731 and 755,822 as of September 30, 2022 and December 31, 2021, respectively. The ESPP appoints the Compensation Committee (the “Committee”) to administer the ESPP. Awards under the ESPP will contain such terms and conditions not inconsistent with the ESPP as the Committee in its discretion approves. The Committee has discretion to administer the ESPP in the manner which it determines, from time to time, is in the best interest of the Company. As of September 30, 2022, no shares had been issued under the ESPP. Incentive Units On March 24, 2021 (“modification date”), Holdings, the Company’s former parent amended the Class P Unit Incentive Plan so that the Tranche I and the Tranche III Incentive Units became fully vested, upon the closing of the Merger. Holdings also amended the Class P Unit Incentive Plan so that the Tranche II Incentive Units would vest on any liquidation event, as defined in the Class P Unit Incentive Plan, rather than only upon consummation of the sale of Holdings, subject to the market-based condition stipulated in the Class P Unit Incentive Plan prior to its amendment. As a result of the Merger, Tranches I and III Incentive Units vested on September 2, 2021 (“vesting date”) and the performance vesting condition was met for the Tranche II Incentive Units. The fair value determined at the date of the amendment of the Class P Unit Incentive Plan was immediately recognized as compensation expense on the vesting date for Tranches I and III. Compensation expense for the Tranche II Incentive Units was recognized over the derived service period of twelve months from the modification date, which resulted in approximately seventy-five percent of the compensation expense for Tranche II being recognized as of December 31, 2021 and $2.4 million of compensation expense being recognized during the nine months ended September 30, 2022. As of September 30, 2022, there was no unrecognized compensation costs related to Tranche II Incentive Units. Stock Options Pursuant to the Plan, the Company’s board of directors granted certain Grantees, options to purchase shares of the Company’s common stock with a contractual term of 10 years. The options vest over a three-year term as follows: 33.3% on the first anniversary of the grant date, 33.3% on the second anniversary of the grant date, and 33.4% on the third anniversary of the grant date. Vesting is contingent upon continued employment or service to the Company; both the vested and unvested portion of a Grantee’s option will be immediately forfeited and cancelled if the Grantee ceases employment or service to the Company. The Company recognizes equity-based compensation expense for the options equal to the fair value of the awards on a straight-line basis over the service based vesting period and recognizes forfeitures as they occur. In connection with the Separation and Release Agreement, the terms of stock options previously issued to the Company’s former CFO were modified to remove the service requirement for vesting. Accordingly, the unvested portion continues to vest for a period of 12 months following the Effective Date. The exercise period of vested stock options was also modified to be 24 months following the Effective Date. Due to these modifications, a portion of the original options were forfeited and the Company determined the fair value of the remaining options as of the Effective Date using the assumptions above. As a result, the Company recognized a net reduction of $0.1 million in equity-based compensation expense during the nine months ended September 30, 2022. On July 1, 2022, the Company’s board of directors approved the grant of up to 959,618 stock options to certain officers, managers and other eligible employees pursuant to the Plan. The contractual terms and vesting conditions for these awards are consistent with previous grants described above. The fair value of options granted under the Plan was estimated on the grant date under the Black-Scholes OPM using the following assumptions: 2022 Grants 2021 Grants Modified Awards Expected option term (years) 6 6 1.5 Expected volatility 59.50 % 32.80 % 45.90 % Risk-free rate of return 2.90% 0.93%-1.15% 2.41 % Expected annual dividend yield — % — % — % A summary of stock options activity under the Plan as of September 30, 2022 and changes during the nine months ended September 30, 2022 is presented as follows: Shares Weighted-Average Grant Date Fair Value per Share Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2021 1,546,400 $ 3.32 $ 10.00 Granted 959,618 1.80 3.13 Exercised — — — Forfeited (105,300) 3.32 10.03 Outstanding at September 30, 2022 2,400,718 $ 2.71 $ 7.25 9.25 As of September 30, 2022, there were 2,400,718 stock options outstanding and $4.5 million of unrecognized compensation cost related to unvested stock options granted under the Plan. There were 499,135 stock options that vested and became exercisable during the three and nine months ended September 30, 2022. Restricted Stock Units Restricted stock units awarded under the Plan are generally subject to forfeiture in the event of termination of employment prior to vesting dates. The Company recognizes equity-based compensation expense for the restricted stock units equal to the fair value of the awards on a straight-line basis over the service based vesting period and recognizes forfeitures as they occur. On May 18, 2022, the Company granted 124,401 restricted stock units of the Company’s common stock to certain members of the Company’s senior management in lieu of cash to settle the 2021 annual bonus. The restricted stock units immediately vested and the weighted average grant date fair value of these awards was 4.12 per share. Because the service inception date preceded the grant date, the Company recognized additional bonus expense of $15 thousand measured as the excess of the grant date fair value over amounts previously accrued as of December 31, 2021. These costs were included in selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended September 30, 2022. On May 26, 2022, the Company granted 164,475 restricted stock units of the Company’s common stock to non-employee directors. The restricted stock units vest over one year. The weighted average grant date fair value of these awards was $4.02 per share. Also in connection with the Separation and Release Agreement, the terms of restricted stock units previously granted to the Company’s former CFO were modified to remove the service requirement for vesting. Accordingly, the unvested portion continues to vest for a period of 12 months following the Effective Date. Due to these modifications, a portion of the original restricted stock units were forfeited and the Company determined the fair value of the remaining options as of the Effective Date to be $4.31 per share. As a result, the Company recognized a net reduction of $0.1 million in equity-based compensation expense during the nine months ended September 30, 2022. On July 1, 2022, the Company granted 1,366,034 restricted stock units to certain officers, managers and other eligible employees. The restricted stock units follow the same contractual terms and vesting conditions as the options described above. The weighted average grant date fair value of these awards was $3.13 per share. On July 1, 2022, the Company granted 39,936 restricted stock units to the recently appointed non-employee director pursuant to the Non-Employee Director Compensation Policy. The weighted average grant date fair value was $3.13 per share. The restricted stock units vest over one year. A summary of the status of the Company’s restricted stock units as of September 30, 2022, and changes during the nine months ended September 30, 2022, is presented as follows: Restricted Shares Weighted-Average Grant Date Fair Value per Share Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Unvested at December 31, 2021 1,717,950 $ 11.66 1.8 $ 11,596 Granted 1,694,846 3.29 Vested (124,401) 4.12 Forfeited (224,400) 10.88 Unvested at September 30, 2022 3,063,995 $ 7.34 1.3 $ 7,292 As of September 30, 2022, there was approximately $15.7 million of total unrecognized compensation cost related to unvested restricted stock units granted under the Plan. This cost is expected to be recognized over a weighted-average period of 2.2 years. There were no restricted stock units that vested during the three months ended September 30, 2022 and a total of 124,401 restricted stock units that vested during the nine months ended September 30, 2022. The table below presents the equity-based compensation expense recorded during the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Cost of Sales Incentive Units $ — $ 1,454 $ 181 $ 1,454 Stock Options 17 — 42 — Restricted Stock Units 594 — 1,760 — Total cost of sales $ 611 $ 1,454 $ 1,983 $ 1,454 Selling, general and administrative expenses Incentive Units — 21,089 2,171 21,089 Stock Options 511 167 1,199 167 Restricted Stock Units 1,396 209 3,319 209 Total selling, general and administrative expenses $ 1,907 $ 21,465 $ 6,689 $ 21,465 Total equity-based compensation expense $ 2,518 $ 22,919 $ 8,672 $ 22,919 |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Note Q – Net Income (Loss) per Share The numerators and denominators of the basic and diluted net income (loss) per share were computed for the periods presented as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Numerator: Net income (loss) $ (10,423) $ (24,252) $ (104,744) $ (47,827) Denominator: Weighted average shares outstanding – basic and diluted 63,460,527 44,036,040 63,050,769 39,503,720 Basic and diluted net income (loss) per share $ (0.16) $ (0.55) $ (1.66) $ (1.21) Because the Company had a net loss for all periods presented, the Company did not have any dilutive securities and/or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the periods presented. For the three and |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note R – Revenue The table below presents revenues by customer grouping for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Civil space $ 13,391 $ 18,166 $ 46,405 $ 49,032 National security 12,032 6,896 29,242 22,649 Commercial and other 11,826 7,618 31,197 24,845 Total revenues $ 37,249 $ 32,680 $ 106,844 $ 96,526 Contract Balances The table below presents the contract assets and contract liabilities included on the condensed consolidated balance sheets for the following periods: September 30, December 31, Contract assets $ 16,319 $ 11,748 Contract liabilities $ 17,373 $ 15,734 The increase in contract assets was primarily driven by growth in revenue recognized and timing of billable milestones occurring during the nine months ended September 30, 2022. The change in contract liabilities was related to timing of billable milestones occurring during the nine months ended September 30, 2022. Revenue recognized in the nine months ended September 30, 2022 that was included in the contract liability balance as of December 31, 2021 was $12.8 million. Revenue recognized in the nine months ended September 30, 2021 that was included in the contract liability balance as of December 31, 2020 was $15.0 million. The Company evaluates the contract value and cost estimates at completion (“EAC”) for performance obligations at least quarterly and more frequently when circumstances significantly change. Due to the nature of the work required to be performed on many of the Company’s performance obligations, the estimate of total revenue and cost at completion is complex, subject to many variables and requires significant judgment by management on a contract by contract basis. As part of this process, management reviews information including, but not limited to, labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, volume assumptions, inflationary trends, and schedule and performance delays. Management’s judgment related to these considerations has become increasingly more significant given the current economic environment and COVID-19 pandemic. When the Company’s estimate of total costs to be incurred to satisfy a performance obligation exceeds the expected revenue, the Company recognizes the loss immediately. When the Company determines that a change in estimate has an impact on the associated profit of a performance obligation, the Company records the cumulative positive or negative adjustment to the statement of operations and comprehensive income (loss). Changes in estimates and assumptions related to the status of certain long-term contracts may have a material effect on the Company’s operating results. The following table summarizes the favorable (unfavorable) impact of the net EAC adjustments for the periods presented: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net EAC adjustments, before income taxes $ (1,159) $ (278) $ (4,377) $ (1,418) Net EAC adjustments, net of income taxes (962) (226) (4,106) (1,215) Net EAC adjustments, net of income taxes, per diluted share (0.02) (0.01) (0.07) (0.03) Remaining Performance Obligations As of September 30, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations was $125.7 million. The Company expects to recognize approximately 86% of its remaining performance obligations as revenue within the next 12 months and the balance thereafter. Geographic Information and Significant Customers The table below presents revenues based on the geographic location of the Company’s customers for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 U.S. $ 36,190 $ 31,367 $ 102,813 $ 93,205 Luxembourg 911 1,156 3,315 3,071 South Korea 11 68 271 144 Germany 51 38 279 55 Poland — 51 — 51 Other 86 — 166 — Total revenues $ 37,249 $ 32,680 $ 106,844 $ 96,526 The majority of the Company’s revenues are derived from government contracts. Customers comprising 10% or more of revenues were as follows for the periods presented: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 NASA $ 4,796 $ 10,589 $ 19,203 $ 29,604 Boeing Co. 4,338 4,446 15,979 13,484 Moog Inc. (1) 4,105 — — — Total $ 13,239 $ 15,035 $ 35,182 $ 43,088 (1) While revenue was generated in each of the periods presented, amounts are only disclosed for the periods in which revenue represented 10% or more of total revenue. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Parties | Note S – Related Parties The table below presents details of the Company’s related party transactions with AEI included on the condensed consolidated statements of operations and comprehensive income (loss) for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Management fees paid to AEI $ — $ 153 $ — $ 477 Transaction fees paid to AEI — 119 — 1,019 Total fees paid to AEI $ — $ 272 $ — $ 1,496 All related party fees associated with AEI were incurred prior to the close of the Merger. Additionally, the Company made a $4.9 million payment to AEI in October 2020, which was repaid in February 2021. As of September 30, 2022, Peter Cannito, the Company’s Chairman and Chief Executive Officer, and Kirk Konert, a member of the Company’s board of directors, also served on the board of directors for a current customer of the Company. During the three and nine months ended September 30, 2022, the Company recognized $0.7 million and $0.9 million of related revenues, respectively and during the three and nine months ended September 30, 2021 the Company recognized $2.2 million and $4.7 million, respectively. The Company had $0.2 million and $1.3 million related outstanding receivables as of September 30, 2022 and December 31, 2021, respectively. In the normal course of business, the Company participates in related party transactions with certain vendors and customers where AEI maintains a significant ownership interest and/or can exhibit significant influence on the operations of such parties. For the three and nine months ended September 30, 2022 and September 30, 2021, transactions with other companies in AEI’s investment portfolio, not separately disclosed, did not have a material impact on the Company’s condensed consolidated financial statements. Please refer to Note J, for related party transactions associated with the Company’s debt obligations. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note T – Subsequent Events Convertible Preferred Stock Offering On October 28, 2022, the Company filed a Certificate of Designation describing the terms and conditions of the newly issued Convertible Preferred Stock, with 88,000 total shares constituting the series. On the same date, the Company entered into the AEI Investment Agreement and the Bain Capital Investment Agreement. Pursuant to (i) the AEI Investment Agreement, the Company sold an aggregate of 40,000 shares (the “AEI Purchased Shares”) of the Convertible Preferred Stock to AEI, for an aggregate purchase price of $40.0 million and (ii) the Bain Capital Investment Agreement, the Company sold 40,000 shares of the Convertible Preferred Stock (the “Bain Capital Purchased Shares,” and together with the AEI Purchased Shares, the “Purchased Shares”) to Bain Capital for a purchase price of $40.0 million. The closing of the purchase and sale to AEI occurred simultaneously with the signing of the AEI Investment Agreement on October 28, 2022. The purchase and sale to Bain Capital occurred on November 3, 2022 (the “Bain Capital Closing”). The Company used a portion of the proceeds from the sale of the Purchased Shares to finance the acquisition of Space NV. In addition, the Company intends to use the remaining proceeds for certain corporate purposes, which may include (i) investing in current capabilities which the Company believes will assist in meeting customer demand and in expanding current Company offerings; (ii) expanding and diversifying the Company’s global infrastructure offerings; and (iii) increasing the total available liquidity of the Company. On November 3, 2022, simultaneously with the Bain Capital Closing, AEI transferred 10,000 of the AEI Purchased Shares to Bain Capital, which Bain Capital purchased from AEI for $10.0 million. After the transfer, Bain Capital and AEI hold, in the aggregate, 80,000 shares of the Convertible Preferred Stock, with Bain Capital and AEI holding 50,000 and 30,000 shares of Convertible Preferred Stock, respectively. In addition, on November 7 and 8, 2022, we entered into additional investment agreements (the “Additional Investment Agreements”) with various investors (collectively, the “Additional Investors,” and together with AEI and Bain Capital, the “Investors”) pursuant to which the Company issued and sold a total of 1,250 shares of the Convertible Preferred Stock to the Additional Investors for an aggregate purchase price of $1.25 million. The Investment Agreements and the Additional Investment Agreements contain customary representations, warranties and covenants of the Company and Investors. Bain Capital Director and Nominees Within 30 days following the Bain Capital Closing, for so long as Bain Capital has record and beneficial ownership of at least 50% of the Purchased Shares issued to it at the time of the Bain Capital Closing, Bain Capital will have the right to designate one member to the Board of Directors of the Company. Convertible Preferred Stock Features No holder of Convertible Preferred Stock may transfer any of their shares to any unaffiliated person for twelve (12) months following the closing date of the applicable investment agreement, except for certain exceptions, including that Bain Capital and AEI may transfer shares to each other. Bain Capital and AEI have been provided customary preemptive rights with respect to the Convertible Preferred Stock and, after the seventh anniversary of their respective closing dates, for so long as each holder has record and beneficial ownership of at least 50% of the Purchased Shares initially issued to them, may cause the Company to retain an investment banker to identify and conduct a potential sale of the Company. The holders of Convertible Preferred Stock are entitled to vote with the holders of Common Stock, on an as-converted basis. The holders of Convertible Preferred Stock have the right, at their option and at any time, to convert their shares into shares of the Common Stock. Each share of Convertible Preferred Stock will mandatorily convert upon achieving thresholds related to the Company’s market capitalization and profitability metrics and the Company is required to make an offer to repurchase the outstanding Convertible Preferred Stock upon a fundamental change. The Convertible Preferred Stock ranks senior to the Company’s common stock. Dividends on the Convertible Preferred Stock can be paid in either cash or in kind in the form of additional shares of Convertible Preferred Stock (such payment in kind, “PIK”), at the option of the Company, subject to certain exceptions. If paid in cash, such dividends will be paid at a rate of 13% per annum, subject to certain adjustments and exceptions or, if the Company issues PIK dividends, at a rate of 15% per annum, subject to certain adjustments and exceptions. Each holder of Convertible Preferred Stock has been given certain registration rights pursuant to the Registration Rights Agreement, dated October 28, 2022. Fifth Amendment to Credit Agreement On October 28, 2022, the Company entered into the Fifth Amendment to the Adams Street Capital Credit Agreement. The Fifth Amendment (i) permitted the investments by the Company in connection with the Space NV acquisition, (ii) removed references to the limited guarantee provided by the AEI Guarantors to the Company for the payment of outstanding term loans, as the AEI Guarantors are no longer providing such limited guarantee; and (iii) other amendments related thereto. Under the terms of the Fifth Amendment, the requirement to comply with the consolidated total net leverage ratio was further suspended through September 30, 2023, and such compliance resumes with the fiscal quarter ending December 31, 2023. The Fifth Amendment amended the financial covenant to require the Company to maintain a maximum total net leverage ratio of 7.50 to 1.00 from the fiscal quarter ended December 31, 2023 through the fiscal quarter ending September 30, 2024 and 6.50 to 1.00 from the fiscal quarter ending December 31, 2024 and thereafter. This amendment to the financial covenant was conditioned upon occurrence of the Company receiving gross cash proceeds in exchange for the issuance and sale of the 2022 Equity-Linked Instrument (as defined in the Credit Agreement, as amended by the Fifth Amendment) in an aggregate amount of at least $80.0 million and if contributed to the Company. If such condition had not occurred, the Company would have been required to maintain a maximum total net leverage ratio of 6.50 to 1.00 commencing with the fiscal quarter ending September 30, 2023 and each fiscal quarter thereafter. Acquisition Activity On October 31, 2022, the Company acquired 100% of the equity interests in Space NV for €32.0 million in cash, subject to certain post-closing adjustments related to acquired cash, assumed debt and working capital adjustments. Space NV is a Belgium-based commercial space business providing design and integration of critical space infrastructure and other instruments for end-to-end space missions, including advanced payloads, small satellite technology, berthing and docking equipment and space instruments. Space NV has over 35 years of mission heritage in orbit, delivering observation, platforms, science, navigation and secure communications critical infrastructure to civil and commercial space customers. Space NV’s business is expected to provide the Company with enhanced scale and innovation capabilities across numerous high-growth space areas and provides an expanded total addressable market and increased exposure to European customers, including the European Space Agency and the Belgian Science Policy Office. The acquisition will be accounted for as a business combination under ASC 805. As of the date of these condensed consolidated financial statements, the determination of the fair values of the acquired assets and assumed liabilities is incomplete due to the recent date of the acquisition. As a result of the subsequent events described herein, as of the date of this filing, the Company anticipates final net proceeds of approximately $37.0 million to $40.0 million, net of transaction expenses, including acquisition-related costs and post-closing adjustments related to acquired cash, assumed debt and working capital adjustments. The Company has evaluated subsequent events after the consolidated balance sheet as of September 30, 2022 through the condensed consolidated financial statements issuance date and there were no additional subsequent events that required disclosure. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statement information and the rules of the SEC. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated balance sheet as of December 31, 2021 was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. In the opinion of management, the condensed consolidated financial statements include all adjustments, consisting of adjustments associated with acquisition accounting and normal recurring adjustments, necessary for the fair statement of such financial statements. All intercompany balances and transactions have been eliminated in consolidation. |
Basis of Consolidation | These unaudited condensed consolidated financial statements should be read in conjunction with the information contained in the Company’s 2021 Annual Report on Form 10-K. Interim results are not necessarily indicative of the results that may be expected for a full year. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Management has prepared the estimates using the most current and best available information that are considered reasonable under the circumstances. However, actual results could differ materially from those estimates. Accounting policies subject to estimates include, but are not limited to, valuation of goodwill and intangible assets, contingent consideration, revenue recognition, income taxes, and warrant liabilities. |
Business Combinations | The Company utilizes the acquisition method of accounting in Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) , for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets acquired and liabilities assumed and to establish the acquisition date fair value as of the measurement date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business combination date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is identified. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. |
Revenue Recognition | Based on the specific analysis of its contracts, the Company has determined that its contracts are subject to revenue recognition in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Recognition under the ASC 606 five-step model involves (i) identification of the contract, (ii) identification of performance obligations in the contract, (iii) determination of the transaction price, (iv) allocation of the transaction price to the previously identified performance obligations, and (v) revenue recognition as the performance obligations are satisfied. During step one of the five step model, the Company considers whether contracts should be combined or separated, and based on this assessment, the Company combines closely related contracts when all the applicable criteria are met. The combination of two or more contracts requires judgment in determining whether the intent of entering into the contracts was effectively to enter into a single contract, which should be combined to reflect an overall profit rate. Similarly, the Company may separate an arrangement, which may consist of a single contract or group of contracts, with varying rates of profitability, only if the applicable criteria are met. Judgment is involved in determining whether a group of contracts may be combined or separated based on how the arrangement and the related performance criteria were negotiated. The conclusion to combine a group of contracts or separate a contract could change the amount of revenue and gross profit recorded in a given period. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied. The Company’s contracts with customers generally do not include a right of return relative to delivered products. In certain cases, contracts are modified to account for changes in the contract specifications or requirements. In most instances, contract modifications are accounted for as part of the existing contract. Certain contracts with customers have options for the customer to acquire additional goods or services. In most cases, the pricing of these options are reflective of the standalone selling price of the good or service. These options do not provide the customer with a material right and are accounted for only when the customer exercises the option to purchase the additional goods or services. If the option on the customer contract was not indicative of the standalone selling price of the good or service, the material right would be accounted for as a separate performance obligation. The Company’s revenues are derived from the design and sales of components for spacecraft and satellites and the performance of engineering, modeling and simulation services related to spacecraft design and mission execution. Each promised good or service within a contract is accounted for separately under the guidance of ASC 606, if they are distinct. Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then applied for the bundled performance obligation. The Company has concluded that its service contracts generally contain a single performance obligation given the interrelated nature of the activities which are significantly customized and not distinct within the context of the contract. Once the Company identifies the performance obligations, the Company determines the transaction price, which includes estimating the amount of variable consideration to be included in the transaction price, if any. The Company’s contracts generally do not contain penalties, credits, price concessions, or other types of potential variable consideration. Prices are fixed at contract inception and are not contingent on performance or any other criteria. The Company engages in long-term contracts for production and service activities and recognizes revenue for performance obligations over time. These long-term contracts involve the design, development, manufacture, or modification of components for spacecraft and satellites. Revenue is recognized over time (versus point in time recognition), as the Company’s performance creates an asset with no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, and the customer receives the benefit as the Company builds the asset. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. These contracts include both fixed-price and cost reimbursable contracts. The Company’s cost reimbursable contracts typically include cost-plus fixed fee and time and material (“T&M”) contracts. For long-term contracts, the Company typically recognizes revenue using the input method, using a cost-to-cost measure of progress. The Company believes that this method represents the most faithful depiction of the Company’s performance because it directly measures value transferred to the customer. Contract estimates are based on various assumptions to project the outcome of future events that may span several years. These assumptions include, but are not limited to, the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed; the cost and availability of materials; the availability of subcontractor services and materials; and the availability and timing of funding from the customer. The Company bears the risk of changes in estimates to complete on a fixed-price contract, which may cause profit levels to vary from period to period. For cost reimbursable contracts, the Company is reimbursed periodically for allowable costs and is paid a portion of the fee based on contract progress. In the limited instances where the Company enters into T&M contracts, revenue recognized reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other direct billable costs. For T&M contracts, the Company recognizes revenue in the amount for which the Company has a right to invoice the customer based on the control transferred to the customer. For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. Accounting for long-term contracts requires significant judgment relative to estimating total contract revenues and costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. On long-term contracts, the portion of the payments retained by the customer is not considered a significant financing component. At contract inception, the Company also expects that the lag period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will not constitute a significant financing component. Many of the Company’s long-term contracts have milestone payments, which align the payment schedule with the progress towards completion on the performance obligation. On some contracts, the Company may be entitled to receive an advance payment, which is not considered a significant financing component because it is used to facilitate inventory demands at the onset of a contract and to safeguard the Company from the failure of the other party to abide by some or all of their obligations under the contract. Contract Balances Contract balances result from the timing of revenue recognized, billings and cash collections, and the generation of contract assets and liabilities. Contract assets represent revenue recognized in excess of amounts invoiced to the customer and the right to payment is not solely subject to the passage of time. Contract liabilities are presented as deferred revenue on the Company’s condensed consolidated balance sheets and consist of deferred product revenue, billings in excess of revenues, deferred service revenue, and customer advances. Deferred product revenue represents amounts that have been invoiced to customers but are not yet recognizable as revenue because the Company has not satisfied its performance obligations under the contract. Billings in excess of revenues represent milestone billing contracts where the billings of the contract exceed recognized revenues. Remaining Performance Obligations |
Cash and Cash Equivalents | Cash and cash equivalents includes cash on hand, cash balances with banks and similar institutions and all highly liquid investments with an original maturity of three months or less. |
Fair Value of Financial Instruments | The Company measures certain financial assets and liabilities, including, but not limited to, contingent consideration, at fair value. ASC 820, Fair Value Measurement and Disclosures Cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable, salaries and benefits payable, accrued interest, other accrued expenses and current liabilities are reflected on the condensed consolidated balance sheets at amounts that approximate fair value because of the short-term nature of these financial assets and liabilities. The fair value of the Company’s debt approximates its carrying value and is classified as Level 2 within the fair value hierarchy as it is based on discounted cash flows using a current borrowing rate. |
Concentration of Credit Risk | Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, certificates of deposit, and accounts receivable. The Company places its cash and cash equivalents with financial institutions of high-credit quality. At times, such amounts may exceed federally insured limits.The Company provides credit to customers in the normal course of business. The carrying amount of current accounts receivable is stated at cost, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of accounts receivable that will not be fully collected. The allowance is based on the assessment of the following factors: customer creditworthiness, historical payment experience, age of outstanding accounts receivable and any applicable collateral. |
Inventory | Inventory is stated at the lower of cost or net realizable value. Cost is calculated on a first-in, first-out (“FIFO”) basis. Inventory may consist of raw materials, work-in-process, and finished goods. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expense. Inventory is impaired when it is probable that inventory values exceed their net realizable value. Changes in these estimates are included in cost of sales in the condensed consolidated statements of operations and comprehensive income (loss). |
Segment Information | Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has concluded that it operates in one operating segment and one reportable segment, space infrastructure, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Goodwill and Intangible Assets | Goodwill is the amount by which the purchase price exceeded the fair value of the net identifiable assets acquired and liabilities assumed in a business combination on the date of acquisition. The Company tests goodwill for impairment annually as of October 1 st or when events and circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company has three reporting units, Mission Solutions, Space Components, and Engineering Services, which were determined based on similar economic characteristics, financial metrics and product and servicing offerings. The Company assesses impairment first on a qualitative basis to determine if a quantitative assessment is necessary. In circumstances where the qualitative analysis indicates that it is more likely than not that the fair value of a reporting unit does not exceed its carrying value, the Company would perform a quantitative analysis and the goodwill impairment loss, if any, is measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. During the second quarter of 2022, the Company identified certain triggering events and performed an interim goodwill impairment assessment for all reporting units. Please refer to Note I for additional information regarding the results of this assessment. Intangible assets include those acquired from the Company’s various business combinations as well as licensed software for internal-use. Licensed software is acquired solely to meet the Company’s internal needs which provides the right to take possession of the software and is hosted on the Company’s specific hardware components as well as the capitalization of qualifying costs during the application development stage. Indefinite-lived intangible assets include tradenames and in-process research and development (“IPR&D”). Finite-lived intangible assets include customer relationships, technology, trademarks, and internal-use software. Finite-lived intangible assets are reported at cost, net of accumulated amortization, and are either amortized on a straight-line basis over their estimated useful lives or over the period the economic benefits of the intangible assets are consumed. IPR&D is recognized as an indefinite-lived intangible asset until completion or abandonment of the related project, then reclassified as a finite-lived intangible asset and amortized over the remaining useful life. |
Property, Plant and Equipment | Property, plant and equipment are the long-lived, physical assets of the Company, acquired for use in the Company’s normal business operations and not intended for resale by the Company. These assets are recorded at cost. Renewals and betterments that increase the useful lives of the assets are capitalized. Repair and maintenance expenditures that increase the efficiency of the assets are expensed as incurred. Depreciation is based on the estimated useful lives of the assets using the straight-line method and is included in selling, general and administrative expenses or cost of sales based upon the asset; depreciation and amortization expense includes the amortization of assets under finance leases. Expected useful lives for property, plant and equipment are reviewed at least annually. Estimated useful lives are as follows: Estimated useful Computer equipment 3 Furniture and fixtures 7 Laboratory equipment 3-10 Software 3-5 Leasehold improvements 5 or lease term |
Leases | The Company is obligated under certain operating leases for its facilities and office equipment. The Company assesses whether an arrangement is a lease or contains a lease at inception of the arrangement. For arrangements considered leases, the Company records a right-of-use (ROU) asset and lease liability as of the commencement date. The Company uses the date of initial possession as the lease commencement date, which is generally when the underlying asset becomes available for the Company’s specific use. ROU assets represent the Company’s right to use the underlying asset for the lease term and are depreciated over the shorter of the useful life of the asset and the lease term. Lease liabilities represent the present value of the Company’s obligations to make payments arising over the lease term. The present value of the lease payments is calculated using the incremental borrowing rate as of the lease commencement date, which reflects the fixed rate the Company would have to pay to borrow an amount equal to the future minimum lease payments over a similar term. The lease term includes renewal options which are reasonably certain to be exercised. Lease and non-lease related components, such as common area maintenance costs, obligations to return the underlying asset to its original condition, or costs to dismantle and remove the underlying asset at the end of the term, are accounted for separately. Certain leasing arrangements contain predetermined fixed escalation of minimum rents and/or require variable payments, such as insurance and tax payments. Variable lease payments which depend on an index or other rate are excluded from lease payments in the measurement of the ROU asset and lease liability and are recognized as expense in the period in which the payment occurs. |
Long-Lived Assets | The Company regularly evaluates its property, plant and equipment and finite-lived intangible assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable, in accordance with ASC 360, Property, Plant, and Equipment (“ASC 360”) and ASC 350, Intangibles—Goodwill and Other (“ASC 350”). If the Company determines that the carrying amount of an asset or asset group is not recoverable based upon the undiscounted expected future cash flows of the asset or asset group, the Company records an impairment loss equal to the excess of carrying amount over the estimated fair value of the asset or asset group. |
Income Taxes | The Company accounts for income taxes under ASC 740, Income Taxes (“ASC 740”). The Company computes its provision for income taxes using the asset and liability method, under which deferred tax assets and liabilities are calculated based on the basis difference for financial reporting and tax basis of assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse. All deferred income taxes are classified as non-current in the Company’s condensed consolidated balance sheets. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. |
Research and Development Costs | Research and development costs are primarily made up of labor charges, prototype material, and development expenses. Research and development costs are expensed in the period incurred. |
Advertising Costs | All advertising, promotional and marketing costs are expensed when incurred and are included in Selling, general and administrative expenses within the condensed consolidated statements of operations and comprehensive income (loss). |
Equity-based Compensation | The Company’s equity-based compensation plans are classified as equity plans and compensation expense is generally recognized over the vesting period of stock awards. The Company issues stock awards in the form of incentive units, non-qualified stock options and restricted stock units. The fair value of incentive units and stock options are calculated on the grant date using the Black-Scholes Option Pricing Model (“OPM”). Given the absence of adequate historical data, the Company uses the Simplified Method to estimate the term of stock options granted to employees. The fair value of the restricted stock units are calculated based on the closing market price of the Company’s common stock on the grant date. The vesting of the incentive units is contingent on service-based, performance-based, and market conditions and, as such, the recognition of compensation expense is deferred until it is probable the performance conditions will be satisfied. Once it is probable that the performance conditions will be satisfied, unrecognized compensation expense is recognized based on the portion of the requisite service period that has been rendered. If the requisite period is complete, compensation expense is recognized regardless of market conditions being met and recognizes forfeitures as they occur. For non-qualified stock options and restricted stock units, the Company recognizes the grant date fair value as compensation expense on a straight-line method over the vesting period (typically three years) and recognizes forfeitures as they occur. |
Derivative Financial Instruments | The Company evaluates its convertible instruments, options, warrants and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC 815 Derivatives and Hedging . The classification of derivative instruments, including whether such instruments should be recorded as assets, liabilities, or equity, is reassessed at the end of each reporting period. For equity-linked financial instruments, the Company must determine whether the underlying instrument is indexed to its own common stock in order to classify the derivative instrument as equity. Otherwise, the derivative asset or liability is recognized at fair value with subsequent changes in fair value recognized in the condensed consolidated statements of operations and comprehensive income (loss). Committed Equity Facility During the second quarter of 2022, the Company evaluated the Purchase Agreement with B. Riley and determined that the committed equity facility was not indexed to the Company’s own common stock. As a result, it was recognized as a derivative asset with changes in fair value recognized as other (income) expense, net in the condensed consolidated statements of operations and comprehensive income (loss). Please refer to Note D and Note N for additional information. Warrants |
Foreign Currency Translation | The Company’s consolidated financial statements are presented in United States dollars (“USD”), which is the functional currency of the Company. The local currency of our operations in Luxembourg, the euro, is considered to be the functional currency of that operation. Assets and liabilities of the Company's foreign subsidiaries, where the functional currency is the local currency, are translated into USD at exchange rates effective as of the balance sheet date. Revenues and expenses are translated using average exchange rates in effect for the periods presented. Balance sheet translation adjustments are reported in accumulated other comprehensive income (loss). Realized gains and losses on foreign currency transactions are included in other (income) expense, net on the condensed consolidated statements of operations and comprehensive income (loss). |
Recently Adopted/Issued Accounting Pronouncements | Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , which supersedes the current lease requirements in ASC 840, Leases. ASU 2016-02 requires lessees to recognize a right-of-use asset and related lease liability for all leases, with a limited exception for short-term leases. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the condensed consolidated statements of operations and comprehensive income (loss). Under ASC 840, leases are classified as either capital or operating, with any capital leases recognized on the condensed consolidated balance sheets. The reporting of lease-related expenses in the condensed consolidated statements of operations and comprehensive income (loss) and consolidated statements of cash flows will be generally consistent with the ASC 840 guidance. Effective January 1, 2022, the Company adopted the new lease standard using a modified retrospective transition method with a cumulative effect adjustment in the period of adoption. In accordance with ASC 842, the Company elected the following package of practical expedients: (i) to use hindsight analysis on expired or existing leases as of the effective date; (ii) to not apply this standard to short-term leases (i.e., with a term less than 12 months); and (iii) to not reassess the lease classification for existing or expired contracts. As a result of adoption, the Company recognized right of use assets and lease liabilities of $10.1 million and $10.2 million, respectively. Adoption of this standard did not have a material impact on the Company’s results of operations or cash flows. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments–Credit Losses (Topic 326) , an amendment of the FASB ASC. Subsequent to the issuance of ASU 2016-13, there were various updates that amended and clarified the impact of ASU 2016-13. ASU 2016-13 broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The amendments in ASU 2016-13 will require an entity to record an allowance for credit losses for certain financial instruments and financial assets, including accounts receivable, based on expected losses rather than incurred losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. The use of forecasted information incorporates more timely information in the estimate of expected credit losses. The new guidance will be effective for the year beginning January 1, 2023. The Company does not expect this guidance to have a material impact on its condensed consolidated financial statements or related disclosures. |
Commitments and Contingencies | Contingencies in the Normal Course of Business Under certain contracts with the U.S. government and certain governmental entities, contract costs, including indirect costs, are subject to audit by and adjustment through negotiation with governmental representatives. Revenue is recorded in amounts expected to be realized on final settlement of any such audits. Legal Proceedings The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. Excluding pending matters disclosed below, the outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s condensed consolidated financial statements. On November 5, 2021, the Company was notified of potential accounting issues with a business unit by an employee in connection with his resignation. Management promptly informed the independent Audit Committee and its independent registered public accounting firm. The Audit Committee promptly engaged independent, external legal and accounting firms to complete an independent investigation. After completing its investigation, the Audit Committee concluded that the potential issues raised by the former employee did not require a restatement or adjustment of the Company’s previously issued consolidated financial statements relating to any prior periods. However, the results of the investigation confirmed the existence of previously identified internal control deficiencies as well as identified certain additional internal control deficiencies. The Company self-reported this matter to the SEC on November 8, 2021 and intends to continue to cooperate with any requests from the SEC. On December 17, 2021, the Company, our CEO, Peter Cannito, and our former CFO, William Read, were named as defendants in a putative class action complaint filed in the United States District Court for the Middle District of Florida. That litigation is captioned Lemen v. Redwire Corp. et al., Case No. 3:21-cv-01254-TJC-PDB (M.D. Fla.). On March 7, 2022, the Court appointed a lead plaintiff. On June 17, 2022, the lead plaintiff filed an amended complaint. In the amended complaint, the lead plaintiff alleges that the Company and certain of its directors and officers made misleading statements and/or failed to disclose material facts about the Company’s business, operations, and prospects, allegedly in violation of Section 10(b) (and Rule 10b-5 promulgated thereunder) and Section 20(a) of the Securities Exchange Act of 1934. As relief, the plaintiffs are seeking, among other things, compensatory damages. The defendants believe the allegations are without merit and intend to defend the suit vigorously. On August 16, 2022, the defendants moved to dismiss the complaint in its entirety, and briefing on that motion is ongoing. Given the early stage of the proceedings, a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. On May 25, 2022, a plaintiff commenced derivative litigation in the United States District Court for the District of Delaware on behalf of the Company against Peter Cannito, Les Daniels, Reggie Brothers, Joanne Isham, Kirk Konert, Jonathan Baliff, and John S. Bolton. That litigation is captioned Yingling v. Cannito, et al., Case No. 1:22-cv-00684-MN (D. Del.). The complaint’s allegations are similar to those of the class action lawsuit filed in December 2021, namely, that statements about Redwire’s business and operations were misleading due to alleged material weaknesses in the Company’s financial reporting internal controls. The plaintiff alleges the defendants violated Section 10(b) (and Rule 10b-5 promulgated thereunder) and Section 20(a) of the Securities Exchange Act of 1934, breached their fiduciary duty by allowing misleading disclosures to be made, and caused the Company to overpay compensation and bonuses tied to the Company’s financial performance. As relief, the plaintiffs are seeking, among other things, compensatory and punitive damages. This litigation has been stayed pending the outcome of the motion to dismiss in the Lemen class action. The defendants believe the allegations are without merit and intend to defend the lawsuit vigorously. However, given the early stage of the proceedings, a reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. Business Combinations The Company has acquired and plans to continue to acquire businesses with prior operating histories. These acquisitions may have unknown or contingent liabilities, which the Company may become responsible for and could have a material impact on the Company’s future operating results and cash flows. In addition, the Company may incur acquisition costs, regardless of whether or not the acquisition is ultimately completed, which may be material to future periods. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Assumptions | These two types of inputs have created the following fair-value hierarchy: Level 1: Quoted prices for identical instruments in active markets; Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The assumptions used in the Black-Scholes OPM were as follows: Roccor Black-Scholes OPM Assumptions Risk-free interest rate 0.1 % Revenue discount rate 7.0 % Revenue volatility 30.0 % Earnout payment discount rate 4.0 % September 30, 2022 December 31, 2021 Fair value $ 0.40 $ 2.47 Exercise price $ 11.50 $ 11.50 Common stock price $ 2.38 $ 6.75 Expected option term (years) 3.92 years 4.67 years Expected volatility 66.30 % 60.50 % Risk-free rate of return 4.12 % 1.21 % Expected annual dividend yield — % — % |
Property, Plant and Equipment, net | Expected useful lives for property, plant and equipment are reviewed at least annually. Estimated useful lives are as follows: Estimated useful Computer equipment 3 Furniture and fixtures 7 Laboratory equipment 3-10 Software 3-5 Leasehold improvements 5 or lease term Property, plant and equipment were as follows: September 30, December 31, Computer equipment $ 1,383 $ 1,380 Furniture and fixtures 1,012 783 Laboratory equipment 3,863 16,856 Leasehold improvements 1,997 2,205 Construction in process 1,240 415 Property, plant and equipment, gross 9,495 21,639 Less: accumulated depreciation (2,798) (2,255) Total property, plant and equipment, net $ 6,697 $ 19,384 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Assets Acquired and Liabilities Assumed as of the Acquisition | The following table summarizes the fair value of the consideration transferred and the estimated fair values of the major classes of assets acquired and liabilities assumed as of the acquisition date. November 1, 2021 Cash paid $ 2,228 Common stock issued 38,493 Purchase consideration $ 40,721 Assets: Cash $ 406 Accounts receivable and other receivable 287 Contract assets 926 Inventory 120 Prepaid expenses and other current assets 86 Property, plant and equipment 14,818 Intangible assets 4,120 Total assets 20,763 Liabilities: Accounts payable 39 Accrued expenses 293 Deferred revenue 675 Other current liabilities 35 Deferred tax liabilities 5,521 Total liabilities 6,563 Fair value of net identifiable assets acquired 14,200 Goodwill $ 26,521 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the intangible assets acquired by class: November 1, 2021 Weighted average Trademark $ 240 3 Technology 1,800 10 Customer relationships 1,400 9 IPR&D 680 Total intangible assets $ 4,120 |
Schedule of Pro Forma Information | The table below presents the pro forma combined results of operations for the business combinations for the three and nine months ended September 30, 2021 as though the acquisitions of Oakman, DPSS, and Techshot (the “2021 Business Combinations”) had been completed as of January 1, 2020. Three Months Ended Nine Months Ended September 30, 2021 September 30, 2021 Revenues $ 34,947 $ 107,256 Net income (loss) (23,645) (46,260) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions | These two types of inputs have created the following fair-value hierarchy: Level 1: Quoted prices for identical instruments in active markets; Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The assumptions used in the Black-Scholes OPM were as follows: Roccor Black-Scholes OPM Assumptions Risk-free interest rate 0.1 % Revenue discount rate 7.0 % Revenue volatility 30.0 % Earnout payment discount rate 4.0 % September 30, 2022 December 31, 2021 Fair value $ 0.40 $ 2.47 Exercise price $ 11.50 $ 11.50 Common stock price $ 2.38 $ 6.75 Expected option term (years) 3.92 years 4.67 years Expected volatility 66.30 % 60.50 % Risk-free rate of return 4.12 % 1.21 % Expected annual dividend yield — % — % |
Schedule of Liabilities Measured at Fair Value | The following table presents information about the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 were as follows: September 30, 2022 Balance Sheet Level 1 Level 2 Level 3 Total Assets: Committed equity facility Other non-current assets $ — $ — $ 616 $ 616 Total assets $ — $ — $ 616 $ 616 Liabilities: Private warrants Warrant liabilities $ — $ — $ 3,093 $ 3,093 Contingent consideration Notes payable to sellers — — 1,000 1,000 Total liabilities $ — $ — $ 4,093 $ 4,093 December 31, 2021 Balance Sheet Level 1 Level 2 Level 3 Total Liabilities: Private warrants Warrant liabilities $ — $ — $ 19,098 $ 19,098 Contingent consideration Notes payable to sellers — — 1,000 1,000 Total liabilities $ — $ — $ 20,098 $ 20,098 |
Changes in the Fair Value of Level 3 Financial Assets | Changes in the fair value of Level 3 financial assets and liabilities during the nine months ended September 30, 2022 were as follows: Assets: Committed Equity Facility Total December 31, 2021 $ — $ — Additions 756 756 Changes in fair value (140) (140) Settlements — — September 30, 2022 $ 616 $ 616 Liabilities: Contingent Consideration Private Total December 31, 2021 $ 1,000 $ 19,098 $ 20,098 Additions — — — Changes in fair value — (16,005) (16,005) Settlements — — — September 30, 2022 $ 1,000 $ 3,093 $ 4,093 |
Changes in the Fair Value of Level 3 Financial Liabilities | Changes in the fair value of Level 3 financial assets and liabilities during the nine months ended September 30, 2022 were as follows: Assets: Committed Equity Facility Total December 31, 2021 $ — $ — Additions 756 756 Changes in fair value (140) (140) Settlements — — September 30, 2022 $ 616 $ 616 Liabilities: Contingent Consideration Private Total December 31, 2021 $ 1,000 $ 19,098 $ 20,098 Additions — — — Changes in fair value — (16,005) (16,005) Settlements — — — September 30, 2022 $ 1,000 $ 3,093 $ 4,093 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, net | The accounts receivable, net balance was as follows: September 30, December 31, Billed receivables $ 16,175 $ 14,820 Unbilled receivables 346 1,442 Total accounts receivable, net $ 16,521 $ 16,262 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The inventory balance was as follows: September 30, December 31, Raw materials $ 1,239 $ 414 Work in process 638 117 Finished goods 152 157 Inventory $ 2,029 $ 688 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Expected useful lives for property, plant and equipment are reviewed at least annually. Estimated useful lives are as follows: Estimated useful Computer equipment 3 Furniture and fixtures 7 Laboratory equipment 3-10 Software 3-5 Leasehold improvements 5 or lease term Property, plant and equipment were as follows: September 30, December 31, Computer equipment $ 1,383 $ 1,380 Furniture and fixtures 1,012 783 Laboratory equipment 3,863 16,856 Leasehold improvements 1,997 2,205 Construction in process 1,240 415 Property, plant and equipment, gross 9,495 21,639 Less: accumulated depreciation (2,798) (2,255) Total property, plant and equipment, net $ 6,697 $ 19,384 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The intangible asset gross carrying amount and accumulated amortization were as follows: September 30, 2022 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 33,165 $ (3,654) $ 29,511 19 Technology 27,348 (4,659) 22,689 14 Trademarks 3,498 (1,275) 2,223 7 Internal-use software licenses 2,158 (740) 1,418 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 66 — 66 Total intangible assets $ 66,535 $ (10,328) $ 56,207 December 31, 2021 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 48,612 $ (3,592) $ 45,020 19 Technology 43,339 (5,894) 37,445 14 Trademarks 6,807 (1,572) 5,235 7 Internal-use software licenses 2,292 (385) 1,907 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 935 — 935 Total intangible assets $ 102,285 $ (11,443) $ 90,842 |
Schedule of Indefinite-Lived Intangible Assets | The intangible asset gross carrying amount and accumulated amortization were as follows: September 30, 2022 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 33,165 $ (3,654) $ 29,511 19 Technology 27,348 (4,659) 22,689 14 Trademarks 3,498 (1,275) 2,223 7 Internal-use software licenses 2,158 (740) 1,418 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 66 — 66 Total intangible assets $ 66,535 $ (10,328) $ 56,207 December 31, 2021 Gross Accumulated Net Weighted average Finite-lived intangible assets: Customer relationships $ 48,612 $ (3,592) $ 45,020 19 Technology 43,339 (5,894) 37,445 14 Trademarks 6,807 (1,572) 5,235 7 Internal-use software licenses 2,292 (385) 1,907 3 Indefinite-lived intangible assets: Cosmos Tradename 300 — 300 IPR&D 935 — 935 Total intangible assets $ 102,285 $ (11,443) $ 90,842 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The table below presents the future amortization expense on intangible assets as of September 30, 2022: Year Total Remainder of 2022 $ 1,402 2023 5,607 2024 5,295 2025 4,721 2026 4,450 Thereafter 34,366 Total future amortization expense on intangible assets $ 55,841 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill were as follows: September 30, 2022 Balance of goodwill as of December 31, 2021 $ 96,314 Change arising from impact of foreign currency (296) Impairment expense (39,308) Balance of goodwill as of September 30, 2022 $ 56,710 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The table below presents details of the Company’s debt as of the following periods including the effective interest rate as of September 30, 2022: Effective interest rate September 30, December 31, Adams Street Term Loan 9.50 % $ 30,547 $ 30,690 Adams Street Revolving Credit Facility 11.38 15,044 — Adams Street Delayed Draw Term Loan 9.49 14,781 14,850 Adams Street Incremental Term Loan 9.53 31,613 31,760 D&O Financing Loans 1.92 2,696 1,904 Total debt 94,681 79,204 Less: unamortized discounts and issuance costs 1,693 1,653 Total debt, net 92,988 77,551 Less: Short-term debt, including current portion of long-term debt 3,476 2,684 Total long-term debt, net $ 89,512 $ 74,867 |
Schedule of Maturities of Long-term Debt | The maturities of the Company’s long-term debt outstanding as of September 30, 2022 are as follows: Remainder of 2022 2023 2024 2025 2026 Thereafter Total Adams Street Term Loan $ 78 $ 310 $ 310 $ 310 $ 29,539 $ — $ 30,547 Adams Street Delayed Draw Term Loan 38 150 150 150 14,293 — 14,781 Adams Street Incremental Term Loan 80 320 320 320 30,573 — 31,613 Adams Street Revolving Credit Facility — — — — 15,044 — 15,044 2022 D&O Financing Loan 899 1,797 — — — — 2,696 Total long-term debt maturities $ 1,095 $ 2,577 $ 780 $ 780 $ 89,449 $ — $ 94,681 |
Interest Income and Interest Expense Disclosure | The table below presents the interest expense on debt, including the amortization of discounts and issuance costs for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Interest expense on debt $ 2,402 $ 1,740 $ 5,523 $ 4,933 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease Information | The following table summarizes total lease costs for the period. As the Company adopted ASC 842 as of January 1, 2022, rent expense recognized in accordance with ASC 840 is reported as operating lease cost for the comparative period in 2021. Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease costs $ 874 $ 867 $ 2,350 $ 2,452 Variable lease costs — — — — Short-term lease costs 55 — 227 — Total lease costs $ 929 $ 867 $ 2,577 $ 2,452 The following table presents other supplemental information related to the Company’s operating leases: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Cash paid for operating lease liabilities $ 825 $ 2,112 Right-of-use assets obtained in exchange for new lease liabilities 3,739 7,368 Weighted average remaining lease term (in years) 2.9 2.9 Weighted average discount rate 5.2 % 5.2 % |
Supplemental Balance Sheet Information | The following table presents supplemental balance sheet information related to the Company’s operating leases: September 30, December 31, Right-of-use assets $ 14,783 $ — Short-term lease liabilities $ 3,484 $ — Long-term lease liabilities 11,379 — Total lease liabilities $ 14,863 $ — |
Schedule of Future Minimum Rental Payments for Operating Leases | As of September 30, 2022, the future annual minimum lease payments for operating lease liabilities under ASC 842 are as follows: Year Total Remainder of 2022 $ 818 2023 3,713 2024 3,516 2025 2,958 2026 2,339 Thereafter 4,551 Total lease payments $ 17,895 Less: imputed interest 3,032 Present value of operating lease liabilities $ 14,863 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate | A reconciliation of the U.S. federal statutory income tax expense to actual income tax expense is as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Effective tax rate 17.0 % 18.7 % 6.2 % 14.3 % |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Fair Value Assumptions | The fair value of options granted under the Plan was estimated on the grant date under the Black-Scholes OPM using the following assumptions: 2022 Grants 2021 Grants Modified Awards Expected option term (years) 6 6 1.5 Expected volatility 59.50 % 32.80 % 45.90 % Risk-free rate of return 2.90% 0.93%-1.15% 2.41 % Expected annual dividend yield — % — % — % |
Summary of Option Activity | A summary of stock options activity under the Plan as of September 30, 2022 and changes during the nine months ended September 30, 2022 is presented as follows: Shares Weighted-Average Grant Date Fair Value per Share Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term (Years) Outstanding at December 31, 2021 1,546,400 $ 3.32 $ 10.00 Granted 959,618 1.80 3.13 Exercised — — — Forfeited (105,300) 3.32 10.03 Outstanding at September 30, 2022 2,400,718 $ 2.71 $ 7.25 9.25 |
Schedule of Nonvested Restricted Stock Units Activity | A summary of the status of the Company’s restricted stock units as of September 30, 2022, and changes during the nine months ended September 30, 2022, is presented as follows: Restricted Shares Weighted-Average Grant Date Fair Value per Share Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Unvested at December 31, 2021 1,717,950 $ 11.66 1.8 $ 11,596 Granted 1,694,846 3.29 Vested (124,401) 4.12 Forfeited (224,400) 10.88 Unvested at September 30, 2022 3,063,995 $ 7.34 1.3 $ 7,292 |
Summary of Stock Compensation Expense | The table below presents the equity-based compensation expense recorded during the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Cost of Sales Incentive Units $ — $ 1,454 $ 181 $ 1,454 Stock Options 17 — 42 — Restricted Stock Units 594 — 1,760 — Total cost of sales $ 611 $ 1,454 $ 1,983 $ 1,454 Selling, general and administrative expenses Incentive Units — 21,089 2,171 21,089 Stock Options 511 167 1,199 167 Restricted Stock Units 1,396 209 3,319 209 Total selling, general and administrative expenses $ 1,907 $ 21,465 $ 6,689 $ 21,465 Total equity-based compensation expense $ 2,518 $ 22,919 $ 8,672 $ 22,919 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | The numerators and denominators of the basic and diluted net income (loss) per share were computed for the periods presented as follows: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Numerator: Net income (loss) $ (10,423) $ (24,252) $ (104,744) $ (47,827) Denominator: Weighted average shares outstanding – basic and diluted 63,460,527 44,036,040 63,050,769 39,503,720 Basic and diluted net income (loss) per share $ (0.16) $ (0.55) $ (1.66) $ (1.21) |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The table below presents revenues by customer grouping for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Civil space $ 13,391 $ 18,166 $ 46,405 $ 49,032 National security 12,032 6,896 29,242 22,649 Commercial and other 11,826 7,618 31,197 24,845 Total revenues $ 37,249 $ 32,680 $ 106,844 $ 96,526 The table below presents revenues based on the geographic location of the Company’s customers for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 U.S. $ 36,190 $ 31,367 $ 102,813 $ 93,205 Luxembourg 911 1,156 3,315 3,071 South Korea 11 68 271 144 Germany 51 38 279 55 Poland — 51 — 51 Other 86 — 166 — Total revenues $ 37,249 $ 32,680 $ 106,844 $ 96,526 The majority of the Company’s revenues are derived from government contracts. Customers comprising 10% or more of revenues were as follows for the periods presented: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 NASA $ 4,796 $ 10,589 $ 19,203 $ 29,604 Boeing Co. 4,338 4,446 15,979 13,484 Moog Inc. (1) 4,105 — — — Total $ 13,239 $ 15,035 $ 35,182 $ 43,088 (1) While revenue was generated in each of the periods presented, amounts are only disclosed for the periods in which revenue represented 10% or more of total revenue. |
Schedule of Contract Assets and Contract Liabilities | The table below presents the contract assets and contract liabilities included on the condensed consolidated balance sheets for the following periods: September 30, December 31, Contract assets $ 16,319 $ 11,748 Contract liabilities $ 17,373 $ 15,734 |
Schedule of Change in Accounting Estimate | The following table summarizes the favorable (unfavorable) impact of the net EAC adjustments for the periods presented: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Net EAC adjustments, before income taxes $ (1,159) $ (278) $ (4,377) $ (1,418) Net EAC adjustments, net of income taxes (962) (226) (4,106) (1,215) Net EAC adjustments, net of income taxes, per diluted share (0.02) (0.01) (0.07) (0.03) |
Related Parties (Tables)
Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The table below presents details of the Company’s related party transactions with AEI included on the condensed consolidated statements of operations and comprehensive income (loss) for the following periods: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Management fees paid to AEI $ — $ 153 $ — $ 477 Transaction fees paid to AEI — 119 — 1,019 Total fees paid to AEI $ — $ 272 $ — $ 1,496 |
Description of the Business (De
Description of the Business (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 27 Months Ended | 30 Months Ended | |||||||||
Nov. 08, 2022 USD ($) shares | Nov. 03, 2022 USD ($) | Oct. 28, 2022 USD ($) $ / shares shares | Sep. 02, 2021 USD ($) shares | Sep. 01, 2021 $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Jun. 30, 2022 shares | Sep. 30, 2022 acquisition $ / shares shares | Apr. 14, 2022 USD ($) | Dec. 31, 2021 $ / shares shares | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Number of businesses acquired | acquisition | 8 | ||||||||||||
Proceeds from the merger | $ | $ 110,600 | $ 0 | $ 110,583 | ||||||||||
Interest expense on debt | $ | $ 2,402 | $ 1,740 | $ 5,523 | $ 4,933 | |||||||||
Merger transaction costs | $ | 38,700 | ||||||||||||
Shares from transaction (in shares) | 600,000,000 | ||||||||||||
Common stock authorized (in shares) | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||
Aggregate gross proceeds | $ | $ 75,000 | ||||||||||||
Units outstanding (in shares) | 59,661,273 | 63,852,690 | 63,852,690 | 63,852,690 | 62,690,869 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Convertible Preferred Stock | Subsequent Event | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||
Preferred stock purchase price | $ | $ 1,250 | ||||||||||||
Convertible Preferred Stock | Subsequent Event | TowerView LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares issued | 1,250 | ||||||||||||
SVB Loan | Notes Payable to Banks | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Debt repayment | $ | $ 41,600 | ||||||||||||
Interest expense on debt | $ | $ 100 | ||||||||||||
Cosmos Intermediate, LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares of common stock to receive (in shares) | 37,200,000 | ||||||||||||
Warrants outstanding (in shares) | 2,000,000 | ||||||||||||
Number of warrants to purchase common stock (in shares) | 1 | ||||||||||||
Genesis Park Acquisition Corp | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Units outstanding (in shares) | 13,961,273 | ||||||||||||
Committed Equity Facility | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares from transaction (in shares) | 8,500,000 | 598,854 | 909,669 | 127,751 | |||||||||
Sale of stock, amount authorized to issue and sell | $ | $ 80,000 | ||||||||||||
Bain Investment Agreement | Subsequent Event | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Preferred stock purchase price | $ | $ 10,000 | ||||||||||||
Bain Investment Agreement | Convertible Preferred Stock | Subsequent Event | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares issued | 40,000 | ||||||||||||
Preferred stock purchase price | $ | $ 40,000 | ||||||||||||
AEI Investment Agreement | Convertible Preferred Stock | Subsequent Event | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares issued | 40,000 | ||||||||||||
Preferred stock purchase price | $ | $ 40,000 | ||||||||||||
AEI and Bain Investment Agreements | Convertible Preferred Stock | Subsequent Event | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Shares issued | 80,000 | ||||||||||||
Preferred stock purchase price | $ | $ 80,000 | ||||||||||||
Cosmos Intermediate, LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Units sold (in shares) | 100 | ||||||||||||
Units outstanding (in shares) | 37,200,000 | ||||||||||||
Cosmos Intermediate, LLC | Genesis Park Acquisition Corp | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Units issued (in shares) | 100 | ||||||||||||
Exchange ratio | 372,000 | ||||||||||||
Cosmos Intermediate, LLC | Cosmos Parent, LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Ownership interest | 100% | ||||||||||||
Cosmos Finance, LLC | Cosmos Intermediate, LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Ownership interest | 100% | ||||||||||||
Cosmos Acquisition, LLC | Cosmos Finance, LLC | |||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||||||||||||
Ownership interest | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 USD ($) segment reportingUnit | Jan. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 7,031 | $ 20,523 | |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 | ||
Number of reporting units | reportingUnit | 3 | ||
Vesting period | 3 years | ||
Operating lease right-of-use assets | $ 14,783 | $ 10,100 | 0 |
Present value of operating lease liabilities | $ 14,863 | $ 10,200 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 7 years |
Laboratory equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 3 years |
Laboratory equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 10 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 5 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life in years | 5 years |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Nov. 01, 2021 | Feb. 17, 2021 | Jan. 15, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 56,710 | $ 56,710 | $ 96,314 | |||||
Transaction expenses | 21 | $ 0 | 100 | $ 2,400 | ||||
Oakman | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of ownership acquired | 100% | |||||||
Number of units acquired (in shares) | 1,000,000 | |||||||
Fair value of assets acquired assumed | $ 10,000 | |||||||
Fair value of liabilities assumed | 4,500 | |||||||
Purchase consideration | 14,300 | |||||||
Cash paid | 12,200 | |||||||
Common stock issued | $ 2,100 | |||||||
Goodwill | 8,800 | 8,800 | 8,800 | |||||
DPSS | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of ownership acquired | 100% | |||||||
Fair value of assets acquired assumed | $ 28,700 | |||||||
Fair value of liabilities assumed | 12,700 | |||||||
Purchase consideration | $ 27,300 | |||||||
Goodwill | $ 11,300 | $ 11,300 | $ 11,300 | |||||
Techshot | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of ownership acquired | 100% | |||||||
Number of units acquired (in shares) | 3,029,596 | |||||||
Fair value of assets acquired assumed | $ 20,763 | |||||||
Fair value of liabilities assumed | 6,563 | |||||||
Purchase consideration | 40,721 | |||||||
Cash paid | 2,228 | |||||||
Common stock issued | 38,493 | |||||||
Goodwill | $ 26,521 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | |||
Goodwill | $ 56,710 | $ 96,314 | |
Techshot | |||
Business Acquisition [Line Items] | |||
Cash paid | $ 2,228 | ||
Common stock issued | 38,493 | ||
Purchase consideration | 40,721 | ||
Assets: | |||
Cash | 406 | ||
Accounts receivable and other receivable | 287 | ||
Contract assets | 926 | ||
Inventory | 120 | ||
Prepaid expenses and other current assets | 86 | ||
Property, plant and equipment | 14,818 | ||
Intangible assets | 4,120 | ||
Total assets | 20,763 | ||
Liabilities: | |||
Accounts payable | 39 | ||
Accrued expenses | 293 | ||
Deferred revenue | 675 | ||
Other current liabilities | 35 | ||
Deferred tax liabilities | 5,521 | ||
Total liabilities | 6,563 | ||
Fair value of net identifiable assets acquired | 14,200 | ||
Goodwill | $ 26,521 |
Business Combinations - Intangi
Business Combinations - Intangible Assets (Details) - Techshot $ in Thousands | Nov. 01, 2021 USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 4,120 |
Trademark | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 240 |
Weighted average useful life in years | 3 years |
Technology | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 1,800 |
Weighted average useful life in years | 10 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 1,400 |
Weighted average useful life in years | 9 years |
IPR&D | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 680 |
Business Combinations - Pro For
Business Combinations - Pro Forma Financial Data (Details) - Business Combinations 2021 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Revenues | $ 34,947 | $ 107,256 |
Net income (loss) | $ (23,645) | $ (46,260) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Valuation Assumptions (Details) - Roccor | Oct. 28, 2020 |
Risk-free interest rate | |
Business Acquisition [Line Items] | |
Measurement input | 0.001 |
Revenue discount rate | |
Business Acquisition [Line Items] | |
Measurement input | 0.070 |
Revenue volatility | |
Business Acquisition [Line Items] | |
Measurement input | 0.300 |
Earnout payment discount rate | |
Business Acquisition [Line Items] | |
Measurement input | 0.040 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 27 Months Ended | ||
Sep. 02, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Apr. 14, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Decrease of fair value in the committed equity facility | $ 140 | ||||
Price per share (in dollars per share) | $ 2.38 | $ 2.38 | |||
Unused capacity | $ 19,300 | $ 19,300 | |||
Decrease in fair value of private warrant liability | 16,005 | ||||
Private Warrants | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Decrease in fair value of private warrant liability | $ 900 | $ 16,005 | |||
Committed Equity Facility | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Derivative asset | $ 800 | ||||
Shares from transaction (in shares) | 8,500,000 | 598,854 | 909,669 | 127,751 | |
Sale of stock, amount authorized to issue and sell | $ 80,000 | ||||
Decrease of fair value in the committed equity facility | $ 100 | $ 140 | |||
Percentage of purchase price per share | 97% | ||||
Percentage of commission on gross proceeds | 3% | ||||
Remaining shares available | 8,090,331 | 8,090,331 | |||
Committed Equity Facility | Minimum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Price per share (in dollars per share) | $ 2.73 | $ 2.73 | |||
Committed Equity Facility | Maximum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Price per share (in dollars per share) | $ 4.29 | $ 4.29 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Private Warrants Assumptions (Details) - Private Warrants - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Fair value (in dollars per share) | $ 0.40 | $ 2.47 |
Exercise price (in dollars per share) | 11.50 | 11.50 |
Common stock price (in dollars per share) | $ 2.38 | $ 6.75 |
Expected option term (years) | 3 years 11 months 1 day | 4 years 8 months 1 day |
Expected volatility | 66.30% | 60.50% |
Risk-free rate of return | 4.12% | 1.21% |
Expected annual dividend yield | 0% | 0% |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Schedule of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Private warrants | $ 3,093 | $ 19,098 |
Contingent consideration | 1,000 | 1,000 |
Fair Value, Recurring | ||
Assets: | ||
Committed equity facility | 616 | |
Total assets | 616 | |
Liabilities: | ||
Private warrants | 3,093 | 19,098 |
Contingent consideration | 1,000 | 1,000 |
Total liabilities | 4,093 | 20,098 |
Level 1 | Fair Value, Recurring | ||
Assets: | ||
Committed equity facility | 0 | |
Total assets | 0 | |
Liabilities: | ||
Private warrants | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Assets: | ||
Committed equity facility | 0 | |
Total assets | 0 | |
Liabilities: | ||
Private warrants | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Assets: | ||
Committed equity facility | 616 | |
Total assets | 616 | |
Liabilities: | ||
Private warrants | 3,093 | 19,098 |
Contingent consideration | 1,000 | 1,000 |
Total liabilities | $ 4,093 | $ 20,098 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Changes in Financial Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Assets: | ||
Beginning balance | $ 0 | |
Additions | 756 | |
Changes in fair value | (140) | |
Settlements | 0 | |
Ending balance | $ 616 | 616 |
Committed Equity Facility | ||
Assets: | ||
Beginning balance | 0 | |
Additions | 756 | |
Changes in fair value | (100) | (140) |
Settlements | 0 | |
Ending balance | $ 616 | $ 616 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Changes in Financial Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Liabilities: | ||
Beginning balance | $ 20,098 | |
Additions | 0 | |
Changes in fair value | (16,005) | |
Settlements | 0 | |
Ending balance | $ 4,093 | 4,093 |
Private Warrants | ||
Liabilities: | ||
Beginning balance | 19,098 | |
Additions | 0 | |
Changes in fair value | (900) | (16,005) |
Settlements | 0 | |
Ending balance | 3,093 | 3,093 |
Contingent Consideration | ||
Liabilities: | ||
Beginning balance | 1,000 | |
Additions | 0 | |
Changes in fair value | 0 | |
Settlements | 0 | |
Ending balance | $ 1,000 | $ 1,000 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Billed receivables | $ 16,175 | $ 14,820 |
Unbilled receivables | 346 | 1,442 |
Total accounts receivable, net | 16,521 | 16,262 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,239 | $ 414 |
Work in process | 638 | 117 |
Finished goods | 152 | 157 |
Inventory | $ 2,029 | $ 688 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 9,495 | $ 21,639 |
Less: accumulated depreciation | (2,798) | (2,255) |
Total property, plant and equipment, net | 6,697 | 19,384 |
Impairment expense, property and equipment | 12,900 | |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,383 | 1,380 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,012 | 783 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,863 | 16,856 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,997 | 2,205 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,240 | $ 415 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (10,328) | $ (11,443) |
Net carrying amount | 55,841 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount | 66,535 | 102,285 |
Accumulated amortization | (10,328) | (11,443) |
Net carrying amount | 56,207 | 90,842 |
Impairment expense, intangible assets | 28,200 | |
Future Amortization Expense on Intangible Assets | ||
Remainder of 2022 | 1,402 | |
2023 | 5,607 | |
2024 | 5,295 | |
2025 | 4,721 | |
2026 | 4,450 | |
Thereafter | 34,366 | |
Net carrying amount | 55,841 | |
Cosmos Tradename | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying amount | 300 | 300 |
IPR&D | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying amount | 66 | 935 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 33,165 | 48,612 |
Accumulated amortization | (3,654) | (3,592) |
Net carrying amount | $ 29,511 | $ 45,020 |
Weighted average useful life in years | 19 years | 19 years |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (3,654) | $ (3,592) |
Future Amortization Expense on Intangible Assets | ||
Net carrying amount | 29,511 | 45,020 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 27,348 | 43,339 |
Accumulated amortization | (4,659) | (5,894) |
Net carrying amount | $ 22,689 | $ 37,445 |
Weighted average useful life in years | 14 years | 14 years |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (4,659) | $ (5,894) |
Future Amortization Expense on Intangible Assets | ||
Net carrying amount | 22,689 | 37,445 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 3,498 | 6,807 |
Accumulated amortization | (1,275) | (1,572) |
Net carrying amount | $ 2,223 | $ 5,235 |
Weighted average useful life in years | 7 years | 7 years |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (1,275) | $ (1,572) |
Future Amortization Expense on Intangible Assets | ||
Net carrying amount | 2,223 | 5,235 |
Internal-use software licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 2,158 | 2,292 |
Accumulated amortization | (740) | (385) |
Net carrying amount | $ 1,418 | $ 1,907 |
Weighted average useful life in years | 3 years | 3 years |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (740) | $ (385) |
Future Amortization Expense on Intangible Assets | ||
Net carrying amount | $ 1,418 | $ 1,907 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||
Beginning balance of goodwill | $ 96,314 | ||
Change arising from impact of foreign currency | (296) | ||
Impairment expense | $ (39,300) | (39,308) | |
Ending balance of goodwill | 56,710 | ||
Goodwill | 56,710 | $ 96,314 | |
Gross goodwill | 96,000 | 96,300 | |
Goodwill accumulated impairment | $ (39,300) | $ 0 | |
Mission Solutions | |||
Goodwill [Roll Forward] | |||
Ending balance of goodwill | 10,700 | ||
Goodwill | $ 10,700 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total debt | $ 94,681 | $ 79,204 |
Less: unamortized discounts and issuance costs | 1,693 | 1,653 |
Total | 92,988 | 77,551 |
Less: Short-term debt, including current portion of long-term debt | 3,476 | 2,684 |
Total long-term debt, net | $ 89,512 | 74,867 |
Adams Street Capital Agreement | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 9.50% | |
Total debt | $ 30,547 | 30,690 |
Adams Street Capital Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 11.38% | |
Total debt | $ 15,044 | 0 |
Adams Street Delayed Draw Term Loan | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 9.49% | |
Total debt | $ 14,781 | 14,850 |
Adams Street Incremental Term Loan | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 9.53% | |
Total debt | $ 31,613 | 31,760 |
D&O Financing Loans | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 1.92% | |
Total debt | $ 2,696 | $ 1,904 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Aug. 08, 2022 USD ($) | Mar. 25, 2022 USD ($) | Sep. 02, 2021 USD ($) | Jun. 18, 2021 USD ($) | Jan. 15, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Sep. 03, 2022 USD ($) | Sep. 03, 2021 USD ($) | Feb. 17, 2021 USD ($) | Oct. 28, 2020 USD ($) | Aug. 31, 2020 USD ($) | May 01, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||
Draw down amount | $ 19,696,000 | $ 49,017,000 | |||||||||||||
Non-cash interest expense | 270,000 | $ 0 | |||||||||||||
Forgiveness amount | $ 600,000 | ||||||||||||||
Available liquidity | $ 17,000,000 | 17,000,000 | |||||||||||||
Cash and cash equivalents | 7,031,000 | 7,031,000 | $ 20,523,000 | ||||||||||||
Line of credit | 10,000,000 | 10,000,000 | |||||||||||||
DSS PPP Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 1,100,000 | ||||||||||||||
Interest rate | 1% | ||||||||||||||
Repayments of debt | 500,000 | ||||||||||||||
Medium-term Notes | Adams Street Capital Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit amount | $ 31,000,000 | ||||||||||||||
Draw down amount | $ 15,000,000 | ||||||||||||||
Additional borrowing capacity | $ 32,000,000 | ||||||||||||||
Net leverage ratio | 6.50 | ||||||||||||||
Minimum liquidity covenant | $ 5,000,000 | ||||||||||||||
Interest rate, increase | 2% | ||||||||||||||
Non-cash interest expense | 300,000 | 300,000 | |||||||||||||
Limited guarantee for the payment of outstanding term loans | $ 7,500,000 | ||||||||||||||
Medium-term Notes | Adams Street Delayed Draw Term Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit amount | 15,000,000 | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Borrowings outstanding under credit facility | $ 15,000,000 | $ 15,000,000 | 0 | ||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Credit amount | $ 25,000,000 | 5,000,000 | |||||||||||||
Current borrowing capacity | $ 10,000,000 | ||||||||||||||
Commitment fee percentage | 2% | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | Maximum | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Current borrowing capacity | $ 15,000,000 | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | First Covenant | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Current borrowing capacity | $ 5,000,000 | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | First Covenant | Eurocurrency Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate | 6% | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | First Covenant | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate | 5% | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | Second Covenant | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Current borrowing capacity | $ 5,000,000 | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | Second Covenant | Eurocurrency Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate | 7.50% | ||||||||||||||
Line of Credit | Adams Street Capital Agreement | Revolving Credit Facility | Second Covenant | Base Rate | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Interest rate | 6.50% | ||||||||||||||
Notes Payable to Banks | SVB Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 51,100,000 | $ 45,400,000 | |||||||||||||
Debt repayment | $ 41,600,000 | ||||||||||||||
Notes Payable to Banks | D&O Financing Loans | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Face amount | $ 2,700,000 | $ 3,000,000 | |||||||||||||
Interest rate | 4.59% | 1.74% | |||||||||||||
Loan | |||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||
Debt repayment | $ 600,000 |
Debt - Maturities of Long-Term
Debt - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Remainder of 2022 | $ 1,095 | |
2023 | 2,577 | |
2024 | 780 | |
2025 | 780 | |
2026 | 89,449 | |
Thereafter | 0 | |
Total | 94,681 | $ 79,204 |
Adams Street Capital Agreement | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 78 | |
2023 | 310 | |
2024 | 310 | |
2025 | 310 | |
2026 | 29,539 | |
Thereafter | 0 | |
Total | 30,547 | 30,690 |
Adams Street Capital Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 15,044 | |
Thereafter | 0 | |
Total | 15,044 | 0 |
Adams Street Delayed Draw Term Loan | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 38 | |
2023 | 150 | |
2024 | 150 | |
2025 | 150 | |
2026 | 14,293 | |
Thereafter | 0 | |
Total | 14,781 | 14,850 |
Adams Street Incremental Term Loan | Medium-term Notes | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 80 | |
2023 | 320 | |
2024 | 320 | |
2025 | 320 | |
2026 | 30,573 | |
Thereafter | 0 | |
Total | 31,613 | 31,760 |
2022 D&O Financing Loan | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Remainder of 2022 | 899 | |
2023 | 1,797 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total | $ 2,696 | $ 1,904 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Interest expense on debt | $ 2,402 | $ 1,740 | $ 5,523 | $ 4,933 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) lease | Dec. 31, 2021 USD ($) | |
Operating Leased Assets [Line Items] | ||
Number of leases with annual escalations | lease | 1 | |
Renewal term | 9 years | |
Renewal term extension | 60 days | |
Future minimum lease obligations | $ | $ 26.3 | |
Number of leases not yet commenced | lease | 1,000 | |
Lessee, operating lease, not yet commenced, amount | $ | $ 1.5 | |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Minimum rent percentage | 1.96% | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Minimum rent percentage | 4% |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease costs | $ 874 | $ 2,350 | ||
Operating lease costs, topic 840 | $ 867 | $ 2,452 | ||
Variable lease costs | 0 | 0 | ||
Short-term lease costs | 55 | 227 | ||
Total lease costs | $ 929 | $ 2,577 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Right-of-use assets | $ 14,783 | $ 10,100 | $ 0 |
Short-term lease liabilities | 3,484 | 0 | |
Long-term lease liabilities | 11,379 | 0 | |
Total lease liabilities | $ 14,863 | $ 10,200 | $ 0 |
Leases - Other Supplemental Inf
Leases - Other Supplemental Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Leases [Abstract] | ||
Cash paid for operating lease liabilities | $ 825 | $ 2,112 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 3,739 | $ 7,368 |
Weighted average remaining lease term (in years) | 2 years 10 months 24 days | 2 years 10 months 24 days |
Weighted average discount rate | 5.20% | 5.20% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Remainder of 2022 | $ 818 | ||
2023 | 3,713 | ||
2024 | 3,516 | ||
2025 | 2,958 | ||
2026 | 2,339 | ||
Thereafter | 4,551 | ||
Total lease payments | 17,895 | ||
Less: imputed interest | 3,032 | ||
Present value of operating lease liabilities | $ 14,863 | $ 10,200 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 17% | 18.70% | 6.20% | 14.30% |
Valuation allowance | $ 3.6 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 27 Months Ended | |||
Apr. 14, 2022 | Sep. 02, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Apr. 22, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Price per share (in dollars per share) | $ 2.38 | $ 2.38 | ||||
Unused capacity | $ 19.3 | $ 19.3 | ||||
Committed Equity Facility | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Share purchase period | 24 months | |||||
Percentage of share issued | 19.99% | |||||
Percentage of share eligible to be purchased based on purchase volume reference amount | 50% | |||||
Trading day period | 10 days | |||||
Percentage of share eligible to be purchased based on shares traded | 20% | |||||
Sale of stock, number of shares authorized for issuance (in shares) | 9,000,000 | |||||
Beneficial ownership percentage | 4.99% | |||||
Payments of stock issuance costs, settled in shares | $ 0.8 | |||||
Payments of stock issuance costs, settled in cash | $ 0.7 | |||||
Shares from transaction (in shares) | 8,500,000 | 598,854 | 909,669 | 127,751 | ||
Net proceeds from sale of common stock | $ 1.7 | $ 3 | ||||
Remaining shares available (in shares) | 8,090,331 | 8,090,331 |
Warrants - Narrative (Details)
Warrants - Narrative (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants to purchase common stock (in shares) | 1 | |
Fair value (in dollars per share) | $ 11.50 | |
Redemption price (in dollars per share) | $ 0.01 | |
Written notice of redemption period | 30 days | |
Stock price trigger (in dollars per share) | $ 18 | |
Threshold trading days | 20 days | |
Threshold trading day period | 30 days | |
Business days prior to the notice of redemption | 3 days | |
Warrants outstanding (in shares) | 8,188,811 | |
Private Warrants | ||
Class of Warrant or Right [Line Items] | ||
Fair value (in dollars per share) | $ 0.40 | $ 2.47 |
Warrants outstanding (in shares) | 7,732,168 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jul. 01, 2022 $ / shares shares | Jun. 01, 2022 $ / shares | May 26, 2022 $ / shares shares | May 18, 2022 USD ($) $ / shares shares | Sep. 02, 2021 shares | Sep. 30, 2022 USD ($) plan shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) plan tranche $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equity-based compensation plans | plan | 3 | 3 | ||||||||
Incentive units participation threshold (in dollars per share) | $ / shares | $ 1 | |||||||||
Number of tranches | tranche | 3 | |||||||||
Common stock shares reserved (in shares) | 7,936,136 | 9,189,953 | 9,189,953 | 7,936,136 | ||||||
Service period | 12 months | |||||||||
Percentage recognized | 75% | |||||||||
Compensation expense | $ | $ 2,518,000 | $ 22,919,000 | $ 8,672,000 | $ 22,919,000 | ||||||
Unrecognized compensation costs | $ | $ 0 | $ 0 | ||||||||
Vesting period | 3 years | |||||||||
Number of shares outstanding (in shares) | 2,400,718 | 2,400,718 | 1,546,400 | |||||||
Unrecognized compensation costs | $ | $ 4,500,000 | $ 4,500,000 | ||||||||
Vested options (in shares) | 499,135 | 499,135 | ||||||||
Exercise of stock options (in shares) | 0 | |||||||||
Options, forfeitures in period (in shares) | 105,300 | |||||||||
Employee Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock shares reserved (in shares) | 755,822 | 1,382,731 | 1,382,731 | 755,822 | ||||||
Annual increase period | 10 years | |||||||||
Awards granted (in shares) | 0 | 0 | ||||||||
Incentive Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Compensation expense | $ | $ 2,400,000 | |||||||||
Stock Options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awards granted (in shares) | 959,618 | |||||||||
Contractual term | 10 years | |||||||||
Vesting period | 3 years | |||||||||
Stock Options | First Anniversary | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 33.30% | |||||||||
Stock Options | Second Anniversary | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 33.30% | |||||||||
Stock Options | Third Anniversary | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting percentage | 33.40% | |||||||||
Modified Awards | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 12 months | |||||||||
Exercise period | 24 months | |||||||||
Reduction in equity-based compensation expense | $ | $ 100,000 | |||||||||
Restricted Stock Units (RSUs) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Awards granted (in shares) | 1,366,034 | |||||||||
Compensation expense | $ | $ 15,000 | |||||||||
Unrecognized compensation costs | $ | $ 15,700,000 | $ 15,700,000 | ||||||||
RSUs granted (in shares) | 124,401 | 1,694,846 | ||||||||
RSUs granted (in dollars per share) | $ / shares | $ 3.13 | $ 4.12 | $ 3.29 | |||||||
Expected period for recognition | 2 years 2 months 12 days | |||||||||
Vested (in shares) | 0 | (124,401) | ||||||||
Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Nonemployee | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | 1 year | ||||||||
RSUs granted (in shares) | 39,936 | 164,475 | ||||||||
RSUs granted (in dollars per share) | $ / shares | $ 3.13 | $ 4.02 | ||||||||
Modified Restricted Stock Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Service period | 12 months | |||||||||
Reduction in equity-based compensation expense | $ | $ 100,000 | |||||||||
RSUs granted (in dollars per share) | $ / shares | $ 4.31 |
Equity-Based Compensation - Wei
Equity-Based Compensation - Weighted Average Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term (years) | 6 years | 6 years |
Expected volatility | 59.50% | 32.80% |
Risk-free rate of return | 2.90% | |
Range of risk-free interest rates, minimum | 0.93% | |
Range of risk-free interest rates, maximum | 1.15% | |
Expected annual dividend yield | 0% | 0% |
Modified Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected option term (years) | 1 year 6 months | |
Expected volatility | 45.90% | |
Risk-free rate of return | 2.41% | |
Expected annual dividend yield | 0% |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of Options (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Shares | |
Outstanding, beginning balance (in shares) | shares | 1,546,400 |
Granted options (in shares) | shares | 959,618 |
Exercised (in shares) | shares | 0 |
Forfeitures (in shares) | shares | (105,300) |
Outstanding, ending balance (in shares) | shares | 2,400,718 |
Weighted-Average Grant Date Fair Value per Share | |
Outstanding, beginning balance (in dollars per share) | $ 3.32 |
Granted (in dollars per share) | 1.80 |
Exercised (in dollars per share) | 0 |
Forfeited (in dollars per share) | 3.32 |
Outstanding, ending balance (in dollars per share) | 2.71 |
Weighted-Average Exercise Price per Share | |
Outstanding, ending balance (in dollars per share) | 7.25 |
Granted (in dollars per share) | 3.13 |
Exercised (in dollars per share) | 0 |
Forfeited (in dollars per share) | 10.03 |
Outstanding, beginning balance (in dollars per share) | $ 10 |
Weighted-Average Remaining Contractual Term (Years) | 9 years 3 months |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Restricted Stock (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 01, 2022 | May 18, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Shares | |||||
Unvested, beginning balance (in shares) | 1,717,950 | ||||
Granted (in shares) | 124,401 | 1,694,846 | |||
Vested (in shares) | 0 | (124,401) | |||
Forfeited (in shares) | (224,400) | ||||
Unvested, ending balance (in shares) | 3,063,995 | 3,063,995 | 1,717,950 | ||
Weighted-Average Grant Date Fair Value per Share | |||||
Unvested, beginning balance (in dollars per share) | $ 11.66 | ||||
Granted (in dollars per share) | $ 3.13 | $ 4.12 | 3.29 | ||
Vested (in dollars per share) | 4.12 | ||||
Forfeited (in dollars per share) | 10.88 | ||||
Unvested, ending balance (in dollars per share) | $ 7.34 | $ 7.34 | $ 11.66 | ||
Weighted-Average Remaining Contractual Term (in Years) | 1 year 3 months 18 days | 1 year 9 months 18 days | |||
Aggregate Intrinsic Value | $ 7,292 | $ 7,292 | $ 11,596 |
Equity-Based Compensation - Equ
Equity-Based Compensation - Equity-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 18, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | $ 2,518 | $ 22,919 | $ 8,672 | $ 22,919 | |
Cost of Sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 611 | 1,454 | 1,983 | 1,454 | |
Selling, general and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 1,907 | 21,465 | 6,689 | 21,465 | |
Incentive Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 2,400 | ||||
Incentive Units | Cost of Sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 0 | 1,454 | 181 | 1,454 | |
Incentive Units | Selling, general and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 0 | 21,089 | 2,171 | 21,089 | |
Stock Options | Cost of Sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 17 | 0 | 42 | 0 | |
Stock Options | Selling, general and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 511 | 167 | 1,199 | 167 | |
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | $ 15 | ||||
Restricted Stock Units | Cost of Sales | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | 594 | 0 | 1,760 | 0 | |
Restricted Stock Units | Selling, general and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total equity-based compensation expense | $ 1,396 | $ 209 | $ 3,319 | $ 209 |
Net Income (Loss) per Share (De
Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) | $ (10,423) | $ (24,252) | $ (104,744) | $ (47,827) |
Denominator: | ||||
Weighted average shares outstanding – basic (in shares) | 63,460,527 | 44,036,040 | 63,050,769 | 39,503,720 |
Weighted average shares outstanding – diluted (in shares) | 63,460,527 | 44,036,040 | 63,050,769 | 39,503,720 |
Basic net income (loss) per share (in dollars per share) | $ (0.16) | $ (0.55) | $ (1.66) | $ (1.21) |
Diluted net income (loss) per share (in dollars per share) | $ (0.16) | $ (0.55) | $ (1.66) | $ (1.21) |
Antidilutive securities (in shares) | 0 | 0 | 0 | 0 |
Revenue - Revenues by Customer
Revenue - Revenues by Customer Grouping (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 37,249 | $ 32,680 | $ 106,844 | $ 96,526 |
Civil space | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 13,391 | 18,166 | 46,405 | 49,032 |
National security | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 12,032 | 6,896 | 29,242 | 22,649 |
Commercial and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 11,826 | $ 7,618 | $ 31,197 | $ 24,845 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 16,319 | $ 11,748 |
Contract liabilities | $ 17,373 | $ 15,734 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liability, revenue recognized | $ 12.8 | $ 15 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, amount | $ 125.7 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation, percentage | 86% | |
Remaining performance obligation, period | 12 months |
Revenue - EAC Adjustments (Deta
Revenue - EAC Adjustments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net EAC adjustments, before income taxes | $ (12,558) | $ (29,834) | $ (111,693) | $ (55,798) |
Net EAC adjustments, net of income taxes | $ (10,423) | $ (24,252) | $ (104,744) | $ (47,827) |
Net EAC adjustments, net of income taxes, per diluted share (in dollars per share) | $ (0.16) | $ (0.55) | $ (1.66) | $ (1.21) |
Contracts Accounted for under Percentage of Completion | ||||
Disaggregation of Revenue [Line Items] | ||||
Net EAC adjustments, before income taxes | $ (1,159) | $ (278) | $ (4,377) | $ (1,418) |
Net EAC adjustments, net of income taxes | $ (962) | $ (226) | $ (4,106) | $ (1,215) |
Net EAC adjustments, net of income taxes, per diluted share (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.07) | $ (0.03) |
Revenue - Revenues by Geographi
Revenue - Revenues by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 37,249 | $ 32,680 | $ 106,844 | $ 96,526 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 36,190 | 31,367 | 102,813 | 93,205 |
Luxembourg | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 911 | 1,156 | 3,315 | 3,071 |
South Korea | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 11 | 68 | 271 | 144 |
Germany | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 51 | 38 | 279 | 55 |
Poland | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 51 | 0 | 51 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 86 | $ 0 | $ 166 | $ 0 |
Revenue - Revenues by Customers
Revenue - Revenues by Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 37,249 | $ 32,680 | $ 106,844 | $ 96,526 |
NASA | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,796 | 10,589 | 19,203 | 29,604 |
Boeing Co. | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,338 | 4,446 | 15,979 | 13,484 |
Moog, Inc. | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 4,105 | 0 | 0 | 0 |
Major Customers | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 13,239 | $ 15,035 | $ 35,182 | $ 43,088 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Total fees paid to AEI | $ 0 | $ 272 | $ 0 | $ 1,496 | ||
Receivable from related party | $ 4,900 | |||||
Due from related party | $ 4,900 | |||||
Chairman Chief Executive Officer and Member of Board of Directors | ||||||
Related Party Transaction [Line Items] | ||||||
Related parties revenue | 700 | 2,200 | 900 | 4,700 | ||
Due from related party | 200 | 200 | $ 1,300 | |||
Management fees paid to AEI | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Total fees paid to AEI | 0 | 153 | 0 | 477 | ||
Transaction fees paid to AEI | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Total fees paid to AEI | $ 0 | $ 119 | $ 0 | $ 1,019 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands, € in Millions | Nov. 08, 2022 USD ($) shares | Nov. 03, 2022 USD ($) shares | Oct. 31, 2022 USD ($) | Oct. 31, 2022 EUR (€) | Oct. 28, 2022 USD ($) shares | Sep. 02, 2021 |
Medium-term Notes | Adams Street Capital Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Net leverage ratio | 6.50 | |||||
Subsequent Event | Bain Investment Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock purchase price | $ | $ 10,000 | |||||
Shares transferred | 10,000 | |||||
Subsequent Event | Medium-term Notes | Adams Street Capital Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Current borrowing capacity | $ | $ 80,000 | |||||
Subsequent Event | Medium-term Notes | Scenario 1 | Adams Street Capital Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Net leverage ratio | 7.50 | |||||
Subsequent Event | Medium-term Notes | Scenario 2 | Adams Street Capital Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Net leverage ratio | 6.50 | |||||
Subsequent Event | Medium-term Notes | Scenario 3 | Adams Street Capital Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Net leverage ratio | 6.50 | |||||
Subsequent Event | Space NV | ||||||
Subsequent Event [Line Items] | ||||||
Percent of ownership acquired | 100% | 100% | ||||
Purchase consideration | € | € 32 | |||||
Subsequent Event | Space NV | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds from investment | $ | $ 40,000 | |||||
Subsequent Event | Space NV | Minimum | ||||||
Subsequent Event [Line Items] | ||||||
Net proceeds from investment | $ | $ 37,000 | |||||
Subsequent Event | Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Shares authorized | 88,000 | |||||
Preferred stock purchase price | $ | $ 1,250 | |||||
Shares outstanding | 80,000 | |||||
Dividend cash paid, interest rate | 13% | |||||
Dividend issued, interest rate | 15% | |||||
Subsequent Event | Convertible Preferred Stock | TowerView LLC | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 1,250 | |||||
Subsequent Event | Convertible Preferred Stock | AEI Investment Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 40,000 | |||||
Preferred stock purchase price | $ | $ 40,000 | |||||
Shares outstanding | 30,000 | |||||
Subsequent Event | Convertible Preferred Stock | Bain Investment Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 40,000 | |||||
Preferred stock purchase price | $ | $ 40,000 | |||||
Shares outstanding | 50,000 | |||||
Beneficial ownership percentage | 50% | |||||
Period for beneficial ownership percentage | 30 days | |||||
Subsequent Event | Convertible Preferred Stock | AEI and Bain Investment Agreements | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 80,000 | |||||
Preferred stock purchase price | $ | $ 80,000 | |||||
Beneficial ownership percentage | 50% | |||||
Period for share transfer | 12 months |