UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to ______
Commission File Number
Orbital Energy Group, Inc.
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
| (Address of principal executive offices and zip code) |
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| | Smaller reporting company |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
There were
Securities registered pursuant to Section 12(b) of the Act.:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | |
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| (in thousands, except share and per share amounts) | 2021 | 2020 | ||||||
| Assets: | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash - current | ||||||||
| Trade accounts receivable, net of allowance of $ and $ at June 30, 2021 and December 31, 2020, respectively | ||||||||
| Inventories | ||||||||
| Contract assets | ||||||||
| Note receivable, current portion | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, less accumulated depreciation of $ and $ at June 30, 2021 and December 31, 2020, respectively | ||||||||
| Investment | ||||||||
| Right of use assets - Operating leases | ||||||||
| Right of use assets - Financing leases | ||||||||
| Goodwill | ||||||||
| Other intangible assets, net | ||||||||
| Restricted cash | ||||||||
| Note receivable | ||||||||
| Deposits and other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity: | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Notes payable, current | ||||||||
| Line of credit | ||||||||
| Operating lease obligations - current portion | ||||||||
| Financing lease obligations - current portion | ||||||||
| Accrued expenses | ||||||||
| Contract liabilities | ||||||||
| Total current liabilities | ||||||||
| Notes payable, less current portion | ||||||||
| Operating lease obligations, less current portion | ||||||||
| Financing lease obligations, less current portion | ||||||||
| Contingent consideration | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, par value $; shares authorized; shares issued at June 30, 2021 or December 31, 2020 | ||||||||
| Common stock, par value $; shares authorized; shares issued and shares outstanding at June 30, 2021 and shares issued and shares outstanding at December 31, 2020 | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock at cost; shares held at June 30, 2021 and December 31, 2020 | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements
Condensed Consolidated Statements of Operations
(Unaudited)
| For the Three Months | For the Six Months | |||||||||||||||
| (in thousands, except share and per share amounts) | Ended June 30, | Ended June 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative expense | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Research and development | ||||||||||||||||
| (Recovery) provision for bad debt | ( | ) | ( | ) | ||||||||||||
| Other operating income | ( | ) | ( | ) | ||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations before income taxes and net loss of affiliate | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss of affiliate | ( | ) | ( | ) | ||||||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations, net of income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Discontinued operations (Note 3) | ||||||||||||||||
| Income from operations of discontinued power and electromechanical components businesses | ||||||||||||||||
| Income tax expense (benefit) | ( | ) | ||||||||||||||
| Income from discontinued operations, net of income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted weighted average common shares outstanding | ||||||||||||||||
| Loss from continuing operations per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income from discontinued operations - basic and diluted | ||||||||||||||||
| Loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to condensed consolidated financial statements
Condensed Consolidated Statements of Comprehensive Income and Loss
(Unaudited)
| For the Three Months | For the Six Months | |||||||||||||||
| (in thousands) | Ended June 30, | Ended June 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to condensed consolidated financial statements
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Six Months Ended June 30, 2021 and 2020
(Unaudited)
| (in thousands, except share amounts) |
Common Stock |
Treasury Stock |
||||||||||||||||||||||||||||||
| Shares |
Amount |
Additional Paid-in Capital |
Shares |
Amount |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders' Equity |
|||||||||||||||||||||||||
| Balance, December 31, 2020 |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Issuance of common stock via equity raises |
||||||||||||||||||||||||||||||||
| Common stock issued for cashless exercises of stock options |
||||||||||||||||||||||||||||||||
| Common stock issued and issuable for compensation, services and royalty payments |
||||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Other comprehensive loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, March 31, 2021 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Common stock issued for acquisition of Gibson Technical Services, Inc. |
||||||||||||||||||||||||||||||||
| Common stock issued and issuable for compensation, services and royalty payments |
||||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Other comprehensive income |
— | — | ||||||||||||||||||||||||||||||
| Balance, June 30, 2021 |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| (in thousands, except share amounts) |
Common Stock |
Treasury Stock |
||||||||||||||||||||||||||||||
| Shares |
Amount |
Additional Paid-in Capital |
Shares |
Amount |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Stockholders' Equity |
|||||||||||||||||||||||||
| Balance, December 31, 2019 |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
| Common stock issued for royalty payments |
||||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Other comprehensive income |
— | — | ||||||||||||||||||||||||||||||
| Balance, March 31, 2020 |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Common stock issued for acquisition of Reach Construction Group, Inc. |
||||||||||||||||||||||||||||||||
| Common stock issued for compensation, services, and royalty payments |
||||||||||||||||||||||||||||||||
| Net loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Other comprehensive loss |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance, June 30, 2020 |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
See accompanying notes to condensed consolidated financial statements
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| For the Six Months |
||||||||
| (in thousands) |
Ended June 30, |
|||||||
| 2021 |
2020 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Depreciation |
||||||||
| Amortization of intangibles |
||||||||
| Amortization of note receivable discount |
( |
) | ( |
) | ||||
| Stock-based compensation and expense |
||||||||
| Fair value adjustment to liability for stock appreciation rights |
||||||||
| Amortization of debt discount |
||||||||
| Gain on extinguishment of debt |
( |
) | ||||||
| Non-cash loss on equity method investment in affiliate |
||||||||
| (Recovery) provision for bad debt |
( |
) | ||||||
| Deferred income taxes |
( |
) | ( |
) | ||||
| Inventory reserve |
( |
) | ( |
) | ||||
| Gain on sale of assets |
( |
) | ||||||
| Non-cash unrealized foreign currency gain (loss) |
( |
) | ||||||
| Change in operating assets and liabilities, net of acquisitions: |
||||||||
| Trade accounts receivable |
||||||||
| Inventories |
( |
) | ( |
) | ||||
| Contract assets |
( |
) | ||||||
| Prepaid expenses and other current assets |
||||||||
| Right of use assets - Operating leases |
( |
) | ( |
) | ||||
| Deposits and other assets |
( |
) | ||||||
| Accounts payable |
( |
) | ( |
) | ||||
| Operating lease liabilities |
||||||||
| Accrued expenses |
( |
) | ||||||
| Contract liabilities |
( |
) | ||||||
| NET CASH USED IN OPERATING ACTIVITIES |
( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Cash paid for acquisition, net of cash received |
( |
) | ( |
) | ||||
| Purchases of property and equipment |
( |
) | ( |
) | ||||
| Deposits on financing lease property and equipment |
( |
) | ||||||
| Cash paid for working capital adjustment on Power group disposition |
( |
) | ||||||
| Proceeds from sale of property and equipment |
||||||||
| Purchase of other intangible assets |
( |
) | ( |
) | ||||
| Purchase of convertible notes receivable |
( |
) | ||||||
| Purchase of investment |
( |
) | ||||||
| Proceeds from notes receivable |
||||||||
| NET CASH USED IN INVESTING ACTIVITIES |
( |
) | ( |
) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Proceeds from line of credit |
||||||||
| Payments on line of credit |
( |
) | ||||||
| Payments on financing lease obligations |
( |
) | ( |
) | ||||
| Proceeds from notes payable |
||||||||
| Payments on notes payable |
( |
) | ( |
) | ||||
| Proceeds from sales of common stock |
||||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES |
||||||||
| Effect of exchange rate changes on cash |
( |
) | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
( |
) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period |
||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |
$ | $ | ||||||
See accompanying notes to condensed consolidated financial statements
Orbital Energy Group, Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(Unaudited)
| For the Six Months |
||||||||
| (in thousands) |
Ended June 30, |
|||||||
| 2021 |
2020 |
|||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||||||
| Income taxes paid (net refunded) |
$ | ( |
) | $ | ||||
| Interest paid |
$ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
||||||||
| Non-cash investment in acquisitions including seller notes, equity issued and contingent consideration |
$ | $ | ||||||
| Financing note payable issued for payment on certain insurance policies |
$ | $ | ||||||
| Accrued property and equipment purchases |
$ | $ | ||||||
See accompanying notes to condensed consolidated financial statements
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
| 1. |
NATURE OF OPERATIONS, BASIS OF PRESENTATION AND COMPANY CONDITIONS |
Nature of Operations
Orbital Energy Group, Inc. (Orbital Energy Group, "OEG," "The Company") is a platform company composed of
The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services ("OPS") based in Dallas, Texas, Eclipse Foundation Group based in Gonzales, Louisiana, and Gibson Technical Services ("GTS") based in Atlanta, Georgia. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility-scale solar construction. The Company serves a wide variety of project types, including commercial, substation, solar farms and public utility projects. Services performed by Orbital Power Services generally include the design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services, including the repair of infrastructure damaged by inclement weather. Eclipse Foundation Group, which began operations in January 2021, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation (drilled piers), industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains. GTS provides engineering, design, construction and maintenance services to the broadband and wireless telecommunication industries and was acquired by the Company effective April 13, 2021.
The Company’s Integrated Energy Infrastructure Solutions and Services segment is made up of Orbital Gas Systems Ltd. (Orbital-UK) and Orbital Gas Systems, North America, Inc. (Orbital North America), collectively referred to as ("Orbital Gas Systems"). Orbital-UK is based in the United Kingdom and Orbital North America is based in Houston, Texas. Orbital Gas Systems is a provider of natural gas infrastructure and advanced technology, including metering, odorization, remote telemetry units (‘‘RTU’’) and provides a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. GasPT® and VE Technology® products are sold through Orbital Gas Systems.
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes condensed consolidated financial statements. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.
It is management's opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. All intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are not necessarily indicative of the results to be expected for the remaining quarters or year ending December 31, 2021.
Reconciliation of Cash, Cash Equivalents, and Restricted Cash on Condensed Consolidated Statements of Cash Flows
| For the Six Months |
||||||||
| (in thousands) |
Ended June 30, |
|||||||
| 2021 |
2020 |
|||||||
| Cash and cash equivalents at beginning of period |
$ | $ | ||||||
| Restricted cash at beginning of period (1) |
||||||||
| Cash, cash equivalents and restricted cash at beginning of period |
$ | $ | ||||||
| Cash and cash equivalents at end of period |
$ | $ | ||||||
| Restricted cash at end of period (1) |
||||||||
| Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
(1) Restrictions on cash at June 30, 2021 and June 30, 2020 relate to collateral for several bank-issued letters of credit for contract guaranties.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition on cost-to-cost-method type contracts, inventory valuation, warranty reserves, valuations of non-cash capital stock issuances, valuation for acquisitions, the valuation allowance on deferred tax assets, note receivable interest imputation, and the incremental borrowing rate used in determining the value of right of use assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different conditions.
Reclassifications
Certain reclassifications have been made to the 2020 segment classifications in order to conform to the 2021 presentation.
Company Conditions
Orbital Solar Services has seen increasing customer opportunities including its association with the Black Sunrise Investment fund. The fund has identified through its investors and others, several projects of scale and for which Orbital Solar Services is expected to be awarded significant work. Orbital Power Services began operations during the first quarter of 2020 with work progressing under master service agreements with several new customers. Eclipse Foundation Group began operations in January 2021 and has begun work on projects for utility customers. The Company purchased GTS in the second quarter of 2021 and the acquisition had positive gross margins during the quarter. GTS is expected to be accretive in future quarters. Orbital Gas Systems, Ltd. continues to face issues surrounding COVID-19, Brexit and the overall economy in the United Kingdom. Orbital Gas Systems, North America, Inc. has experienced a significant delay in customer projects and orders related to COVID-19 and the impact of pricing pressure on oil and gas industry customers.
The Company had a net loss of $
Goodwill
Upon acquisition of Reach Construction Group, LLC, (name changed to Orbital Solar Services) the Company recorded $
Upon acquisition of GTS, the Company recorded $
During the three months ended June 30, 2021, the Company completed a quantitative analysis to determine whether it was more likely than not that the fair value of its reporting units were less than their carrying amount, including goodwill. To complete the review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. The review of goodwill, prepared as of May 31, 2021, determined that there were not indicators present to suggest that it was more likely than not that the fair value of the Orbital Solar Services reporting unit was less than its carrying amount and thus
Other Intangible Assets
The following table provides the components of identifiable intangible assets:
| Finite-lived intangible assets (in thousands) |
June 30, 2021 |
December 31, 2020 |
||||||||||||||||||||||||||||||
| Estimated Useful Life (in years) |
Weighted average remaining amortization period |
Gross Carrying Amount |
Accumulated Amortization |
Identifiable Intangible Assets, less Accumulated Amortization |
Gross Carrying Amount |
Accumulated Amortization |
Identifiable Intangible Assets, less Accumulated Amortization |
|||||||||||||||||||||||||
| Electric Power and Solar Infrastructure Services Segment |
||||||||||||||||||||||||||||||||
| Customer Relationships |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
| Trade name - Reach Construction Group |
— | ( |
) | — | ( |
) | ||||||||||||||||||||||||||
| Non-compete agreements |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Total Electric Power and Solar Infrastructure Services Segment |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Integrated Energy Infrastructure Solutions and Services Segment |
||||||||||||||||||||||||||||||||
| Order backlog |
— | ( |
) | - | ( |
) | - | |||||||||||||||||||||||||
| Trade name - Orbital-UK |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Customer list - Orbital-UK |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Technology rights |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Technology-Based Asset - Know How |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Technology-Based Asset - Software |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Computer software |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Total Integrated Energy Infrastructure Solutions and Services Segment |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Other category |
||||||||||||||||||||||||||||||||
| Computer software |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Product certifications |
— | ( |
) | ( |
) | |||||||||||||||||||||||||||
| Total Other category |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Total identifiable finite-lived other intangible assets |
( |
) | ( |
) | ||||||||||||||||||||||||||||
| Identifiable indefinite-lived other intangible assets |
||||||||||||||||||||||||||||||||
| Electric Power and Solar Infrastructure Services Segment |
||||||||||||||||||||||||||||||||
| Trade Name - GTS |
— | — | ||||||||||||||||||||||||||||||
| Total identifiable other intangible assets |
$ | $ | ( |
) | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
COVID-19 Assessment and Liquidity
In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects can be severe. While the Company expects the effects of the pandemic to negatively impact its results from operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time. The Company has experienced customer delays and extensions for projects, supply chain delays, furloughs of personnel, increased utilization of telework, increased safety protocols to address COVID-19 risks, decreased field service work and other impacts from the COVID-19 pandemic. While the economic effects of COVID-19 are beginning to subside as a higher percentage of people become vaccinated, the highly transmissible delta variant and the slowing rates of vaccination has caused there to be uncertainty regarding the future affects of the pandemic. Events and changes in circumstances arising after June 30, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.
Management believes the Company's present cash flows along with access to additional debt and equity raises will meet its obligations for twelve months from the date these financial statements are available to be issued. Including our cash balance, we continue to manage working capital primarily related to trade accounts receivable, notes receivable, prepaid assets, contract assets and our inventory less current liabilities that we will manage during the next twelve months. In 2020 and the first six months of 2021, the Company has entered into various long and short-term debt agreements (Note 16. Notes Payable). In addition, the Company has secured funding and has an available S-3 registration statement allowing the Company to issue various types of securities including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $
The Company’s available capital may be consumed faster than anticipated due to other events, including the length and severity of the global novel coronavirus disease pandemic and measures taken to control the spread of COVID-19, as well as changes in and progress of our development activities and the impact of commercialization efforts due to the COVID-19 pandemic. The Company may seek to obtain additional capital as needed through equity financings, debt or other financing arrangements, but given the impact of COVID-19 on the U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to raise additional capital when needed or under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares.
Restructuring Charges
During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of September 30, 2020. In conjunction with the 2019 sale, it was concluded that should the remaining power and electromechanical operations not sell, the Company will fulfill its backlog obligations and wind down the remaining operations of CUI-Canada during 2020. As of December 31, 2020, the Company had remaining an accrued liability for estimated employee termination costs of $
Activity in the termination benefit liability in 2021 is as follows:
| CUI-Canada termination benefits (in thousands) |
||||
| December 31, 2020 |
$ | |||
| Severance payouts |
( |
) | ||
| Translation |
||||
| June 30, 2021 |
$ | |||
| Estimated total termination benefits paid and to be paid |
$ |
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Our significant accounting policies are detailed in "Note 2 Summary of Significant Accounting Policies" within Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 30, 2021. Changes to the Company's accounting policies are discussed below:
Adoption of new accounting standards
On January 1, 2021, the Company adopted ASU No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. There was not a material effect on the Company's financial statements due to the Company not having any current financial instruments that are affected by this new guidance.
On January 1, 2021, the Company adopted ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. ASU 2020-01 clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU 2020-01 are effective for the Company's 2021 fiscal year, including interim periods. The new guidance does not have a material impact on the Company's consolidated financial statements due to the Company currently not having any equity-method investments or any derivative instruments.
On January 1, 2021, the Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's 2021 fiscal year, including interim periods. The ASU does not have a material impact on the Company's consolidated financial statements.
| 3. |
DISCONTINUED OPERATIONS AND SALE OF A BUSINESS |
As part of the Company’s previously stated strategy to transform Orbital Energy Group, Inc. into a diversified infrastructure services platform serving North American and U.K. customers, in 2019 the Company’s Board of Directors made the decision to divest of its Power and Electromechanical businesses. On September 30, 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, CUI, Inc. ("Seller"), a wholly owned subsidiary of the Company ("Parent"), and Back Porch International, Inc. ("Buyer") to sell the Company’s Electromechanical business to a management led group. In November 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, the Seller and Bel Fuse, Inc. to sell the domestic Power supply business. Both sales closed in 2019. On September 30, 2020, the Company sold the CUI Japan operations to Back Porch International for approximately $
The associated results of operations of the discontinued Power and Electromechanical segment are separately reported as Discontinued Operations for 2020 on the Condensed Consolidated Statements of Operations. Cash flows from these discontinued businesses are included in the Condensed Consolidated Cash Flow statements. See below for additional information on operating and investing cash flows of the discontinued operations. Results from continuing operations for the Company and segment highlights exclude the former Power and Electromechanical segment, which is included in these discontinued operations.
The former Power and Electromechanical segment consisted of the wholly owned subsidiaries: CUI, Inc. (CUI), based in Tualatin, Oregon; CUI Japan, based in Tokyo, Japan; CUI-Canada, based in Toronto, Canada; and the entity that previously held the corporate building, CUI Properties. The subsidiaries were providers of power and electromechanical components for Original Equipment Manufacturers (OEMs).
Selected data for these discontinued businesses consisted of the following:
Reconciliation of the Major Classes of Line Items Constituting Pretax Income from
Discontinued Operations to the After-Tax Income from Discontinued Operations That Are
Presented in the Condensed Consolidated Statement of Operations
(Unaudited)
| (in thousands) |
For the Three Months |
For the Six Months |
||||||||||||||
| Ended June 30, |
Ended June 30, |
|||||||||||||||
| Major classes of line items constituting pretax profit (loss) of discontinued operations: |
2021 |
2020 |
2021 |
2020 |
||||||||||||
| Revenues |
$ | $ | $ | $ | ||||||||||||
| Cost of revenues |
( |
) | ( |
) | ||||||||||||
| Selling, general and administrative expense |
( |
) | ( |
) | ||||||||||||
| Other income |
||||||||||||||||
| Pretax income of discontinued operations |
||||||||||||||||
| Income tax (benefit) expense |
( |
) | ||||||||||||||
| Total income from discontinued operations |
$ | $ | $ | $ | ||||||||||||
There was $
| 4. |
REVENUE FROM CONTRACTS WITH CUSTOMERS |
The Electric Power and Solar Infrastructure Services segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar and community solar construction, and Gibson Technical Services provides technical implementation, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.
The Integrated Energy Infrastructure Solutions and Services segment subsidiaries, collectively referred to as Orbital Gas Systems, generate their revenue from a portfolio of products, services and resources that offer a diverse range of personalized gas engineering solutions to the gas utilities, power generation, petrochemical, emissions, manufacturing and automotive industries among others.
Orbital Gas Systems accounts for a majority of its contract revenue proportionately over time. For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided.
For our construction contracts, revenue is generally recognized over time. Our construction projects generally use a cost-to-cost input method or an output method to measure our progress towards complete satisfaction of the performance obligation as we believe these methods best depict the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Under the output method, progress towards completion is measured based on units or hours of work completed.
The timing of revenue recognition for Integrated Energy Infrastructure products also depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts where the Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced or for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. These performance obligations use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date and we are not enhancing a customer controlled asset, we recognize revenue at the point in time when control is transferred to the customer, generally when the product is shipped.
For our service contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term.
Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.
Under the output method, revenue is determined by actual work achieved. For time and materials jobs, revenue is recognized based on the output of hours of work completed multiplied by the contractual agreed upon rate per hour. For the remainder of jobs under the output method, revenue is earned based on each unit in the contract completed. We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. Revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service.
Product-type contracts (for example, sale of GasPT units) for which revenue does not qualify to be recognized over time are recognized at a point in time. Revenues from extended warranty and maintenance activities are recognized ratably over the term of the warranty and maintenance period. Extended warranties are not a material portion of our revenue.
Accounts Receivable, Contract Assets and Contract Liabilities
Accounts receivable are recognized in the period when our right to consideration is unconditional. We also assess our customer's ability and intention to pay, which is based on a variety of factors, including our historical payment experience with and the financial condition of our customers. Payment terms and conditions vary by contract, although our standard terms include a requirement of payment within 30 days. Accounts receivable are recognized net of an allowance for doubtful accounts.
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenue recognized under the cost-to-cost or output method measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Also included in contract assets are retainage receivables and amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to both scope and/or price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Condensed Consolidated Balance Sheets.
Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost or output method measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts and provision for future contract losses for those contracts estimated to close in a gross loss position. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue.
Balances and activity in the current contract liabilities as of and for the six months ended June 30, 2021 and 2020 was as follows:
| For the Six Months |
||||||||
| Ended June 30, |
||||||||
| (in thousands) |
2021 |
2020 |
||||||
| Total contract liabilities - beginning of period (1) |
$ | $ | ||||||
| Contract additions - acquisition |
||||||||
| Other contract additions, net |
||||||||
| Revenue recognized |
( |
) | ( |
) | ||||
| Contract settlements |
( |
) | ||||||
| Translation |
( |
) | ||||||
| Total contract liabilities - end of period |
$ | $ | ||||||
| As of June 30, |
||||||||
| (in thousands) |
2021 |
2020 |
||||||
| Current contract liabilities |
$ | $ | ||||||
| Long-term contract liabilities (2) |
||||||||
| Total contract liabilities |
$ | $ | ||||||
(1) For the beginning balance in 2021 and 2020, total contract liabilities included $
(2) Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.
Performance Obligations
Remaining Performance Obligations
Remaining performance obligations represents the transaction price of contracts with customers for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. As of June 30, 2021, the Company's remaining performance obligations are generally expected to be filled within the next 12 months.
Any adjustments to net revenues, cost of revenues, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks. Changes in estimates of net revenues, cost of revenues and the related impact to operating income are recognized on a cumulative catch-up basis in the period they become known, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For separately priced extended warranty or product maintenance performance obligations, when estimates of total costs to be incurred on the performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.
Performance Obligations Satisfied Over Time
To determine the proper revenue recognition method for our contracts, we evaluate whether a single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to separate the single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period.
For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In cases where we do, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized customer specific solution, and in these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.
Performance Obligations Satisfied at a Point in Time
Revenue from goods and services transferred to customers at a single point in time accounted for
Variable Consideration
The nature of our contracts gives rise to several types of variable consideration. In rare instances, we include in our contract estimates, additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. These amounts are included in our calculation of net revenue recorded for our contracts and the associated remaining performance obligations. Additionally, if the contract has a provision for liquidated damages in the case that the Company misses a timing target, or fails to meet any other contract benchmarks, we account for those estimated liquidated damages as variable consideration and will adjust revenue accordingly with periodic updates to the estimated variable consideration as the job progresses. Liquidated damages are recognized as variable consideration only when we estimate that they will be a factor in the performance of the contract and are not common.
Significant Judgments
Our contracts with certain customers may be subject to contract cancellation clauses. Contracts with other cancellation provisions may require judgment in determining the contract term, including the existence of material rights, transaction price and identifying the performance obligations and whether a contract should be accounted for over time or on a completed contract basis. Revenue is recognized for certain projects over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.
At times, customers may request changes that either amend, replace or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts require the changes to be accounted for as a separate contract or as a modification. Generally, contract modifications containing additional goods and services that are determined to be distinct and sold at their stand-alone selling price are accounted for as a separate contract. For contract modifications where goods and services are not determined to be distinct and sold at their stand-alone selling price, the original contract is updated and the required adjustments to revenue and contract assets, liabilities, and other accounts will be made accordingly.
Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together may require significant judgment. For, example, we consider many of our contracts that coordinate multiple products into an integrated system to be a single performance obligation, while the same products would be considered separate performance obligations if not so integrated.
In contracts where there are timing differences between when we transfer a promised good or service to the customer and when the customer pays for that good or service, we have determined that, our contracts do not include a significant financing component.
The following tables present the Company's revenues disaggregated by timing of revenue recognition:
| For the Three Months |
For the Three Months |
|||||||||||||||||||||||
| Ended June 30, 2021 |
Ended June 30, 2020 |
|||||||||||||||||||||||
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
||||||||||||||||||
| Revenues recognized at point in time |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenues recognized over time |
||||||||||||||||||||||||
| Total revenues |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| For the Six Months |
For the Six Months |
|||||||||||||||||||||||
| Ended June 30, 2021 |
Ended June 30, 2020 |
|||||||||||||||||||||||
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
||||||||||||||||||
| Revenues recognized at point in time |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revenues recognized over time |
||||||||||||||||||||||||
| Total revenues |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
The following tables present the Company's revenues disaggregated by region:
| For the Three Months |
For the Three Months |
|||||||||||||||||||||||
| Ended June 30, 2021 |
Ended June 30, 2020 |
|||||||||||||||||||||||
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
||||||||||||||||||
| North America |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Europe |
||||||||||||||||||||||||
| Other |
( |
) | ( |
) | ||||||||||||||||||||
| Total revenues |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| For the Six Months |
For the Six Months |
|||||||||||||||||||||||
| Ended June 30, 2021 |
Ended June 30, 2020 |
|||||||||||||||||||||||
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Total |
||||||||||||||||||
| North America |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Europe |
||||||||||||||||||||||||
| Other |
||||||||||||||||||||||||
| Total revenues |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| 5. |
OTHER INTANGIBLE ASSETS |
In January 2021, the Company completed the acquisition of the VE Technology rights, which it has previously utilized the VE Technology through a licensing agreement with Endet Ltd. Orbital Gas Systems has the existing proprietary knowledge for the marketing, engineering and production of the VE Technology based solutions. The VE Technology, amortized over ten years, is the basis for a patented sampling system product line marketed by Orbital Gas Systems and utilized in many of its integrated solutions.
In 2020, the Company entered into an agreement to acquire the intellectual property rights and know-how associated with the VE Technology including patents for
| 6. |
INVENTORIES |
Inventories consist of raw materials, work-in-process and finished goods and are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method. At June 30, 2021 and December 31, 2020, accrued liabilities included $
| As of June 30, |
As of December 31, |
|||||||
| (in thousands) |
2021 |
2020 |
||||||
| Finished goods |
$ | $ | ||||||
| Raw materials |
||||||||
| Work-in-process |
||||||||
| Total inventories |
$ | $ | ||||||
| 7. |
INVESTMENTS |
As of June 30, 2021, the Company had a minority ownership in Virtual Power Systems ("VPS"). Prior to the third quarter of 2020, based on its equity ownership and that the Company maintains a board seat and participated in operational activities of VPS, the Company maintained significant influence to account for the investment as an equity-method investment. Under the equity method of accounting, results are not consolidated, but the Company records a proportionate percentage of the profit or loss of VPS as an addition to or a subtraction from the VPS investment asset balance. During the six months ended June 30, 2020, the Company recorded a $
The Company made a purchase of a convertible note receivable for thousand from VPS in the six months ended June 30, 2020, which is reflected in investing cash flows on the consolidated statement of cash flows.
| 8. |
LEASES |
Consolidated total lease costs were $
Future minimum operating lease obligations at June 30, 2021 are as follows for the years ended December 31:
| (in thousands) |
||||
| 2021 (remaining period) |
$ | |||
| 2022 |
||||
| 2023 |
||||
| 2024 |
||||
| 2025 |
||||
| Thereafter |
||||
| Interest portion |
( |
) | ||
| Total operating lease obligations |
$ |
Total lease cost and other lease information is as follows:
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| (in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
| Operating lease cost |
$ | $ | $ | $ | ||||||||||||
| Short-term lease cost |
||||||||||||||||
| Variable lease cost |
||||||||||||||||
| Sublease income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Total lease cost |
$ | $ | $ | $ | ||||||||||||
| Other information - Operating leases (in thousands) |
Six Months Ended June 30, |
|||||||
| 2021 |
2020 |
|||||||
| Cash paid for amounts included in the measurement of lease obligations: |
||||||||
| Operating cash flows from operating leases (includes discontinued operations in 2020) |
$ | ( |
) | $ | ( |
) | ||
| Right-of-use assets obtained in exchange for new operating lease obligations |
$ | $ | ||||||
| Weighted-average remaining lease term - operating leases (in years) |
||||||||
| Weighted-average discount rate - operating leases |
% | % | ||||||
Variable lease costs primarily include common area maintenance costs, real estate taxes and insurance costs passed through to the Company from lessors.
Future minimum finance lease obligations are as follows:
| (in thousands) |
||||
| 2021 (remaining period) |
$ | |||
| 2022 |
||||
| 2023 |
||||
| 2024 |
||||
| 2025 |
||||
| Thereafter |
||||
| Interest portion |
( |
) | ||
| Total financing lease obligations |
$ |
Total financing lease costs are as follows:
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| (in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
| Depreciation of financing lease assets |
$ | $ | $ | $ | ||||||||||||
| Interest on lease liabilities |
||||||||||||||||
| Total finance lease cost |
$ | $ | $ | $ | ||||||||||||
| Other information - Financing leases |
For the Six Months Ended June 30, |
|||||||
| (in thousands) |
2021 |
2020 |
||||||
| Cash paid for amounts included in the measurement of lease obligations: |
||||||||
| Operating cash flows from financing leases |
$ | ( |
) | $ | ||||
| Financing cash flows from financing leases |
$ | ( |
) | $ | ( |
) | ||
| Right-of-use assets obtained in exchange for new financing lease obligations |
$ | $ | ||||||
| Weighted-average remaining lease term - financing leases (in years) |
||||||||
| Weighted-average discount rate - operating leases |
% | % | ||||||
| 9. |
STOCK-BASED COMPENSATION AND EXPENSE |
The Company records its stock-based compensation expense on options issued in the past under its stock option plans and the Company also issues stock for services and royalties. The Company's current stock incentive award plan was approved in 2020 following the expiration of its previous stock incentive award plan in 2018. The Company did issue any stock options during the six months ended June 30, 2021 or 2020. A detailed description of the awards under these plans and the respective accounting treatment is included in the “Notes to the Consolidated Financial Statements” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC on March 30, 2021. For the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense of $
Restricted Stock
In March 2021, the Company granted
Stock Appreciation Rights ("SARs")
In addition to stock-based compensation settled in stock, the Company also has cash settled stock appreciation rights ("SARs") which were granted in June 2020 as described in the Company's Form 10-K filed March 30, 2021 and additional grant made in April 2021 as reflected in the table below. Accrued compensation for SARs at June 30, 2021 and December 31, 2020 were $
The fair value of cash-settled SARs is revalued (mark-to-market) each reporting period using a binomial lattice valuation model based on the company’s period-end stock price. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the SARs. The risk-free interest rate is based on the U.S treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.
The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs outstanding as of June 30, 2021 and December 31, 2020.
| As of |
||||||||
| June 30, 2021 |
December 31, 2020 |
|||||||
| Expected term of cash-settled SARs (in years) |
||||||||
| Expected volatility factor |
% | % | ||||||
| Risk-free interest rate |
% | % | ||||||
Changes to the company’s non-vested cash-settled SARs during the six months ended June 30, 2021, are as follows:
| Cash-settled SARs |
Fair Value Price per Share* |
|||||||
| (in thousands) |
||||||||
| Non-vested cash-settled SARs at December 31, 2020 |
$ | |||||||
| Granted |
||||||||
| Vested |
( |
) | ||||||
| Non-vested cash-settled SARs at June 30, 2021 |
$ | |||||||
| * weighted-average |
||||||||
| 10. |
SEGMENT REPORTING |
Operating segments are defined in accordance with ASC 280-10 as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The measurement basis of segment profit or loss is income (loss) from operations. Management has identified three operating segments based on the activities of the Company in accordance with ASC 280-10. These operating segments have been aggregated into reportable segments. The three reportable segments are Electric Power and Solar Infrastructure Services, Integrated Energy Infrastructure Solutions and Services, and Other.
The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, Eclipse Foundation Group based in Gonzales, Louisiana, and GTS based in Atlanta, GA. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries.
The Integrated Energy Infrastructure Solutions and Services segment is focused on the operations of Orbital Gas Systems Ltd. in the UK and Orbital Gas Systems, North America, Inc. which includes gas related test and measurement systems, including the GasPT.
The Other segment represents the remaining activities that are not included as part of the other reportable segments and represent primarily corporate activity. In 2019, the Company sold its domestic power and electromechanical businesses and reclassified the income of the former Power and Electromechanical segment to income from discontinued operations. The Company sold the remaining portions of the Power and Electromechanical segment in 2020.
The following information represents segment activity for the three months ended June 30, 2021:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Revenues from external customers |
$ | $ | $ | $ | ||||||||||||
| Depreciation and amortization (1) |
||||||||||||||||
| Interest expense |
||||||||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Expenditures for long-lived assets (2) |
||||||||||||||||
(1) For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $
(2) Includes purchases of property, plant and equipment and other intangible assets.
The following information represents segment activity for the six months ended June 30, 2021:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Revenues from external customers |
$ | $ | $ | $ | ||||||||||||
| Depreciation and amortization (1) |
||||||||||||||||
| Interest expense |
||||||||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Expenditures for long-lived assets (2) |
||||||||||||||||
(1) For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $
(2) Includes purchases of property, plant and equipment and other intangible assets.
The following information represents selected balance sheet items by segment as of June 30, 2021:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Segment assets |
$ | $ | $ | $ | ||||||||||||
| Goodwill |
||||||||||||||||
| Other intangible assets, net |
||||||||||||||||
The following information represents segment activity for the three months ended June 30, 2020:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Revenues from external customers |
$ | $ | $ | $ | ||||||||||||
| Depreciation and amortization (1) |
||||||||||||||||
| Interest expense |
||||||||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Expenditures for long-lived assets (2) |
||||||||||||||||
(1) For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $
(2) Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.
The following information represents segment activity for the six months ended June 30, 2020:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Revenues from external customers |
$ | $ | $ | $ | ||||||||||||
| Depreciation and amortization (1) |
||||||||||||||||
| Interest expense |
||||||||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Expenditures for long-lived assets (2) |
||||||||||||||||
(1) For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $
(2) Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.
The following information represents selected balance sheet items by segment as of December 31, 2020:
| (in thousands) |
Electric Power and Solar Infrastructure Services |
Integrated Energy Infrastructure Solutions and Services |
Other |
Total |
||||||||||||
| Segment assets |
$ | $ | $ | $ | ||||||||||||
| Goodwill |
||||||||||||||||
| Other intangible assets, net |
||||||||||||||||
The following represents revenue by country:
| (dollars in thousands) |
For the Three Months Ended June 30, |
|||||||||||||||
| 2021 |
2020 |
|||||||||||||||
| Amount |
% | Amount |
% | |||||||||||||
| USA |
$ | % | $ | % | ||||||||||||
| United Kingdom |
% | % | ||||||||||||||
| All Others |
% | % | ||||||||||||||
| Total |
$ | % | $ | % | ||||||||||||
| (dollars in thousands) |
For the Six Months Ended June 30, |
|||||||||||||||
| 2021 |
2020 |
|||||||||||||||
| Amount |
% | Amount |
% | |||||||||||||
| USA |
$ | % | $ | % | ||||||||||||
| United Kingdom |
% | % | ||||||||||||||
| All Others |
% | % | ||||||||||||||
| Total |
$ | % | $ | % | ||||||||||||
| 11. |
RECENT ACCOUNTING PRONOUNCEMENTS |
There were no recent accounting pronouncements for which the Company determined would be material to its balance sheet or statement of operations.
| 12. |
FAIR VALUE MEASUREMENTS |
The Company’s fair value hierarchy for its contingent consideration and convertible note payable as of June 30, 2021 and December 31, 2020 was as follows:
| (in thousands) |
||||||||||||||||
| June 30, 2021 |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
| Contingent consideration |
$ | $ | $ | $ | ||||||||||||
| Total liabilities |
$ | $ | $ | $ | ||||||||||||
| December 31, 2020 |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||
| Convertible note payable |
$ | $ | $ | $ | ||||||||||||
| Contingent consideration |
||||||||||||||||
| Total liabilities |
$ | $ | $ | $ | ||||||||||||
| Changes in Fair Value Measurements |
| Using Significant Unobservable Inputs (Level 3) |
| (in thousands) |
Convertible note payable |
|||
| Balance at December 31, 2020 |
$ | |||
| Loss on extinguishment on amendment to remove convertible feature |
||||
| Amortization of original issue discount |
||||
| Accrued interest |
||||
| Extinguishment of note |
( |
) | ||
| Balance at June 30, 2021 |
$ | |||
There were no transfers between Level 3 and Level 2 in the three months ended June 30, 2021 as determined at the end of the reporting period.
| 13. | LOSS PER COMMON SHARE |
In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 260 (“FASB ASC 260”), “Earnings per Share,” Basic loss from continuing operations per share, basic income from discontinued operations per share and basic net income (loss) per share that is available to shareholders is computed by dividing the income or loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the respective loss available to common stockholders by the weighted average number of diluted shares outstanding during the period calculated using the treasury stock method. Due to the Company’s loss from continuing operations in the three and six months ended June 30, 2021 and June 30, 2020, the assumed exercise of stock options and the unvested restricted stock that would otherwise increase diluted shares using the treasury stock method would have had an antidilutive effect and therefore
| For the Three Months | For the Six Months | |||||||||||||||
| (in thousands, except share and per share amounts) | Ended June 30, | Ended June 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Loss from continuing operations, net of income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income from discontinued operations, net of income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and diluted weighted average number of shares outstanding | ||||||||||||||||
| Loss from continuing operations per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income from discontinued operations - basic and diluted | ||||||||||||||||
| Loss per common share - basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 14. |
INCOME TAXES |
The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and foreign net deferred tax assets as it is not more likely than not that the Company will realize a benefit from these assets in a future period. In future periods, tax benefits and related deferred tax assets will be recognized when management concludes realization of such amounts is more likely than not.
Total net income tax benefit of $
Total net income tax benefit of $
A net income tax benefit of $
| 15. |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
The components of accumulated other comprehensive loss are as follows:
| (in thousands) |
As of June 30, 2021 |
As of December 31, 2020 |
||||||
| Foreign currency translation adjustment |
$ | ( |
) | $ | ( |
) | ||
| Accumulated other comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
| 16. |
NOTES PAYABLE |
Notes payable is summarized as follows:
| (in thousands) |
As of June 30, 2021 |
As of December 31, 2020 |
||||||
| Note Payable - Financing notes (1) |
$ | $ | ||||||
| Pay-check protection loans (2) |
||||||||
| Seller Financed notes payable - Reach Construction Group, LLC acquisition (3) |
||||||||
| Vehicle and equipment loans (4) |
||||||||
| Non-recourse payable agreements (5) |
||||||||
| Notes payable - Institutional investor (6) |
||||||||
| Conditional settlement notes payable agreement (7) |
||||||||
| Subtotal |
||||||||
| Unamortized prepaid financing fees |
( |
) | ( |
) | ||||
| Total long-term debt |
||||||||
| Less: notes payable, current |
( |
) | ( |
) | ||||
| Notes payable, less current portion |
$ | $ | ||||||
| (1) |
Note payable with an original balance for $ |
| (2) | On April 30, 2020 and May 2, 2020, the Company entered into unsecured loans in the aggregate principal amount of approximately $ |
| (3) | Includes two seller financed notes payable, one for $ |
| (4) | Includes vehicle and equipment loans with interest rates ranging from |
| (5) | To refinance an earlier non-recourse note and to provide the Company with additional capital, the Company took out two non-recourse agreements with C6 Capital for the sale of future revenues in the total amount of $ |
| (6) | On November 13, 2020, the Company completed a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue to the Investor an unsecured convertible instrument in the principal amount of $ |
| (7) | In October 2020, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $ |
| 17. | CONCENTRATIONS |
The Company's major product lines are energy infrastructure services including natural gas infrastructure solutions and services through Orbital Gas Systems; full-service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group; EPC services that support the development of renewable energy generation focused on utility scale solar construction through Orbital Solar Services; and diversified telecommunications services provided by GTS. The Company had the following revenue concentrations by customer greater than 10% of consolidated revenue:
| For the Three Months Ended June 30, | ||||||||
| Customer | 2021 | 2020 | ||||||
| Customer 1 | % | <10% | ||||||
| Customer 2 | <10% | | % | |||||
| Customer 3 | <10% | % | ||||||
| Customer 4 | <10% | % | ||||||
| Total concentrations | % | % | ||||||
There were no revenue concentrations by customer greater than 10% of consolidated revenue for the six months ended June 30, 2021 or 2020.
The Company had the following geographic revenue concentrations outside the U.S.A. greater than 10% of consolidated revenue:
| For the Three Months Ended June 30, | ||||||||
| Country | 2021 | 2020 | ||||||
| United Kingdom | % | % | ||||||
| Total concentrations | % | % | ||||||
| For the Six Months Ended June 30, | ||||||||
| Country | 2021 | 2020 | ||||||
| United Kingdom | % | % | ||||||
| Total concentrations | % | % | ||||||
The Company had the following gross trade accounts receivable concentrations by customer greater than 10% of gross trade accounts receivable:
| As of June 30, | As of December 31, | |||||||
| Customer | 2021 | 2020 | ||||||
| Customer 5 | % | <10% | ||||||
| Customer 6 | % | % | ||||||
| Customer 7 | <10% | % | ||||||
| Customer 8 | <10% | % | ||||||
| Total concentrations | % | % | ||||||
The Company had the following geographic concentrations of gross trade accounts receivable outside of the U.S.A. greater than 10% of gross trade accounts receivable:
| As of June 30, | As of December 31, | |||||||
| Country | 2021 | 2020 | ||||||
| United Kingdom | % | % | ||||||
| Total concentrations | % | % | ||||||
The Company had
| 18. |
OTHER EQUITY TRANSACTIONS |
S-3 registration
The Company filed an S-3 registration statement on July 17, 2020 containing a prospectus that was effective in September 2020. The Company utilized this filing in January 2021 to issue common stock for $
| 19. | ACQUISITIONS |
Acquisition of Gibson Technical Services
Effective April 13, 2021, the Company entered into a share purchase agreement to acquire Gibson Technical Services, an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), dated as of April 13, 2021, between Orbital Energy Group and the shareholders of GTS (the "Seller"). Orbital Energy Group paid $
The purchase consideration was as follows:
(in thousands)
| Purchase Consideration | ||||
| Cash payment | $ | |||
| Orbital Energy common stock issued - restricted shares | ||||
| Total | $ |
The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.
| Purchase price | $ | |||
| Cash and cash equivalents | $ | |||
| Trade accounts receivable | ||||
| Contract assets | ||||
| Contingent receivable | ||||
| Prepaid expenses and other current assets | ||||
| Property and equipment | ||||
| Right of use assets - Operating leases | ||||
| Goodwill | ||||
| Intangible, customer relationships | ||||
| Intangible, trade name | ||||
| Intangible, non-compete agreements | ||||
| Other long-term assets | ||||
| Deferred tax liability | ( | ) | ||
| Liabilities assumed | ( | ) | ||
| Purchase price allocation | $ |
| (in thousands) | ||||
| Revenue since April 13, 2021 acquisition date | $ | |||
| Income from continuing operations, net of income taxes since April 13, 2021 acquisition date | * |
* The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in the three months ended June 30, 2021.
The table below summarizes the unaudited condensed pro forma information of the results of operations of Orbital Energy Group, Inc. for the six months ended June 30, 2021 and 2020 as though the acquisition had been completed as of January 1, 2020.
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| Gross revenue | $ | $ | ||||||
| Loss from continuing operations, net of income taxes | $ | ( | ) | $ | ( | ) | ||
| Loss from continuing operations per common share - basic and diluted | $ | ( | ) | $ | ( | ) | ||
Acquisition of Reach Construction Group, LLC
Effective April 1, 2020, the Company entered into an equity purchase agreement to acquire
The purchase consideration was as follows:
(in thousands)
| Purchase Consideration | ||||
| Orbital Energy Stock issued - million shares | $ | |||
| 18-Month Seller Note | ||||
| 3-year Seller Note | ||||
| Contingent consideration | ||||
| Cash payment | ||||
| Total | $ |
The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.
(in thousands)
| Purchase price | $ | |||
| Cash and cash equivalents | $ | |||
| Trade accounts receivable, net of allowance | ||||
| Contract assets | ||||
| Prepaid expenses and other current assets | ||||
| Property and equipment | ||||
| Right of use assets - Operating leases | ||||
| Goodwill | ||||
| Intangible, customer relationships & backlog | ||||
| Intangible, trade name | ||||
| Intangible, non-compete agreements | ||||
| Deferred tax liability | ( | ) | ||
| Liabilities assumed | ( | ) | ||
| Purchase price allocation | $ |
| 20. |
COMMITMENTS AND CONTINGENCIES |
Off-Balance Sheet Arrangements
Performance and Payment Bonds and Parent Guarantees
In the ordinary course of business, Orbital Energy Group and its subsidiaries are required by certain customers to provide performance and payment bonds for contractual commitments related to its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. Certain bonds are for open-ended contracts with multiple work orders so the value may increase as the work progresses and more work orders are started. The bonds will remain in place as the Company completes projects and resolves any disputed matters with the customers, vendors and subcontractors related to the bonded projects. As of June 30, 2021 the total amount of the outstanding performance and payment bonds was approximately $
Additionally, from time to time, we guarantee certain obligations and liabilities of our subsidiaries that may arise in connection with, among other things, contracts with customers, equipment lease obligations, and contractor licenses. These guarantees may cover all of the subsidiary’s unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. For example, with respect to customer contracts, a guarantee may cover a variety of obligations and liabilities arising during the ordinary course of the subsidiary’s business or operations, including, among other things, warranty and breach of contract claims, third-party and environmental liabilities arising from the subsidiary’s work and for which it is responsible, liquidated damages, or indemnity claims.
Contingent Liabilities
Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.
Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Other than the reserve on the item described below, the Company currently has no such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. Except as otherwise stated below, none of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.’s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.
| 21. | SUBSEQUENT EVENTS |
Exchange agreement to partially pay off note payable
On July 20, 2021, the Company issued
Share issuances in a registered offering
On July 21, 2021, the Company issued
Paycheck Protection Loan Forgiveness
On July 22, 2021, the Company was notified that the Paycheck Protection Program loan acquired as part of the GTS acquisition in the amount of $
Acquisition
On July 28, 2021, the Company’s telecommunication subsidiary, GTS, entered into a definitive share purchase agreement to acquire
Subject to the terms and conditions set forth in the share purchase agreement, the base purchase price for
| ● | $ |
| ● | |
| ● | The Share purchase agreement provides for the adjustment of the selling price to adjust the final closing working capital at the acquisition date as a post-closing adjustment for net working capital above or below the 3-1 ratio for the closing working capital ratio estimated on the acquisition date and to be finalized within 45 days after the closing date of July 28, 2021. At closing, an additional $ |
The acquisition will immediately add revenues and earnings to GTS and to OEG. IMMCO will become a wholly-owned subsidiary of GTS, significantly expanding GTS’s product portfolio and services it can provide to its customers. The Company has not completed the initial purchase price allocation for this transaction as it is still in the preliminary stages of assessing the fair value of the underlying tangible and intangible assets.
| Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Important Note about Forward-Looking Statements
The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements as of June 30, 2021 and notes thereto included in this document and the audited consolidated financial statements in the Company’s 10-K filing for the period ended December 31, 2020 and the notes thereto. In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties. The Company’s actual results could differ materially from those anticipated by such forward-looking information due to factors discussed elsewhere in this Form 10-Q.
The statements that are not historical constitute “forward-looking statements.” Said forward-looking statements involve risks and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements, express or implied by such forward-looking statements. These forward-looking statements are identified by their use of such terms and phrases as "expects,” “intends,” “goals,” “estimates,” “projects,” “plans,” “anticipates,” “should,” “future,” “believes,” and “scheduled.”
The variables which may cause differences include, but are not limited to, the following: general economic and business conditions; changes in regulatory environment; extraordinary external events such as the current pandemic health event resulting from COVID-19; competition; success of operating initiatives; operating costs; advertising and promotional efforts; the existence or absence of adverse publicity; changes in business strategy or development plans; the ability to retain management; availability, terms and deployment of capital; business abilities and judgment of personnel; availability of qualified personnel; labor and employment benefit costs; availability and costs of raw materials and supplies; and changes in, or failure to comply with various government regulations. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate; therefore, there can be no assurance that the forward-looking statements included in this Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any person that the objectives and expectations of the Company will be achieved.
Orbital Energy Group is a platform company dedicated to maximizing shareholder value through greenfield development and the acquisition of, and investment in successful, entrepreneurial led companies to profitably grow revenues by providing end-to-end solutions to customers, primarily in the renewable, electric power, and telecommunications infrastructure markets. Orbital Energy Group’s Electric Power and Solar Infrastructure Services segment provides comprehensive network solutions to customers in the electric power, telecommunications and solar industries. This segment includes Orbital Solar Services, Orbital Power Services, the Eclipse Foundation Group, Inc subsidiary launched in the first quarter of 2021 and Gibson Technical Services ("GTS") acquired during the current quarter. GTS is an Atlanta-based telecommunications company that provides diversified telecommunications services on a national basis. Orbital Solar Services (formerly Reach Construction Group, LLC) was acquired by the Company as of April 1, 2020 and provides engineering, procurement and construction services that support the development of renewable energy generation focused on utility scale solar and community solar projects. The Company started its Orbital Power Services operations during the first three months of 2020 as a full-service provider of building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America. Eclipse Foundation Group, Inc., which began operations in January 2021, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains. The Company has doubled its second-quarter revenue year over year and has almost doubled its revenue for the first six months of 2021 compared to the similar period in 2020. This has been accomplished through the Company's acquisition and organic growth efforts. However, ramp-up costs at Orbital Power Services and start-up costs at Eclipse Foundation Group, Inc. contributed to lower margins and increased SG&A in the Electric Power and Solar Infrastructure Services segment during the three and six months ended June 30, 2021. The Company also continued to incur professional fees related to mergers and acquisitions as the Company continues to pursue both organic growth and growth through acquisitions. The Company's Integrated Energy Infrastructure Solutions and Services Segment include subsidiaries, Orbital Gas Systems, Ltd., and Orbital Gas Systems, North America, Inc., which are leaders in innovative gas solutions with more than 30 years of experience in design, installation and the commissioning of industrial gas sampling, measurement and delivery systems providing solutions to the energy, power and processing markets. Orbital Gas Systems manufactures and delivers a broad range of technologies including environmental monitoring, gas metering, process control, telemetry, gas sampling and BioMethane. The three-and six-month periods ended June 30, 2021 for both segments continue to face headwinds due to the COVID-19 pandemic that has caused economic slowdowns throughout the world, but economic activity has begun to improve.
In the first half of 2020, the Company launched Orbital Power Services. The first six months of 2020 included set up costs related to Orbital Power Services and the establishment of the Company's shared services center in Dallas, Texas as well as elevated professional fees related to mergers and acquisitions as the Company pivoted from its legacy Power and Electromechanical business that was divested in the second half of 2019 with the remaining Canada and Japan business being divested in 2020. The second quarter of 2020 was affected by generally lower economic activity due to the COVID-19 pandemic that caused economic slowdowns throughout the world, which hampered growth in its electric power and solar infrastructure ventures. The first three and six months of 2020 also included a $4.4 million and $4.8 million net loss of affiliate in Virtual Power Systems ("VPS"), respectively primarily as a result of a $3.5 million impairment loss on the investment in the three months ended June 30, 2020.
For the three and six months ended June 30, 2021, Orbital Energy Group, Inc. had consolidated loss from operations of $18.3 million and $35.5 million, respectively compared to consolidated loss from operations in the three and six months ended June 30, 2020 of $7.2 million and $14.3 million. During the three and six months ended June 30, 2021, Orbital Energy Group, Inc. had a consolidated loss from continuing operations of $8.2 million and $26.2 million, respectively compared to a loss of $9.9 million and $16.9 million, respectively, in the comparable prior year period.
During the three and six months ended June 30, 2021, Orbital Energy Group, Inc. had a consolidated net loss of $8.2 million and $26.2 million, respectively, compared to a consolidated net loss in the three and six months ended June 30, 2020 of $9.3 million and $16.7 million, respectively. The lower net loss for the three months ended June 30, 2021, was primarily the result of a $9.0 million tax benefit related to the acquisition of GTS in the three months ended June 30, 2021. This tax benefit offset higher cost of revenue and selling, general and administrative expense ("SG&A") in the Electric Power and Solar Infrastructure Services and Other segments. Cost increases were associated with the inclusion of GTS since it's April 13, 2021 acquisition and inclusion of the Orbital Solar Services business, acquired April 1, 2020, including amortization costs on both GTS and Orbital Solar Service's acquisition intangibles, the ramp up of the Orbital Power Services and Eclipse Foundation Group operations, and stock-based compensation. As the Company adds new service crews in the Orbital Power Services business, there is a certain amount of upfront costs related to that, including equipment, supplies and training before the new crews can start generating income for the Company. As the Company aggressively has ramped up the Orbital Power Services business, it has absorbed more of these type set-up costs than it will need to once all teams are in place and operating at full capacity. SG&A cost increases in the Other segment relate to vesting and mark to market adjustments on cash-based executive stock appreciation rights and employee performance bonus payments as well as continuing merger and acquisition costs. Partially offsetting the increased costs were decreased costs in the Integrated Infrastructure Solutions and Services segment related to cost saving measures and slightly lower sales volume over the first six months of 2021.
Revenues from continuing operations increased for the three and six months ended June 30, 2021 due to the continued ramp-up of Orbital Power Services, Eclipse Foundation Group and the additions of GTS and Orbital Solar Services.
Continuing Results of Operations
The following tables set forth, for the period indicated, certain financial information regarding revenue and costs by segment.
For the Three Months Ended June 30, 2021:
| (dollars in thousands) |
Electric Power and Solar Infrastructure Services |
Percent of Segment Revenues |
Integrated Energy Infrastructure Solutions and Services |
Percent of Segment Revenues |
Other |
Percent of Segment Revenues |
Total |
Percent of Total Revenues |
||||||||||||||||||||||||
| $% |
$% |
$% |
$% |
|||||||||||||||||||||||||||||
| Revenues |
$ | 11,519 | 100.0 | % | $ | 4,789 | 100.0 | % | $ | — | — | % | $ | 16,308 | 100.0 | % | ||||||||||||||||
| Cost of revenue |
14,353 | 124.6 | % | 3,129 | 65.3 | % | (10 | ) | — | % | 17,472 | 107.1 | % | |||||||||||||||||||
| Gross profit (loss) |
(2,834 | ) | (24.6 | )% | 1,660 | 34.7 | % | 10 | — | % | (1,164 | ) | (7.1 | )% | ||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Selling, general and administrative |
9,897 | 85.9 | % | 2,391 | 49.9 | % | 3,407 | — | % | 15,695 | 96.2 | % | ||||||||||||||||||||
| Depreciation and amortization |
992 | 8.6 | % | 413 | 8.7 | % | 10 | — | % | 1,415 | 8.7 | % | ||||||||||||||||||||
| Research and development |
— | — | % | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||
| Recovery of bad debt |
— | — | % | (3 | ) | (0.1 | )% | — | — | % | (3 | ) | — | % | ||||||||||||||||||
| Other operating Expenses |
(9 | ) | — | % | — | — | % | — | — | % | (9 | ) | — | % | ||||||||||||||||||
| Total operating expenses |
10,880 | 94.5 | % | 2,801 | 58.5 | % | 3,417 | — | % | 17,098 | 104.9 | % | ||||||||||||||||||||
| Loss from operations |
$ | (13,714 | ) | (119.1 | )% | $ | (1,141 | ) | (23.8 | )% | $ | (3,407 | ) | — | % | $ | (18,262 | ) | (112.0 | )% | ||||||||||||
| (dollars in thousands) |
Electric Power and Solar Infrastructure Services |
Percent of Segment Revenues |
Integrated Energy Infrastructure Solutions and Services |
Percent of Segment Revenues |
Other |
Percent of Segment Revenues |
Total |
Percent of Total Revenues |
||||||||||||||||||||||||
| $% |
$% |
$% |
$% |
|||||||||||||||||||||||||||||
| Revenues |
$ | 4,028 | 100.0 | % | $ | 3,747 | 100.0 | % | $ | — | — | % | $ | 7,775 | 100.0 | % | ||||||||||||||||
| Cost of revenue |
4,397 | 109.2 | % | 2,334 | 62.3 | % | — | — | % | 6,731 | 86.6 | % | ||||||||||||||||||||
| Gross profit (loss) |
(369 | ) | (9.2 | )% | 1,413 | 37.7 | % | — | — | % | 1,044 | 13.4 | % | |||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Selling, general and administrative |
1,569 | 39.0 | % | 2,667 | 71.2 | % | 2,551 | — | % | 6,787 | 87.3 | % | ||||||||||||||||||||
| Depreciation and amortization |
1,077 | 26.7 | % | 337 | 9.0 | % | 10 | — | % | 1,424 | 18.3 | % | ||||||||||||||||||||
| Research and development |
— | — | % | 28 | 0.7 | % | — | — | % | 28 | 0.4 | % | ||||||||||||||||||||
| Provision for bad debt |
— | — | % | 2 | 0.1 | % | — | — | % | 2 | — | % | ||||||||||||||||||||
| Total operating expenses |
2,646 | 65.7 | % | 3,034 | 81.0 | % | 2,561 | — | % | 8,241 | 106.0 | % | ||||||||||||||||||||
| Loss from operations |
$ | (3,015 | ) | (74.9 | )% | $ | (1,621 | ) | (43.3 | )% | $ | (2,561 | ) | — | % | $ | (7,197 | ) | (92.6 | )% | ||||||||||||
For the Six Months Ended June 30, 2021
| (dollars in thousands) |
Electric Power and Solar Infrastructure Services |
Percent of Segment Revenues |
Integrated Energy Infrastructure Solutions and Services |
Percent of Segment Revenues |
Other |
Percent of Segment Revenues |
Total |
Percent of Total Revenues |
||||||||||||||||||||||||
| $% |
$% |
$% |
$% |
|||||||||||||||||||||||||||||
| Revenues |
$ | 17,080 | 100.0 | % | $ | 8,719 | 100.0 | % | $ | — | — | % | $ | 25,799 | 100.0 | % | ||||||||||||||||
| Cost of revenue |
22,471 | 131.6 | % | 5,844 | 67.0 | % | (46 | ) | — | % | 28,269 | 109.6 | % | |||||||||||||||||||
| Gross profit (loss) |
(5,391 | ) | (31.6 | )% | 2,875 | 33.0 | % | 46 | — | % | (2,470 | ) | (9.6 | )% | ||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Selling, general and administrative |
15,856 | 92.8 | % | 4,947 | 56.8 | % | 9,352 | — | % | 30,155 | 116.9 | % | ||||||||||||||||||||
| Depreciation and amortization |
2,066 | 12.1 | % | 845 | 9.7 | % | 19 | — | % | 2,930 | 11.3 | % | ||||||||||||||||||||
| Research and development |
— | — | % | 1 | — | % | — | — | % | 1 | — | % | ||||||||||||||||||||
| Recovery of bad debt |
— | — | % | (22 | ) | (0.3 | )% | — | — | % | (22 | ) | (0.1 | )% | ||||||||||||||||||
| Other operating expenses |
(9 | ) | — | % | — | — | % | — | — | % | (9 | ) | — | % | ||||||||||||||||||
| Total operating expenses |
17,913 | 104.9 | % | 5,771 | 66.2 | % | 9,371 | — | % | 33,055 | 128.1 | % | ||||||||||||||||||||
| Loss from operations |
$ | (23,304 | ) | (136.5 | )% | $ | (2,896 | ) | (33.2 | )% | $ | (9,325 | ) | — | % | $ | (35,525 | ) | (137.7 | )% | ||||||||||||
For the Six Months Ended June 30, 2020
| (dollars in thousands) |
Electric Power and Solar Infrastructure Services |
Percent of Segment Revenues |
Integrated Energy Infrastructure Solutions and Services |
Percent of Segment Revenues |
Other |
Percent of Segment Revenues |
Total |
Percent of Total Revenues |
||||||||||||||||||||||||
| $% |
$% |
$% |
$% |
|||||||||||||||||||||||||||||
| Revenues |
$ | 4,427 | 100.0 | % | $ | 9,036 | 100.0 | % | $ | — | — | % | $ | 13,463 | 100.0 | % | ||||||||||||||||
| Cost of revenue |
5,779 | 130.5 | % | 6,081 | 67.3 | % | — | — | % | 11,860 | 88.1 | % | ||||||||||||||||||||
| Gross profit (loss) |
(1,352 | ) | (30.5 | )% | 2,955 | 32.7 | % | — | — | % | 1,603 | 11.9 | % | |||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| Selling, general and administrative |
2,644 | 59.8 | % | 5,630 | 62.3 | % | 5,705 | — | % | 13,979 | 103.8 | % | ||||||||||||||||||||
| Depreciation and amortization |
1,077 | 24.3 | % | 736 | 8.1 | % | 18 | — | % | 1,831 | 13.6 | % | ||||||||||||||||||||
| Research and development |
— | — | % | 45 | 0.5 | % | — | — | % | 45 | 0.3 | % | ||||||||||||||||||||
| Provision for bad debt |
— | — | % | 8 | 0.1 | % | — | — | % | 8 | 0.1 | % | ||||||||||||||||||||
| Total operating expenses |
3,721 | 84.1 | % | 6,419 | 71.0 | % | 5,723 | — | % | 15,863 | 117.8 | % | ||||||||||||||||||||
| Loss from operations |
$ | (5,073 | ) | (114.6 | )% | $ | (3,464 | ) | (38.3 | )% | $ | (5,723 | ) | — | % | $ | (14,260 | ) | (105.9 | )% | ||||||||||||
Revenue
(dollars in thousands)
| For the Three Months Ended |
||||||||||||||||
| Revenues by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 11,519 | $ | 4,028 | $ | 7,491 | 186.0 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
4,789 | 3,747 | 1,042 | 27.8 | % | |||||||||||
| Total revenues |
$ | 16,308 | $ | 7,775 | $ | 8,533 | 109.7 | % | ||||||||
| For the Six Months Ended |
||||||||||||||||
| Revenues by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 17,080 | $ | 4,427 | $ | 12,653 | 285.8 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
8,719 | 9,036 | (317 | ) | (3.5 | )% | ||||||||||
| Total revenues |
$ | 25,799 | $ | 13,463 | $ | 12,336 | 91.6 | % | ||||||||
The Electric Power and Solar Infrastructure Services Segment held backlogs of customer orders of approximately $281.6 million as of June 30, 2021 and $30.3 million at December 31, 2020. Increases to the backlog are due to the acquisition of GTS, the ramp up of the Orbital Power Services and Eclipse Foundation Group operations and an improved Orbital Solar Services backlog compared to December 31, 2020. The Integrated Energy Infrastructure Solutions and Services segment held backlogs of customer orders of approximately $13.3 million as of June 30, 2021, an increase from the December 31, 2020 backlog of $10.1 million due to the improvement in the business climate in both the U.S. and U.K. markets. Of the June 30, 2021 backlog totals, approximately $124.9 million is expected to be recognized in the twelve months following Q2, consisting of $112.0 million from the Electric Power and Solar Infrastructure Services segment and $12.9 million from the Integrated Energy Infrastructure Solutions and Services segment.
Cost of revenues
(dollars in thousands)
| For the Three Months Ended |
||||||||||||||||
| Cost of revenues by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 14,353 | $ | 4,397 | $ | 9,956 | 226.4 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
3,129 | 2,334 | 795 | 34.1 | % | |||||||||||
| Other |
(10 | ) | — | (10 | ) | (100.0 | )% | |||||||||
| Total cost of revenues |
$ | 17,472 | $ | 6,731 | $ | 10,741 | 159.6 | % | ||||||||
| For the Six Months Ended |
||||||||||||||||
| Cost of revenues by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 22,471 | $ | 5,779 | $ | 16,692 | 288.8 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
5,844 | 6,081 | (237 | ) | (3.9 | )% | ||||||||||
| Other |
(46 | ) | — | (46 | ) | (100.0 | )% | |||||||||
| Total cost of revenues |
$ | 28,269 | $ | 11,860 | $ | 16,409 | 138.4 | % | ||||||||
For the three and six months ended June 30, 2021, the cost of revenues as a percentage of revenue increased to 107% and 110% respectively from 87% and 88%, respectively from the prior-year period. This increase was primarily in the Electric Power and Solar Infrastructure Services segment and was attributable to ramp-up costs at the Company's Orbital Power Services group, start-up costs at Eclipse Foundation Group, Inc. and lower margin projects during the period for Orbital Solar Services. Ramp-up costs have included onboarding personnel, equipment and supplies in advance of projected work in order to obtain the necessary resources in a competitive market as we prepare for forward demand expectations. Additionally, adverse weather negatively impacted several of Orbital Power Services' fixed price jobs in the first quarter of 2021, which are now complete. Margin percentages will vary based upon the mix of natural gas systems sold, proprietary technology included in projects, contract labor necessary to complete gas related projects, mix of Orbital Power Services projects including emergency response services, new crew onboarding costs, Orbital Solar Services solar projects, the competitive markets in which the Company competes, and foreign exchange rates. The three and six months ended June 30, 2020 were also affected negatively by the COVID-19 pandemic and the resulting world-wide economic slowdown.
The Company expects improvement in margins during 2021 as Orbital Power Services and Eclipse Foundation Group continue to gain efficiencies and increase revenues, GTS is included going forward and benefits from its recently announced acquisition of IMMCO, as companies continue to learn to cope with the COVID-19 pandemic, and several large Orbital Solar Services solar projects begin.
Selling, General and Administrative Expenses
(dollars in thousands)
| For the Three Months Ended |
||||||||||||||||
| Selling, general, and administrative expense by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 9,897 | $ | 1,569 | $ | 8,328 | 530.8 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
2,391 | 2,667 | (276 | ) | (10.3 | )% | ||||||||||
| Other |
3,407 | 2,551 | 856 | 33.6 | % | |||||||||||
| Total selling, general and administrative expense |
$ | 15,695 | $ | 6,787 | $ | 8,908 | 131.3 | % | ||||||||
| For the Six Months Ended |
||||||||||||||||
| Selling, general, and administrative expense by Segment or Category |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 15,856 | $ | 2,644 | $ | 13,212 | 499.7 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
4,947 | 5,630 | (683 | ) | (12.1 | )% | ||||||||||
| Other |
9,352 | 5,705 | 3,647 | 63.9 | % | |||||||||||
| Total selling, general and administrative expense |
$ | 30,155 | $ | 13,979 | $ | 16,176 | 115.7 | % | ||||||||
Selling, General and Administrative (SG&A) expenses include such items as wages, commissions, consulting, general office expenses, business promotion expenses and costs of being a public company, including legal and accounting fees, insurance and investor relations. SG&A expenses are generally associated with the ongoing activities to reach new customers, promote new product and service lines including GTS, Orbital Solar Services, Orbital Power Services, Orbital Gas Systems, Orbital Telecom Services and other new product and service introductions.
During the three and six months ended June 30, 2021, SG&A increased $8.9 million and $16.2 million, respectively, compared to the prior-year comparative period. The increase in SG&A for the quarter and year-to-date periods was due to increased SG&A costs in the Electric Power and Solar Infrastructure Services segment primarily due to ramp-up costs at Orbital Power Services group, which included increased payroll and insurance costs and start-up costs at Eclipse Foundation Group, as well as $4.6 million and $6.6 million of employee stock-based compensation vesting expense, for the three and six month periods, respectively. The addition of GTS in April 2021 and Orbital Solar Services in April 2020 compared to the first six months of 2020, which was prior to the GTS acquisition and only included Orbital Solar Services for three of the six months ended June 30, 2020, also contributed to the increase in SG&A costs. Also contributing to the increase were increased corporate costs in the Other segment due to an increase in the mark to market adjustment to the executive cash-based stock appreciation rights and employee performance bonuses. These increases were partially offset by decreased SG&A costs in the Integrated Energy Infrastructure Solutions and Services segment due to cost saving measures.
Depreciation and Amortization
(dollars in thousands)
| For the Three Months Ended |
||||||||||||||||
| Depreciation and amortization expense by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 1,864 | $ | 1,201 | $ | 663 | 55.2 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
413 | 337 | 76 | 22.6 | % | |||||||||||
| Other |
10 | 11 | (1 | ) | (9.1 | )% | ||||||||||
| Total depreciation and amortization |
$ | 2,287 | $ | 1,549 | $ | 738 | 47.6 | % | ||||||||
| For the Six Months Ended |
||||||||||||||||
| Depreciation and amortization by Segment |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Electric Power and Solar Infrastructure Services |
$ | 3,170 | $ | 1,280 | $ | 1,890 | 147.7 | % | ||||||||
| Integrated Energy Infrastructure Solutions and Services |
845 | 736 | 109 | 14.8 | % | |||||||||||
| Other |
19 | 19 | — | 0.0 | % | |||||||||||
| Total depreciation and amortization |
$ | 4,034 | $ | 2,035 | $ | 1,999 | 98.2 | % | ||||||||
Depreciation and amortization expenses are associated with depreciation on buildings, furniture, equipment, vehicles, and amortization of intangible assets over the estimated useful lives of the related assets.
Depreciation and amortization expense in the three and six months ended June 30, 2021 were up compared to the three and six months ended June 30, 2020 primarily due to additional amortization in the Electric Power and Solar Infrastructure Services segment including Orbital Solar Services and GTS acquisition intangibles and depreciation of equipment used by Orbital Power Services and Eclipse Foundation Group, Inc, which began operations in the first quarter of 2020, and 2021, respectively, and have both been ramping up their capital expenditures as more crews are added to OPS and Eclipse.
Equity Method/Cost Method Investment
The Company owns a cost-basis investment in VPS with a book value at June 30, 2021 of $1.1 million. Through June 30, 2020, the Company accounted for its investment in VPS under the equity method of accounting and accordingly recorded income or loss of affiliate based on the equity method of accounting. The Company recorded losses in the three and six months ended June 30, 2020 of $4.4 million and $4.8 million, respectively, related to its share of VPS's loss. Due to additional outside investments into VPS during the third quarter of 2020, which diluted OEG's ownership percentage coupled with increased board seats reducing OEG's board influence, the Company's management determined that it no longer met the qualification of having significant influence necessary to record its investment under the equity method of accounting. Following this change, the Company has recorded its investment under the cost method of accounting. There were no changes in the basis in the Company's investment in the three and six months ended June 30, 2021.
Other Income (Expense), net
(dollars in thousands)
| For the Three Months Ended |
||||||||||||||||
| Other Income (Expense), net |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Foreign exchange gain |
$ | 37 | $ | 81 | $ | (44 | ) | (54.3 | )% | |||||||
| Interest income |
82 | 75 | 7 | 9.3 | % | |||||||||||
| Rental income |
130 | 78 | 52 | 66.7 | % | |||||||||||
| Gain on extinguishment of debt |
1,939 | — | 1,939 | 100.0 | % | |||||||||||
| Other income |
5 | — | 5 | 100.0 | % | |||||||||||
| Total Other income (expense) |
$ | 2,193 | $ | 234 | $ | 1,959 | 837.2 | % | ||||||||
| For the Six Months Ended |
||||||||||||||||
| Other Income (Expense), net |
June 30, |
|||||||||||||||
| 2021 |
2020 |
$ Change |
% Change |
|||||||||||||
| Foreign exchange gain (loss) |
$ | 131 | $ | (1,119 | ) | $ | 1,250 | (111.7 | )% | |||||||
| Interest income |
163 | 145 | 18 | 12.4 | % | |||||||||||
| Rental income |
243 | 176 | 67 | 38.1 | % | |||||||||||
| Gain on extinguishment of debt |
1,689 | — | 1,689 | 100.0 | % | |||||||||||
| Other income |
29 | — | 29 | 100.0 | % | |||||||||||
| Total Other income (expense) |
$ | 2,255 | $ | (798 | ) | $ | 3,053 | (382.6 | )% | |||||||
Other income (expense) changes were primarily the result of $1.9 million gain on extinguishment of debt due to the forgiveness by the U.S. government of certain payroll protection loans. For the six month period, the gain on extinguishment was partially offset by the loss on the extinguishment of debt due to the amendment to remove the convertible equity feature of its convertible debt during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Foreign currency gain/loss fluctuations in the six month periods principally related to the weakening U.K. pound in the first quarter of 2020.
Interest Expense
For the three and six months ended June 30, 2021, the Company incurred interest expense of $1.1 million and $1.8 million, respectively compared to interest for the three and six months ended June 30, 2020 of $0.1 million and $0.1 million, respectively. The increase in interest expense in 2021 is related to the increase in notes payable outstanding in the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020. See note 16 for more information on the Company's notes payable.
Income Tax Expense (Benefit)
The Company is subject to taxation in the U.S., various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and United Kingdom net deferred tax assets and partial valuation allowance against the Company’s Canada net deferred tax assets, as it is not more likely than not that the Company will realize a benefit from these assets in a future period.
In the three months ended June 30, 2021, as a result of the assets acquired and liabilities assumed related to the acquisition of GTS, the Company recorded a $9.0 million deferred tax liability. As a result, the Company recorded a $9.0 million tax benefit for a reduction in prior recorded valuation allowances.
In the three months ended June 30, 2020, as a result of the assets acquired and liabilities assumed related to the acquisition of Reach Construction, LLC, the Company recorded a $1.6 million deferred tax liability. As a result, the Company recorded a $1.6 million tax benefit for a reduction in prior recorded valuation allowances.
For the three and six months ended June 30, 2020, the Company is allocating income tax expense (benefit) in accordance to ASC 740-20-45-7 to more than one financial statement component other than continuing operations. Prior period comparative allocations have also been made.
In the six months ended June 30, 2020, as a result of HM Revenue & Customs review, the Company recorded a $1.6 million tax benefit for estimated prior year taxes related to refunds for the surrender for cash, United Kingdom net operating losses generated related to enhanced research and development deduction claims.
For additional analysis, see Note 14, "Income Taxes," of the condensed consolidated financial statements in Part I - Item I, "Financial Statements."
Restructuring Charges
During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of September 30, 2020 and completed the disposal of Canada's assets in the fourth quarter of 2020. The Company recorded an accrued liability of $4.0 million Canadian dollars ($3.1 million US dollars at December 31, 2019) for estimated employee termination costs. This accrual was adjusted down by $0.3 million Canadian dollars ($0.2 million US dollars) in 2020 based on updated estimates. The termination costs began to be paid out in the third quarter of 2020 and the majority of the remaining accrual was paid in the fourth quarter of 2020. The Company paid out an additional $0.3 million of termination benefits in the first six months of 2021 and expect to pay the remaining $0.1 million during the remainder of 2021. For more information on the Company's restructuring charges, see Note 1 Nature of Operations, Basis of Presentation and Company Conditions under the Restructuring Charges subheading.
Liquidity and Capital Resources
General
As of June 30, 2021, the Company held cash and cash equivalents of $9.6 million and restricted cash of $1.2 million. Operations, investments, and equipment have been funded through cash on hand, the issuance of common stock authorized by its July 2020 S-3 filing, seller financing, the issuance of debt and financing through the sale of future revenues. The Company's cash used in operations was more in the first six months of 2021 than in the first six months of 2020 primarily driven by a larger net loss in the first six months of 2021 compared to the first six months of 2020. Major uses of cash in the first six months of 2021 included the acquisitions of Gibson Technical Services, purchases of property and equipment, completion of the purchase of the VE Technology and changes in working capital. The Company continues to work to improve its short-term liquidity through management of its working capital. Long-term liquidity is expected to benefit from revenue growth and earnings through its existing operations. Overall volume growth in the Company's businesses both organically and through acquisitions are expected to benefit cash flows as well. In addition, the Company filed an S-3 in February of 2021 which became effective in April 2021 for the possible issuance of additional stock or public debt. In July, 2021, the Company issued 10,410,959 shares of common stock at $3.65 a share for a total raise of $38.0 million before expenses.
Cash Used in Operations
Cash used in operations of $22.8 million was a $13.8 million increase in cash used compared to the six-month period in 2020. Cash used in operations for the six months ended June 30, 2021 were approximately $10.9 million in the other segment, $10.3 million in the Electric Power and Solar Infrastructure Services segment and $1.6 million in the Integrated Energy Infrastructure Solutions and Services segment. Included in the Other segment is a $0.3 million source of cash related to the former discontinued operations of the Power and Electromechanical segment, which was primarily the collection of trade accounts receivable. This compares to prior year six-month-period cash used of approximately $6.1 million used in the Other segment, $1.3 million used for the Electric Power and Solar Infrastructure Services segment $0.3 million provided by the Integrated Energy Infrastructure Solutions and Services segment and $1.9 million used related to the discontinued Power and Electromechanical segment.
Increased uses of cash in the first six months of 2021 are primarily for costs associated with mergers and acquisitions in the Electric Power and Solar Infrastructure Services segment in addition to normal administrative costs, cash usage in the Electric Power and Solar Infrastructure Services segment primarily related to ramp-up costs on the Company's Orbital Power Services group, start-up costs by Eclipse Foundation Group, Inc. and cash used by Orbital Solar Services operations. The Company believes that revenue generated by Gibson Technical Services will improve cash flow from operating activities. While the Company saw an initial cost increase from Orbital Power Services and Eclipse Foundation Group, Inc., management expects these groups to become cash flow positive, as the business environment normalizes and the Company continues to increase revenue-generating service crews deployed. The Company believes overall cash used in operations will improve through revenue growth associated with new customers and larger projects, the additional cash expected from operations of Orbital Solar Services when it begins work on contracts with solar developers including performing as company "of choice" for the recently-formed Black Sunrise Century Fund, which over the next three years is expected to build over 1 gigawatt of solar power.
The change in cash used in operating activities, exclusive of net loss, is primarily the result of the following line items: payment towards accounts payable of $4.1 million was mostly due to timing of payments following increased liquidity after the issuance of $45 million of common stock in January 2021, increased cash used for right of use assets, which are partially offset by increased lease liabilities, related to the ramp up of the Orbital Power Services group and start-up of the Eclipse Foundation Group, Inc. In addition, there was a $2.7 million non-cash fair value adjustment to the cash-settled executive stock appreciation rights. Timing of cash receipts on trade accounts receivable was a $4.0 million source of cash, which related to sources of cash at Orbital Solar Services, Orbital Power Services, Gibson Technical Services and receipts of final sales at CUI-Canada, partially offset by a buildup of receivables at Orbital-UK, Orbital Gas Systems and Eclipse Foundation Group. Changes in prepaid expenses of $1.4 million was a source of cash and were due to timing of payments primarily related to changes in prepaid expenses at Orbital-UK, Orbital Power Services, and the Other segment.
During the six months ended June 30, 2021 and 2020, the Company recorded a total of $8.1 million and $7 thousand, respectively, for share-based compensation related to equity given, or to be given to directors, employees and consultants for services provided and as payment for royalties earned. The increase in expense during the first six months of 2021 compared to the first six months of 2020 is primarily due to employee stock-based bonuses and increased director stock-based compensation in 2021 compared to director stock-based compensation in the six three months of 2020 when director compensation was being accrued as cash compensation while the structure of their compensation was being evaluated.
S-3 registration
The Company filed an S-3 registration statement on July 17, 2020 containing a prospectus that was effective in September 2020. The Company utilized this filing in January 2021 to issue common stock for $45 million before costs. The Company filed a new S-3 shelf registration in January 2021, which, as amended, became effective in April 2021. With this filing, Orbital Energy Group may from time-to-time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million. The Company utilized this S-3 registration to issue additional common stock in July 2021 for $38 million before expenses.
As the Company focuses on growing its infrastructure services market presence both organically and through strategic acquisitions, technology development, product and service line additions, and increasing Orbital’s market presence, it will fund these activities together with related operating, sales and marketing efforts for its various product offerings with cash on hand, and possible proceeds from future issuances of equity through the S-3 registration statement, and available debt.
Orbital Energy Group may raise additional capital needed to fund the further development and marketing of its products and services as well as payment of its debt obligations.
See the section entitled Recent Sales of Unregistered Securities for a complete listing of all unregistered securities transactions.
Capital Expenditures and Investments
During the first six months of 2021 and 2020, Orbital Energy Group invested $4.7 million and $1.4 million, respectively, in property and equipment. These purchases in 2021 were primarily for capital assets associated with the Company's Orbital Power Services group and Eclipse Foundation Group. These investments typically include additions to equipment including vehicles and equipment for powerline service and maintenance, engineering, furniture, computer equipment for office personnel, facilities improvements and other fixed assets as needed for operations. In addition, during the six months ended June 30, 2021 and 2020, the Company paid cash for acquisitions, net of cash received of $21.4 million and $3.0 million respectively. The Company anticipates further investment in fixed assets and acquisitions during 2021 in support of its on-going business and continued development of its infrastructure services operations.
The Company entered into a $3 million note receivable with Orbital Solar Services during the three months ended March 31, 2020 prior to the April 1 acquisition. This payment became part of the Company's purchase consideration upon the close of the acquisition.
Also the Company made an additional $0.3 million investment in a convertible note receivable from Virtual Power Systems ("VPS") in the six months ended June 30, 2020 including payments made related to the Company's transition agreement with VPS.
During the six months ended June 30, 2021 and 2020, Orbital Energy Group invested $0.7 million and $5 thousand, respectively, in other intangible assets. These investments typically include patents, intellectual property rights, capitalized website development, software for engineering and research and development and software upgrades for office personnel. The $0.7 million payment in 2021 was the final payment to acquire the intellectual property rights and know-how associated with the VE Technology.
The Company also paid out $2.8 million in the six months ended June 30, 2020 related to a working capital adjustment on the disposition of the domestic power business to Bel Fuse, Inc in accordance with the sale agreement.
Financing Activities
In the three months ended March 31, 2021, the Company issued a total of 15.6 million shares of commons stock in two separate equity raises with a face amount of $45.0 million for which the Company netted $42.4 million after expenses. For the six months ended June 30, 2021, the Company received cash proceeds of $19.0 million for the issuance of debt with a face value of $21.74 million and a stated interest rate of 9% and an estimated effective rate of 19.6%. In the six months ended June 30, 2021 and 2020 the Company made payments on notes payable of $5.6 million and $0.8 million, respectively, including $1.0 million in 2021 toward the seller notes payable related to the April 2020 acquisition of Orbital Solar Services. See Note 16 for more information on the Company's notes payable. In addition, the Company paid $0.4 million in the three months ended March 31, 2021 to close its line of credit that was acquired with the Orbital Solar Services business.
Recap of Liquidity and Capital Resources
At June 30, 2021, the Company had unrestricted cash and cash equivalents balances of $9.6 million. At June 30, 2021 the Company had $2.0 million of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposits programs and $0.1 million and $74 thousand, at foreign financial institutions covered under the United Kingdom Financial Services Compensation (FSC) and Canada Deposit Insurance Corporation (CDIC), respectively. At June 30, 2021, the Company had cash and cash equivalents of $1.8 million in European bank accounts and $74 thousand in Canadian bank accounts.
The Company had a net loss of $26.2 million and cash used in operating activities of $22.8 million during the six months ended June 30, 2021. As of June 30, 2021, the Company's accumulated deficit is $175.8 million.
The Company expects the revenues from its continuing operations, and cash on hand, to cover operating and other expenses for the next twelve months of operations. However, in the short-term, the Company expects to continue to need cash support as the Company's businesses increase their market positions and revenue. The Company issued $38 million of equity in July 2021. The Company may issue additional debt or equity to support continuing operations and acquisition efforts in 2021.
Critical Accounting Policies
The Company has adopted various accounting policies to prepare the consolidated financial statements in accordance with Generally Accepted Accounting Principals, ("GAAP"). Certain of the Company's accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. In the Company's 2020 Annual Report on Form 10-K filed on March 30, 2021, the Company identified the critical accounting policies that affect the Company's more significant estimates and assumptions used in preparing the Company's consolidated financial statements.
Adoption of new accounting standards
See Note 2 Summary of Significant Accounting Policies - Update of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of recent accounting pronouncement adoptions, including the dates of adoption and effects on financial position, results of operations and cash flows if any.
Recent Accounting Pronouncements
See Note 11 Recent Accounting Pronouncements of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial position, results of operations and cash flows.
Off-Balance Sheet Arrangements
See Note 20 Commitments and Contingencies of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of the Company's off-balance sheet arrangements.
| Quantitative and Qualitative Disclosure about Market Risk. |
The Company is exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact the Company’s financial position due to adverse changes in financial market prices and rates. This market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates. The Company neither holds nor issues financial instruments for trading purposes.
The following sections provide quantitative information on the Company’s exposure to foreign currency exchange rate risk. The Company makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.
Foreign Currency Exchange Rates
The Company conducts continuing operations in two principal currencies: the U.S. dollar and the British pound sterling. These currencies operate primarily as the functional currency for the Company’s U.S. and U.K. operations, respectively. Cash is managed centrally within each of the two regions.
Because of fluctuations in currency exchange rates, the Company is subject to currency translation exposure on the results of its operations. Foreign currency translation risk is the risk that exchange rate gains or losses arise from translating foreign entities’ statements of earnings and balance sheets from functional currency to the Company’s reporting currency, the U.S. dollar, for consolidation purposes. As currency exchange rates fluctuate, translation of the Company’s statements of operations into U.S. dollars affects the comparability of revenues and operating expenses between years.
Revenues and operating expenses from continuing operations are primarily denominated in the currencies of the countries in which the Company’s operations are located, the U.S. and U.K. The Company’s consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.
The tables below detail the percentage of revenues and expenses from continuing operations by the two principal currencies:
| British Pound |
||||||||
| U.S. Dollar |
Sterling |
|||||||
| For the Three Months Ended June 30, 2021 |
||||||||
| Revenues |
76 | % | 24 | % | ||||
| Operating expenses |
91 | % | 9 | % | ||||
| For the Three Months Ended June 30, 2020 |
||||||||
| Revenues |
67 | % | 33 | % | ||||
| Operating expenses |
82 | % | 18 | % | ||||
| British Pound |
||||||||
| U.S. Dollar |
Sterling |
|||||||
| For the Six Months Ended June 30, 2021 |
||||||||
| Revenues |
75 | % | 25 | % | ||||
| Operating expenses |
90 | % | 10 | % | ||||
| For the Six Months Ended June 30, 2020 |
||||||||
| Revenues |
59 | % | 41 | % | ||||
| Operating expenses |
78 | % | 22 | % | ||||
To date, the Company has not entered into any hedging arrangements with respect to foreign currency risk and have limited activity with forward foreign currency contracts or other similar derivative instruments. The Company believes that during the three and six months ended June 30, 2021, the effect of a hypothetical 100 basis point shift in foreign currency exchange rates applicable to the Company’s business would not have had a material impact on the Company’s condensed consolidated financial statements.
Brexit Risk
On January 31, 2020, the United Kingdom (“UK”) formally withdrew from the European Union (“EU”), entering a transitional period which came to an end on December 31, 2020. During this transitional period, EU law continued to apply in the UK while providing time for the UK and EU to negotiate the details of their future relationship. Now that the transition has ended, the two sides are free to negotiate new trade agreements. The impact of the withdrawal may adversely affect business activity, political stability and economic conditions in the UK, the European Union and elsewhere. The economic conditions and outlook could be further adversely affected by the uncertainty concerning new or modified trading arrangements between the UK and other countries. Any of these developments could negatively affect economic growth or business activity in the UK, the European Union and elsewhere, and could materially and adversely affect our business and results of operations. We continue to closely monitor the negotiations and the impact to foreign currency markets, however we cannot predict the direction of Brexit-related developments or the impact of those developments on our UK operations and the economies of the markets in which we operate.
Investment Risk
The Company has an Investment Policy that, among other things, provides an internal control structure that takes into consideration safety (credit risk and interest rate risk), liquidity and yield. The Company’s investment committee consists of two independent Directors and the CFO, who oversee the investment portfolio and compile a quarterly analysis of the investment portfolio, if any investments exist during the period.
Investments made by the Company are subject to Investment committee Charter and investment policy, which limits the Company’s risk of loss exposure by setting appropriate credit quality requirements for investments held, limiting maturities to be 1 year or less, and also setting appropriate concentration levels to prevent concentrations. This includes a requirement that no more than 3% of the portfolio, or $0.5 million, whichever is greater, may be invested in one particular issue. In 2019, since the investment in VPS was considered a strategic investment, the board and management reviewed and approved the investment above the board set limit for individual issuers.
Cash and cash equivalents are diversified and maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.
The Company has trade receivable and revenues concentrations with large customers. Additionally, the Company has a large concentration of cash, trade receivables and revenues in foreign countries including the United Kingdom. Owning assets in a foreign country exposes the Company to foreign currency risk coupled with liquidity risk. Foreign owned assets may be difficult to timely convert to U.S. dollars if necessary.
| Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
The Company's management, with the participation of the Company's Chief Executive Officer (CEO) and its Chief Financial Officer (CFO), evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management is required to apply their judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon that evaluation, the Company's management, including the CEO and the CFO, concluded that, as of June 30, 2021, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no significant changes in the Company’s internal control over financial reporting during the three months ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.
Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. The Company currently has no such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. None of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.’s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.
There are no material changes from Risk Factors as previously disclosed in the Company’s Form 10-K filed with the Commission on March 30, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Common Stock Issued.
During the six months ended June 30, 2021, the Company issued the following shares of common stock, which were not registered under the Securities Act. The Company relied on Section 4(2) of the Securities Act of 1933 as the basis for an exemption from registration for the following issuances.
| Date of issuance |
Type of issuance |
Expense/ Prepaid/ Cash |
Stock issuance recipient |
Reason for issuance |
Total no. of shares |
Grant date fair value recorded at issuance (in thousands) |
||||||||||
| January, April, and May 2021 |
Common stock |
Expense |
Four directors |
Director compensation |
118,672 | $ | 541 | |||||||||
| January, April, and May 2021 |
Common stock |
Expense |
3 Employees |
Employee bonuses |
1,016,613 | 6,638 | ||||||||||
| February and June 2021 |
Common stock |
Expense |
2 Consultants |
Services |
184,516 | 865 | ||||||||||
| February 2021 |
Common stock |
Cashless exercise |
Employee |
Stock option exercise |
214,596 | * |
— | |||||||||
| April and June 2021 |
Common stock |
Acquisition |
Various GTS sellers |
GTS Acquisition |
5,929,267 | 16,932 | ||||||||||
| May 2021 |
Common stock |
Expense |
Consultant |
Royalty |
2,705 | 12 | ||||||||||
| Total other equity transactions |
7,466,369 | $ | 24,988 | |||||||||||||
* The cashless exercise consisted of an exercise of 552,663 shares for which 338,067 of those share options were returned to the Company in return for the 214,596 shares issued. Expense related to these stock options were recorded in prior periods as they were fully vested.
None
The following exhibits are included as part of this Form 10-Q.
| Exhibit No. |
Description |
| 10.113 | Exchange Agreement between Streeterville Capital, LLC and Orbital Energy Group, Inc. |
| 31.1 1 |
|
| 31.2 1 |
|
| 32.1 1 |
|
| 32.2 1 |
|
| 101.INS 1 |
Inline XBRL Instance Document |
| 101.SCH 1 |
Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL 1 |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF 1 |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB 1 |
Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE 1 |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Footnotes to Exhibits:
1Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Signed and submitted this 16th day of August 2021.
| Orbital Energy Group, Inc. |
|||
| By: |
/s/ James F. O'Neil |
||
| James F. O'Neil, |
|||
| Chief Executive Officer |
|||
| (Principle Executive Officer) |
|||
| By: |
/s/ Daniel N. Ford |
||
| Daniel N. Ford, |
|||
| Chief Financial Officer |
|||
| (Principle Financial Officer) |
|||
Exhibit 10.113
THE EXCHANGE CONTEMPLATED HEREIN IS INTENDED TO COMPORT WITH THE REQUIREMENTS OF SECTION 3(a)(9) OF THE SECURITIES ACT OF 1933, AS AMENDED.
EXCHANGE AGREEMENT
This Exchange Agreement (this “Agreement”) is entered into as of July 20, 2021 by and between Streeterville Capital, LLC, a Utah limited liability company (“Lender”), and Orbital Energy Group, Inc., a Colorado corporation (“Borrower”). Capitalized terms used in this Agreement without definition shall have the meanings given to them in the Original Note (as defined below).
A. Borrower previously sold and issued to Lender that certain Amended and Restated Promissory Note dated November 12, 2020 in the original principal amount of $2,215,000.00 (the “Original Note”) pursuant to that certain Securities Purchase Agreement dated November 12, 2020 by and between Lender and Borrower (the “Purchase Agreement,” and together with the Original Note and all other documents entered into in conjunction therewith, the “Transaction Documents”).
B. Subject to the terms of this Agreement, Borrower and Lender desire to partition a new Amended and Restated Promissory Note in the form of the Original Note (the “Partitioned Note”) in the original principal amount of $1,000,000.00 (the “Exchange Amount”) from the Original Note and then cause the outstanding balance of the Original Note to be reduced by an amount equal to the Exchange Amount, which represents the total outstanding balance of the Partitioned Note.
C. Borrower and Lender desire to exchange (such exchange is referred to as the “Exchange”) the Partitioned Note for 248,509 shares of Borrower’s Common Stock, par value
$0.001 (the “Common Stock,” and such 248,509 shares of Common Stock, the “Exchange Shares”), according to the terms and conditions of this Agreement.
D. The Exchange will consist of Lender surrendering the Partitioned Note in exchange for the Exchange Shares, which will be issued free of any restrictive securities legend.
E. Other than the surrender of the Partitioned Note, no consideration of any kind whatsoever shall be given by Lender to Borrower in connection with this Agreement.
F. Lender and Borrower now desire to exchange the Partitioned Note for the Exchange Shares on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals and Definitions. Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Agreement are true and accurate, are contractual in nature, and are hereby incorporated into and made a part of this Agreement.
2. Partition. Effective as of the date hereof, Borrower and Lender agree that the Partitioned Note is hereby partitioned from the Original Note. Following such partition of the Original Note, Borrower and Lender agree that the Original Note shall remain in full force and effect, provided that the outstanding balance of the Original Note shall be reduced by an amount equal to the Exchange Amount.
3. Issuance of Shares. Pursuant to the terms and conditions of this Agreement, the Exchange Shares shall be delivered to Lender on or before July 22, 2021 and the Exchange shall occur with Lender surrendering the Partitioned Note to Borrower on the Free Trading Date (as defined below). On the Free Trading Date, the Partitioned Note shall be cancelled and all obligations of Borrower under the Partitioned Note shall be deemed fulfilled. All Exchange Shares delivered hereunder shall be delivered via DWAC to Lender’s designated brokerage account. Borrower agrees to provide all necessary cooperation or assistance that may be required to cause all Exchange Shares delivered hereunder to become Free Trading (the first date on which all Exchange Shares become Free Trading, the “Free Trading Date”). For purposes hereof, the term “Free Trading” means that (a) the Exchange Shares have been cleared and approved for public resale by the compliance departments of Lender’s brokerage firm and the clearing firm servicing such brokerage, and (b) such shares are held in the name of the clearing firm servicing Lender’s brokerage firm and have been deposited into such clearing firm’s account for the benefit of Lender.
4. Closing. The closing of the transaction contemplated hereby (the “Closing”) along with the delivery of the Exchange Shares to Lender shall occur on the date that is mutually agreed to by Borrower and Lender by means of the exchange by express courier or email of .pdf documents, but shall be deemed to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.
5. Holding Period, Tacking and Legal Opinion. Borrower represents, warrants and agrees that for the purposes of Rule 144 (“Rule 144”) of the Securities Act of 1933, as amended (the “Securities Act”), the holding period of the Partitioned Note and the Exchange Shares will include Lender’s holding period of the Original Note from November 12, 2020. Borrower agrees not to take a position contrary to this Section 4 in any document, statement, setting, or situation. Borrower agrees to take all action necessary to issue the Exchange Shares without restriction, and not containing any restrictive legend without the need for any action by Lender; provided that the applicable holding period has been met. In furtherance thereof, prior to the Closing, counsel to Lender may, in its sole discretion, provide an opinion that: (a) the Exchange Shares may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions; and (b) the transactions contemplated hereby and all other documents associated with this transaction comport with the requirements of Section 3(a)(9) of the Securities Act. Borrower represents that it is not subject to Rule 144(i). The Exchange Shares are being issued in substitution of and exchange for and not in satisfaction of the Partitioned Note. The Exchange Shares shall not constitute a novation or satisfaction and accord of the Partitioned Note. Borrower acknowledges and understands that the representations and agreements of Borrower in this Section 4 are a material inducement to Lender’s decision to consummate the transactions contemplated herein.
6. Borrower’s Representations, Warranties and Agreements. In order to induce Lender to enter into this Agreement, Borrower, for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (a) Borrower has full
power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action, (b) no consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Agreement or the performance of any of the obligations of Borrower hereunder, (c) no Event of Default has occurred under the Original Note and any Events of Default that may have occurred thereunder have not been, and are not hereby, waived by Lender, (d) except as specifically set forth herein, nothing herein shall in any manner release, lessen, modify or otherwise affect Borrower’s obligations under the Original Note, (e) the issuance of the Exchange Shares is duly authorized by all necessary corporate action and the Exchange Shares are validly issued, fully paid and non-assessable, free and clear of all taxes, liens, claims, pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description, (f) Borrower has not received any consideration in any form whatsoever for entering into this Agreement, other than the surrender of the Partitioned Note, and
(g) Borrower has taken no action which would give rise to any claim by any person for a brokerage commission, placement agent or finder’s fee or other similar payment by Borrower related to this Agreement.
7. Lender’s Representations, Warranties and Agreements. In order to induce Borrower to enter into this Agreement, Lender, for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows: (a) Lender has full power and authority to enter into this Agreement and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action, (b) no consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Agreement or the performance of any of the obligations of Lender hereunder, and (c) Lender has taken no action which would give rise to any claim by any person for a brokerage commission, placement agent or finder’s fee or other similar payment by Borrower related to this Agreement.
8. Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, Borrower shall not deliver Exchange Shares in an amount that would cause Lender (together with its affiliates) to beneficially own a number of shares exceeding 9.99% of the number of shares of Common Stock outstanding on such date (including for such purpose the Common Stock issuable upon such issuance) (the “Maximum Percentage”). For purposes of this section, beneficial ownership of Common Stock will be determined pursuant to Section 13(d) of the 1934 Act. By written notice to Borrower, Lender may increase, decrease or waive the Maximum Percentage as to itself but any such waiver will not be effective until the 61st day after delivery thereof. The foregoing 61-day notice requirement is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.
9. Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference. BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
10. Arbitration of Claims. This Agreement shall be subject to the arbitration of claims provisions set forth in Section 9.1 of the Purchase Agreement.
11. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission or other electronic transmission (including email) shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile transmission or other electronic transmission (including email) shall be deemed to be their original signatures for all purposes.
12. Attorneys’ Fees. In the event of any action at law or in equity to enforce or interpret the terms of this Agreement, the parties agree that the party who is awarded the most money shall be deemed the prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’ fees and expenses paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict or impair a court’s power to award fees and expenses for frivolous or bad faith pleading.
13. No Reliance. Borrower acknowledges and agrees that neither Lender nor any of its officers, directors, members, managers, equity holders, representatives or agents has made any representations or warranties to Borrower or any of its agents, representatives, officers, directors, or employees except as expressly set forth in this Agreement and the Transaction Documents and, in making its decision to enter into the transactions contemplated by this Agreement, Borrower is not relying on any representation, warranty, covenant or promise of Lender or its officers, directors, members, managers, equity holders, agents or representatives other than as set forth in this Agreement.
14. Severability. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.
15. Entire Agreement. This Agreement, together with the Transaction Documents, and all other documents referred to herein, supersedes all other prior oral or written agreements between Borrower, Lender, its affiliates and persons acting on its behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Lender nor Borrower makes any representation, warranty, covenant or undertaking with respect to such matters.
16. Amendments. This Agreement may be amended, modified, or supplemented only by written agreement of the parties. No provision of this Agreement may be waived except in writing signed by the party against whom such waiver is sought to be enforced.
17. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Lender hereunder may be assigned by Lender to a third party, including its financing sources, in whole or in part. Borrower may not assign this Agreement or any of its obligations herein without the prior written consent of Lender.
18. Continuing Enforceability; Conflict Between Documents. Except as otherwise modified by this Agreement, the Original Note and each of the other Transaction Documents shall remain in full force and effect, enforceable in accordance with all of its original terms and provisions. This Agreement shall not be effective or binding unless and until it is fully executed and delivered by Lender and Borrower. If there is any conflict between the terms of this Agreement, on the one hand, and the Original Note or any other Transaction Document, on the other hand, the terms of this Agreement shall prevail.
19. Time of Essence. Time is of the essence with respect to each and every provision of this Agreement.
20. Notices. Unless otherwise specifically provided for herein, all notices, demands or requests required or permitted under this Agreement to be given to Borrower or Lender shall be given as set forth in the “Notices” section of the Purchase Agreement.
21. Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
[Remainder of page intentionally left blank]
5
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.
BORROWER:
ORBITAL ENERGY GROUP, INC.
By: /s/ William Clough William Clough, Executive Chairman
LENDER:
STREETERVILLE CAPITAL, LLC
By: /s/ John M. Fife John M. Fife, President
Exhibit 31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, James F. O'Neil, certify that:
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I have reviewed this quarterly report on Form 10-Q of Orbital Energy Group, Inc.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and; |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
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By: /s/ James F. O'Neil |
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Dated: August 16, 2021 |
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James F. O'Neil, |
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Chief Executive Officer |
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Exhibit 31.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Daniel N. Ford, certify that:
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1. |
I have reviewed this quarterly report on Form 10-Q of Orbital Energy Group, Inc.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and; |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
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By: /s/ Daniel N. Ford |
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Dated: August 16, 2021 |
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Daniel N. Ford |
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Chief Financial Officer |
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Exhibit 32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Orbital Energy Group, Inc. (the "Company"), on Form 10-Q of the quarter ended June 30, 2021, I hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The quarterly report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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By: /s/ James F. O'Neil |
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Dated: August 16, 2021 |
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James F. O'Neil, |
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Chief Executive Officer |
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Exhibit 32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the quarterly report of Orbital Energy Group, Inc. (the "Company"), on Form 10-Q of the quarter ended June 30, 2021, I hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The quarterly report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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By: /s/ Daniel N. Ford |
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Dated: August 16, 2021 |
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Daniel N. Ford |
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Chief Financial Officer |
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Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Trade accounts receivable, allowance | $ 1,205 | $ 1,227 |
| Accumulated depreciation | $ 3,135 | $ 2,158 |
| Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
| Preferred stock, issued (in shares) | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized (in shares) | 325,000,000 | 325,000,000 |
| Common stock, shares issued (in shares) | 54,051,567 | 31,029,642 |
| Common stock, shares outstanding (in shares) | 53,698,504 | 30,676,579 |
| Treasury stock, shares (in shares) | 353,063 | 353,063 |
Condensed Consolidated Statements of Comprehensive Income and Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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| Net loss | $ (8,213) | $ (9,325) | $ (26,165) | $ (16,706) |
| Foreign currency translation adjustment | 8 | (44) | (14) | 371 |
| Comprehensive loss | $ (8,205) | $ (9,369) | $ (26,179) | $ (16,335) |
Note 1 - Nature of Operations, Basis of Presentation and Company Conditions |
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| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Description and Basis of Presentation [Text Block] |
Nature of Operations Orbital Energy Group, Inc. (Orbital Energy Group, "OEG," "The Company") is a platform company composed of three segments, the Electric Power and Solar Infrastructure Services segment, the Integrated Energy Infrastructure Solutions and Services segment, and the Other segment. In 2019, the Company divested of most of its previous Power and Electromechanical segment and the remaining portion of that segment was divested in 2020. The Other segment represents the remaining activities that are not included as part of the other reportable segments and represent primarily corporate activity.
The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services ("OPS") based in Dallas, Texas, Eclipse Foundation Group based in Gonzales, Louisiana, and Gibson Technical Services ("GTS") based in Atlanta, Georgia. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility-scale solar construction. The Company serves a wide variety of project types, including commercial, substation, solar farms and public utility projects. Services performed by Orbital Power Services generally include the design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services, including the repair of infrastructure damaged by inclement weather. Eclipse Foundation Group, which began operations in January 2021, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation (drilled piers), industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains. GTS provides engineering, design, construction and maintenance services to the broadband and wireless telecommunication industries and was acquired by the Company effective April 13, 2021.
The Company’s Integrated Energy Infrastructure Solutions and Services segment is made up of Orbital Gas Systems Ltd. (Orbital-UK) and Orbital Gas Systems, North America, Inc. (Orbital North America), collectively referred to as ("Orbital Gas Systems"). Orbital-UK is based in the United Kingdom and Orbital North America is based in Houston, Texas. Orbital Gas Systems is a provider of natural gas infrastructure and advanced technology, including metering, odorization, remote telemetry units (‘‘RTU’’) and provides a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. GasPT® and VE Technology® products are sold through Orbital Gas Systems.
Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes condensed consolidated financial statements. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.
It is management's opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. All intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are not necessarily indicative of the results to be expected for the remaining quarters or year ending December 31, 2021.
Reconciliation of Cash, Cash Equivalents, and Restricted Cash on Condensed Consolidated Statements of Cash Flows
(1) Restrictions on cash at June 30, 2021 and June 30, 2020 relate to collateral for several bank-issued letters of credit for contract guaranties.
Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition on cost-to-cost-method type contracts, inventory valuation, warranty reserves, valuations of non-cash capital stock issuances, valuation for acquisitions, the valuation allowance on deferred tax assets, note receivable interest imputation, and the incremental borrowing rate used in determining the value of right of use assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different conditions.
Reclassifications Certain reclassifications have been made to the 2020 segment classifications in order to conform to the 2021 presentation.
Company Conditions Orbital Solar Services has seen increasing customer opportunities including its association with the Black Sunrise Investment fund. The fund has identified through its investors and others, several projects of scale and for which Orbital Solar Services is expected to be awarded significant work. Orbital Power Services began operations during the first quarter of 2020 with work progressing under master service agreements with several new customers. Eclipse Foundation Group began operations in January 2021 and has begun work on projects for utility customers. The Company purchased GTS in the second quarter of 2021 and the acquisition had positive gross margins during the quarter. GTS is expected to be accretive in future quarters. Orbital Gas Systems, Ltd. continues to face issues surrounding COVID-19, Brexit and the overall economy in the United Kingdom. Orbital Gas Systems, North America, Inc. has experienced a significant delay in customer projects and orders related to COVID-19 and the impact of pricing pressure on oil and gas industry customers.
The Company had a net loss of $26.2 million, a negative gross margin of $2.5 million, and cash used in operating activities of $22.8 million during the six months ended June 30, 2021. As of June 30, 2021, our accumulated deficit is $175.8 million and we had negative working capital of $11.9 million.
Goodwill Upon acquisition of Reach Construction Group, LLC, (name changed to Orbital Solar Services) the Company recorded $7.0 million of goodwill. Goodwill was valued as of April 1, 2020 by a third-party valuation expert and was recorded following the recognition of Orbital Solar Service's tangible assets and liabilities and $13.7 million of finite-lived identifiable intangible assets. Factors that contributed to the Company's goodwill are Orbital Solar Service's skilled workforce and reputation within its industry. The Company also expected to achieve future synergies between the Orbital Solar Services and Orbital Power Services businesses. These synergies were expected to be achieved in the form of power line work necessary when bringing new solar power systems online.
Upon acquisition of GTS, the Company recorded $12.3 million of goodwill. Goodwill was valued as of April 13, 2021 by a third-party valuation expert and was recorded following the recognition of GTS's tangible assets and liabilities and $22.8 million of identifiable intangible assets. Factors that contributed to the Company's goodwill are GTS's skilled workforce and reputation within its industry. Future synergies are expected with OPS with possibilities including shared equipment, shared engineering labor and telecommunication line work from OPS.
During the three months ended June 30, 2021, the Company completed a quantitative analysis to determine whether it was more likely than not that the fair value of its reporting units were less than their carrying amount, including goodwill. To complete the review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. The review of goodwill, prepared as of May 31, 2021, determined that there were not indicators present to suggest that it was more likely than not that the fair value of the Orbital Solar Services reporting unit was less than its carrying amount and thus no impairment was necessary during the quarter ended June 30, 2021.
Other Intangible Assets The following table provides the components of identifiable intangible assets:
COVID-19 Assessment and Liquidity In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects can be severe. While the Company expects the effects of the pandemic to negatively impact its results from operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time. The Company has experienced customer delays and extensions for projects, supply chain delays, furloughs of personnel, increased utilization of telework, increased safety protocols to address COVID-19 risks, decreased field service work and other impacts from the COVID-19 pandemic. While the economic effects of COVID-19 are beginning to subside as a higher percentage of people become vaccinated, the highly transmissible delta variant and the slowing rates of vaccination has caused there to be uncertainty regarding the future affects of the pandemic. Events and changes in circumstances arising after June 30, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.
Management believes the Company's present cash flows along with access to additional debt and equity raises will meet its obligations for twelve months from the date these financial statements are available to be issued. Including our cash balance, we continue to manage working capital primarily related to trade accounts receivable, notes receivable, prepaid assets, contract assets and our inventory less current liabilities that we will manage during the next twelve months. In 2020 and the first six months of 2021, the Company has entered into various long and short-term debt agreements (Note 16. Notes Payable). In addition, the Company has secured funding and has an available S-3 registration statement allowing the Company to issue various types of securities including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million. Subsequent to June 30, 2021, the Company utilized its registration statement and issued an updated prospectus to issue 10,410,959 additional common shares for an additional $38 million in proceeds before expenses, allowing for up to $112 million on its registration statement to be utilized in the future. The Company used $17.1 million of these proceeds on the acquisition of IMMCO, Inc. in July 2021, which is expected to be immediately accretive to earnings. Considering these above factors, management believes the Company can meet its obligations for the twelve-month period from the date the financial statements are available to be issued.
The Company’s available capital may be consumed faster than anticipated due to other events, including the length and severity of the global novel coronavirus disease pandemic and measures taken to control the spread of COVID-19, as well as changes in and progress of our development activities and the impact of commercialization efforts due to the COVID-19 pandemic. The Company may seek to obtain additional capital as needed through equity financings, debt or other financing arrangements, but given the impact of COVID-19 on the U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to raise additional capital when needed or under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares.
Restructuring Charges During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of September 30, 2020. In conjunction with the 2019 sale, it was concluded that should the remaining power and electromechanical operations not sell, the Company will fulfill its backlog obligations and wind down the remaining operations of CUI-Canada during 2020. As of December 31, 2020, the Company had remaining an accrued liability for estimated employee termination costs of $0.4 million related to the discontinued operations. The Company paid out an additional $0.3 million of termination benefits in the first six months of 2021 and expect the remaining $0.1 million to be paid out during the remainder of 2021.
Activity in the termination benefit liability in 2021 is as follows:
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Note 2 - Summary of Significant Accounting Policies |
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| Significant Accounting Policies [Text Block] |
Our significant accounting policies are detailed in "Note 2 Summary of Significant Accounting Policies" within Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 30, 2021. Changes to the Company's accounting policies are discussed below:
Adoption of new accounting standards On January 1, 2021, the Company adopted ASU No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. There was not a material effect on the Company's financial statements due to the Company not having any current financial instruments that are affected by this new guidance.
On January 1, 2021, the Company adopted ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. ASU 2020-01 clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU 2020-01 are effective for the Company's 2021 fiscal year, including interim periods. The new guidance does not have a material impact on the Company's consolidated financial statements due to the Company currently not having any equity-method investments or any derivative instruments.
On January 1, 2021, the Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's 2021 fiscal year, including interim periods. The ASU does not have a material impact on the Company's consolidated financial statements.
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Note 3 - Discontinued Operations and Sale of a Business |
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| Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
As part of the Company’s previously stated strategy to transform Orbital Energy Group, Inc. into a diversified infrastructure services platform serving North American and U.K. customers, in 2019 the Company’s Board of Directors made the decision to divest of its Power and Electromechanical businesses. On September 30, 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, CUI, Inc. ("Seller"), a wholly owned subsidiary of the Company ("Parent"), and Back Porch International, Inc. ("Buyer") to sell the Company’s Electromechanical business to a management led group. In November 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, the Seller and Bel Fuse, Inc. to sell the domestic Power supply business. Both sales closed in 2019. On September 30, 2020, the Company sold the CUI Japan operations to Back Porch International for approximately $163 thousand. The assets of the Company's CUI-Canada subsidiary were divested in the fourth quarter of 2020.
The associated results of operations of the discontinued Power and Electromechanical segment are separately reported as Discontinued Operations for 2020 on the Condensed Consolidated Statements of Operations. Cash flows from these discontinued businesses are included in the Condensed Consolidated Cash Flow statements. See below for additional information on operating and investing cash flows of the discontinued operations. Results from continuing operations for the Company and segment highlights exclude the former Power and Electromechanical segment, which is included in these discontinued operations.
The former Power and Electromechanical segment consisted of the wholly owned subsidiaries: CUI, Inc. (CUI), based in Tualatin, Oregon; CUI Japan, based in Tokyo, Japan; CUI-Canada, based in Toronto, Canada; and the entity that previously held the corporate building, CUI Properties. The subsidiaries were providers of power and electromechanical components for Original Equipment Manufacturers (OEMs).
Selected data for these discontinued businesses consisted of the following:
Reconciliation of the Major Classes of Line Items Constituting Pretax Income from Discontinued Operations to the After-Tax Income from Discontinued Operations That Are Presented in the Condensed Consolidated Statement of Operations (Unaudited)
Net cash used in operating activities of discontinued operations for the
six months ended
June
30,
2020 was
$1.9 million.
There was $0 net cash used in investing activities of discontinued operations for the six months ended June 30, 2020.
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| Revenue from Contract with Customer [Text Block] |
The Electric Power and Solar Infrastructure Services segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar and community solar construction, and Gibson Technical Services provides technical implementation, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.
The Integrated Energy Infrastructure Solutions and Services segment subsidiaries, collectively referred to as Orbital Gas Systems, generate their revenue from a portfolio of products, services and resources that offer a diverse range of personalized gas engineering solutions to the gas utilities, power generation, petrochemical, emissions, manufacturing and automotive industries among others.
Orbital Gas Systems accounts for a majority of its contract revenue proportionately over time. For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided.
For our construction contracts, revenue is generally recognized over time. Our construction projects generally use a cost-to-cost input method or an output method to measure our progress towards complete satisfaction of the performance obligation as we believe these methods best depict the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Under the output method, progress towards completion is measured based on units or hours of work completed.
The timing of revenue recognition for Integrated Energy Infrastructure products also depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts where the Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced or for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. These performance obligations use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date and we are not enhancing a customer controlled asset, we recognize revenue at the point in time when control is transferred to the customer, generally when the product is shipped.
For our service contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term.
Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.
Under the output method, revenue is determined by actual work achieved. For time and materials jobs, revenue is recognized based on the output of hours of work completed multiplied by the contractual agreed upon rate per hour. For the remainder of jobs under the output method, revenue is earned based on each unit in the contract completed. We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. Revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service.
Product-type contracts (for example, sale of GasPT units) for which revenue does not qualify to be recognized over time are recognized at a point in time. Revenues from extended warranty and maintenance activities are recognized ratably over the term of the warranty and maintenance period. Extended warranties are not a material portion of our revenue.
Accounts Receivable, Contract Assets and Contract Liabilities Accounts receivable are recognized in the period when our right to consideration is unconditional. We also assess our customer's ability and intention to pay, which is based on a variety of factors, including our historical payment experience with and the financial condition of our customers. Payment terms and conditions vary by contract, although our standard terms include a requirement of payment within 30 days. Accounts receivable are recognized net of an allowance for doubtful accounts.
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenue recognized under the cost-to-cost or output method measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Also included in contract assets are retainage receivables and amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to both scope and/or price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Condensed Consolidated Balance Sheets.
Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost or output method measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts and provision for future contract losses for those contracts estimated to close in a gross loss position. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue.
Balances and activity in the current contract liabilities as of and for the six months ended June 30, 2021 and 2020 was as follows:
(1) For the beginning balance in 2021 and 2020, total contract liabilities included $186 thousand and $192 thousand, respectively that were classified as long term. (2) Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.
Performance Obligations Remaining Performance Obligations Remaining performance obligations represents the transaction price of contracts with customers for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. As of June 30, 2021, the Company's remaining performance obligations are generally expected to be filled within the next 12 months.
Any adjustments to net revenues, cost of revenues, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks. Changes in estimates of net revenues, cost of revenues and the related impact to operating income are recognized on a cumulative catch-up basis in the period they become known, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For separately priced extended warranty or product maintenance performance obligations, when estimates of total costs to be incurred on the performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.
Performance Obligations Satisfied Over Time To determine the proper revenue recognition method for our contracts, we evaluate whether a single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to separate the single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period.
For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In cases where we do, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized customer specific solution, and in these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.
Performance Obligations Satisfied at a Point in Time Revenue from goods and services transferred to customers at a single point in time accounted for 13% and 20% of revenues for the three month periods ended June 30, 2021 and 2020, respectively and 16% and 26% for the six month periods ended June 30, 2021 and 2020, respectively. Revenue on these contracts is recognized when the product is shipped and the customer takes control of the product. Determination of control transfer is typically determined by shipping terms delineated on the customer purchase orders and is generally when shipped.
Variable Consideration The nature of our contracts gives rise to several types of variable consideration. In rare instances, we include in our contract estimates, additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. These amounts are included in our calculation of net revenue recorded for our contracts and the associated remaining performance obligations. Additionally, if the contract has a provision for liquidated damages in the case that the Company misses a timing target, or fails to meet any other contract benchmarks, we account for those estimated liquidated damages as variable consideration and will adjust revenue accordingly with periodic updates to the estimated variable consideration as the job progresses. Liquidated damages are recognized as variable consideration only when we estimate that they will be a factor in the performance of the contract and are not common.
Significant Judgments Our contracts with certain customers may be subject to contract cancellation clauses. Contracts with other cancellation provisions may require judgment in determining the contract term, including the existence of material rights, transaction price and identifying the performance obligations and whether a contract should be accounted for over time or on a completed contract basis. Revenue is recognized for certain projects over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.
At times, customers may request changes that either amend, replace or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts require the changes to be accounted for as a separate contract or as a modification. Generally, contract modifications containing additional goods and services that are determined to be distinct and sold at their stand-alone selling price are accounted for as a separate contract. For contract modifications where goods and services are not determined to be distinct and sold at their stand-alone selling price, the original contract is updated and the required adjustments to revenue and contract assets, liabilities, and other accounts will be made accordingly.
Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together may require significant judgment. For, example, we consider many of our contracts that coordinate multiple products into an integrated system to be a single performance obligation, while the same products would be considered separate performance obligations if not so integrated.
In contracts where there are timing differences between when we transfer a promised good or service to the customer and when the customer pays for that good or service, we have determined that, our contracts do not include a significant financing component.
The following tables present the Company's revenues disaggregated by timing of revenue recognition:
The following tables present the Company's revenues disaggregated by region:
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Note 5 - Other Intangible Assets |
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| Notes to Financial Statements | |||
| Goodwill and Intangible Assets Disclosure [Text Block] |
In January 2021, the Company completed the acquisition of the VE Technology rights, which it has previously utilized the VE Technology through a licensing agreement with Endet Ltd. Orbital Gas Systems has the existing proprietary knowledge for the marketing, engineering and production of the VE Technology based solutions. The VE Technology, amortized over ten years, is the basis for a patented sampling system product line marketed by Orbital Gas Systems and utilized in many of its integrated solutions.
In 2020, the Company entered into an agreement to acquire the intellectual property rights and know-how associated with the VE Technology including patents for 1.5 million British pounds ("GBP"), or approximately $1.8 million. The completion of the acquisition was made upon the final payment towards this agreement. In June 2020, the parties to the agreement mutually agreed to extend the payments until January 15, 2021 in consideration of the financial consequences created by the COVID-19 pandemic in exchange for a technology fee of an additional 100,000 GBP. The Company paid the remaining 500,000 GBP in January 2021. The $1.9 million paid was recorded as an intangible asset upon making the final payment in January 2021 with $0.7 million paid in 2021 and $1.2 million reclassified from long-term deposits.
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Note 6 - Inventories |
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| Inventory Disclosure [Text Block] |
Inventories consist of raw materials, work-in-process and finished goods and are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method. At June 30, 2021 and December 31, 2020, accrued liabilities included $0.2 million and $0.1 million of accrued inventory payable, respectively. At June 30, 2021 and December 31, 2020, inventory by category is valued net of reserves and consists of:
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Note 7 - Investments |
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| Notes to Financial Statements | |||
| Investment [Text Block] |
As of June 30, 2021, the Company had a minority ownership in Virtual Power Systems ("VPS"). Prior to the third quarter of 2020, based on its equity ownership and that the Company maintains a board seat and participated in operational activities of VPS, the Company maintained significant influence to account for the investment as an equity-method investment. Under the equity method of accounting, results are not consolidated, but the Company records a proportionate percentage of the profit or loss of VPS as an addition to or a subtraction from the VPS investment asset balance. During the six months ended June 30, 2020, the Company recorded a $0.4 million loss on its equity method investment in VPS. The VPS investment basis at June 30, 2021 and December 31, 2020 was $1.1 million and $1.1 million, respectively, as reflected on the consolidated balance sheets. With the decrease in ownership percentage following a Q3 2020 equity raise by VPS and additional board seats placed, OEG no longer has sufficient influence to recognize the investment under the equity method. The investment is held at June 30, 2021 under the cost method of accounting for investments.
The Company made a purchase of a convertible note receivable for thousand from VPS in the six months ended June 30, 2020, which is reflected in investing cash flows on the consolidated statement of cash flows.
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Note 8 - Leases |
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| Lease Disclosure [Text Block] |
Consolidated total lease costs were $1.0 million for the three months ended June 30, 2021 and is included in cost of sales; selling, general and administrative expense; and other income (expense), on the condensed consolidated statement of operations.
Future minimum operating lease obligations at June 30, 2021 are as follows for the years ended December 31:
Total lease cost and other lease information is as follows:
Variable lease costs primarily include common area maintenance costs, real estate taxes and insurance costs passed through to the Company from lessors. Future minimum finance lease obligations are as follows:
Total financing lease costs are as follows:
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Note 9 - Stock-based Compensation and Expense |
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| Share-based Payment Arrangement [Text Block] |
The Company records its stock-based compensation expense on options issued in the past under its stock option plans and the Company also issues stock for services and royalties. The Company's current stock incentive award plan was approved in 2020 following the expiration of its previous stock incentive award plan in 2018. The Company did issue any stock options during the six months ended June 30, 2021 or 2020. A detailed description of the awards under these plans and the respective accounting treatment is included in the “Notes to the Consolidated Financial Statements” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC on March 30, 2021. For the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense of $8.1 million and $7 thousand, respectively.
Restricted Stock In March 2021, the Company granted 3 million restricted shares for employee compensation with an aggregate fair value of $16.4 million with a graded vesting schedule. One- of which were vested in April 2021, one- of which will vest in April 2022, and one- of which will vest in April 2023. The Company recorded $4.6 million and $6.6 million in compensation expense related to the partial vesting of these grants in the three and six months ended June 30, 2021, respectively, and total unrecognized share-based compensation for restricted stock was $9.8 million and will be recognized over the remaining vesting period.
Stock Appreciation Rights ("SARs") In addition to stock-based compensation settled in stock, the Company also has cash settled stock appreciation rights ("SARs") which were granted in June 2020 as described in the Company's Form 10-K filed March 30, 2021 and additional grant made in April 2021 as reflected in the table below. Accrued compensation for SARs at June 30, 2021 and December 31, 2020 were $3.3 million and $0.6 million, respectively and were recorded in accrued expenses within the Condensed Consolidated Balance Sheets. Vesting expense for the three and six months ended June 30, 2021 was $0.8 million and $2.7 million, respectively, compared with $27 thousand, and $27 thousand, respectively, for the three and six months ended June 30, 2020 and was recorded within selling, general and administrative expense within the Condensed Consolidated Statements of Operations.
The fair value of cash-settled SARs is revalued (mark-to-market) each reporting period using a binomial lattice valuation model based on the company’s period-end stock price. Expected volatility is based on the historical volatility of the company’s stock for the length of time corresponding to the expected term of the SARs. The risk-free interest rate is based on the U.S treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.
The following weighted-average assumptions were used in calculating the fair value of cash-settled SARs outstanding as of June 30, 2021 and December 31, 2020.
Changes to the company’s non-vested cash-settled SARs during the six months ended June 30, 2021, are as follows:
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Note 10 - Segment Reporting |
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| Segment Reporting Disclosure [Text Block] |
Operating segments are defined in accordance with ASC 280-10 as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The measurement basis of segment profit or loss is income (loss) from operations. Management has identified three operating segments based on the activities of the Company in accordance with ASC 280-10. These operating segments have been aggregated into reportable segments. The three reportable segments are Electric Power and Solar Infrastructure Services, Integrated Energy Infrastructure Solutions and Services, and Other.
The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, Eclipse Foundation Group based in Gonzales, Louisiana, and GTS based in Atlanta, GA. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries.
The Integrated Energy Infrastructure Solutions and Services segment is focused on the operations of Orbital Gas Systems Ltd. in the UK and Orbital Gas Systems, North America, Inc. which includes gas related test and measurement systems, including the GasPT.
The Other segment represents the remaining activities that are not included as part of the other reportable segments and represent primarily corporate activity. In 2019, the Company sold its domestic power and electromechanical businesses and reclassified the income of the former Power and Electromechanical segment to income from discontinued operations. The Company sold the remaining portions of the Power and Electromechanical segment in 2020.
The following information represents segment activity for the three months ended June 30, 2021:
(1) For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $0.9 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations. (2) Includes purchases of property, plant and equipment and other intangible assets.
The following information represents segment activity for the six months ended June 30, 2021:
(1) For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $1.1 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations. (2) Includes purchases of property, plant and equipment and other intangible assets.
The following information represents selected balance sheet items by segment as of June 30, 2021:
The following information represents segment activity for the three months ended June 30, 2020:
(1) For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $0.1 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations. (2) Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.
The following information represents segment activity for the six months ended June 30, 2020:
(1) For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $0.2 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations. (2) Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.
The following information represents selected balance sheet items by segment as of December 31, 2020:
The following represents revenue by country:
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Note 11 - Recent Accounting Pronouncements |
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| Notes to Financial Statements | |||
| Accounting Standards Update and Change in Accounting Principle [Text Block] |
There were no recent accounting pronouncements for which the Company determined would be material to its balance sheet or statement of operations. |
Note 12 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
The Company’s fair value hierarchy for its contingent consideration and convertible note payable as of June 30, 2021 and December 31, 2020 was as follows:
There were no transfers between Level 3 and Level 2 in the three months ended June 30, 2021 as determined at the end of the reporting period.
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Note 13 - Loss Per Common Share |
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| Earnings Per Share [Text Block] |
In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 260 (“FASB ASC 260”), “Earnings per Share,” Basic loss from continuing operations per share, basic income from discontinued operations per share and basic net income (loss) per share that is available to shareholders is computed by dividing the income or loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the respective loss available to common stockholders by the weighted average number of diluted shares outstanding during the period calculated using the treasury stock method. Due to the Company’s loss from continuing operations in the three and six months ended June 30, 2021 and June 30, 2020, the assumed exercise of stock options and the unvested restricted stock that would otherwise increase diluted shares using the treasury stock method would have had an antidilutive effect and therefore 0.2 million shares related to stock options outstanding at June 30, 2021 and 2 million shares of restricted stock were excluded from the computation of diluted net loss per share for the three and six months ended June 30, 2021 and 0.8 million shares related to stock options outstanding at June 30, 2020 were excluded for the three and six months ended June 30, 2020. Accordingly, diluted earnings (loss) per share for continuing operations, discontinued operations and net income is the same as basic earnings (loss) per share for continuing operations, discontinued operations and net income for the three and six months ended June 30, 2021 and 2020.
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Note 14 - Income Taxes |
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| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and foreign net deferred tax assets as it is not more likely than not that the Company will realize a benefit from these assets in a future period. In future periods, tax benefits and related deferred tax assets will be recognized when management concludes realization of such amounts is more likely than not.
Total net income tax benefit of $9.0 million and $8.9 million was recorded to the income tax provision from continuing operations for the three and six months ended June 30, 2021, respectively, resulting in an effective tax rate of 52.2% and 25.5%, respectively. The income tax benefit from continuing operations for the three and six months ended June 30, 2021 was as a result of the Company's purchase price allocation related to the April 2021 acquisition of GTS, the Company recorded a $9.0 million deferred tax liability. As a result, the Company recorded a $9.0 million tax benefit for a reduction in prior recorded valuation allowances. All of the Company’s domestic and foreign net deferred tax assets were reduced by a full valuation allowance.
Total net income tax benefit of $1.6 million and $3.2 million for the three and six months ended June 30, 2020 was allocated under ASC 740-20-45-7 to more than one financial statement component other than continuing operations. In the three months ended June 30, 2020, as a result of the Company's purchase price allocation related to the acquisition of Reach Construction, LLC, the Company recorded a $1.6 million deferred tax liability. As a result, the Company recorded a $1.6 million tax benefit for a reduction in prior recorded valuation allowances.
A net income tax benefit of $1.6 million and $3.2 million was recorded to the income tax provision from continuing operations for the three and six months ended June 30, 2020, respectively, resulting in an effective tax rate of 13.5% and 15.8%, respectively.
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Note 15 - Accumulated Other Comprehensive Loss |
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| Comprehensive Income (Loss) Note [Text Block] |
The components of accumulated other comprehensive loss are as follows:
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Note 16 - Notes Payable |
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| Debt Disclosure [Text Block] |
Notes payable is summarized as follows:
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Note 17 - Concentrations |
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| Concentration Risk Disclosure [Text Block] |
The Company's major product lines are energy infrastructure services including natural gas infrastructure solutions and services through Orbital Gas Systems; full-service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group; EPC services that support the development of renewable energy generation focused on utility scale solar construction through Orbital Solar Services; and diversified telecommunications services provided by GTS. The Company had the following revenue concentrations by customer greater than 10% of consolidated revenue:
There were no revenue concentrations by customer greater than 10% of consolidated revenue for the six months ended June 30, 2021 or 2020.
The Company had the following geographic revenue concentrations outside the U.S.A. greater than 10% of consolidated revenue:
The Company had the following gross trade accounts receivable concentrations by customer greater than 10% of gross trade accounts receivable:
The Company had the following geographic concentrations of gross trade accounts receivable outside of the U.S.A. greater than 10% of gross trade accounts receivable:
The Company had one supplier concentration of approximately 14% for the three months ended June 30, 2021 and one supplier concentration of approximately 18% in the three months ended June 30, 2020 in the Electric Power and Solar Infrastructure Services segment. The same supplier that was a concentration for the three months ended June 30, 2021 was also a supplier concentration in the six months ended June 30, 2021 in the amount of approximately 11%. There were no supplier concentrations in the six months ended June 30, 2020. |
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Note 18 - Other Equity Transactions |
6 Months Ended | ||
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Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Stockholders' Equity Note Disclosure [Text Block] |
S-3 registration The Company filed an S-3 registration statement on July 17, 2020 containing a prospectus that was effective in September 2020. The Company utilized this filing in January 2021 to issue common stock for $45 million before costs of $2.6 million for net proceeds of $42.4 million in two separate equity raises. The Company has used and plans to use the remaining funds for general corporate purposes, which may include operating expenses, working capital to improve and promote our commercially available products and service offerings, advance product and service offering candidates, future acquisitions or share repurchases, expand our market presence and commercialization, general capital expenditures and satisfaction of debt obligations. The Company filed a new S-3 shelf registration in January 2021, which, as amended, became effective in April 2021. With this filing, Orbital Energy Group may from time to time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million.
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Note 19 - Acquisitions |
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| Business Combination Disclosure [Text Block] |
Acquisition of Gibson Technical Services Effective April 13, 2021, the Company entered into a share purchase agreement to acquire Gibson Technical Services, an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), dated as of April 13, 2021, between Orbital Energy Group and the shareholders of GTS (the "Seller"). Orbital Energy Group paid $22 million and issued 5,929,267 shares of restricted common stock issued to the Seller ($16.9 million estimated fair value as of April 13, 2021) for a combined total of $38.9 million. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded $12.3 million of goodwill as part of this transaction and all of this goodwill is deductible for tax purposes. Acquisition-related expenses incurred during the six months ended June 30, 2021 were approximately $0.9 million before tax which were recognized within the Selling, general and administrative expense line of the Condensed Consolidated Statements of Operations.
The purchase consideration was as follows:
(in thousands)
The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.
* The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in the three months ended June 30, 2021.
The table below summarizes the unaudited condensed pro forma information of the results of operations of Orbital Energy Group, Inc. for the six months ended June 30, 2021 and 2020 as though the acquisition had been completed as of January 1, 2020.
Acquisition of Reach Construction Group, LLC Effective April 1, 2020, the Company entered into an equity purchase agreement to acquire 100% of the assets of Reach Construction Group, LLC (Renamed "Orbital Solar Services"), an, industry-leading solar construction company. Headquartered in Sanford, NC, Orbital Solar Services is an EPC company with expertise in the renewable energy industry. The acquisition was effectuated pursuant to the Equity Purchase Agreement, dated as of April 1, 2020, between Orbital Energy Group and the Seller. Orbital Energy Group issued 2,000,000 shares of restricted common stock issued to Brandon Martin ($1.2 million estimated fair value as of April 1, 2020) along with two seller notes for a combined total of $35 million (Adjusted to $6.5 million following preliminary working capital adjustment as of April 1, 2020) and an earn-out not in excess of $30 million ($0.7 million estimated fair value as of April 1, 2020.) The seller notes were subject to a $28.5 million preliminary working capital adjustment.
The purchase consideration was as follows:
(in thousands)
The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.
(in thousands)
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Note 20 - Commitments and Contingencies |
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Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Commitments and Contingencies Disclosure [Text Block] |
Off-Balance Sheet Arrangements
Performance and Payment Bonds and Parent Guarantees In the ordinary course of business, Orbital Energy Group and its subsidiaries are required by certain customers to provide performance and payment bonds for contractual commitments related to its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. Certain bonds are for open-ended contracts with multiple work orders so the value may increase as the work progresses and more work orders are started. The bonds will remain in place as the Company completes projects and resolves any disputed matters with the customers, vendors and subcontractors related to the bonded projects. As of June 30, 2021 the total amount of the outstanding performance and payment bonds was approximately $1.2 million.
Additionally, from time to time, we guarantee certain obligations and liabilities of our subsidiaries that may arise in connection with, among other things, contracts with customers, equipment lease obligations, and contractor licenses. These guarantees may cover all of the subsidiary’s unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. For example, with respect to customer contracts, a guarantee may cover a variety of obligations and liabilities arising during the ordinary course of the subsidiary’s business or operations, including, among other things, warranty and breach of contract claims, third-party and environmental liabilities arising from the subsidiary’s work and for which it is responsible, liquidated damages, or indemnity claims.
Contingent Liabilities Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.
Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Other than the reserve on the item described below, the Company currently has no such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. Except as otherwise stated below, none of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.’s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation. |
Note 21 - Subsequent Events |
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| Notes to Financial Statements | ||||||||||||
| Subsequent Events [Text Block] |
Exchange agreement to partially pay off note payable On July 20, 2021, the Company issued 248,509 shares of common stock to an institutional investor, and creditor of the Company in exchange for $1 million to decrease the outstanding balance of a $2.2 million loan originated in November 2020.
Share issuances in a registered offering On July 21, 2021, the Company issued 10,410,959 shares of common stock at a purchase price of $3.65 per share and $38 million in total before fees to institutional investors with a supplemental prospectus under the S-3 the Company filed in February 2021.
Paycheck Protection Loan Forgiveness On July 22, 2021, the Company was notified that the Paycheck Protection Program loan acquired as part of the GTS acquisition in the amount of $1.4 million was forgiven. Upon forgiveness, the Company's contingent receivable for the same amount was satisfied with no gain or loss incurred.
Acquisition On July 28, 2021, the Company’s telecommunication subsidiary, GTS, entered into a definitive share purchase agreement to acquire 100% of IMMCO, Inc. (“IMMCO”), and Atlanta-based privately-owned full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.
Subject to the terms and conditions set forth in the share purchase agreement, the base purchase price for 100% of the equity ownership of IMMCO is $20,000,000, with the consideration structured as follows:
The acquisition will immediately add revenues and earnings to GTS and to OEG. IMMCO will become a wholly-owned subsidiary of GTS, significantly expanding GTS’s product portfolio and services it can provide to its customers. The Company has not completed the initial purchase price allocation for this transaction as it is still in the preliminary stages of assessing the fair value of the underlying tangible and intangible assets.
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Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
| Accounting Policies [Abstract] | |
| New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of new accounting standards On January 1, 2021, the Company adopted ASU No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. There was not a material effect on the Company's financial statements due to the Company not having any current financial instruments that are affected by this new guidance.
On January 1, 2021, the Company adopted ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. ASU 2020-01 clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU 2020-01 are effective for the Company's 2021 fiscal year, including interim periods. The new guidance does not have a material impact on the Company's consolidated financial statements due to the Company currently not having any equity-method investments or any derivative instruments.
On January 1, 2021, the Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's 2021 fiscal year, including interim periods. The ASU does not have a material impact on the Company's consolidated financial statements.
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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Cash and Cash Equivalents from Balance Sheet to Cash Flow Statement [Table Text Block] |
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| Schedule of Intangible Assets and Goodwill [Table Text Block] |
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| Restructuring and Related Costs [Table Text Block] |
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Note 3 - Discontinued Operations and Sale of a Business (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disposal Groups, Including Discontinued Operations [Table Text Block] |
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Note 4 - Revenue From Contracts With Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block] |
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| Disaggregation of Revenue [Table Text Block] |
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Note 6 - Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventory, Current [Table Text Block] |
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Note 8 - Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee, Operating Lease, Liability, Maturity [Table Text Block] |
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| Lease, Cost and Other Lease Information [Table Text Block] |
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| Finance Lease, Liability, Fiscal Year Maturity [Table Text Block] |
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Note 9 - Stock-based Compensation and Expense (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] |
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| Share-based Payment Arrangement, Stock Appreciation Right, Activity [Table Text Block] |
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Note 10 - Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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| Revenue from External Customers by Geographic Areas [Table Text Block] |
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Note 12 - Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] |
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Note 13 - Loss Per Common Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Note 15 - Accumulated Other Comprehensive Loss (Tables) |
6 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||
| Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] |
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Note 16 - Notes Payable (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Debt [Table Text Block] |
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Note 17 - Concentrations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedules of Concentration of Risk, by Risk Factor [Table Text Block] |
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Note 19 - Acquisitions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Business Acquisitions, by Acquisition [Table Text Block] |
|
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| Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] |
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| Business Acquisition, Pro Forma Information [Table Text Block] |
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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
Jun. 30, 2020 |
||
|---|---|---|---|---|---|
| Cash and cash equivalents at beginning of period | $ 3,046 | $ 4,370 | $ 23,351 | ||
| Restricted cash at beginning of period (1) | [1] | 1,478 | 3,578 | 0 | |
| Cash, cash equivalents and restricted cash at beginning of period | 4,524 | 7,948 | 23,351 | ||
| Cash and cash equivalents at end of period | 9,626 | 3,046 | 4,370 | ||
| Restricted cash at end of period (1) | [1] | 1,180 | 1,478 | 3,578 | |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | $ 10,806 | $ 4,524 | $ 7,948 | ||
| |||||
Note 1 - Nature of Operations, Basis of Presentation and Company Conditions - Termination Benefit Liability (Details) $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2021
USD ($)
| |
| Balance | $ 400 |
| Employee Severance [Member] | |
| Balance | 371 |
| Severance payouts | (289) |
| Translation | 6 |
| Balance | 88 |
| Estimated total termination benefits paid and to be paid | $ 2,825 |
Note 3 - Discontinued Operations and Sale of a Business (Details Textual) - CUI Japan Operations [Member] - Discontinued Operations, Disposed of by Sale [Member] - USD ($) $ in Thousands |
6 Months Ended | |
|---|---|---|
Jun. 30, 2020 |
Sep. 30, 2020 |
|
| Disposal Group, Including Discontinued Operation, Consideration | $ 163 | |
| Cash Provided by (Used in) Operating Activities, Discontinued Operations | $ (1,900) | |
| Cash Provided by (Used in) Investing Activities, Discontinued Operations | $ 0 |
Note 3 - Discontinued Operations and Sale of a Business - Schedule of Discontinued Operations for Income Statement and Balance Sheet Disclosures (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Income tax expense (benefit) | $ 0 | $ 22 | $ 0 | $ (35) |
| Income from discontinued operations, net of income taxes | 0 | 573 | 0 | 144 |
| Power and Electromechanical Business [Member] | ||||
| Revenues | 0 | 3,911 | 0 | 5,944 |
| Cost of revenues | 0 | (3,261) | 0 | (5,247) |
| Selling, general and administrative expense | 0 | (420) | 0 | (805) |
| Other income | 0 | 365 | 0 | 217 |
| Pretax income of discontinued operations | 0 | 595 | 0 | 109 |
| Income tax expense (benefit) | 0 | 22 | 0 | (35) |
| Income from discontinued operations, net of income taxes | $ 0 | $ 573 | $ 0 | $ 144 |
Note 4 - Revenue From Contracts With Customers (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jan. 01, 2021 |
Jan. 01, 2020 |
|||||||
| Contract with Customer, Liability, Noncurrent | $ 103 | [1] | $ 162 | [1] | $ 103 | [1] | $ 162 | [1] | $ 186 | $ 192 | ||
| Transferred at Point in Time [Member] | ||||||||||||
| Percentage of Revenue From Goods and Services | 13.00% | 20.00% | 16.00% | 26.00% | ||||||||
| ||||||||||||
Note 4 - Revenue From Contracts With Customers - Contract Liabilities (Details) - USD ($) $ in Thousands |
6 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jan. 01, 2021 |
Dec. 31, 2020 |
Jan. 01, 2020 |
|||||||
| Total contract liabilities - beginning of period | [1] | $ 6,996 | $ 1,860 | ||||||||
| Contract additions - acquisition | 0 | 3,201 | |||||||||
| Other contract additions, net | 2,949 | 3,553 | |||||||||
| Revenue recognized | (2,608) | (1,741) | |||||||||
| Contract settlements | (3,141) | 0 | |||||||||
| Translation | 44 | (95) | |||||||||
| Total contract liabilities - end of period | 4,240 | 6,778 | |||||||||
| Current contract liabilities | 4,137 | 6,616 | $ 6,810 | ||||||||
| Contract with Customer, Liability, Noncurrent | $ 103 | [2] | $ 162 | [2] | $ 186 | $ 192 | |||||
| |||||||||||
Note 5 - Other Intangible Assets (Details Textual) |
1 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
|
Jan. 31, 2021
USD ($)
|
Jan. 31, 2021
GBP (£)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2020
GBP (£)
|
Dec. 31, 2020
USD ($)
|
|
| Payments to Acquire Intangible Assets | $ 695,000 | $ 5,000 | |||||
| Finite-Lived Intangible Assets, Net, Ending Balance | 29,392,000 | $ 13,697,000 | |||||
| VE Technology [Member] | |||||||
| Acquisition Agreement, Intangible Assets, Total Consideration | $ 1,800,000 | £ 1,500,000 | |||||
| Acquisition Agreement, Additional Fee for Payments Extension | $ 100,000 | ||||||
| Payments to Acquire Intangible Assets | £ | £ 500,000 | ||||||
| VE Technology [Member] | Intellectual Property [Member] | |||||||
| Payments to Acquire Intangible Assets | $ 700,000 | $ 1,200,000 | |||||
| Finite-Lived Intangible Assets, Net, Ending Balance | $ 1,900,000 | ||||||
Note 6 - Inventories (Details Textual) - USD ($) $ in Millions |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Accrued Inventory Payable | $ 0.2 | $ 0.1 |
Note 6 - Inventories - Inventory (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Finished goods | $ 246 | $ 255 |
| Raw materials | 415 | 217 |
| Work-in-process | 1,061 | 651 |
| Total inventories | $ 1,722 | $ 1,123 |
Note 7 - Investments (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Income (Loss) from Equity Method Investments, Total | $ 0 | $ (4,360) | $ 0 | $ (4,806) | |
| Equity Method Investments | $ 1,063 | 1,063 | $ 1,063 | ||
| Payments to Acquire Notes Receivable | $ (0) | 260 | |||
| Virtual Power Systems [Member] | |||||
| Income (Loss) from Equity Method Investments, Total | 400 | ||||
| Equity Method Investments | $ 1,100 | 1,100 | $ 1,100 | ||
| Payments to Acquire Notes Receivable | $ 200 | ||||
Note 8 - Leases (Details Textual) $ in Millions |
3 Months Ended |
|---|---|
|
Jun. 30, 2021
USD ($)
| |
| Selling, General and Administrative Expenses [Member] | |
| Operating Lease, Expense | $ 1 |
Note 8 - Leases - Future Minimum Operating Lease Obligations (Details) $ in Thousands |
Jun. 30, 2021
USD ($)
|
|---|---|
| 2021 (remaining period) | $ 2,287 |
| 2022 | 4,387 |
| 2023 | 3,308 |
| 2024 | 1,841 |
| 2025 | 1,171 |
| Thereafter | 2,434 |
| Interest portion | (2,052) |
| Operating Lease Obligations [Member] | |
| Total operating lease obligations | $ 13,376 |
Note 8 - Leases - Future Minimum Finance Lease Obligations (Details) $ in Thousands |
Jun. 30, 2021
USD ($)
|
|---|---|
| 2021 (remaining period) | $ 871 |
| 2022 | 1,742 |
| 2023 | 1,742 |
| 2024 | 528 |
| 2025 | 4 |
| Thereafter | 1 |
| Interest portion | (407) |
| Total financing lease obligations | $ 4,481 |
Note 9 - Stock-based Compensation and Expense - Weighted Average Assumptions (Details) - Stock Appreciation Rights (SARs) [Member] |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|
| Expected term of cash-settled SARs (in years) (Year) | 2 years 9 months 29 days | 3 years 5 months 1 day |
| Expected volatility factor | 193.97% | 210.56% |
| Risk-free interest rate | 0.46% | 0.17% |
Note 9 - Stock-based Compensation and Expense - Changes to Non-vested Cash-settled SARs (Details) - Stock Appreciation Rights (SARs) [Member] |
6 Months Ended | |||
|---|---|---|---|---|
|
Jun. 30, 2021
$ / shares
shares
| ||||
| Non-vested cash-settled SARs (in shares) | shares | 748 | |||
| Non-vested cash-settled SARs, fair value price per share (in dollars per share) | $ / shares | $ 2.12 | [1] | ||
| Granted (in shares) | shares | 3,771 | |||
| Granted, fair value price per share (in dollars per share) | $ / shares | $ 4.03 | [1] | ||
| Vested (in shares) | shares | (500) | |||
| Vested, fair value price per share (in dollars per share) | $ / shares | $ 4.06 | [1] | ||
| Non-vested cash-settled SARs (in shares) | shares | 4,019 | |||
| Non-vested cash-settled SARs, fair value price per share (in dollars per share) | $ / shares | $ 4.06 | [1] | ||
| ||||
Note 10 - Segment Reporting (Details Textual) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2021
USD ($)
|
Jun. 30, 2020
USD ($)
|
|||||||||||||
| Number of Reportable Segments | 3 | |||||||||||||||
| Depreciation, Depletion and Amortization, Total | $ 2,287 | [1] | $ 1,549 | [2] | $ 4,034 | [3] | $ 2,035 | [4] | ||||||||
| Energy Segment [Member] | Cost of Sales [Member] | ||||||||||||||||
| Depreciation, Depletion and Amortization, Total | $ 900 | $ 100 | $ 1,100 | $ 200 | ||||||||||||
| ||||||||||||||||
Note 10 - Segment Reporting - Segment Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
Apr. 01, 2020 |
|||||||||||||||||
| Revenues from external customers | $ 16,308 | $ 7,775 | $ 25,799 | $ 13,463 | ||||||||||||||||||
| Depreciation, Depletion and Amortization, Total | 2,287 | [1] | 1,549 | [2] | 4,034 | [3] | 2,035 | [4] | ||||||||||||||
| Interest expense | 1,096 | 125 | 1,832 | 136 | ||||||||||||||||||
| Loss from operations | (18,262) | (7,197) | (35,525) | (14,260) | ||||||||||||||||||
| Expenditures for long-lived assets | 1,755 | [5] | 114 | [6] | 5,394 | [5] | 1,396 | [6] | ||||||||||||||
| Segment assets | 128,114 | 128,114 | $ 66,045 | |||||||||||||||||||
| Goodwill | 19,275 | 19,275 | 7,006 | $ 7,000 | ||||||||||||||||||
| Other intangible assets, net | 35,780 | 35,780 | 13,697 | |||||||||||||||||||
| Electric Power and Solar Infrastructure Services Segment [Member] | ||||||||||||||||||||||
| Revenues from external customers | 11,519 | 4,028 | 17,080 | 4,427 | ||||||||||||||||||
| Depreciation, Depletion and Amortization, Total | 1,864 | [1] | 1,201 | [2] | 3,170 | [3] | 1,280 | [4] | ||||||||||||||
| Interest expense | 58 | 121 | 74 | 129 | ||||||||||||||||||
| Loss from operations | (13,714) | (3,015) | (23,304) | (5,073) | ||||||||||||||||||
| Expenditures for long-lived assets | 1,706 | [5] | 95 | [6] | 4,627 | [5] | 1,304 | [6] | ||||||||||||||
| Segment assets | 95,189 | 95,189 | 35,825 | |||||||||||||||||||
| Goodwill | 19,275 | 19,275 | 7,006 | |||||||||||||||||||
| Other intangible assets, net | 31,377 | 31,377 | 10,550 | |||||||||||||||||||
| Integrated Energy Infrastructure Solutions and Services Segment [Member] | ||||||||||||||||||||||
| Revenues from external customers | 4,789 | 3,747 | 8,719 | 9,036 | ||||||||||||||||||
| Depreciation, Depletion and Amortization, Total | 413 | [1] | 337 | [2] | 845 | [3] | 736 | [4] | ||||||||||||||
| Interest expense | 0 | 1 | 2 | 1 | ||||||||||||||||||
| Loss from operations | (1,141) | (1,621) | (2,896) | (3,464) | ||||||||||||||||||
| Expenditures for long-lived assets | 6 | [5] | 1 | [6] | 710 | [5] | 19 | [6] | ||||||||||||||
| Segment assets | 18,296 | 18,296 | 17,094 | |||||||||||||||||||
| Goodwill | 0 | 0 | 0 | |||||||||||||||||||
| Other intangible assets, net | 4,401 | 4,401 | 3,144 | |||||||||||||||||||
| Other Segments [Member] | ||||||||||||||||||||||
| Revenues from external customers | 0 | 0 | 0 | 0 | ||||||||||||||||||
| Depreciation, Depletion and Amortization, Total | 10 | [1] | 11 | [2] | 19 | [3] | 19 | [4] | ||||||||||||||
| Interest expense | 1,038 | 3 | 1,756 | 6 | ||||||||||||||||||
| Loss from operations | (3,407) | (2,561) | (9,325) | (5,723) | ||||||||||||||||||
| Expenditures for long-lived assets | 43 | [5] | $ 18 | [6] | 57 | [5] | $ 73 | [6] | ||||||||||||||
| Segment assets | 14,629 | 14,629 | 13,126 | |||||||||||||||||||
| Goodwill | 0 | 0 | 0 | |||||||||||||||||||
| Other intangible assets, net | $ 2 | $ 2 | $ 3 | |||||||||||||||||||
| ||||||||||||||||||||||
Note 10 - Segment Reporting - Revenue by Country (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Revenues from external customers | $ 16,308 | $ 7,775 | $ 25,799 | $ 13,463 |
| Revenues, percent | 100.00% | 100.00% | 100.00% | 100.00% |
| UNITED STATES | ||||
| Revenues from external customers | $ 12,398 | $ 5,575 | $ 19,411 | $ 8,817 |
| Revenues, percent | 76.00% | 72.00% | 75.00% | 66.00% |
| UNITED KINGDOM | ||||
| Revenues from external customers | $ 3,683 | $ 1,978 | $ 5,671 | $ 4,199 |
| Revenues, percent | 23.00% | 25.00% | 22.00% | 31.00% |
| All Others [Member] | ||||
| Revenues from external customers | $ 227 | $ 222 | $ 717 | $ 447 |
| Revenues, percent | 1.00% | 3.00% | 3.00% | 3.00% |
Note 12 - Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Contingent consideration | $ 720 | $ 720 |
| Total liabilities | 720 | 2,675 |
| Fair Value, Inputs, Level 1 [Member] | ||
| Contingent consideration | 0 | 0 |
| Total liabilities | 0 | 0 |
| Fair Value, Inputs, Level 2 [Member] | ||
| Contingent consideration | 0 | 0 |
| Total liabilities | 0 | 0 |
| Fair Value, Inputs, Level 3 [Member] | ||
| Contingent consideration | 720 | 720 |
| Total liabilities | $ 720 | 2,675 |
| Convertible Notes Payable [Member] | ||
| Convertible note payable | 1,955 | |
| Convertible Notes Payable [Member] | Fair Value, Inputs, Level 1 [Member] | ||
| Convertible note payable | 0 | |
| Convertible Notes Payable [Member] | Fair Value, Inputs, Level 2 [Member] | ||
| Convertible note payable | 0 | |
| Convertible Notes Payable [Member] | Fair Value, Inputs, Level 3 [Member] | ||
| Convertible note payable | $ 1,955 |
Note 12 - Fair Value Measurements - Reconciliation of Changes in Fair Value (Details) - Fair Value, Inputs, Level 3 [Member] - Investment in Convertible Note Receivable [Member] $ in Thousands |
6 Months Ended |
|---|---|
|
Jun. 30, 2021
USD ($)
| |
| Balance | $ 1,955 |
| Loss on extinguishment on amendment to remove convertible feature | 250 |
| Amortization of original issue discount | 40 |
| Accrued interest | 57 |
| Extinguishment of note | (2,302) |
| Balance | $ 0 |
Note 13 - Loss Per Common Share (Details Textual) - shares shares in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Share-based Payment Arrangement, Option [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 0.2 | 0.8 | 0.2 | 0.8 |
| Restricted Stock [Member] | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 2.0 | 2.0 | ||
Note 13 - Loss Per Common Share - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Loss from continuing operations, net of income taxes | $ (8,213) | $ (9,898) | $ (26,165) | $ (16,850) | ||
| Income from discontinued operations, net of income taxes | 0 | 573 | 0 | 144 | ||
| Net loss | $ (8,213) | $ (17,952) | $ (9,325) | $ (7,381) | $ (26,165) | $ (16,706) |
| Basic and diluted weighted average number of shares outstanding (in shares) | 51,838,830 | 30,424,896 | 48,221,943 | 29,422,813 | ||
| Loss from continuing operations per common share - basic and diluted (in dollars per share) | $ (0.16) | $ (0.33) | $ (0.54) | $ (0.57) | ||
| Income from discontinued operations - basic and diluted (in dollars per share) | 0 | 0.02 | 0 | 0 | ||
| Loss per common share - basic and diluted (in dollars per share) | $ (0.16) | $ (0.31) | $ (0.54) | $ (0.57) | ||
Note 15 - Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Foreign currency translation adjustment | $ (4,420) | $ (4,406) |
| Accumulated other comprehensive loss | $ (4,420) | $ (4,406) |
Note 16 - Notes Payable (Details Textual) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Oct. 31, 2021 |
May 11, 2021 |
Mar. 23, 2021 |
Mar. 03, 2021 |
Nov. 13, 2020 |
Oct. 30, 2020 |
May 02, 2020 |
Feb. 28, 2021 |
Jan. 31, 2021 |
Jul. 30, 2020 |
Mar. 31, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|||||||||||||
| Long-term Debt, Total | $ 33,365,000 | $ 17,302,000 | |||||||||||||||||||||||||
| Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||
| Gain (Loss) on Extinguishment of Debt, Total | $ 1,677,000 | $ (0) | |||||||||||||||||||||||||
| Long-term Debt, Gross | 35,007,000 | $ 18,206,000 | |||||||||||||||||||||||||
| Seller Financed Notes Payable, Two [Member] | |||||||||||||||||||||||||||
| Long-term Debt, Total | 1,500,000 | ||||||||||||||||||||||||||
| Unsecured Debt [Member] | Streeterville Capital, LLC [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 10,700,000 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 18 months | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 1,000,000 | ||||||||||||||||||||||||||
| Debt Instrument, Unamortized Discount, Total | $ 1,000,000.0 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Effective Percentage | 19.60% | ||||||||||||||||||||||||||
| Long-term Debt, Gross | 10,200,000 | ||||||||||||||||||||||||||
| Financing Note [Member] | |||||||||||||||||||||||||||
| Long-term Debt, Gross | [1] | 100,000 | 1,163,000 | ||||||||||||||||||||||||
| Paycheck Protection Program CARES Act [Member] | |||||||||||||||||||||||||||
| Proceeds from Issuance of Long-term Debt, Total | $ 1,900,000 | ||||||||||||||||||||||||||
| Debt Instrument, Decrease, Forgiveness | 1,900,000 | ||||||||||||||||||||||||||
| Long-term Debt, Gross | [2] | 1,424,000 | 1,924,000 | ||||||||||||||||||||||||
| Paycheck Protection Program CARES Act [Member] | Gibson Technical Services, Inc. [Member] | |||||||||||||||||||||||||||
| Long-term Debt, Total | $ 1,400,000 | ||||||||||||||||||||||||||
| Seller Financed Notes Payable, One [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 18 months | ||||||||||||||||||||||||||
| Long-term Debt, Total | $ 5,000,000 | ||||||||||||||||||||||||||
| Repayments of Debt | $ 1,000,000 | ||||||||||||||||||||||||||
| Seller Financed Notes Payable, One [Member] | Forecast [Member] | |||||||||||||||||||||||||||
| Repayments of Debt | $ 3,000,000 | $ 1,000,000 | |||||||||||||||||||||||||
| Seller Financed Notes Payable, Two [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 36 months | ||||||||||||||||||||||||||
| Vehicle and Equipment loans [Member] | |||||||||||||||||||||||||||
| Long-term Debt, Gross | [3] | $ 313,000 | 195,000 | ||||||||||||||||||||||||
| Vehicle and Equipment loans [Member] | Minimum [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 5.74% | ||||||||||||||||||||||||||
| Vehicle and Equipment loans [Member] | Maximum [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 8.99% | ||||||||||||||||||||||||||
| Non-Recourse Payable Agreement [Member] | |||||||||||||||||||||||||||
| Long-term Debt, Gross | [4] | $ 0 | 2,699,000 | ||||||||||||||||||||||||
| The Convertible Notes Payable [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 2,200,000 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 18 months | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 250,000 | ||||||||||||||||||||||||||
| Long-term Debt, Total | 2,200,000 | ||||||||||||||||||||||||||
| Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | ||||||||||||||||||||||||||
| Proceeds from Convertible Debt | $ 2,200,000 | ||||||||||||||||||||||||||
| Debt Instrument, Unamortized Discount, Total | $ 200,000 | ||||||||||||||||||||||||||
| Debt Instrument, Redemption Price, Percentage | 115.00% | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Effective Percentage | 29.00% | ||||||||||||||||||||||||||
| Gain (Loss) on Extinguishment of Debt, Total | $ (250,000) | ||||||||||||||||||||||||||
| Long-term Debt, Gross | 2,400,000 | ||||||||||||||||||||||||||
| The Investor Note [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 10,700,000 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 18 months | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 1,000,000 | ||||||||||||||||||||||||||
| Debt Instrument, Unamortized Discount, Total | 1,000,000.0 | ||||||||||||||||||||||||||
| Long-term Debt, Gross | $ 10,000,000.0 | 24,190,000 | [5] | 2,245,000 | [5] | ||||||||||||||||||||||
| Conditional Settlement Agreement [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 0.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 3 years | ||||||||||||||||||||||||||
| Long-term Debt, Total | $ 3,500,000 | ||||||||||||||||||||||||||
| Second Conditional Settlement Agreement [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 5 months | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 1,400,000 | ||||||||||||||||||||||||||
| First Insurance Funding [Member] | Financing Note [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 1,400,000 | $ 100,000 | |||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 3.35% | 3.35% | |||||||||||||||||||||||||
| Debt Instrument, Term (Month) | 9 months | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 159,000 | ||||||||||||||||||||||||||
| First Insurance Funding [Member] | Second Financing Note [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 400,000 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 4.35% | ||||||||||||||||||||||||||
| Amended C6 Capital Agreement [Member] | Non-Recourse Payable Agreement [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Face Amount | $ 3,500,000 | ||||||||||||||||||||||||||
| Debt Instrument, Interest Rate, Stated Percentage | 0.00% | ||||||||||||||||||||||||||
| Debt Instrument, Periodic Payment, Total | $ 54,000 | $ 116,000 | |||||||||||||||||||||||||
| Amended C6 Capital Agreement [Member] | Future Revenue Payable [Member] | |||||||||||||||||||||||||||
| Debt Instrument, Effective Interest Rate for Discount Amortization | 117.00% | ||||||||||||||||||||||||||
| |||||||||||||||||||||||||||
Note 16 - Notes Payable - Summary of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2021 |
May 11, 2021 |
Dec. 31, 2020 |
Apr. 01, 2020 |
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Long-term Debt, gross | $ 35,007 | $ 18,206 | ||||||||||||||||||
| Unamortized prepaid financing fees | (1,642) | (904) | ||||||||||||||||||
| Total long-term debt | 33,365 | 17,302 | ||||||||||||||||||
| Less: notes payable, current | (23,956) | (12,246) | ||||||||||||||||||
| Notes payable, less current portion | 9,409 | 5,056 | ||||||||||||||||||
| Financing Note [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [1] | 100 | 1,163 | |||||||||||||||||
| Paycheck Protection Program CARES Act [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [2] | 1,424 | 1,924 | |||||||||||||||||
| Seller Financed Notes Payable [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [3] | 5,480 | 6,480 | |||||||||||||||||
| Total long-term debt | $ 6,500 | |||||||||||||||||||
| Vehicle and Equipment loans [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [4] | 313 | 195 | |||||||||||||||||
| Non-Recourse Payable Agreement [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [5] | 0 | 2,699 | |||||||||||||||||
| The Investor Note [Member] | ||||||||||||||||||||
| Long-term Debt, gross | 24,190 | [6] | $ 10,000 | 2,245 | [6] | |||||||||||||||
| Conditional Settlement Note Payable [Member] | ||||||||||||||||||||
| Long-term Debt, gross | [7] | $ 3,500 | $ 3,500 | |||||||||||||||||
| ||||||||||||||||||||
Note 17 - Concentrations (Details Textual) - Supplier Concentration Risk [Member] - Cost of Goods and Service Benchmark [Member] |
3 Months Ended | 6 Months Ended | |
|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
|
| Number of Supplier | 1 | 1 | 1 |
| One Supplier [Member] | |||
| Concentration Risk, Percentage | 14.00% | 18.00% | 11.00% |
Note 17 - Concentrations - Concentration Risk (Details) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member] | |||||
| Concentration risk, percentage | 11.00% | ||||
| Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member] | |||||
| Concentration risk, percentage | 14.00% | ||||
| Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member] | |||||
| Concentration risk, percentage | 14.00% | ||||
| Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Four [Member] | |||||
| Concentration risk, percentage | 10.00% | ||||
| Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customers [Member] | |||||
| Concentration risk, percentage | 11.00% | 38.00% | |||
| Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Five [Member] | |||||
| Concentration risk, percentage | 27.00% | ||||
| Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Six [Member] | |||||
| Concentration risk, percentage | 14.00% | 19.00% | |||
| Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Seven [Member] | |||||
| Concentration risk, percentage | 12.00% | ||||
| Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Eight [Member] | |||||
| Concentration risk, percentage | 11.00% | ||||
| Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customers [Member] | |||||
| Concentration risk, percentage | 41.00% | 42.00% | |||
| Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED KINGDOM | |||||
| Concentration risk, percentage | 23.00% | 25.00% | 22.00% | 31.00% | |
| Geographic Concentration Risk [Member] | Accounts Receivable [Member] | UNITED KINGDOM | |||||
| Concentration risk, percentage | 14.00% | 21.00% | |||
Note 18 - Other Equity Transactions (Details Textual) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | ||
|---|---|---|---|---|
Jan. 31, 2021 |
Mar. 31, 2021 |
Apr. 30, 2021 |
Feb. 28, 2021 |
|
| Stock Issued During Period, Value, New Issues | $ 45,000 | $ 42,376 | ||
| Payments of Stock Issuance Costs | 2,600 | |||
| Proceeds from Issuance of Common Stock | $ 42,400 | |||
| Sale of Equity, Registration, Maximum Value | $ 150,000 | $ 150,000 |
Note 19 - Acquisitions (Details Textual) - USD ($) $ in Thousands |
6 Months Ended | |||
|---|---|---|---|---|
Apr. 13, 2021 |
Apr. 01, 2020 |
Jun. 30, 2021 |
Dec. 31, 2020 |
|
| Goodwill, Ending Balance | $ 7,000 | $ 19,275 | $ 7,006 | |
| Long-term Debt, Total | 33,365 | 17,302 | ||
| Business Combination, Contingent Consideration, Liability, Total | 720 | $ 720 | ||
| Seller Financed Notes Payable [Member] | ||||
| Long-term Debt Issued for Business Acquisition, Subject to Preliminary Working Capital Adjustment | 35,000 | |||
| Long-term Debt, Total | 6,500 | |||
| Gibson Technical Services, Inc. [Member] | ||||
| Payments to Acquire Businesses, Gross | $ 22,000 | |||
| Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 5,929,267 | |||
| Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 16,932 | |||
| Business Combination, Consideration Transferred, Total | 38,932 | |||
| Goodwill, Ending Balance | $ 12,269 | |||
| Business Combination, Acquisition Related Costs | $ 900 | |||
| Reach Construction Group, LLC [Member] | ||||
| Payments to Acquire Businesses, Gross | $ 3,000 | |||
| Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 2,000,000 | |||
| Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 1,224 | |||
| Business Combination, Consideration Transferred, Total | 11,424 | |||
| Goodwill, Ending Balance | $ 7,006 | |||
| Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||
| Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 30,000 | |||
| Business Combination, Contingent Consideration, Liability, Total | 700 | |||
| Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred | $ 28,500 |
Note 19 - Acquisitions - Purchase Consideration (Details) - USD ($) $ in Thousands |
Apr. 13, 2021 |
Apr. 01, 2020 |
|---|---|---|
| Reach Construction Group, LLC [Member] | ||
| Cash payment | $ 3,000 | |
| Orbital Energy common stock issued - 5,929,267 restricted shares | 1,224 | |
| Total | 11,424 | |
| Reach Construction Group, LLC [Member] | Contingent Consideration [Member] | ||
| Liabilities incurred | 720 | |
| Reach Construction Group, LLC [Member] | The 18 Month Seller Note [Member] | ||
| Liabilities incurred | 5,000 | |
| Reach Construction Group, LLC [Member] | The 3 Year Seller Note [Member] | ||
| Liabilities incurred | $ 1,480 | |
| Gibson Technical Services, Inc. [Member] | ||
| Cash payment | $ 22,000 | |
| Orbital Energy common stock issued - 5,929,267 restricted shares | 16,932 | |
| Total | $ 38,932 |
Note 19 - Acquisitions - Purchase Consideration (Details) (Parentheticals) - shares |
Apr. 13, 2021 |
Apr. 01, 2020 |
|---|---|---|
| Reach Construction Group, LLC [Member] | ||
| Orbital Energy common stock issued - restricted shares (in shares) | 2,000,000 | |
| Gibson Technical Services, Inc. [Member] | ||
| Orbital Energy common stock issued - restricted shares (in shares) | 5,929,267 |
Note 19 - Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands |
Apr. 13, 2021 |
Apr. 01, 2020 |
Jun. 30, 2021 |
Dec. 31, 2020 |
||
|---|---|---|---|---|---|---|
| Goodwill, Ending Balance | $ 7,000 | $ 19,275 | $ 7,006 | |||
| Gibson Technical Services, Inc. [Member] | ||||||
| Business Combination, Consideration Transferred, Total | $ 38,932 | |||||
| Cash and cash equivalents | 610 | |||||
| Trade accounts receivable | 7,871 | |||||
| Contract assets | 1,686 | |||||
| Contingent receivable | 1,424 | |||||
| Prepaid expenses and other current assets | 408 | |||||
| Property and equipment | 3,795 | |||||
| Right of use assets - Operating leases | 860 | |||||
| Goodwill, Ending Balance | 12,269 | |||||
| Other long-term assets | 123 | |||||
| Deferred tax liability | [1] | (8,978) | ||||
| Liabilities assumed | (3,984) | |||||
| Purchase price allocation | 38,932 | |||||
| Deferred tax liability | [1] | (8,978) | ||||
| Gibson Technical Services, Inc. [Member] | Indefinite Trade Names [Member] | ||||||
| Intangible, trade name | 6,388 | |||||
| Gibson Technical Services, Inc. [Member] | Customer Relationships [Member] | ||||||
| Intangible | 16,075 | |||||
| Gibson Technical Services, Inc. [Member] | Noncompete Agreements [Member] | ||||||
| Intangible | $ 385 | |||||
| Reach Construction Group, LLC [Member] | ||||||
| Business Combination, Consideration Transferred, Total | 11,424 | |||||
| Cash and cash equivalents | 19 | |||||
| Trade accounts receivable | 6,972 | |||||
| Contract assets | 3,299 | |||||
| Prepaid expenses and other current assets | 427 | |||||
| Property and equipment | 382 | |||||
| Right of use assets - Operating leases | 890 | |||||
| Goodwill, Ending Balance | 7,006 | |||||
| Deferred tax liability | [1] | (1,570) | ||||
| Deferred tax liability | [1] | (1,570) | ||||
| Liabilities assumed | (19,738) | |||||
| Purchase price allocation | 11,424 | |||||
| Reach Construction Group, LLC [Member] | Customer Relationships [Member] | ||||||
| Intangible | 8,647 | |||||
| Reach Construction Group, LLC [Member] | Trade Names [Member] | ||||||
| Intangible | 1,878 | |||||
| Reach Construction Group, LLC [Member] | Noncompete Agreements [Member] | ||||||
| Intangible | $ 3,212 | |||||
| ||||||
Note 19 - Acquisitions - Pro Forma Information (Details) - Gibson Technical Services, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|||
| Revenue since April 13, 2021 acquisition date | $ 6,075 | |||
| Income from continuing operations, net of income taxes since April 13, 2021 acquisition date | [1] | 9,540 | ||
| Gross revenue | 34,846 | $ 32,953 | ||
| Loss from continuing operations, net of income taxes | $ (27,749) | $ (17,575) | ||
| Loss from continuing operations per common share - basic and diluted (in dollars per share) | $ (0.53) | $ (0.50) | ||
| ||||
Note 20 - Commitments and Contingencies (Details Textual) $ in Millions |
Jun. 30, 2021
USD ($)
|
|---|---|
| Performance and Payment Bonds Outstanding Amount | $ 1.2 |
Note 21 - Subsequent Events (Details Textual) - USD ($) |
1 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jul. 28, 2021 |
Jul. 22, 2021 |
Jul. 21, 2021 |
Jul. 20, 2021 |
Jan. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
|
| Long-term Debt, Total | $ 33,365,000 | $ 17,302,000 | |||||
| Proceeds from Issuance of Common Stock | $ 42,400,000 | ||||||
| The Convertible Notes Payable [Member] | |||||||
| Long-term Debt, Total | $ 2,200,000 | ||||||
| Subsequent Event [Member] | IMMCO, Inc. [Member] | |||||||
| Shares Issued, Price Per Share (in dollars per share) | $ 4.575 | ||||||
| Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | ||||||
| Business Combination, Consideration Transferred, Total | $ 20,000,000 | ||||||
| Payments to Acquire Businesses, Gross | $ 16,000,000.0 | ||||||
| Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 874,317 | ||||||
| Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 4,000,000 | ||||||
| Payments to Acquire Businesses, Additional Amount | $ 1,100,000 | ||||||
| Subsequent Event [Member] | Registered Offering [Member] | |||||||
| Stock Issued During Period, Shares, New Issues (in shares) | 10,410,959 | ||||||
| Shares Issued, Price Per Share (in dollars per share) | $ 3.65 | ||||||
| Proceeds from Issuance of Common Stock | $ 38,000,000 | ||||||
| Subsequent Event [Member] | Paycheck Protection Program Loan Acquired as Part of GTS Acquisition [Member] | |||||||
| Debt Instrument, Decrease, Forgiveness | $ 1,400,000 | ||||||
| Exchange Agreement to Partially Pay Off Note Payable [Member] | Subsequent Event [Member] | |||||||
| Debt Conversion, Converted Instrument, Shares Issued (in shares) | 248,509 | ||||||
| Debt Conversion, Original Debt, Amount | $ 1,000,000 |