Financial Data and Key Metrics Changes - The company achieved record revenues of $62.6 million in Q3 2023, representing a year-over-year growth of 68.1% from Q3 2022 [6][26] - Adjusted EBITDA was positive at $4.9 million, a year-over-year increase of $6.4 million [6][39] - The net loss improved to $6.3 million, a $4.1 million year-over-year improvement [6][39] - Free cash flow was negative $5.9 million, showing a year-over-year improvement of $6.7 million [6][39] - Cash from operations was negative $3.3 million, an improvement of $8 million year-over-year [14] Business Line Data and Key Metrics Changes - Revenue from commercial customers grew by 90.2% year-over-year, civil customer revenues increased by 78.5%, and national security revenues grew by 30.5% year-over-year through September [27] - The company reported organic growth of 31.8% when excluding revenue from Space NV [40] Market Data and Key Metrics Changes - 21.2% of revenues were derived from national security for the year-to-date period through September 30, 2023 [21] - The U.S. Space Force budget request for fiscal year 2024 is $30 billion, a 15% increase from the previous year [20] Company Strategy and Development Direction - The company aims to balance top-line growth with bottom-line profitability, avoiding growth at any cost [17][75] - Redwire is focusing on selective bidding to maintain margins and profitability [62] - The company is well-positioned to capitalize on growth in the national security market due to current geopolitical dynamics [15][32] Management's Comments on Operating Environment and Future Outlook - Management noted that the commercial space market faces near-term headwinds due to volatility in capital markets, but national security growth is expected to offset this trend [8][32] - The company reaffirmed its full-year guidance range of $220 million to $250 million, indicating a 46% year-over-year growth at the midpoint [43] Other Important Information - The contracted backlog increased by 59.5% year-over-year to $253.4 million as of Q3 2023 [34] - The company has identified approximately $4.5 billion in opportunities, with $714 million in proposals submitted year-to-date [34] Q&A Session Summary Question: Can you provide more detail on the bid pipeline and any expected awards? - Management acknowledged that while they are always bidding and losing, they are also winning and have increased their bid tempo, which is crucial for growth [53] Question: What factors could lead to a spike in revenue in Q4? - The timing of awards is key, as many customers do not focus on fiscal year-end dynamics, which could shift revenue expectations [56] Question: How is the company managing CapEx and investments? - Management emphasized the importance of balancing investments with profitability, ensuring that CapEx supports growth without compromising cash flow [75] Question: What is the outlook for commercial LEO destinations? - The company feels confident in its position, as it continues to generate revenue from services to both government and commercial space stations [59] Question: How has the pricing process changed in the last 12 to 18 months? - The company has become more disciplined in its pricing strategy, focusing on profitability rather than growth at any cost [62][102]

Revenue Growth - Revenues increased 64% to $60.1 million for Q2 2023 compared to $36.7 million in Q2 2022, driven by $14.2 million from the Space NV Acquisition[171] - Revenues increased by $48.1 million, or 69%, to $117.7 million for the six months ended June 30, 2023, compared to $69.6 million in the same period of 2022, driven by the Space NV Acquisition and growth in deployables and engineering services[188] Financial Performance - Net loss decreased 93% to $5.5 million in Q2 2023 from $77.0 million in Q2 2022[171] - Net income (loss) attributable to Redwire Corporation was a loss of $12.7 million for the six months ended June 30, 2023, compared to a loss of $94.3 million in the same period of 2022, reflecting an improvement of $81.6 million[202] - Adjusted EBITDA for the six months ended June 30, 2023, was $8.7 million, compared to a loss of $8.7 million in the same period of 2022, indicating a significant operational improvement[202] Cost Management - Gross margin improved to 26% in Q2 2023 from 19% in Q2 2022, reflecting a $8.9 million increase[176] - Selling, general and administrative expenses as a percentage of revenues decreased to 29% in Q2 2023 from 48% in Q2 2022[178] - Selling, general and administrative (SG&A) expenses decreased by $4.8 million, or 12%, to $33.7 million, representing 29% of revenues in 2023, down from 55% in 2022, due to reduced share-based compensation and legal expenses[191] - Gross margin improved by $18.0 million, or 148%, reaching $30.1 million, with a gross margin percentage of 26% for the six months ended June 30, 2023, compared to 17% in 2022, attributed to cost reduction activities and a higher proportion of fixed-price contracts[190] Backlog and Contracts - Contracted backlog rose to $272.8 million as of June 30, 2023, up from $162.1 million a year earlier[171] - The contracted backlog as of June 30, 2023, was $272.8 million, down from $313.1 million as of December 31, 2022[213] - Organic backlog at the end of June 30, 2023, was $154.8 million, a decrease from $184.9 million at the end of December 31, 2022[213] - The book-to-bill ratio for the three months ended June 30, 2023, was 0.76, a significant decrease from 1.68 for the same period in 2022[209] - For the last twelve months (LTM) ended June 30, 2023, the book-to-bill ratio improved to 1.49, compared to 1.15 for the LTM ended June 30, 2022[210] - The company expects all amounts reflected in contracted backlog to ultimately be fully funded despite potential terminations or cancellations[216] Expenses and Liabilities - Interest expense increased to $2.7 million in Q2 2023 from $1.7 million in Q2 2022 due to rising variable interest rates[182] - Interest expense, net increased by $2.2 million, or 70%, to $5.3 million for the six months ended June 30, 2023, primarily due to unfavorable changes in variable interest rates[195] - Other (income) expense, net decreased by $14.5 million, or 94%, primarily due to changes in the fair value of the private warrant liability[183] - Other (income) expense, net decreased by $15.8 million, or 110%, for the six months ended June 30, 2023, primarily due to a loss from the increase in the fair value of the Company's private warrant liability[196] - Impairment expense decreased by $80.5 million, or 100%, with no impairment charge recognized in Q2 2023[180] - Impairment expense decreased by $80.5 million, or 100%, with no impairment charges recognized in the first half of 2023, compared to an $80.5 million charge in the same period of 2022[193] Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2023, were $11.2 million, compared to $10.9 million at the end of June 30, 2022[224] - Net cash used in operating activities for the six months ended June 30, 2023, was $(11.2) million, an improvement from $(15.6) million in the same period in 2022[224] - The company had $25.0 million in available borrowings from existing credit facilities as of June 30, 2023[217] - The increase in cash used for working capital was primarily driven by increases in contract assets of $11.9 million and deferred revenue of $4.0 million[225] Taxation - The effective tax rate was relatively stable at 1.5% for Q2 2023 compared to 2.4% for Q2 2022[184] Research and Development - Research and development expenses remained consistent compared to the same period in 2022[181] - Research and development expenses decreased by $1.0 million, or 28%, to $2.5 million for the six months ended June 30, 2023, as resources were redirected to projects aligned with market needs[194]

204 251 254 Organic contracted backlog change excludes backlog activity from acquisitions for the first four full quarters since the entities' acquisition date. Contracted backlog activity for the first four full quarters since the entities' acquisition date is included in acquisitionrelated contracted backlog change. After the completion of four fiscal quarters, acquired entities are treated as organic for current and comparable historical periods. We view book-to-bill as an indicator of future revenue gro ...

Financial Data and Key Metrics Changes - The company achieved record revenue of $60.1 million in Q2 2023, a 63.6% increase year-over-year from $57.6 million in Q2 2022 [7][23] - Positive cash from operations was reported at $2.8 million, marking a $7 million improvement year-over-year [8][48] - Adjusted EBITDA reached $4.4 million, an increase of $8.4 million compared to Q2 2022 [23][42] - The net loss improved by $71.6 million year-over-year to $5.5 million in Q2 2023 [17][23] Business Line Data and Key Metrics Changes - The company reported a 103.6% year-over-year growth in commercial customer revenues for the first half of 2023 [25] - National Security revenues grew by 43.9% year-over-year in the first half of 2023 [26] - The gross profit increased from $7 million to $15.9 million, reflecting a 2.3 times growth year-over-year [27] Market Data and Key Metrics Changes - The company has a healthy pipeline with $3.7 billion of identified opportunities, including $512 million in proposals currently under review [20][72] - The contracted backlog increased by 68.3% year-over-year to $272.8 million at the end of Q2 2023 [45] Company Strategy and Development Direction - The company is focused on developing lunar infrastructure solutions as a trusted partner for NASA [16] - Investments in a new microgravity payload development facility are planned to support increased demand in biopharma R&D and sustainable human space flight [21] - The company aims to maintain positive adjusted EBITDA and free cash flow while continuing to invest in future growth [11][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future growth driven by a strong backlog and pipeline [55][106] - The company reaffirmed its full-year guidance range of $220 million to $250 million, representing a 46% year-over-year growth at the midpoint [55] - Management acknowledged the variability in revenue due to the timing of government awards and emphasized the importance of backlog growth for reliable future revenue [101][103] Other Important Information - The company made $2.5 million in capital expenditures during the first half of 2023, including investments in a radio frequency test chamber and solar production [11][46] - The SG&A expenses as a percentage of revenue decreased significantly from 47.8% in Q2 2022 to 29.4% in Q2 2023 [27] Q&A Session Summary Question: Clarification on proposals submitted and pipeline growth - Management confirmed a $23 million increase in proposals submitted during the quarter and acknowledged the variability in conversion rates for the pipeline [32][33] Question: Insights on gross margin improvements - Management indicated that improvements in gross margins were due to better program management and a favorable contract mix, but did not provide specific future guidance [58][66] Question: Outlook for revenue in the second half of the year - Management noted that revenue variability is primarily due to the timing of orders and government awards, emphasizing a prudent approach to guidance [67][68] Question: National security business opportunities - Management highlighted the growth potential in the national security sector and the company's unique capabilities in government contracting [74][86] Question: Customer mix and future growth - Management discussed the quality of the remaining 15% of revenue from non-government customers and the potential for large wins in various segments [95][106]

Revenue and Growth - Revenues increased by $24.7 million, or 75%, for Q1 2023 compared to Q1 2022, driven by $12.3 million from the Space NV Acquisition and growth in deployables and engineering services [215]. - Contracted backlog increased to $286.8 million as of March 31, 2023, compared to $137.3 million as of March 31, 2022 [213]. - The company's contracted backlog as of March 31, 2023, was $286,750,000, a decrease from $313,057,000 as of December 31, 2022 [239]. - Organic backlog at the end of Q1 2023 was $163,053,000, down from $184,912,000 at the beginning of the period [239]. Costs and Expenses - Cost of sales rose by $15.7 million, or 57%, for Q1 2023 compared to Q1 2022, primarily due to increased costs associated with revenue growth and $10.0 million from the Space NV Acquisition [216]. - Selling, general and administrative (SG&A) expenses decreased by 23.4% year-over-year, with SG&A as a percentage of revenues dropping from 64% to 28% [218][219]. - Research and development expenses decreased by $1.3 million, or 77%, for Q1 2023 compared to Q1 2022, reflecting a strategic redirection of resources [221]. Profitability and Loss - Gross margin increased by $9.0 million, or 175%, for Q1 2023, with gross margin as a percentage of sales rising to 25% from 16% in Q1 2022 [217]. - Net loss decreased by 58% for Q1 2023, amounting to $7.3 million compared to a net loss of $17.3 million in Q1 2022 [212][214]. - For the three months ended March 31, 2023, the company reported a net loss of $7,258,000, an improvement from a net loss of $17,293,000 for the same period in 2022 [230]. - Adjusted EBITDA for the first quarter of 2023 was $4,344,000, compared to an Adjusted EBITDA of $(4,669,000) for the same period in 2022 [230]. Financial Ratios and Metrics - The book-to-bill ratio for the three months ended March 31, 2023, was 0.51, down from 0.93 for the same period in 2022, indicating a decrease in contracts awarded relative to revenues [234]. - For the last twelve months (LTM) ended March 31, 2023, the book-to-bill ratio improved to 1.76, compared to 0.85 for the LTM ended March 31, 2022 [236]. Cash Flow and Debt - Cash and cash equivalents at the end of Q1 2023 were $11,273,000, a decrease from $28,316,000 at the beginning of the year [250]. - Total debt as of March 31, 2023, was $78,230,000, slightly down from $78,938,000 as of December 31, 2022 [248]. - Net cash used in operating activities for Q1 2023 was $(14,048,000), compared to $(11,446,000) for the same period in 2022, indicating increased cash outflow [250]. - The company had $25,000,000 available in borrowings from existing credit facilities as of March 31, 2023 [243]. Tax and Other Financial Information - Interest expense, net increased by $1.2 million, or 82%, for Q1 2023 due to unfavorable changes in variable interest rates on debt obligations [222]. - Other (income) expense, net increased by $1.2 million, or 106%, primarily due to a loss from the increase in the fair value of the Company's private warrant liability [223]. - Effective tax rate decreased to 0.4% for Q1 2023 from 14.3% in Q1 2022, primarily due to an increase in the valuation allowance [224]. - The Company is classified as a smaller reporting company and is not obligated to provide the information required under Item 3 [255].

Financial Data and Key Metrics Changes - Redwire reported record revenues of $57.6 million for Q1 2023, a 75.3% increase year-over-year from $32.9 million in Q1 2022 and a 7.3% increase sequentially from $53.7 million in Q4 2022 [5][21][37] - The company achieved positive adjusted EBITDA of $4.3 million, an improvement of $9 million year-over-year, marking the first positive adjusted EBITDA since becoming a public company [23][38] - Net loss improved to $7.3 million from a net loss of $17.3 million in Q1 2022, reflecting a $10 million positive change [11][23] - Contracted backlog reached $286.8 million, representing a 108.8% growth since March 31, 2022 [45] Business Line Data and Key Metrics Changes - Revenue growth was observed across all three primary focus areas: Space systems, payloads for exploration, and Redwire Europe, with all customer types (national security, civil, and commercial) showing year-over-year growth [22][49] - Gross profit nearly tripled from $5.2 million to $14.2 million, with gross margin increasing from 15.7% to 24.7% year-over-year [50] Market Data and Key Metrics Changes - Commercial revenue saw the largest percentage increase of over 129% year-over-year, indicating a balanced customer diversity [49] - The company is positioned as a global leader in international space missions, with significant contracts and collaborations enhancing its market presence [16] Company Strategy and Development Direction - Redwire aims to accelerate humanity's expansion into space by providing reliable and sustainable infrastructure, focusing on differentiated solutions for complex space missions [8][20] - The company is expanding its leadership in in-space manufacturing and bioprinting, with a recent €14 million contract from the European Space Agency for a 3D bioprinting system [43][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue between $220 million to $250 million, representing a 46% year-over-year growth at the midpoint [27] - The company is focused on maintaining SG&A as a percentage of revenue while continuing to improve gross margins and operational efficiencies [60][72] Other Important Information - Redwire has made changes to its key performance indicators, now reporting only contracted backlog and using a last 12 months basis for the book-to-bill calculation [10][18] - The company has a healthy pipeline of opportunities, with a focus on converting contracts into revenue [85] Q&A Session All Questions and Answers Question: Can you provide more details on gross margin percentages for the rest of the year? - Management indicated that improvements in gross margins are expected as unique technologies gain wider adoption, with a focus on maintaining efficiency [54][55] Question: How sustainable is the positive EBITDA moving forward? - Management highlighted ongoing efficiency improvements and disciplined execution as key factors for sustaining positive EBITDA [61][62] Question: Can you discuss the dynamics of revenue growth throughout the year? - Management noted that while revenue typically builds sequentially, the timing of contract awards can vary, making it challenging to predict exact quarterly revenue [63][84] Question: What are the implications of the €14 million contract for the 3D bioprinting system? - This contract expands Redwire's global presence in biomanufacturing and represents a shift from single experiments to a full business offering [66][87] Question: How does Redwire plan to manage SG&A as revenue grows? - Management aims to keep SG&A in line with revenue growth while exploring opportunities for further efficiency [60][72]

Financial Performance - Revenues for the year ended December 31, 2022, were $160,549,000, representing a 16.6% increase from $137,601,000 in 2021[433]. - The company's net loss for the year ended December 31, 2022, was $130,620,000, compared to a net loss of $61,537,000 in 2021, indicating a significant increase in losses[433]. - Net income for the year ended December 31, 2022, was $(130,620) thousand, compared to $(61,537) thousand for the year ended December 31, 2021, representing a 112% increase in net loss[441]. - Total revenues for the year ended December 31, 2022, were $207,761 thousand, slightly up from $206,204 thousand in 2021[568]. - The company incurred transaction expenses of $3,112 thousand related to the Space NV acquisition for the year ended December 31, 2022[566]. Assets and Liabilities - Total current assets increased to $96,167,000 as of December 31, 2022, from $55,216,000 in 2021, reflecting a growth of 74.4%[428]. - Total liabilities rose to $187,808,000 as of December 31, 2022, compared to $154,534,000 in 2021, marking an increase of 21.5%[428]. - Total equity as of December 31, 2022, was $226 thousand, a decrease from $107,222 thousand as of December 31, 2021[441]. - Cash and cash equivalents at the end of the period increased to $28,316 thousand from $20,523 thousand, marking a net increase of $7,793 thousand[442]. - Cash flows from operating activities for the year ended December 31, 2022, were $(31,657) thousand, an improvement from $(37,358) thousand in 2021[441]. Research and Development - Research and development expenses for the year ended December 31, 2022, were $4.9 million[85]. - Research and development costs are primarily composed of labor charges, prototype material, and development expenses, and are expensed in the period incurred[519]. Acquisitions - The company completed nine acquisitions from March 2020 to December 31, 2022, enhancing its technology and product offerings[446]. - The Company acquired 100% of Oakman for a total purchase consideration of $14.252 million, which included $12.142 million in cash and $2.110 million in equity issued[538][540]. - The Company acquired 100% of DPSS for $27.305 million, with post-acquisition revenues of $26.678 million and a net loss of $554,000 for the year ended December 31, 2021[545][550]. - The acquisition of Techshot involved a total purchase consideration of $40.721 million, with post-acquisition revenues of $1.563 million and a net loss of $392,000 for the year ended December 31, 2021[551][557]. - The Company acquired QinetiQ Space NV for $36.9 million, which supports growth in satellite technologies and expands its global footprint[558]. Market and Industry Trends - Approximately $253 billion of equity investment has been made across 1,694 space companies over the last 10 years, indicating significant growth in the space market[72]. - The annual number of Smallsats launched has increased almost eightfold since 2012, with 94% of all launches in 2021 including a Smallsat[77]. - The per-kilogram cost of launching satellites to LEO is as low as approximately $2,700/kg, driven by competition among launch providers[76]. Workforce and Talent Management - The company plans to increase its workforce by approximately 20% to support contracted work and anticipated new awards in 2023[96]. - The company has established a talent acquisition team and is utilizing AI sourcing tools to enhance recruitment efforts in a tight labor market[97]. - The company offers competitive compensation packages, including short- and long-term incentive programs, to attract and retain high-performing individuals[99]. - The company is committed to promoting diversity and inclusion within its workforce and supports various organizations in the aerospace field[98]. - The company has implemented programs to celebrate workforce diversity and highlight contributions from under-represented communities[98]. Financial Reporting and Accounting - The Company recognizes revenue based on ASC 606, with a five-step model for revenue recognition including identification of contracts and performance obligations[501]. - The Company recognizes anticipated contract losses as soon as they become known and estimable, impacting revenue recognition for long-term contracts[512]. - The Company accounts for income taxes under ASC 740, recognizing deferred tax assets and liabilities based on the expected reversal of basis differences using enacted tax rates[530]. - The Company adopted the new lease standard (ASC 842) effective January 1, 2022, recognizing right-of-use assets and lease liabilities of $10.1 million and $10.2 million, respectively[535]. Operational Highlights - The number of satellites and spacecraft deployed increased by 36% in 2022, reaching a total of 2,354 deployments[73]. - The company currently has nine active payload facilities on the ISS, demonstrating the increasing demand for living and working in space[79]. - The company is developing a robotic arm for space applications in collaboration with the Luxembourg Space Agency and the European Space Agency[67]. - The company operates in one reportable segment, space infrastructure, as reviewed by the Chief Operating Decision Maker[459].

Financial Data and Key Metrics Changes - Redwire's total revenue for Q4 2022 was $53.7 million, the highest in the company's history, representing a 16.7% increase year-over-year [12][38] - The total backlog grew by 71.2% from $271.6 million at the end of 2021 to $465.1 million at the end of 2022 [5][42] - Adjusted EBITDA improved by over 47.5% compared to Q3 2022, with a year-over-year increase of 83.4% [12][47] - The GAAP net loss for Q4 2022 was $25.9 million, primarily due to a $16.2 million non-cash impairment charge, while the full year net loss was $130.6 million compared to $61.5 million in 2021 [22][45] Business Line Data and Key Metrics Changes - The acquisition of Space NV contributed $11.7 million to Q4 revenue since its closing on October 31, 2022, with the overall revenue excluding this contribution still reaching a record $42 million [20][21] - The company launched 11 products and capabilities during Q4 2022, including additional solar arrays installed on the International Space Station [12][13] - The backlog for Space NV increased from $109 million at acquisition to $128 million by the end of 2022, indicating strong growth potential [66] Market Data and Key Metrics Changes - Redwire's revenue growth was supported by a diversified customer base, with 86.2% of revenues coming from government and marquee customers [45][60] - The company reported a book-to-bill ratio of 2.04, indicating strong demand and contract additions [42] Company Strategy and Development Direction - Redwire aims to accelerate humanity's expansion into space by providing reliable and sustainable infrastructure, focusing on government contracts and commercial opportunities [11][36] - The company is positioned to capitalize on the growing global space race and the increasing demand for space infrastructure [36][37] - Redwire's strategy includes expanding its global footprint through acquisitions, such as Space NV, which enhances its capabilities and market reach [16][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining liquidity and profitability, emphasizing a focus on cash management and operational efficiency [32][70] - For 2023, the company expects full-year revenue to be between $220 million and $250 million, representing a 46% year-over-year growth at the midpoint [25][42] - Management highlighted the importance of backlog conversion and the potential for larger multi-year contracts to drive future revenue [51][66] Other Important Information - Redwire's adjusted EBITDA margin is expected to improve, with a target of exceeding 20% gross margins [94] - The company has a strong liquidity position with $53.3 million available as of December 31, 2022, bolstered by recent equity financing [49] Q&A Session Summary Question: How is the backlog conversion expected to change? - Management noted that the backlog conversion may have shifted slightly due to the acquisition and contracts from 2022, but they remain optimistic about future conversions [31] Question: What is the outlook for EBITDA and profitability in 2023? - Management is focused on profitability and expects to continue the positive trend seen in 2022, although they did not provide specific guidance for EBITDA [32] Question: What is the expected contribution from Space NV in 2023? - Management indicated that Space NV is expected to be a strong contributor, with its backlog growing significantly since acquisition [66] Question: How does the company view cash management and working capital? - Management emphasized the importance of cash management and plans to receive cash upfront for contracts to support growth and maintain liquidity [70] Question: What are the key drivers of backlog expansion? - Management stated that no single program drives over 10% of revenue, indicating a diverse base of programs contributing to backlog and revenue growth [96]

Q4 2022 Investor Presentation March 29, 2023 47 85 151 22 204 251 254 Industry and market data used in this Presentation have been obtained from third-party industry publications and sources as well as from research reports prepared for other purposes. Redwire has not independently verified the data obtained from these sources and cannot assure you of the data's accuracy or completeness. This data is subject to change. Recipients of this Presentation are not to construe its contents, or any prior or subsequ ...

Operational Performance - The company reported significant operational wins in areas such as power systems, LEO commercialization, and human space flight, contributing to increased revenues and bookings [244]. - The company successfully delivered multiple L-Band Link-16 Helical Antenna systems for the SDA's National Defense Space Architecture constellation's Transport Layer in Q1 2022 [245]. - The company delivered the fourth Roll-Out Solar Array (ROSA) for the ISS ahead of schedule, with additional wings scheduled for launch in the coming years [246]. - The company is progressing on OSAM-2, a satellite that will manufacture and assemble parts of itself in space, aligning with national strategies for in-space manufacturing [248]. - The company has a robust backlog for its solar array product lines, including projects for NASA and various commercial customers [247]. Financial Performance - Revenues increased 14% to $37.2 million for the three months ended September 30, 2022, compared to $32.7 million for the same period in 2021, driven by $2.3 million from the Techshot Acquisition [266]. - Cost of sales rose by $2.5 million, or 9%, to $29.3 million for the three months ended September 30, 2022, primarily due to $1.5 million from the Techshot Acquisition and increased production costs [267]. - Gross margin improved by $2.1 million, or 35%, to $7.9 million, representing 21% of revenues for the three months ended September 30, 2022, up from 18% in the prior year [268]. - SG&A expenses decreased by $19.0 million, or 55%, to $15.3 million for the three months ended September 30, 2022, mainly due to a reduction in equity-based compensation [271]. - Net income loss narrowed to $10.4 million for the three months ended September 30, 2022, compared to a loss of $24.3 million in the same period of 2021, reflecting a $13.8 million improvement [265]. - Revenues for the nine months ended September 30, 2022 increased by $10.3 million, or 11%, to $106.8 million, with $5.1 million attributed to the Techshot Acquisition [279]. - Cost of sales for the nine months ended September 30, 2022 increased by $12.3 million, or 17%, to $86.7 million, driven by revenue growth and $4.0 million from the Techshot Acquisition [280]. - Gross margin decreased by $2.0 million, or 9%, to $20.1 million for the nine months ended September 30, 2022, representing 19% of revenues, down from 23% in the prior year [281]. - Research and development expenses increased by $1.2 million, or 37%, for the nine months ended September 30, 2022, reflecting strategic investments in future technologies [287]. - Impairment expense surged by $80.5 million for the nine months ended September 30, 2022, due to a non-cash impairment charge related to goodwill and long-lived assets [286]. - Interest expense, net increased by $0.6 million, or 12.0%, for the nine months ended September 30, 2022, compared to the same period in 2021 [288]. - Other (income) expense, net rose by $11.5 million, or 386%, for the nine months ended September 30, 2022, primarily due to a gain from a decrease in the fair value of the private warrant liability [289]. - The effective tax rate decreased to 6.2% for the nine months ended September 30, 2022, down from 14.3% in the same period of 2021 [290]. - Adjusted EBITDA for the nine months ended September 30, 2022, was $(10.2) million, compared to $1.8 million for the same period in 2021 [294]. - The company reported a net loss of $104.7 million for the nine months ended September 30, 2022, compared to a net loss of $47.8 million for the same period in 2021 [294]. Liquidity and Capital Structure - The company’s primary sources of liquidity include cash flows from operations and proceeds from the Purchase Agreement with B. Riley [307]. - As of September 30, 2022, the company's available liquidity totaled $17.0 million, consisting of $7.0 million in cash and cash equivalents, and $10.0 million in available borrowings from existing credit facilities [312]. - The total outstanding debt as of September 30, 2022, was $94.681 million, an increase from $79.204 million as of December 31, 2021 [316]. - The company anticipates final net proceeds of approximately $37.0 million to $40.0 million from the sale of Convertible Preferred Stock, net of transaction expenses [314]. - The company sold an aggregate of 80,000 shares of Convertible Preferred Stock for a total purchase price of $80.0 million to AEI and Bain Capital [313]. - The company is executing cost reduction actions, including workforce rationalizations and business unit optimization initiatives, to strengthen its financial position [311]. - The company entered into a committed equity facility on April 14, 2022, allowing it to sell up to $80.0 million of its common stock over 24 months [332]. - The company intends to use proceeds from the Convertible Preferred Stock sale for acquisitions, expanding global infrastructure offerings, and increasing total available liquidity [315]. - The company was in compliance with its debt covenants under the Adams Street Credit Agreement as of September 30, 2022 [326]. - The company has a maturity date of October 28, 2026, for the Adams Street Credit Agreement, which is secured by a first lien security interest in certain assets [321]. - As of September 30, 2022, total contractual obligations amounted to $112.6 million, with long-term debt maturities contributing $94.7 million and future minimum lease payments totaling $17.9 million [335]. Cash Flow and Investment Activities - For the nine months ended September 30, 2022, net cash used in operating activities was $26.8 million, an improvement from $34.3 million in the same period of 2021 [338][339]. - The net cash provided by financing activities for the nine months ended September 30, 2022, was $16.9 million, significantly lower than $75.5 million in the prior year [343][344]. - Net cash used in investing activities for the nine months ended September 30, 2022, was $3.4 million, a substantial decrease from $36.1 million in the same period of 2021 [341][342]. - The company reported a net loss before deducting depreciation, amortization, and other non-cash items of $28.5 million for the nine months ended September 30, 2022 [338]. - The change in net working capital during the nine months ended September 30, 2022, was a favorable $1.7 million, driven by increases in accounts payable and accrued expenses [338]. - The company had a future lease obligation of $1.5 million for a facility lease that had not yet commenced as of September 30, 2022 [336]. - Cash and cash equivalents at the end of the period on September 30, 2022, were $7.0 million, down from $27.3 million at the end of the same period in 2021 [337]. - The company utilized $2.8 million for the purchase of property, plant, and equipment during the nine months ended September 30, 2022 [341]. - The company’s future minimum lease payments for operating leases were estimated at $0.8 million for 2022, with total minimum lease payments of $17.9 million through the expiration of current leases [335].