Variable Interest Entity

9 Months Ended

Oct. 01, 2023

Condensed Financial Information Disclosure [Abstract]

Oxbow Realty was established by Oxbow for the purpose of holding real estate and facilitating real estate transactions. This included the purchase of the land and building of SkyWater's Minnesota facility with proceeds from a bank loan (see Note 6 – Debt) and managing the leaseback of the land and building to SkyWater (see Note 12 – Related Party Transactions). Management determined that Oxbow Realty meets the definition of a VIE under ASC Topic 810, "Consolidations" ("Topic 810"), because it lacks sufficient equity to finance its activities. Furthermore, the Company is the primary beneficiary of Oxbow Realty as it has the power to direct operating and maintenance decisions of the Minnesota facility during the lease term, which would most significantly affect the VIE's economic performance. As the primary beneficiary, the Company consolidates the assets, liabilities and results of operations of Oxbow Realty pursuant to Topic 810, eliminating any transactions between the Company and Oxbow Realty, and recording a noncontrolling interest for the economic interest in Oxbow Realty attributable to the Company because the owners of SkyWater's common stock do not legally have rights or obligations to the profits or losses of Oxbow Realty. 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 the Company as of October 1, 2023 and January 1, 2023. The assets and liabilities are presented prior to consolidation, and thus do not reflect the elimination of intercompany balances.


	October 1, 2023		January 1, 2023
Cash and cash equivalents	$	54	$	16
Accounts receivable	7,099		—
Prepaid expenses	21		860
Finance receivable	40,596		37,652
Other assets	746		256
Total assets	$	48,516	$	38,784
Accounts payable	$	5,944	$	117
Accrued expenses	296		1,581
Contract liabilities	1,334		—
Debt	35,990		36,778
Total liabilities	$	43,564	$	38,476

The following table shows the revenue and expenses of Oxbow Realty for the three- and nine-month periods ended October 1, 2023 and October 2, 2022. These results of Oxbow Realty are presented prior to consolidation, and thus do not reflect the elimination of intercompany transactions.


	Three-Month Period Ended				Nine-Month Period Ended
	October 1, 2023		October 2, 2022		October 1, 2023		October 2, 2022
Revenue	$	1,462	$	1,264	$	5,411	$	3,786
General and administrative expenses	183		492		728		671
Interest expense	313		332		944		991
Total expenses	496		824		1,672		1,662
Net income	$	966	$	440	$	3,739	$	2,124