Variable Interest Entity

3 Months Ended

Apr. 02, 2023

Condensed Financial Information Disclosure [Abstract]

Oxbow Realty was established for the purpose of holding real estate and facilitating real estate transactions. This included facilitating the purchase of the land and building of our primary operating location in Bloomington, Minnesota with proceeds from a bank loan from Citi (see Note 6 – Debt) and managing the leaseback of the land and building to us (see Note 12 – Related Party Transactions). We determined that Oxbow Realty meets the definition of a VIE under FASB Topic 810, Consolidation, because it lacks sufficient equity to finance its activities. Furthermore, we are the primary beneficiary of Oxbow Realty as we have the power to direct operating and maintenance decisions of our Bloomington, Minnesota facility during the lease term, which would most significantly affect the VIE’s economic performance. As the primary beneficiary, we consolidate the assets, liabilities and results of operations of Oxbow Realty, eliminate any transactions between us and Oxbow Realty, and record a non-controlling interest for the economic interest in Oxbow Realty not owned by us because the owners of our common stock do not legally have rights or obligations to those profits or losses. In addition, the assets of Oxbow Realty can only be used to settle its liabilities, and the creditors of Oxbow Realty do not have recourse to the general credit of SkyWater.

The following table shows the carrying amounts of assets and liabilities of Oxbow Realty that are consolidated by us as of April 2, 2023 and January 1, 2023. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation.


	April 2, 2023		January 1, 2023
Cash and cash equivalents	$	40	$	16
Prepaid expenses	3,315		860
Finance receivable	37,690		37,652
Other assets	256		256
Total assets	$	41,301	$	38,784
Accounts payable	$	1,655	$	117
Accrued expenses	2,321		1,581
Debt	36,340		36,778
Total liabilities	$	40,316	$	38,476

The following table shows the revenue and expenses of Oxbow Realty that are consolidated by us for the three months ended April 2, 2023 and April 3, 2022. We have included these amounts, net of eliminations, in the corresponding tables in the notes to our condensed consolidated financial statements.


	Three Months Ended
	April 2, 2023		Three Months Ended	April 3, 2022
Revenue	$	1,318		$	1,260
General and administrative expenses	293			77
Interest expense	318			324
Total expenses	611			401
Net income	$	707		$	859