Financial Performance - Total revenues for Q3 2023 were $14.259 million, a decrease of 65.3% compared to $41.094 million in Q3 2022[16] - Gross profit for Q3 2023 was $5.231 million, down from $16.336 million in the same quarter last year, reflecting a gross margin of approximately 36.7%[16] - The company reported a net income of $9.888 million for Q3 2023, compared to a net loss of $23.314 million in Q3 2022[16] - For the nine months ended September 30, 2023, Airspan Networks reported a net loss of $44.6 million, compared to a net loss of $74.1 million for the same period in 2022, indicating a 39.8% improvement in losses year-over-year[19] - Net income for the three months ended September 30, 2023, was $9.888 million, compared to a net loss of $23.314 million for the same period in 2022[113] - Basic net income per share for Q3 2023 was $0.13, a significant improvement from a loss of $0.32 per share in Q3 2022[113] - The company’s diluted net income per share for Q3 2023 was $0.12, compared to a loss of $0.32 per share in Q3 2022[113] Expenses and Costs - Research and development expenses for the nine months ended September 30, 2023, totaled $36.901 million, a decrease from $48.244 million in the same period of 2022[16] - The company experienced a significant increase in interest expense, which rose to $9.944 million in Q3 2023 from $4.296 million in Q3 2022[16] - The company incurred $6.2 million in cash paid for interest during the nine months ended September 30, 2023, compared to $4.4 million in the same period of 2022[20] - The Company implemented a restructuring program in Q2 2023, incurring total restructuring costs of $944,000 for the three months ended September 30, 2023[50] - Total share-based compensation for the three months ended September 30, 2023 was $2.1 million, compared to $5.9 million for the same period in 2022[107] Assets and Liabilities - Total current assets decreased to $47.792 million as of September 30, 2023, from $89.697 million at the end of 2022, primarily due to a reduction in accounts receivable and inventory[15] - Total liabilities decreased to $176.745 million as of September 30, 2023, from $205.894 million at the end of 2022, indicating improved financial management[15] - Airspan's current assets were $47.8 million, while current liabilities stood at $172.3 million as of September 30, 2023, indicating a significant liquidity challenge[33] - The Company had accrued expenses totaling $29,406,000 as of September 30, 2023, down from $32,243,000 as of December 31, 2022[54] Business Operations - The company achieved a gain of $28.631 million from the sale of its Mimosa business, contributing positively to the net income for the quarter[16] - The company generated a cash inflow of $55.2 million from the sale of Mimosa Networks, contributing to a net cash provided by investing activities of $54.1 million for the nine months ended September 30, 2023[19] - The company plans to focus on increasing sales in additional geographic markets as part of its strategy to improve operating and financial results[34] - The Company is focusing on developing 5G product offerings and improving days sales outstanding to enhance liquidity[39] Debt and Financing - The company is seeking waivers for current covenant breaches but may not be able to comply with prospective financial covenants in the next twelve months without additional financing[36] - The Company has classified its senior term loan, convertible debt, subordinated term loan, and subordinated debt as current as of September 30, 2023, due to potential defaults[37] - The Fortress Credit Agreement's total loan commitment is $34,000,000, with an additional term loan commitment of $10,000,000 funded on December 30, 2020[69] - The company borrowed $20,000,000 from the Fortress Credit Agreement facility in the second quarter of 2023, and as of September 30, 2023, there was no remaining borrowing capacity[66] - The interest rates under the Fortress Credit Agreement were increased to 5.5% plus SOFR, with a maximum of 8.5% for paid-in-kind interest[67] - The Company was not in compliance with the minimum last twelve-month EBITDA and revenue covenants under the Fortress Credit Agreement as of December 31, 2022, and March 31, 2023, leading to events of default[72] - The Company did not make principal and interest payments due under the Fortress Credit Agreement on October 31, 2023, resulting in another event of default[75] - The Company is pursuing alternative sources of capital to meet its prospective minimum liquidity obligations under the Fortress Credit Agreement[76] - The Company may face bankruptcy or liquidation if lenders declare all borrowed funds due due to covenant breaches[77] Related Party Transactions - The company reported no revenue from sales to a related party for Q3 2023, but generated approximately $41 thousand for the nine months ended September 30, 2023[116] - Revenue from sales to a separate related party was approximately $7.0 million for Q3 2023, compared to $9.6 million for Q3 2022[118] - Accounts receivable from a related party amounted to $2.1 million as of September 30, 2023, down from $4.5 million as of December 31, 2022[118] - The company had outstanding payables to a related party totaling $1.6 million as of September 30, 2023[117] Stock and Equity - The weighted average shares outstanding for basic earnings per share increased to 74,605,474 in Q3 2023 from 72,572,138 in Q3 2022[16] - Airspan issued 55,901 restricted shares during the third quarter of 2023, contributing to share-based compensation expenses of $2.1 million for the period[19] - The Company recorded a $1.7 million reduction in convertible debt and an increase in additional paid-in capital due to the issuance of 5,912,040 Fortress Warrants[105] - As of September 30, 2023, there were 12,045,000 Common Stock Warrants outstanding, including 11,500,000 Public Warrants and 545,000 Private Placement Warrants[100] - The Company had stock options outstanding of 7,335,035 as of September 30, 2023, compared to 7,931,652 in the same period of 2022[114]
Airspan Networks (MIMO) - 2023 Q3 - Quarterly Report