Delaware
|
7372
|
85-4164597
|
||
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification No.)
|
Timothy Cruickshank, P.C.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212)
446-4800
|
Jeffrey C. Selman, Esq.
John F. Maselli, Esq.
DLA Piper LLP (US)
555 Mission Street, Suite 2400
San Francisco, California 94105
(415)
836-2500
|
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated
filer
|
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
|
||||||||
TITLE OF EACH CLASS OF
SECURITY BEING REGISTERED |
|
AMOUNT
TO BE
REGISTERED
(1)
|
|
PROPOSED
MAXIMUM OFFERING PRICE PER SECURITY |
|
PROPOSED
MAXIMUM AGGREGATE OFFERING PRICE |
|
AMOUNT OF
REGISTRATION FEE |
Common Stock, par value $0.0001 per share
(2)
|
|
12,326,472
|
|
$11.50
(4)
|
|
$141,754,428.00
|
|
$13,140.64
|
Common Stock, par value $0.0001 per share
(3)
|
|
124,931,453
|
|
$7.98
(5)
|
|
$996,952,994.94
|
|
$92,417.54
|
Warrants to purchase Common Stock
|
|
12,326,472
|
|
N/A
(6)
|
|
—
|
|
—
|
6.00% convertible senior notes due 2026
(7)
|
|
$200,000,000
(8)
|
|
—
|
|
$200,000,000
(8)
|
|
$18,540.00
|
Guarantees of 6.00% convertible senior notes due 2026
|
|
—
|
|
—
|
|
—
|
|
—
(9)
|
Common Stock, par value $0.0001 per share
(10)
|
|
23,058,494
(10)
|
|
—
|
|
—
|
|
$—
(10)
|
Total
|
|
|
|
|
|
|
|
$124,098.18
|
|
||||||||
|
(1)
|
Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the
“Securities Act”
|
(2)
|
Represents shares of common stock, par value $0.0001 per share (“
Common Stock
|
(3)
|
Represents securities registered for resale by the Selling Stockholders named in this registration statement, including (i) 124,564,920 issued and outstanding shares of Common Stock held by Selling Stockholders, and (ii) 366,533 shares of Common Stock issuable upon exercise of warrants held by the Selling Stockholders.
|
(4)
|
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(i) under the Securities Act. The price per share is based upon the exercise price per warrant of $11.50 per share.
|
(5)
|
Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. The price per share and aggregate offering price are based on the average of the high and low prices of the Registrant’s common stock on December 20, 2021 as reported on The New York Stock Exchange.
|
(6)
|
No separate fee due in accordance with Rule 457(i). In accordance with Rule 457(i), the entire registration fee for the warrants is allocated to the shares of common stock underlying the warrants, and no separate fee is payable for the warrants.
|
(7)
|
Consists of 6.00% convertible senior notes due 2026 of BigBear.ai Holdings, Inc. (the “
2026 Convertible Notes
|
(8)
|
The maximum offering price is based on the aggregate principal amount of the 2026 Convertible Notes as of December 20, 2021.
|
(9)
|
Pursuant to Rule 457(n) under the Securities Act, no additional registration fee is payable with respect to the guarantees.
|
(10)
|
Represents the number of shares of common stock that may be issued upon conversion of the 2026 Convertible Notes registered hereunder. As more fully described in this Registration Statement, the initial conversion rate is 86.9565 shares of Common Stock per $1,000 principal amount of the 2026 Convertible Notes, which may be adjusted to up to 102.2495 as more fully described in this Registration Statement. The 2026 Convertible Notes are initially convertible into 17,391,304 shares of Common Stock, which may be adjusted to up to 23,058,494 as more fully described in this Registration Statement. The number of shares of Common Stock being registered represents a good faith estimate of the maximum number of shares that may be issued upon conversion of the Selling Noteholders’ 2026 Convertible Notes. The shares of Common Stock issued upon conversion of the 2026 Convertible Notes are not subject to an additional fee pursuant to Rule 457(i) under the Securities Act since no additional consideration will be received for the shares of Common Stock issuable upon conversion of the 2026 Convertible Notes.
|
Exact Name of
Additional Registrants
|
|
Jurisdiction of
Incorporation or Formation |
|
Principal Executive
Offices
|
|
Primary
Standard Industrial Classification Code Number |
|
I.R.S.
Employer Identification No. |
BigBear.ai Intermediate Holdings, LLC
|
|
DE
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
85-1242144
|
BigBear.ai, LLC
|
|
DE
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
85-1259867
|
NuWave Solutions, L.L.C.
|
|
MD
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
52-2195680
|
PCI Strategic Management, LLC
|
|
MD
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
85-3441283
|
ProModel Government Solutions, Inc.
|
|
UT
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
87-0458395
|
Open Solutions Group, LLC
|
|
VA
|
|
6811 Benjamin Franklin Drive, Suite 200 Columbia, Maryland 21046
|
|
7372
|
|
26-2253724
|
• |
Value of Insights
: Sorting the “wheat from the chaff” across disparate data sources and identifying optimal roadmaps to desired futures make our offerings unique in the market and especially valuable to customers. We don’t just increase the piles of data analysts must explore to make sense of the world around them, we automate sense-making and provide the actionable insights for customers to achieve proactive operation optimization.
|
• |
Time to Capability
: The event-driven,
API-focused
architecture allows our developers to quickly select, sequence, and integrate
pre-made
data, analytic and processing modules that will yield insights for customers’ unique needs. The ability to assemble
pre-configured
analytics and data sources means our products yield rapid value, often within
30-60
days, and create opportunities for horizontal growth within customer accounts (request for additional capabilities). In the past, customers have frequently requested additional capabilities within a year of initial deployment.
|
• |
Interoperability
: Our products are highly interoperable and easily integrated due of our
API-centric
architecture. While BigBear’s products can be used in a stand-alone manner, it is common for them to be integrated into customers’ existing technology environments to quickly produce customized solutions. This is a considerable differentiator with many competitors that force new customers into the difficult decisions of discarding prior investments and existing capabilities to implement new capabilities. The result of our unique approach allows customers to retain (or even improve) existing capabilities and investments, thus making the decision to implement our software much easier.
|
• |
Continuous Improvement/Results
: Continuous improvement of our processing modules drives retention and loyalty. Every module is continuously refined and improved to adjust to the ever-changing data
|
environment. As each implementation is the product of combining our interoperable modules, every customer benefits from enhancements as they are deployed in our capability library. Rather than requiring customers to retain staff to maintain or sustain their capabilities, their BigBear-provided products continue to evolve and improve over time. This drives customer retention over time.
|
• |
Scalability
: As an entirely cloud-based solution, SaaS customers can scale their requirements without limitations based on their data and/or processing needs. There is no need for costly infrastructure (storage or processing) investments to grow with their needs.
|
(1) |
MarketsAndMarkets, Inc., May, 2021.
|
(1) |
Additive Technology: The potential to acquire technology that can accelerate growth in a specific commercial market. This can include new/proprietary data sets, market-specific analytics, and novel AI/ML approaches that improve the overall impact of our products.
|
(2) |
Market Access: The opportunity to gain a strategic foothold in a high-growth market, thus immediately accelerating our growth in that space. While some of our target markets do not necessarily require an existing presence in that space, there are some markets that place more importance on industry experience, history, or reputation. In these cases, inorganic investments may dramatically increase the probability of us achieving our growth objectives in those markets.
|
1. |
incorporating market-specific data sets and sources that will be incorporated into the Company’s existing library of data (the Observe product);
|
2. |
creating new (and modifying existing) analytics in the Orient product to derive insights into targeted commercial markets and the data that drives their specific decision making process;
|
3. |
creating additional data views, dashboards, and visualizations for the commercial market data and analytics;
|
4. |
optimizing the Dominate product around commercial drivers, such as resource allocation/optimization, revenue-generating courses of action, and scenario planning for strategic market drivers; and
|
5. |
expanding cloud-based hosting infrastructure and processing to support commercial applications.
|
• |
our limited operating history as a combined company makes it difficult to evaluate our current business and future prospects;
|
• |
the impact of health epidemics, including the
COVID-19
pandemic, on our business, financial condition, growth and the actions we may take in response thereto;
|
• |
the high degree of uncertainty of the level of demand for and market utilization of our solutions and products;
|
• |
substantial regulation and the potential for unfavorable changes to, or failure by us to comply with, these regulations, which could substantially harm our business and operating results;
|
• |
our dependency upon third-party service providers for certain technologies;
|
• |
increases in costs, disruption of supply or shortage of materials, which could harm our business;
|
• |
developments and projections relating to our competitors and industry;
|
• |
the unavailability, reduction or elimination of government and economic incentives, which could have a material adverse effect on our business, prospects, financial condition and operating results;
|
• |
our management team’s limited experience managing a public company;
|
• |
the possibility of our need to defend ourselves against fines, penalties and injunctions if we are determined to be promoting products for unapproved uses;
|
• |
concentration of ownership among our existing executive officers, directors and their respective affiliates, which may prevent new investors from influencing significant corporate decisions;
|
• |
if the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the potential for the market price of our securities to decline;
|
• |
the risk that the Business Combination disrupts current plans and operations of our business as a result of consummation of the transactions described herein;
|
• |
the risk that our significant increased expenses and administrative burdens as a public company could have an adverse effect on our business, financial condition and results of operations; and
|
• |
other factors detailed under the section entitled “
Risk Factors
|
Issuer
|
BigBear.ai Holdings, Inc. |
Shares of Common Stock to be issued upon
exercise of all Warrants |
12,326,472 shares (including 11,959,939 public warrants and 366,533 private warrants). |
Shares of Common Stock Offered by the Selling Stockholders
|
Up to 124,931,453 shares (including 366,533 shares issuable upon exercise of warrants held by the Selling Stockholders). |
Warrants Offered by the Selling Stockholders
|
366,533 warrants. |
Shares of Common Stock to be issued upon Conversion of the 2026 Convertible Notes
|
23,058,494 shares issuable upon the conversion of $200,000,000 in aggregate principal amount of outstanding 2026 Convertible Notes. |
2026 Convertible Notes Offered by the Selling Noteholders
|
Up to $200,000,000 aggregate principal amount of 2026 Convertible Notes. |
Outstanding
|
135,566,227 shares (as of December 20, 2021). |
Use of Proceeds
|
We will not receive any proceeds from the sale of shares of Common Stock by the Selling Securityholders. With respect to the shares of Common Stock underlying the warrants, we will not receive any proceeds from such shares except with respect to amounts received by us upon exercise of such warrants to the extent such warrants are exercised for cash. We will not receive any of the proceeds from the sale of the shares of Common Stock or 2026 Convertible Notes by the Selling Noteholders. We intend to use any such proceeds for general corporate purposes. |
Market for Common Stock, Warrants and 2026 Convertible Notes
|
Our Common Stock and warrants are currently traded on the NYSE under the symbols “BBAI” and “BBAIW,” respectively. The 2026 Convertible Notes will not be listed on any securities exchange. |
Risk Factors
|
See “
Risk Factors
|
• |
our limited operating history as a combined company, which makes it difficult to evaluate our current business and future prospects;
|
• |
our ability to sustain our revenue growth in the future;
|
• |
our ability to execute our strategy to grow our business and increase our sales and the number and types of markets we compete in;
|
• |
the length of our sales cycle and the time and expense associated with it;
|
• |
our ability to grow our customer base and to expand our relationships with our existing customers, including with our government customers;
|
• |
our reliance on customers in the public/government sector;
|
• |
the market and our customers accepting and adopting our products, including our future new product offerings;
|
• |
the impact of health epidemics, including the
COVID-19
pandemic, on our business, financial condition, growth, and the actions we may take in response thereto;
|
• |
competition in our industry;
|
• |
our ability to gain contracts on favorable terms, including with our government customers;
|
• |
our ability to grow, maintain and enhance our brand and reputation;
|
• |
risks related to security and our technology, including cybersecurity;
|
• |
our ability to maintain competitive pricing for our products;
|
• |
our ability to secure financing necessary to operate and grow our business as planned, including through acquisitions;
|
• |
the high degree of uncertainty of the level of demand for, and market utilization of, our solutions and products;
|
• |
substantial regulation and the potential for unfavorable changes to, or failure by us to comply with, these regulations, which could substantially harm our business and operating results;
|
• |
our dependency upon third-party service providers for certain technologies;
|
• |
increases in costs, disruption of supply or shortage of materials, which could harm our business;
|
• |
developments and projections relating to our competitors and industry;
|
• |
the unavailability, reduction or elimination of government and economic incentives, which could have a material adverse effect on our business, prospects, financial condition and operating results;
|
• |
our existing debt and our ability to refinance it on more favorable terms;
|
• |
our management team’s limited experience managing a public company;
|
• |
our ability to hire, retain, train and motivate qualified personnel and senior management and ability to deploy our personnel and resources to meet customer demand;
|
• |
future joint ventures, channel sales relationships, platform partnerships, strategic alliances and subcontracting opportunities;
|
• |
our ability to grow through acquisitions and successfully integrate any such acquisitions;
|
• |
our ability to successfully maintain, protect, enforce and grow our intellectual property rights;
|
• |
our compliance with governmental laws, trade controls, customs requirements and other regulations we are subject to;
|
• |
the possibility of our need to defend ourselves against fines, penalties and injunctions if we are determined to be promoting products for unapproved uses or otherwise found to have violated a law or regulation;
|
• |
concentration of ownership among our existing executive officers, directors and their respective affiliates, which may prevent new investors from influencing significant corporate decisions;
|
• |
the effect of economic downturns, depressions and recessions;
|
• |
if the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the potential for the market price of our securities to decline;
|
• |
the risk that the Business Combination disrupted current plans and operations of our business as a result of consummation of the transactions described herein; and
|
• |
the risk that our significant increased expenses and administrative burdens as a public company could have an adverse effect on our business, financial condition and results of operations.
|
• |
the success of our sales and marketing efforts, including the success of pilot deployments;
|
• |
our ability to increase our margins;
|
• |
the timing of expenses and revenue recognition;
|
• |
the timing and amount of payments received from our customers;
|
• |
termination of one or more large contracts by customers, including for convenience;
|
• |
the time- and cost-intensive nature of our sales efforts and the length and variability of sales cycles;
|
• |
the amount and timing of operating expenses related to the maintenance and expansion of our business and operations;
|
• |
the timing and effectiveness of new sales and marketing initiatives;
|
• |
changes in our pricing policies or those of our competitors;
|
• |
the timing and success of new products, features, and functionality introduced by us or our competitors;
|
• |
cyberattacks and other actual or perceived data or security breaches;
|
• |
our ability to hire and retain employees, in particular, those responsible for the development, operations and maintenance, and selling or marketing of our software; and our ability to develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts;
|
• |
the amount and timing of our stock-based compensation expenses;
|
• |
changes in the way we organize and compensate our sales teams;
|
• |
changes in the way we operate and maintain our software;
|
• |
changes in the competitive dynamics of our industry;
|
• |
the cost of and potential outcomes of future claims or litigation, which could have a material adverse effect on our business;
|
• |
changes in laws and regulations that impact our business, such as the Federal Acquisition Streamlining Act of 1994 (“
FASA
|
• |
indemnification payments to our customers or other third parties;
|
• |
ability to scale our business with increasing demands;
|
• |
the timing of expenses related to any future acquisitions; and
|
• |
general economic, regulatory, and market conditions, including the impact of the
COVID-19
pandemic.
|
• |
our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion;
|
• |
product defects, errors, or failures or our inability to satisfy customer service level requirements;
|
• |
negative publicity or negative private statements about the security, performance, or effectiveness of our software or product enhancements;
|
• |
delays in releasing to the market our new offerings or enhancements to our existing offerings, including new product modules;
|
• |
introduction or anticipated introduction of competing software or functionalities by our competitors;
|
• |
inability of our software or product enhancements to scale and perform to meet customer demands;
|
• |
receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance;
|
• |
poor business conditions for our customers, causing them to delay software purchases;
|
• |
reluctance of customers to purchase proprietary software products;
|
• |
reluctance of our customers to purchase products hosted by our vendors and/or service interruption from such providers; and
|
• |
reluctance of customers to purchase products incorporating open source software.
|
• |
cause certain customers to cease doing business with us;
|
• |
impair our ability to attract new customers, or to expand our relationships with existing customers;
|
• |
diminish our ability to hire or retain employees;
|
• |
undermine our standing in professional communities to which we contribute and from which we receive expert knowledge; or
|
• |
prompt us to cease doing business with certain customers.
|
• |
greater name recognition, longer operating histories, and larger customer bases;
|
• |
larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products;
|
• |
broader, deeper, or otherwise more established relationships with technology, channel and distribution partners, and customers;
|
• |
wider geographic presence or greater access to larger potential customer bases;
|
• |
greater focus in specific geographies;
|
• |
lower labor and research and development costs;
|
• |
larger and more mature intellectual property portfolios; and
|
• |
substantially greater financial, technical, and other resources to provide services, to make acquisitions, and to develop and introduce new products and capabilities.
|
• |
increased leverage held by large customers in negotiating contractual arrangements with us;
|
• |
changes in key decision makers within these organizations that may negatively impact our ability to negotiate in the future;
|
• |
customer IT departments may perceive that our software and services pose a threat to their internal control and advocate for legacy or internally developed solutions over our software;
|
• |
resources may be spent on a potential customer that ultimately elects not to purchase our software and services;
|
• |
more stringent requirements in our service contracts, including stricter service response times, and increased penalties for any failure to meet service requirements;
|
• |
increased competition from larger competitors, such as defense contractors, system integrators, or large software and service companies that traditionally target large enterprises and government entities and that may already have purchase commitments from those customers; and
|
• |
less predictability in completing some of our sales than we do with smaller customers.
|
• |
develop new products, features, capabilities, and enhancements;
|
• |
continue to expand our product development, sales, and marketing organizations;
|
• |
hire, train, and retain employees;
|
• |
respond to competitive pressures or unanticipated working capital requirements; or
|
• |
pursue acquisition or other growth opportunities.
|
• |
create liens on certain assets;
|
• |
incur additional debt;
|
• |
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and
|
• |
sell certain assets.
|
• |
an acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition;
|
• |
costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business;
|
• |
we may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, products, personnel, or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise;
|
• |
we may not realize the expected benefits of the acquisition;
|
• |
an acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management;
|
• |
an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company;
|
• |
the potential impact on relationships with existing customers, vendors, and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships;
|
• |
the potential that our due diligence of the acquired company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities;
|
• |
exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces;
|
• |
potential goodwill impairment charges related to acquisitions;
|
• |
we may encounter difficulties in, or may be unable to, successfully sell any acquired products;
|
• |
an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions;
|
• |
an acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company’s failure to comply with applicable laws or regulations;
|
• |
our use of cash to pay for an acquisition would limit other potential uses for our cash;
|
• |
if we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and
|
• |
to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
|
• |
changes in fiscal or contracting policies or decreases in available government funding;
|
• |
changes in government programs or applicable requirements;
|
• |
restrictions in the grant of personnel security clearances to our employees;
|
• |
ability to maintain facility clearances required to perform on classified contracts for U.S. federal government agencies;
|
• |
changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding;
|
• |
changes in the government’s attitude towards the capabilities that we offer, especially in the areas of national defense, cybersecurity, and critical infrastructure, including the financial, energy, telecommunications, and healthcare sectors;
|
• |
changes in the government’s attitude towards us as a company or our software as a viable or acceptable software solution;
|
• |
appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government;
|
• |
the adoption of new laws or regulations or changes to existing laws or regulations;
|
• |
budgetary constraints, including automatic reductions as a result of “sequestration” or similar measures and constraints imposed by any lapses in appropriations for the federal government or certain of its departments and agencies;
|
• |
influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers;
|
• |
changes in political or social attitudes with respect to security or data privacy issues;
|
• |
potential delays or changes in the government appropriations or procurement processes, including as a result of events such as war, incidents of terrorism, natural disasters, and public health concerns or epidemics, such as the recent coronavirus outbreak; and
|
• |
increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our subcontractors.
|
• |
specialized disclosure and accounting requirements unique to government contracts;
|
• |
financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S. government;
|
• |
public disclosures of certain contract and company information; and
|
• |
mandatory socioeconomic compliance requirements, including labor requirements,
non-discrimination
and affirmative action programs and environmental compliance requirements.
|
• |
terminate existing contracts for convenience with short notice;
|
• |
reduce orders under or otherwise modify contracts;
|
• |
for contracts subject to the Truth in Negotiations Act, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate, and current;
|
• |
for some contracts, (i) demand a refund, make a forward price adjustment, or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (ii) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated;
|
• |
cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;
|
• |
decline to exercise an option to renew a multi-year contract or issue task orders in connection with indefinite delivery/indefinite quantity (“
IDIQ
|
• |
claim rights in solutions, systems, or technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services, and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position;
|
• |
prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment;
|
• |
subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction, or modification of the awarded contract;
|
• |
suspend or debar us from doing business with the applicable government; and
|
• |
control or prohibit the export of our services.
|
• |
increasing our vulnerability to general adverse economic and industry conditions;
|
• |
requiring us to dedicate a portion of our cash flow from operations to principal and interest payments on our indebtedness, thereby reducing the availability of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
|
• |
making it more difficult for us to optimally capitalize and manage the cash flow for our businesses;
|
• |
limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
|
• |
possibly placing us at a competitive disadvantage compared to our competitors that have less debt;
|
• |
limiting our ability to borrow additional funds or to borrow funds at rates or on other terms that we find acceptable; and
|
• |
exposing us to the risk of increased interest rates because certain of our borrowings, including our Credit Agreement, are subject to variable rates of interest.
|
• |
incur or guarantee additional indebtedness or issue disqualified stock or preferred stock;
|
• |
pay dividends and make other distributions on, or redeem or repurchase, capital stock;
|
• |
make certain investments;
|
• |
incur certain liens;
|
• |
enter into transactions with affiliates;
|
• |
merge or consolidate;
|
• |
enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to us or the guarantors;
|
• |
designate restricted subsidiaries as unrestricted subsidiaries; and
|
• |
transfer or sell assets.
|
• |
finance our operations;
|
• |
make needed capital expenditures;
|
• |
make strategic acquisitions or investments or enter into joint ventures;
|
• |
withstand a future downturn in our business, the industry or the economy in general;
|
• |
engage in business activities, including future opportunities, that may be in our best interest; and
|
• |
plan for or react to market conditions or otherwise execute our business strategies.
|
• |
upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock of such Guarantor following which the applicable Guarantor ceases to be a Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
|
• |
upon the release or discharge of such Guarantor’s obligations under the Credit Agreement or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
|
• |
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture;
|
• |
upon the discharge of the 2026 Convertible Notes, as provided in Article 3 of the Indenture; or
|
• |
as provided in Article 10 of the Indenture.
|
• |
the issuer or such guarantor, as applicable, was insolvent or rendered insolvent by reason of the issuance of the 2026 Convertible Notes or the incurrence of its guarantees;
|
• |
the issuance of the 2026 Convertible Notes or the incurrence of its guarantees left the issuer or such guarantor, as applicable, with an unreasonably small amount of capital or assets to carry on the business;
|
• |
the issuer or such guarantor intended to, or believed that it would, incur indebtedness beyond its ability to pay as they mature; or
|
• |
the issuer or such guarantor was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, the judgment is unsatisfied after final judgment.
|
• |
the sum of its indebtedness, including contingent and unliquidated liabilities, was greater than the fair saleable value of all of its assets;
|
• |
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing indebtedness, including contingent liabilities, as they become absolute and mature; or
|
• |
it could not pay its indebtedness as it became due.
|
• |
changes in the valuation of our deferred tax assets and liabilities;
|
• |
expected timing and amount of the release of any tax valuation allowances;
|
• |
tax effects of stock-based compensation;
|
• |
costs related to intercompany restructurings;
|
• |
changes in tax laws, regulations or interpretations thereof; or
|
• |
lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
|
• |
actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
|
• |
changes in the market’s expectations about our operating results;
|
• |
success of competitors;
|
• |
our operating results failing to meet the expectation of securities analysts or investors in a particular period;
|
• |
changes in financial estimates and recommendations by securities analysts concerning us or the market in general;
|
• |
operating and stock price performance of other companies that investors deem comparable to us;
|
• |
our ability to market new and enhanced services and products on a timely basis;
|
• |
changes in laws and regulations affecting our business;
|
• |
commencement of, or involvement in, litigation involving us;
|
• |
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of our securities available for public sale;
|
• |
any major change in the board or management;
|
• |
sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and
|
• |
general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.
|
• |
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
|
• |
a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board;
|
• |
the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board;
|
• |
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and
|
• |
the requirement that a meeting of stockholders may only be called by members of our Board or the stockholders holding a majority of our shares, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
|
• |
that a majority of the board consists of independent directors;
|
• |
for an annual performance evaluation of the nominating and corporate governance and compensation committees;
|
• |
that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
• |
that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.
|
• |
on June 19, 2020, BigBear.ai acquired NuWave Solutions, LLC (“
NuWave
NuWave Acquisition
|
• |
on December 2, 2020, NuWave entered into an agreement with Open Solutions Group, LLC (“
Open Solutions
Open Solutions Acquisition
|
• |
on December 21, 2020, NuWave acquired the Government Services division of ProModel Government Services, Inc. (“
ProModel”
ProModel Acquisition”
|
• |
members of Ultimate’s senior management comprise all key management positions of the combined company;
|
• |
Ultimate, along with its affiliate, AE BBAI Aggregator, LP, has the majority voting interest (83.5%) in the combined company;
|
• |
Ultimate has the ability to appoint the majority of the Board of Directors and elect those directors through its majority voting power;
|
• |
the Company’s subsidiaries comprise the ongoing operations of the combined company;
|
• |
the Company is larger in relative size than GigCapital4; and
|
• |
the combined company continues to operate under the BigBear tradename, and the headquarters of the combined company remains the BigBear headquarters.
|
• |
historical audited financial statements of GigCapital4 as of December 31, 2020 and for the period from December 4, 2020 (date of inception) through December 31, 2020;
|
• |
historical audited combined financial statements of BigBear (“
Successor
Predecessor
|
• |
historical audited financial statements of NuWave as of June 18, 2020 and for the period from January 1, 2020 through June 18, 2020;
|
• |
historical audited financial statements of Open Solutions as of December 1, 2020 and for the period from January 1, 2020 through December 1, 2020;
|
• |
historical audited financial statements of ProModel as of December 20, 2020 for the period from January 1, 2020 through December 20, 2020;
|
• |
historical unaudited interim condensed financial statements of GigCapital4 as of and for the nine months ended September 30, 2021; and
|
• |
historical unaudited interim condensed consolidated financial statements of BigBear (“
Successor
|
BigBear
(Historical) |
GigCapital4
(Historical) |
Business
Combination Transaction Accounting Adjustments |
Notes
|
Pro Forma
Combined |
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current Assets
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 10,776 | $ | 982 | $ | 110,033 | (a.2) | $ | 95,032 | |||||||||||
— | — | 195,027 | (b) | — | ||||||||||||||||
— | — | 80,000 | (g) | — | ||||||||||||||||
— | — | (5,023 | ) | (e.1) | — | |||||||||||||||
(5,380 | ) | (e.2a) | ||||||||||||||||||
— | — | (4,524 | ) | (e.2b) | — | |||||||||||||||
— | — | (75,000 | ) | (f) | — | |||||||||||||||
— | — | (110,838 | ) | (h) | — | |||||||||||||||
— | — | (101,021 | ) | (j) | — | |||||||||||||||
Restricted Cash
|
— | — | 101,021 | (j) | 101,021 | |||||||||||||||
Accounts receivable
|
21,263 | — | — | 21,263 | ||||||||||||||||
Contract assets
|
2,863 | — | — | 2,863 | ||||||||||||||||
Inventory
|
— | — | — | — | ||||||||||||||||
Related party receivable
|
— | 1 | — | 1 | ||||||||||||||||
Prepaid expenses and other current assets
|
6,420 | 348 | (4,471 | ) | (e.2a) | 2,297 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total current assets
|
41,322 | 1,331 | 179,824 | 222,477 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Cash and marketable securities held in Trust Account
|
— | 358,817 | (110,030 | ) | (a.2) | — | ||||||||||||||
— | — | (248,787 | ) | (a.1) | — | |||||||||||||||
Property and equipment, net
|
1,213 | — | — | 1,213 | ||||||||||||||||
Goodwill
|
91,636 | — | — | 91,636 | ||||||||||||||||
Intangible assets, net
|
85,317 | — | — | 85,317 | ||||||||||||||||
Deferred tax assets
|
4,135 | — | — | 4,135 | ||||||||||||||||
Other
non-current
assets
|
592 | 114 | — | 706 | ||||||||||||||||
Interest receivable on cash and marketable securities held in Trust Account
|
— | 3 | (3 | ) | (a.2) | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total assets
|
$ | 224,215 | $ | 360,265 | $ | (178,996 | ) | $ | 405,484 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 9,468 | $ | 26 | $ | (429 | ) | (e.2a) | $ | 9,065 | ||||||||||
Note payable to related parties
|
— | — | — | — | ||||||||||||||||
Short-term debt, including current portion of long-term debt
|
2,600 | — | (2,600 | ) | (h) | — | ||||||||||||||
Accrued liabilities
|
12,368 | 2,312 | (163 | ) | (h) | 22,965 | ||||||||||||||
— | — | (150 | ) | (e.2a) | — | |||||||||||||||
— | — | 8,598 | (e.2b) | — | ||||||||||||||||
Contract liabilities
|
2,136 | — | — | 2,136 | ||||||||||||||||
Derivative liability
|
— | — | 12,047 | (j) | 12,047 | |||||||||||||||
Payable to related parties
|
— | 57 | — | 57 | ||||||||||||||||
Other current liabilities
|
464 | 6 | — | 470 | ||||||||||||||||
|
|
|
|
|
|
|
|
BigBear
(Historical) |
GigCapital4
(Historical) |
Business
Combination Transaction Accounting Adjustments |
Notes
|
Pro Forma
Combined |
||||||||||||||
Total current liabilities
|
27,036 | 2,401 | 17,303 | 46,740 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Long-term debt
|
105,447 | — | 190,227 | (b) | 190,227 | |||||||||||||
— | — | (105,447 | ) | (h) | — | |||||||||||||
Warrant liability
|
— | 385 | — | 385 | ||||||||||||||
Deferred underwriting fee payable
|
— | 12,558 | (12,558 | ) | (e.1) | — | ||||||||||||
Deferred tax liabilities
|
— | — | — | — | ||||||||||||||
Other
non-current
liabilities
|
7 | — | — | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities
|
132,490 | 15,344 | 89,525 | 237,359 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Common stock subject to possible redemption
|
— | 358,814 | (110,027 | ) | (c) | — | ||||||||||||
— | — | (248,787 | ) | (a.1) | — | |||||||||||||
Equity:
|
||||||||||||||||||
Common stock, $0.0001 par value
|
— | 1 | 1 | (c) | 14 | |||||||||||||
— | — | — | (b) | — | ||||||||||||||
— | — | 11 | (d) | — | ||||||||||||||
— | — | — | (e.1) | — | ||||||||||||||
— | — | — | (e.2a) | — | ||||||||||||||
— | — | — | (e.2b) | — | ||||||||||||||
— | — | 1 | (g) | — | ||||||||||||||
Members’ contribution/Additional
paid-in
capital
|
108,321 | — | 110,026 | (c) | 258,483 | |||||||||||||
— | — | 4,800 | (b) | — | ||||||||||||||
— | — | (13,905 | ) | (d) | — | |||||||||||||
— | — | 7,535 | (e.1) | — | ||||||||||||||
— | — | (9,272 | ) | (e.2a) | — | |||||||||||||
— | — | 2,000 | (e.2b) | — | ||||||||||||||
— | — | (75,000 | ) | (f) | — | |||||||||||||
— | — | 79,999 | (g) | — | ||||||||||||||
— | — | 56,026 | (i) | — | ||||||||||||||
— | — | (12,047 | ) | (j) | — | |||||||||||||
Accumulated deficit
|
(16,596 | ) | (13,894 | ) | 13,894 | (d) | (90,372 | ) | ||||||||||
— | — | (15,122 | ) | (e.2b) | — | |||||||||||||
— | — | (56,026 | ) | (i) | — | |||||||||||||
— | — | (2,628 | ) | (h) | — | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total equity
|
91,725 | (13,893 | ) | 90,293 | 168,125 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities and equity
|
$ | 224,215 | $ | 360,265 | $ | (178,996 | ) | $ | 405,484 | |||||||||
|
|
|
|
|
|
|
|
BigBear
(Historical) |
NuWave
Acquisition Transaction Accounting Adjustments * |
Notes
|
PCI
Acquisition Transaction Accounting Adjustments ** |
Notes
|
Open
Solutions Acquisition Transaction Accounting Adjustments *** |
Notes
|
ProModel
Acquisition Transaction Accounting Adjustments **** |
Notes
|
BigBear
(Pro Forma) |
GigCapital4
(Historical) |
Business
Combination Transaction Accounting Adjustments |
Notes
|
Pro Forma
Combined |
|||||||||||||||||||||||||||||||||||||||
Revenues
|
$ | 31,552 | $ | 10,809 | $ | 59,765 | $ | 22,693 | $ | 15,782 | $ | 138,992 | $ | — | $ | — | $ | 138,992 | ||||||||||||||||||||||||||||||||||
— | — | — | — | (1,609 | ) | (l) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Cost of sales
|
22,877 | 5,436 | 46,755 | 13,183 | 9,491 | 96,133 | — | 6,482 | (o) | 102,615 | ||||||||||||||||||||||||||||||||||||||||||
— | (1,609 | ) | (l) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Gross margin
|
|
8,675
|
|
|
6,982
|
|
|
13,010
|
|
|
9,510
|
|
|
4,682
|
|
|
42,859
|
|
|
—
|
|
|
(6,482
|
)
|
|
36,377
|
|
|||||||||||||||||||||||||
Operating expenses:
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative
|
7,909 | 3,266 | 7,632 | 4,192 | 1,555 | 30,235 | 34 | 49,543 | (o) | 79,812 | ||||||||||||||||||||||||||||||||||||||||||
— | 735 | (k) | 922 | (k) | 2,331 | (k) | 1,693 | (k) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Research and development
|
530 | — | 85 | — | — | 615 | — | — | 615 | |||||||||||||||||||||||||||||||||||||||||||
Transaction expenses
|
10,091 | — | — | — | — | 10,091 | — | 20,112 | (p) | 30,203 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Operating (loss) income
|
|
(9,855
|
)
|
|
2,981
|
|
|
4,371
|
|
|
2,987
|
|
|
1,434
|
|
|
1,918
|
|
|
(34
|
)
|
|
(76,137
|
)
|
|
(74,253
|
)
|
|||||||||||||||||||||||||
Interest income
|
— | — | — | (3 | ) | — | (3 | ) | — | — | (3 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest expense
|
616 | — | 1 | — | — | 8,399 | — | — | 13,955 | |||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 13,955 | (q) | — | |||||||||||||||||||||||||||||||||||||||||||
— | 862 | (m.1) | 1,873 | (m.1) | 2,131 | (m.1) | 2,918 | (m.1) | — | — | (8,399 | ) | (r.1) | — | ||||||||||||||||||||||||||||||||||||||
— | (1 | ) | (m.2) | (1 | ) | (m.2) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net
|
— | — | — | — | — | — | — | 2,628 | (r.2) | 2,628 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
(Loss) income before taxes
|
|
(10,471
|
)
|
|
2,120
|
|
|
2,498
|
|
|
859
|
|
|
(1,484
|
)
|
|
(6,478
|
)
|
|
(34
|
)
|
|
(84,321
|
)
|
|
(90,833
|
)
|
|||||||||||||||||||||||||
Income tax (benefit) expense
|
(2,633 | ) | 445 | (n) | 525 | (n) | 180 | (n) | (312 | ) | (n) | (1,795 | ) | — | (17,280 | ) | (s) | (19,075 | ) | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net (loss) income
|
$
|
(7,838
|
)
|
$
|
1,675
|
|
$
|
1,973
|
|
$
|
679
|
|
$
|
(1,172
|
)
|
$
|
(4,683
|
)
|
$
|
(34
|
)
|
$
|
(67,041
|
)
|
$
|
(71,758
|
)
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Net loss per share of common stock—basic and diluted
|
$ | (71,758 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average shares of common stock outstanding—basic and diluted
|
135,566,227 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share of common stock—basic and diluted
|
$ | (0.53 | ) |
*
|
Represents the addition of NuWave
pre-acquisition
activity for the period January
1, 2020 to June
18, 2020 to the historical BigBear statement of operations and pro forma adjustments related to the NuWave Acquisition.
|
**
|
Represents the addition of PCI
pre-acquisition
activity for the period January
1, 2020 to October
22, 2020 to the historical BigBear statement of operations and pro forma adjustments related to the PCI Acquisition.
|
***
|
Represents the addition of Open Solutions
pre-acquisition
activity for the period January
1, 2020 to December
1, 2020 to the historical BigBear statement of operations and pro forma adjustments related to the Open Solutions Acquisition.
|
****
|
Represents the addition of ProModel
pre-acquisition
activity for the period January
1, 2020 to December
20, 2020 to the historical BigBear statement of operations and pro forma adjustments related to the ProModel Acquisition.
|
BigBear
(Historical) |
GigCapital4
(Historical) |
Business
Combination Transaction Accounting Adjustments |
Notes
|
Pro Forma
Combined |
||||||||||||||
Revenues
|
$ | 112,100 | $ | — | $ | — | $ | 112,100 | ||||||||||
Cost of sales
|
81,859 | — | — | 81,859 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Gross margin
|
|
30,241
|
|
|
—
|
|
|
—
|
|
|
30,241
|
|
||||||
Operating expenses
|
— | — | — | — | ||||||||||||||
Selling, general and administrative
|
32,557 | 4,097 | — | 36,654 | ||||||||||||||
Research and development
|
4,158 | — | — | 4,158 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Operating (loss) income
|
|
(6,474
|
)
|
|
(4,097
|
)
|
|
—
|
|
|
(10,571
|
)
|
||||||
Interest income
|
— | (20 | ) | 20 | (t) | — | ||||||||||||
Interest expense
|
5,579 | — | 10,441 | (u) | 10,441 | |||||||||||||
— | — | (5,579 | ) | (v) | — | |||||||||||||
Other (income) expense, net
|
(1 | ) | 197 | — | 196 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
(Loss) income before taxes
|
|
(12,052
|
)
|
|
(4,274
|
)
|
|
(4,882
|
)
|
|
(21,208
|
)
|
||||||
Income tax (benefit) expense
|
(3,294 | ) | 6 | (1,166 | ) | (w) | (4,454 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Net (loss) income
|
$
|
(8,758
|
)
|
$
|
(4,280
|
)
|
$
|
(3,716
|
)
|
$
|
(16,754
|
)
|
||||||
|
|
|
|
|
|
|
|
|||||||||||
Net loss per share of common stock—basic and diluted
|
$ | (16,754 | ) | |||||||||||||||
Weighted average shares of common stock outstanding—basic and diluted
|
135,566,227 | |||||||||||||||||
Net loss per share of common stock—basic and diluted
|
$ | (0.12 | ) |
• |
GigCapital4’s unaudited balance sheet as of September 30, 2021 and the related notes; and
|
• |
BigBear (“
Successor
|
• |
GigCapital4’s historical audited statement of operations for the period from December 4, 2020 (date of inception) to December 31, 2020 and the related notes;
|
• |
BigBear (“
Successor
Predecessor
|
• |
NuWave’s historical audited statement of operations for the period from January 1, 2020 through June 18, 2020 and the related notes;
|
• |
Open Solutions’ historical audited statement of operations for the period from January 1, 2020 through December 1, 2020 and the related notes; and
|
• |
ProModel’s historical audited statement of operations for the period from January 1, 2020 through December 20, 2020 and the related notes.
|
• |
GigCapital4’s historical unaudited statement of operations for the nine months ended September 30, 2021 and the related notes; and
|
• |
BigBear (“
Successor
|
a) |
Reflects (1) the redemption of 24,878,693
|
b) |
Reflects the gross cash proceeds from the Note Financing of $200.0 million, net of debt issuance costs paid, and recognition of the associated convertible notes payable. Of the $9.8 million debt issuance costs, $5 million were settled in cash and $4.8 million was settled in equity of New BigBear.
|
c) |
Reflects the reclassification of the remaining 11,001,307
|
d) |
Reflects the recapitalization of BigBear, including the reclassification of members’ equity to common stock and additional
paid-in
capital of New BigBear, and the closing of GigCapital4’s accumulated deficit to additional
paid-in
capital of New BigBear.
|
e) |
Reflects the cash and equity settlement and accrual of transaction costs. Transaction costs are made up of (1) $12.5 million of GigCapital4’s deferred underwriting fees recorded on the historical balance sheet as of September 30, 2021. After a $2.5 million reduction in fee agreed at close, $5.0 million was settled in cash and $5.0 million in New BigBear common stock; (2a) $12.4 million of BigBear’s costs incurred in connection with the issuance of equity (with a corresponding adjustment to additional
paid-in
capital). At close, $5.4 million was settled in cash and $3.1 million was settled in New BigBear common stock. $4.8 million was reclassified from prepaid expenses and other current assets to equity; and (2b) $15.1 million of GigCapital4’s transaction costs expensed as incurred and BigBear’s expenses unrelated to the issuance of equity. At close, $4.5 million was settled in cash and $2.0 million was settled in New BigBear common stock.
|
f) |
Reflects the payment of the Cash Merger Consideration to stockholders of Ultimate.
|
g) |
Reflects the proceeds of PIPE financing from AE BBAI Aggregator, LP consisting of 8,000,000 shares of New BigBear common stock at a purchase price of $10 per share.
|
h) |
Reflects the repayment of long-term debt and related interest payable, as well as the associated loss on debt extinguishment related to unamortized debt issuance costs.
|
i) |
Reflects the recognition of share-based compensation related to certain equity incentives issued by Ultimate that would vest on an accelerated basis as a result of the Business Combination.
|
j) |
Reflects the establishment of an escrow account ($101.0 million) and a derivative liability ($12.0 million) for New BigBear’s contingent obligation to purchase 9,952,803 shares of common stock at $10.15 from certain shareholders, if those shares are not sold in the open market during the three-month period from the close of the Business Combination.
|
k) |
Adjustment to include
pre-acquisition
amortization on the fair value of the acquired intangible assets.
|
l) |
Adjustment to eliminate
pre-acquisition
intercompany sales between NuWave and ProModel.
|
m) |
Adjustment to (1) include the interest expense that would have been incurred to finance the NuWave Acquisition, the PCI Acquisition, the Open Solutions Acquisition, and Pro Model Acquisition as if they had taken place on January 1, 2020, based on the effective interest rate of the credit facility used to finance the acquisitions, and (2) eliminate the
pre-acquisition
interest expense, including amortization of deferred financing fees, related to the outstanding debt balances of PCI, which were settled by the sellers of PCI with proceeds from the sale.
|
n) |
Adjustment for income taxes, applying a statutory tax rate of 21% for the year ended December 31, 2020.
|
o) |
Adjustment to include the share-based compensation related to vesting of profit interests, issued by Ultimate to employees of BigBear, on consummation of the Business Combination.
|
p) |
Addition of transaction expenses for the Business Combination incurred or expected to be incurred subsequent to December 31, 2020. These costs will not affect BigBear’s statement of operations beyond 12 months after the Closing.
|
q) |
Addition of interest expense related to the Note Financing, net of amortization of debt issuance costs, that would have been incurred if the Business Combination had occurred on January 1, 2020.
|
r) |
Adjustment to (1) eliminate BigBear’s interest expense and amortization of debt issuance costs that would not have been incurred had the planned long-term debt repayment contingent on close of the Business Combination occurred on January 1, 2020 and (2) include the loss on debt extinguishment on repayment of the long-term loan.
|
s) |
Adjustment for income taxes, applying a statutory tax rate of 21% for the year ended December 31, 2020.
|
t) |
Elimination of GigCapital4 trust account interest income of approximately $20.
|
u) |
Addition of interest expense related to the Note Financing, net of amortization of debt issuance costs, that would have been incurred if the Business Combination had occurred on January 1, 2020.
|
v) |
Elimination of BigBear’s interest expense and amortization of debt issuance costs related to the paydown of debt that would not have been incurred if the Business Combination had occurred on January 1, 2020.
|
w) |
Adjustment for income taxes, applying a statutory tax rate of 21% for the nine months ended September 30, 2021.
|
Year ended December 31, 2020
|
||||
Pro Forma Combined
|
||||
Net loss
|
$ | (71,758 | ) | |
Weighted average shares outstanding—basic and diluted
|
135,566,227 | |||
Net loss per share—basic and diluted
|
$ | (0.53 | ) | |
Nine months ended September 30,
2021 |
||||
Pro Forma Combined
|
||||
Net loss
|
$ | (16,754 | ) | |
Weighted average shares outstanding—basic and diluted
|
135,566,227 | |||
Net loss per share—basic and diluted
|
$ | (0.12 | ) |
• |
Value of Insights
: Sorting the “wheat from the chaff” across disparate data sources and identifying optimal roadmaps to desired futures make our offerings unique in the market and especially valuable to customers. We don’t just increase the piles of data analysts must explore to make sense of the world around them, we automate sense-making and provide the actionable insights for customers to achieve proactive operation optimization.
|
• |
Time to Capability
: The event-driven,
API-focused
architecture allows our developers to quickly select, sequence, and integrate
pre-made
data, analytic and processing modules that will yield insights for customers’ unique needs. The ability to assemble
pre-configured
analytics and data sources means our products yield rapid value, often within
30-60
days, and create opportunities for horizontal growth within customer accounts (request for additional capabilities). In the past, customers have frequently requested additional capabilities within a year of initial deployment.
|
• |
Interoperability
: Our products are highly interoperable and easily integrated due of our
API-centric
architecture. While BigBear’s products can be used in a stand-alone manner, it is common for them to be integrated into customers’ existing technology environments to quickly produce customized solutions. This is a considerable differentiator with many competitors that force new customers into the difficult decisions of discarding prior investments and existing capabilities to implement new capabilities. The result of our unique approach allows customers to retain (or even improve) existing capabilities and investments, thus making the decision to implement our software much easier.
|
• |
Continuous Improvement/Results
: Continuous improvement of our processing modules drives retention and loyalty. Every module is continuously refined and improved to adjust to the ever-changing data environment. As each implementation is the product of combining our interoperable modules, every customer benefits from enhancements as they are deployed in our capability library. Rather than requiring customers to retain staff to maintain or sustain their capabilities, their BigBear-provided products continue to evolve and improve over time. This drives customer retention over time.
|
• |
Scalability
: As an entirely cloud-based solution, SaaS customers can scale their requirements without limitations based on their data and/or processing needs. There is no need for costly infrastructure (storage or processing) investments to grow with their needs.
|
(1) |
MarketsAndMarkets, Inc., May, 2021.
|
(1) |
Additive Technology: The potential to acquire technology that can accelerate growth in specific commercial market. This can include new/proprietary data sets, market-specific analytics, and novel AI/ML approaches that improve the overall impact of our products.
|
(2) |
Market Access: The opportunity to gain a strategic foothold in a high-growth market, thus immediately accelerating our growth in that space. While some of our target markets do not necessarily require an existing presence in that space, there are some markets that place more importance on industry experience, history, or reputation. In these cases, inorganic investments may dramatically increase the probability of our achieving our growth objectives in those markets.
|
1. |
incorporating market-specific data sets and sources that will be incorporated into the Company’s existing library of data (the Observe product);
|
2. |
creating new (and modifying existing) analytics in the Orient Product to derive insights into targeted commercial markets and the data that drives their specific decision making process;
|
3. |
creating additional data views, dashboards, and visualizations for the commercial market data and analytics;
|
4. |
optimizing the Dominate product around commercial drivers, such as resource allocation/optimization, revenue-generating courses of action, and scenario planning for strategic market drivers; and
|
5. |
expanding of cloud-based hosting infrastructure and processing to support commercial applications.
|
• |
platform capabilities and product functionality;
|
• |
data security and privacy;
|
• |
ease and speed of adoption, use, and deployment;
|
• |
product innovation;
|
• |
pricing and cost structures;
|
• |
customer experience, including support; and
|
• |
brand awareness and reputation.
|
Named Executive Officer
|
Principal Position
|
|
Dr. Reginald Brothers | Chief Executive Officer | |
Joshua Kinley | Chief Financial Officer | |
Sean Battle | Chief Strategy Officer |
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
All Other
Compensation
(6)
|
Total
|
|||||||||||||||
Dr. Reginald Brothers,
|
2020 | $ | 159,231 |
(2)
|
$ | 245,000 | — | $ | 404,231 | |||||||||||
Chief Executive Officer
|
||||||||||||||||||||
Joshua Kinley,
|
2020 | $ | 429,865 |
(3)
|
— |
(5)
|
$ | 56,824 | $ | 486,689 | ||||||||||
Chief Financial Officer
|
||||||||||||||||||||
Sean Battle,
(1)
|
2020 | $ | 432,867 |
(4)
|
— |
(5)
|
$ | 48,410 | $ | 481,277 | ||||||||||
Chief Strategy Officer
|
(1) |
Sean Battle resigned from his position as Chief Strategy Officer, effective December 7, 2021 and is no longer an employee of BigBear as of such date.
|
(2) |
Dr. Brothers commenced employment on June 19, 2020 and, as such, the salary amount reported represents salary amounts actually paid to Dr. Brothers for the portion of the year during which he was employed.
|
(3) |
Consists of $385,197 for services provided to PCI prior to its acquisition on October 23, 2020 and $44,688 for services provided to BigBear and its affiliates following such acquisition.
|
(4) |
Consists of $385,877 for services provided to PCI prior to its acquisition on October 23, 2020 and $46,990 for services provided to BigBear and its affiliates following such acquisition.
|
(5) |
Messrs. Kinley and Battle did not receive bonus payments in fiscal year 2020 due to their commencement of employment with BigBear, in each case, on October 23, 2020.
|
(6) |
The amounts reported in the “All Other Compensation” column consist of the following:
|
Name
|
Company 401(k)
Matching Contributions
(a)
|
Term Life
Insurance Premiums
(b)
|
Long-Term
Disability Premiums
(b)
|
Dental, Vision
and Medical Care Premiums
(b)
|
Supplemental
Accidental Death and Dismemberment Insurance Premiums
(b)
|
Tax Return
Preparation Services |
||||||||||||||||||
Joshua Kinley
|
$ | 17,100 | $ | 710 | $ | 7,856 | $ | 28,342 | $ | 750 | $ | 867 | ||||||||||||
Sean Battle
|
$ | 17,100 | — | $ | 4,171 | $ | 24,323 | $ | 750 | $ | 867 |
(a) |
See below under “
—Additional Narrative Disclosure—Retirement Benefits
|
(b) |
Represents the Company portion of premiums for coverage under benefit plans available only to certain executives.
|
Name
|
Fees Earned or
Paid in Cash ($) |
Total ($)
|
||||||
Kevin McAleenan
|
$ | 25,000 |
(1)
|
$ | 25,000 | |||
Paul Fulchino
|
$ | 25,000 |
(2)
|
$ | 25,000 |
(1) |
Represents fees earned by Mr. McAleenan in respect of his service on the BigBear Board commencing July 1, 2020. Fees earned by Mr. McAleenan in respect of his service on the BigBear Board in the fourth fiscal quarter of 2020 (in an amount equal to $12,500) were paid in March 2021.
|
(2) |
Represents fees earned by Mr. Fulchino in respect of his service on the BigBear Board commencing July 20, 2020. Per the terms of Mr. Fulchino’s service agreement (as described below), Mr. Fulchino elected to receive such amount in the form of equity, which amounts the Company expects to pay to Mr. Fulchino in 2021.
|
• |
Business Overview
|
• |
Recent Developments
|
• |
Results of Operations
|
• |
the three and nine-month periods ended September 30, 2021 (the “
Successor 2021 Q3 Period
Successor 2021 Period
|
• |
the three months ended September 30, 2020 (the “
Successor 2020 Q3 Period
|
• |
the period from May 22, 2020 through September 30, 2020 (the “
Successor 2020 Period
|
• |
the three and nine-month periods ended September 30, 2020 (the “
Predecessor 2020 Q3 Period
Predecessor 2020 Period,”
|
• |
the three and nine-month periods ended September 30, 2020 that gives effect to each acquisition as if each had been completed as of January 1, 2020 (the “
Successor 2020 Q3 Pro Forma Period
Successor 2020 Pro Forma Period
NuWave
“BigBear.ai”)
|
• |
Liquidity and Capital Resources
|
• |
Critical Accounting Policies and Estimates
|
our significant accounting policies, including critical accounting policies, are summarized in Note B in our audited financial statements for the year ended December 31, 2020 included in the definitive proxy statement.
|
• |
it provides us with opportunities to interact directly with our customers and build intimate customer relationships;
|
• |
it allows us to work alongside our customers and understand their needs so that we can better tailor agile solutions to meet those needs as mission objectives evolve;
|
• |
it grants access to real operational environments where we can test current and future technology-enabled solutions;
|
• |
it offers insights into the future technology needs of our customers, which helps inform our investment in research and development and the design of new offerings; and
|
• |
it presents unique and complex challenges that require us to operationalize the latest breakthroughs in AI/ML technologies and push the envelope in terms of flexibility and scale.
|
• |
Entered into a
one-year
contract with the Defense Intelligence Agency to develop a force element tracking and identity platform utilizing Machine Assisted Rapid Repository Services solution.
|
• |
Awarded the five-year, single award TACTICALCRUISER contract by the United States Cyber Command.
|
• |
Entered into a memorandum of understanding with Redwire Corporation for the development of advanced cyber resiliency capabilities for future space missions.
|
• |
Awarded one of two Global Force Information Management Phase 1 Prototype contracts by the United States Army.
|
• |
Entered into a three-year commercial partnership with Terran Orbital to support manufacturing and supply chain optimization, constellation tasking optimization, space situational awareness analytics, and sensor exploitation to identify relevant insights.
|
• |
Cyber & Engineering: The Cyber & Engineering segment provides
high-end
technology and management consulting services to its customers. This segment focuses in the areas of cloud engineering and enterprise IT, cybersecurity, computer network operations and wireless, systems engineering, as well as strategy and program planning. The segment’s primary solutions relate to the development and deployment of customized solutions in the areas of cloud engineering and IT
|
infrastructure, cybersecurity and computer network operations, data analytics and visualization, and system engineering and program planning. The results of PCI are included in the Cyber & Engineering segment results.
|
• |
Analytics: The Analytics segment provides
high-end
technology and consulting services to its customers. This segment focuses on the areas of big data computing and analytical solutions, including predictive and prescriptive analytics solutions. The segment’s primary solutions assist customers in aggregating, interpreting, and synthesizing data to enable real-time decision making capabilities. The results of NuWave, Open Solutions, and ProModel are included in the Analytics segment results.
|
Successor
|
Predecessor
|
|||||||||||
2021 Q3
|
2020 Q3
|
2021
|
2020
|
2020 Q3
|
2020
|
|||||||
PCI | July 1, 2021 – September 30, 2021 | Not Applicable | January 1, 2021 – September 30, 2021 | Not Applicable | July 1, 2020 – September 30, 2020 | January 1, 2020 – September 30, 2020 | ||||||
Open Solutions | Not Applicable | |||||||||||
ProModel | ||||||||||||
NuWave | July 1, 2020 – September 30, 2020 | June 19, 2020 –September 30, 2020 | ||||||||||
BigBear.ai | May 22, 2020 –September 30, 2020 |
Successor
2020 Q3 (Historical) |
PCI
Three months ended September 30, 2020 (Historical) |
Open
Solutions Three months ended September 30, 2020 (Historical) |
ProModel
Three months ended September 30, 2020 (Historical) |
Acquisition
Accounting Adjustments |
Successor
2020 Q3 Pro Forma |
|||||||||||||||||||
Revenues
|
$ | 7,802 | $ | 17,899 | $ | 6,214 | $ | 4,090 | $ | (417 |
)
(a)
|
$ | 35,588 | |||||||||||
Cost of revenues
|
5,584 | 13,972 | 3,610 | 2,460 | (417 |
)
(a)
|
25,209 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross margin
|
|
2,218
|
|
|
3,927
|
|
|
2,604
|
|
|
1,630
|
|
|
—
|
|
|
10,379
|
|
||||||
Operating expenses:
|
||||||||||||||||||||||||
Selling, general and administrative
|
1,910 | 2,426 | 1,148 | 403 | 1,359 |
(b)
|
7,246 | |||||||||||||||||
Research and development
|
184 | 41 | — | — | — | 225 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating income (loss)
|
|
124
|
|
|
1,460
|
|
|
1,456
|
|
|
1,227
|
|
|
(1,359
|
)
|
|
2,908
|
|
||||||
Interest expense
|
65 | — | — | — | 1,915 |
(c)
|
1,980 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) before taxes
|
|
59
|
|
|
1,460
|
|
|
1,456
|
|
|
1,227
|
|
|
(3,274
|
)
|
|
928
|
|
||||||
Income tax (benefit) expense
|
(14 | ) | — | (10 | ) | (266 | ) | 1,068 |
(d)
|
778 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss)
|
$
|
73
|
|
$
|
1,460
|
|
$
|
1,466
|
|
$
|
1,493
|
|
$
|
(4,342
|
)
|
$
|
150
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Adjustment to eliminate $417 of
pre-acquisition
intercompany revenues and cost of revenues between NuWave and ProModel.
|
(b) |
Adjustment to include
pre-acquisition
amortization of the acquired intangible assets of $283 for PCI, $637 for Open Solutions, and $439 for ProModel.
|
(c) |
Adjustment to (1) include the interest expense of $576 to finance the PCI Acquisition, $583 to finance the Open Solutions Acquisition, and $756 to finance the ProModel Acquisition as if each acquisition had taken place on January 1, 2020, based on the effective interest rate of the credit facility used to finance the acquisitions.
|
(d) |
Adjustment for income taxes of $79 expense for NuWave, $278 expense for PCI, $161 expense for Open Solutions, and $550 expense for ProModel, applying a statutory tax rate of 21% as if the acquisitions had taken place on January 1, 2020.
|
Successor
2020 (Historical) |
NuWave
January 1, 2020 – June 18, 2020 (Historical) |
PCI
Nine months ended September 30, 2020 (Historical) |
Open
Solutions Nine months ended September 30, 2020 (Historical) |
ProModel
Nine months ended September 30, 2020 (Historical) |
Acquisition
Accounting Adjustments |
Successor
2020 Pro Forma |
||||||||||||||||||||||
Revenues
|
$ | 9,183 | $ | 10,809 | $ | 55,093 | $ | 18,506 | $ | 12,182 | $ | (1,241 |
)
(a)
|
$ | 104,532 | |||||||||||||
Cost of revenues
|
6,325 | 5,436 | 43,088 | 10,750 | 7,326 | (1,241 |
)
(a)
|
71,684 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Gross margin
|
|
2,858
|
|
|
5,373
|
|
|
12,005
|
|
|
7,756
|
|
|
4,856
|
|
|
—
|
|
|
32,848
|
|
|||||||
Operating expenses:
|
||||||||||||||||||||||||||||
Selling, general and administrative
|
2,024 | 3,266 | 7,183 | 3,418 | 1,201 | 4,792 |
(b)
|
21,884 | ||||||||||||||||||||
Research and development
|
258 | — | 77 | — | — | — | 335 | |||||||||||||||||||||
Transaction expenses
|
1,662 | — | — | — | — | 8,429 |
(c)
|
10,091 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating (loss) income
|
|
(1,086
|
)
|
|
2,107
|
|
|
4,745
|
|
|
4,338
|
|
|
3,655
|
|
|
(13,221
|
)
|
|
538
|
|
|||||||
Interest expense (income)
|
65 | — | 1 | (3 | ) | — | 6,578 |
(d)
|
6,641 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(Loss) income before taxes
|
|
(1,151
|
)
|
|
2,107
|
|
|
4,744
|
|
|
4,341
|
|
|
3,655
|
|
|
(19,799
|
)
|
|
(6,103
|
)
|
|||||||
Income tax (benefit) expense
|
(296 | ) | (6 | ) | 7 | 51 | 903 | (1,995 |
)
(e)
|
(1,336 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
$
|
(855
|
)
|
$
|
2,113
|
|
$
|
4,737
|
|
$
|
4,290
|
|
$
|
2,752
|
|
$
|
(17,804
|
)
|
$
|
(4,767
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Adjustment to eliminate $1,241 of
pre-acquisition
intercompany revenues and cost of revenues between NuWave and ProModel.
|
(b) |
Adjustment to include
pre-acquisition
amortization of the acquired intangible assets of $735 for NuWave, $849 for PCI, $1,901 for Open Solutions, and $1,307 for ProModel.
|
(c) |
Adjustment for transaction costs related to the acquisition of PCI for $3,484, Open Solutions for $2,432, and ProModel $2,513.
|
(d) |
Adjustment to (1) include the interest expense of $861 to finance the NuWave Acquisition, $1,728 to finance the PCI Acquisition, $1,738 to finance the Open Solutions Acquisition, and $2,252 to finance the ProModel Acquisition as if each acquisition had taken place on January 1, 2020, based on the effective interest rate of the credit facility used to finance the acquisitions, and (2) eliminate $1 of
pre-acquisition
interest expense, including amortization of deferred financing fees, related to the outstanding debt balances for PCI, which were settled by the sellers of PCI with proceeds from the sale.
|
(e) |
Adjustment for income taxes of $113 expense for NuWave, $(283) benefit for PCI, $(414) benefit for Open Solutions, and $(1,411) benefit for ProModel, applying a statutory tax rate of 21% as if the acquisitions had taken place on January 1, 2020.
|
Successor
|
Predecessor
|
Successor
|
||||||||||||||||||||||||||||||
Three months
ended September 30, 2021 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2021 |
Period from
May 22, 2020 through September 30, 2020 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2020 |
Three months
ended September 30, 2020 Q3 Pro Forma |
Nine months
ended September 30, 2020 Pro Forma |
|||||||||||||||||||||||||
Revenues
|
$ | 40,219 | $ | 7,802 | $ | 112,100 | $ | 9,183 | $ | 17,899 | $ | 55,093 | $ | 35,588 | $ | 104,532 | ||||||||||||||||
Cost of revenues
|
29,421 | 5,584 | 81,859 | 6,325 | 13,972 | 43,088 | 25,209 | 71,684 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross margin
|
|
10,798
|
|
|
2,218
|
|
|
30,241
|
|
|
2,858
|
|
|
3,927
|
|
|
12,005
|
|
|
10,379
|
|
|
32,848
|
|
||||||||
Operating expenses:
|
|
|||||||||||||||||||||||||||||||
Selling, general and administrative
|
12,038 | 1,910 | 32,557 | 2,024 | 2,426 | 7,183 | 7,246 | 21,884 | ||||||||||||||||||||||||
Research and development
|
1,363 | 184 | 4,158 | 258 | 41 | 77 | 225 | 335 | ||||||||||||||||||||||||
Transaction expenses
|
— | — | — | 1,662 | — | — | — | 10,091 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating (loss) income
|
|
(2,603
|
)
|
|
124
|
|
|
(6,474
|
)
|
|
(1,086
|
)
|
|
1,460
|
|
|
4,745
|
|
|
2,908
|
|
|
538
|
|
||||||||
Interest expense
|
1,870 | 65 | 5,579 | 65 | — | 1 | 1,980 | 6,641 | ||||||||||||||||||||||||
Other income, net
|
— | — | (1 | ) | — | — | — | — |
|
—
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(Loss) income before taxes
|
|
(4,473
|
)
|
|
59
|
|
|
(12,052
|
)
|
|
(1,151
|
)
|
|
1,460
|
|
|
4,744
|
|
|
928
|
|
|
(6,103
|
)
|
||||||||
Income tax (benefit) expense
|
(1,327 | ) | (14 | ) | (3,294 | ) | (296 | ) | — | 7 | 778 | (1,336 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Net (loss) income
|
$
|
(3,146
|
)
|
$
|
73
|
|
$
|
(8,758
|
)
|
$
|
(855
|
)
|
$
|
1,460
|
|
$
|
4,737
|
|
$
|
150
|
|
$
|
(4,767
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor
2021 Q3 |
Successor
2020 Q3 |
Predecessor
2020 Q3 |
Successor
2020 Q3 Pro Forma |
|||||||||||||
Revenues:
|
|
|||||||||||||||
Cyber & Engineering
|
$ | 19,229 | $ | — | $ | 17,899 | $ | 17,899 | ||||||||
Analytics
|
20,990 | 7,802 | — | 17,689 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues
|
$
|
40,219
|
|
$
|
7,802
|
|
$
|
17,899
|
|
$
|
35,588
|
|
||||
|
|
|
|
|
|
|
|
Successor
2021 Q3 |
Successor
2020 Q3 |
Predecessor
2020 Q3 |
Successor
2020 Q3 Pro Forma |
|||||||||||||
Cost of revenues:
|
|
|||||||||||||||
Cyber & Engineering
|
$ | 15,502 | $ | — | $ | 13,972 | $ | 13,972 | ||||||||
Analytics
|
13,919 | 5,584 | — | 11,237 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues
|
$
|
29,421
|
|
$
|
5,584
|
|
$
|
13,972
|
|
$
|
25,209
|
|
||||
|
|
|
|
|
|
|
|
Successor
2021 Q3 |
Successor
2020 Q3 |
Predecessor
2020 Q3 |
||||||||||
Income tax (benefit) expense
|
$ | (1,327 | ) | $ | (14 | ) | $ | — | ||||
Effective tax rate
|
29.7 | % | (23.7 | )% | 0.0 | % |
Successor
2021 |
Successor
2020 |
Predecessor
2020 |
Successor
2020 Pro Forma |
|||||||||||||
Revenues:
|
|
|||||||||||||||
Cyber & Engineering
|
$ | 58,039 | $ | — | $ | 55,093 | $ | 55,093 | ||||||||
Analytics
|
54,061 | 9,183 | — | 49,439 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues
|
$
|
112,100
|
|
$
|
9,183
|
|
$
|
55,093
|
|
$
|
104,532
|
|
||||
|
|
|
|
|
|
|
|
Successor
2021 |
Successor
2020 |
Predecessor
2020 |
Successor
2020 Pro Forma |
|||||||||||||
Cost of revenues:
|
|
|||||||||||||||
Cyber & Engineering
|
$ | 46,642 | $ | — | $ | 43,088 | $ | 43,088 | ||||||||
Analytics
|
35,217 | 6,325 | — | 28,596 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues
|
$
|
81,859
|
|
$
|
6,325
|
|
$
|
43,088
|
|
$
|
71,684
|
|
||||
|
|
|
|
|
|
|
|
Successor
2021 |
Successor
2020 |
Predecessor
2020 |
||||||||||
Income tax (benefit) expense
|
$ | (3,294 | ) | $ | (296 | ) | $ | 7 | ||||
Effective tax rate
|
27.3 | % | 25.7 | % | 0.1 | % |
Successor
2021 Q3 |
Successor
2020 Q3 |
Predecessor
2020 Q3 |
Successor
2020 Q3 Pro Forma |
|||||||||||||
Net (loss) income
|
$ | (3,146 | ) | $ | 73 | $ | 1,460 | $ | 150 | |||||||
Interest expense
|
1,870 | 65 | — | 1,980 | ||||||||||||
Income tax (benefit) expense
|
(1,327 | ) | (14 | ) | — | 778 | ||||||||||
Depreciation and amortization
|
1,759 | 330 | 18 | 1,902 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA
|
|
(844
|
)
|
|
454
|
|
|
1,478
|
|
|
4,810
|
|
||||
Adjustments:
|
||||||||||||||||
Capital market advisory fees
(i)
|
1,510 | — | — | — | ||||||||||||
Termination of legacy benefits
(ii)
|
1,482 | — | — | — | ||||||||||||
Non-recurring
integration costs
(iii)
|
740 | — | — | — | ||||||||||||
Commercial
start-up
costs
(iv)
|
773 | — | — | — | ||||||||||||
Management fees
(v)
|
229 | 150 | — | 150 | ||||||||||||
Equity-based compensation
|
30 | — | 25 | 303 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$
|
3,920
|
|
$
|
604
|
|
$
|
1,503
|
|
$
|
5,263
|
|
||||
|
|
|
|
|
|
|
|
(i) |
The Company incurred capital market and advisory fees related to advisors assisting with preparation for the Business Combination.
|
(ii) |
The company terminated certain legacy employee incentive benefits with final payments being made in the fourth quarter of 2021.
|
(iii) |
Non-recurring
internal integration costs related to streamlining business functions across the Company and realized synergies from our acquisitions.
|
(iv) |
Non-recurring
commercial
start-up
costs incurred prior to the commencement of operations of the Company’s commercial market solutions.
|
(v) |
Management and other related consulting fees paid to AE Partners. These fees will no longer be accrued or paid subsequent to the Business Combination.
|
Successor
2021 |
Successor
2020 |
Predecessor
2020 |
Successor
2020 Pro Forma |
|||||||||||||
Net (loss) income
|
$ | (8,758 | ) | $ | (855 | ) | $ | 4,737 | $ | (4,767 | ) | |||||
Interest expense
|
5,579 | 65 | 1 | 6,641 | ||||||||||||
Income tax (benefit) expense
|
(3,294 | ) | (296 | ) | 7 | (1,336 | ) | |||||||||
Depreciation and amortization
|
5,432 | 374 | 48 | 5,401 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA
|
|
(1,041
|
)
|
|
(712
|
)
|
|
4,793
|
|
|
5,939
|
|
||||
Adjustments:
|
||||||||||||||||
Capital market advisory fees
(i)
|
3,956 | — | — | — | ||||||||||||
Transaction expenses
(ii)
|
— | 1,662 | — | 10,091 | ||||||||||||
Termination of legacy benefits
(iii)
|
1,482 | — | — | — | ||||||||||||
Non-recurring
integration costs
(iv)
|
1,245 | — | — | — | ||||||||||||
Commercial
start-up
costs
(v)
|
773 | — | — | — | ||||||||||||
Management fees
(vi)
|
683 | 150 | — | 150 | ||||||||||||
Equity-based compensation
|
86 | — | 74 | 902 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$
|
7,184
|
|
$
|
1,100
|
|
$
|
4,867
|
|
$
|
17,082
|
|
||||
|
|
|
|
|
|
|
|
(i) |
The Company incurred capital market and advisory fees related to advisors assisting with preparation for the Business Combination.
|
(ii) |
For the Successor 2020 Period, the Company incurred acquisition costs related to the purchase of NuWave. For the Successor 2020 Pro Forma Period, the Company incurred acquisition costs related to the purchase of NuWave, PCI, Open Solutions and ProModel in 2020. Costs include both diligence costs and integration costs after each company was acquired.
|
(iii) |
The company has elected to terminate certain legacy employee incentive benefits with final payments being made in the fourth quarter of 2021.
|
(iv) |
Non-recurring
internal integration costs related to streamlining business functions across the Company and realized synergies from our acquisitions.
|
(v) |
Non-recurring
commercial
start-up
costs incurred prior to the commencement of operations of the Company’s commercial market solutions.
|
(vi) |
Management and other related consulting fees paid to AE Partners. These fees will no longer be accrued or paid subsequent to the Business Combination.
|
Successor
2021 |
Successor
2020 |
Predecessor
2020 |
||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 1,222 | $ | 182 |
|
$ | 6,822 | |||||||||
Capital expenditures
|
(601 | ) | (57 | ) |
|
(115 | ) | |||||||||
|
|
|
|
|
|
|||||||||||
Free cash flow
|
$
|
621
|
$
|
125
|
$
|
6,707
|
||||||||||
|
|
|
|
|
|
|||||||||||
Free cash flow from acquired businesses
|
|
9,563
|
|
|||||||||||||
Operating cash flow from acquired businesses
|
9,765 | |||||||||||||||
Capital expenditures of acquired businesses
|
(202 | ) | ||||||||||||||
|
|
|||||||||||||||
Successor 2020 Pro Forma free cash flow
(i)
|
$
|
9,688
|
(i) |
The Successor 2020 Pro Forma free cash flow represent free cash flow for the respective nine months ended September 30, 2020, adjusted for estimated free cash flow for NuWave, PCI, Open Solutions, and ProModel as if each of those transactions occurred at the beginning of the period. Adjustments to reflect the estimated free cash flows from acquired businesses includes certain transaction costs (and the associated tax impacts) not already included in the net loss, where applicable. The Successor 2020 Pro Forma free cash flow were not prepared in accordance with GAAP or the pro forma rules of Regulation S-X promulgated by the SEC and should not be considered as an alternative to net cash provided by (used in) operating activities determined in accordance with GAAP. We believe that the inclusion of Successor 2020 Pro Forma free cash flow is appropriate to provide additional information to investors because securities analysts and other investors may use this non-GAAP financial measure to assess our operating performance across periods on a consistent basis. The Successor 2020 Pro Forma free cash flow has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.
|
• |
Funded Backlog.
|
• |
Unfunded Backlog.
|
• |
Priced Unexercised Options.
|
• |
Unpriced Unexercised Options.
|
• |
Anticipated
Follow-on
Awards.
Follow-on
Awards represents our estimate of the value of goods and services to be delivered under a contract that has not yet been awarded to us, but where we believe we are highly likely to be awarded the contract because we are the incumbent on an ongoing customer program, the program we support is of critical importance to national security, and that if the contract was awarded to a different party, the transition would be highly disruptive to the achievement of our customer’s objectives. We estimate backlog related to Anticipated
Follow-on
Awards based on the assumption that the goods and services that we will deliver under the anticipated future contract will be generally similar in scope and pricing compared to our current contract and that our current level of support on that program will persist under the new contract.
|
Successor
As of September 30, 2021 |
Successor
As of December 31, 2020 |
|||||||
Funded
|
$ | 103,605 | $ | 63,048 | ||||
Unfunded
|
54,545 | 45,795 | ||||||
Priced, unexercised options
|
136,669 | 57,345 | ||||||
Unpriced, unexercised options
|
148,072 | 175,509 | ||||||
Anticipated
follow-on
awards
|
42,582 | 66,864 | ||||||
|
|
|
|
|||||
Total backlog
|
$
|
485,473
|
|
$
|
408,561
|
|
||
|
|
|
|
Successor
|
||||||||
September 30, 2021
|
December 31, 2020
|
|||||||
Term Loan
|
$ | 109,175 | $ | 110,000 | ||||
Revolver
|
1,500 | — | ||||||
|
|
|
|
|||||
Total debt
|
110,675 | 110,000 | ||||||
Less: unamortized discounts and issuance costs
|
2,628 | 3,006 | ||||||
|
|
|
|
|||||
Total debt, net
|
108,047 | 106,994 | ||||||
Less: current portion
|
2,600 | 1,100 | ||||||
|
|
|
|
|||||
Long-term debt, net
|
$
|
105,447
|
|
$
|
105,894
|
|
||
|
|
|
|
(i) |
$110 million term loan (the “
Antares Capital Term Loan
|
(ii) |
$15 million revolving credit facility (the “
Antares Capital Revolving Credit Facility
|
Successor 2021
|
Successor 2020
|
Predecessor 2020
|
||||||||||
Net cash provided by operating activities
|
$ | 1,222 | $ | 182 | $ | 6,822 | ||||||
Net cash used in investing activities
|
(825 | ) | (26,900 | ) | (115 | ) | ||||||
Net cash provided by (used in) financing activities
|
675 | 30,517 | (4,011 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents
|
1,072 | 3,799 | 2,696 | |||||||||
Cash and cash equivalents at beginning of period
|
9,704 | 1,664 | ||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period
|
$
|
10,776
|
|
$
|
3,799
|
|
$
|
4,340
|
|
|||
|
|
|
|
|
|
Total
|
Less than
1 Year |
1 – 3
Years |
3 – 5
Years |
More than
5 Years |
||||||||||||||||
Operating lease commitments
|
$ | 4,580 | $ | 1,449 | $ | 1,713 | $ | 987 | $ | 431 | ||||||||||
Term loan
|
110,000 | 1,100 | 2,200 | 2,200 | 104,500 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
$
|
114,580
|
|
$
|
2,549
|
|
$
|
3,913
|
|
$
|
3,187
|
|
$
|
104,931
|
|
|||||
|
|
|
|
|
|
|
|
|
|
• |
our failure to reach our internal forecasts could impact our ability to achieve our forecasted levels of cash flows and reduce the estimated discounted value of our reporting units;
|
• |
adverse technological events that could impact our performance;
|
• |
volatility in equity and debt markets resulting in higher discount rates; and
|
• |
significant adverse changes in the regulatory environment or markets in which we operate.
|
Name
|
Age
|
Position
|
||||
Dr. Reginald Brothers
|
62 | Chief Executive Officer, Director | ||||
Jeffry Dyer
|
49 | President of Commercial | ||||
Brian Frutchey
|
44 | Chief Technology Officer | ||||
Samuel Gordy
|
61 | Chief Operating Officer | ||||
Joshua Kinley
|
47 | Chief Financial Officer | ||||
Sean Battle
|
52 | Director | ||||
Peter Cannito
|
49 | Director, Chairman | ||||
Pamela Braden
|
63 | Director | ||||
Dr. Raluca Dinu
|
47 | Director | ||||
Paul Fulchino
|
75 | Director | ||||
Jeffrey Hart
|
32 | Director | ||||
Dorothy D. Hayes
|
71 | Director | ||||
Raanan I. Horowitz
|
61 | Director | ||||
Dr. Avi Katz
|
63 | Director | ||||
Kirk Konert
|
34 | Director |
• |
the requirement that a majority of board consist of independent directors;
|
• |
the requirement that the controlled company have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
• |
the requirement that the controlled company have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
• |
assisting the BigBear Board in the oversight of (i) the accounting and financial reporting processes of the Company and the audits of the financial statements of Company, (ii) the preparation and integrity of the financial statements of the Company, (iii) the compliance by the Company with financial statement and regulatory requirements, (iv) the performance of the Company’s internal finance and accounting personnel and its independent registered public accounting firm, and (v) the qualifications and independence of the Company’s independent registered public accounting firm;
|
• |
reviewing with each of the internal and independent registered public accounting firm the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation;
|
• |
reviewing and discussing with management and internal auditors the Company’s system of internal control and discussing with the independent registered public accounting firm any significant matters regarding internal controls over financial reporting that have come to its attention during the conduct of its audit;
|
• |
reviewing and discussing with management, internal auditors and independent registered public accounting firm the Company’s financial and critical accounting practices, and policies relating to risk assessment and management;
|
• |
receiving and reviewing reports of the independent registered public accounting firm discussing (i) all critical accounting policies and practices to be used in the firm’s audit of the Company’s financial statements, (ii) all alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm, and (iii) other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences;
|
• |
reviewing and discussing with management and the independent registered public accounting firm the annual and quarterly financial statements and section entitled “
Management’s Discussion and Analysis of Financial Condition and Results of Operations
10-K
and Quarterly Reports on Form
10-Q;
|
• |
reviewing, or establishing, standards for the type of information and the type of presentation of such information to be included in, earnings press releases and earnings guidance provided to analysts and rating agencies;
|
• |
discussing with management and the independent registered public accounting firm any changes in the Company’s critical accounting principles and the effects of alternative GAAP methods,
off-balance
sheet structures and regulatory and accounting initiatives;
|
• |
reviewing material pending legal proceedings involving the Company and other contingent liabilities;
|
• |
meeting periodically with the Chief Executive Officer, Chief Financial Officer, the senior internal auditing executive and the independent registered public accounting firm in separate executive sessions to discuss results of examinations;
|
• |
reviewing and approving all transactions between the Company and related parties or affiliates of the officers of the Company requiring disclosure under Item 404 of Regulation
S-K
prior to the Company entering into such transactions;
|
• |
establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or accounting matters;
|
• |
reviewing periodically with the Company’s management, the independent registered public accounting firm and outside legal counsel (i) legal and regulatory matters which may have a material effect on the financial statements, and (ii) corporate compliance policies or codes of conduct, including any correspondence with regulators or government agencies and any employee complaints or published reports that raises material issues regarding the Company’s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities; and
|
• |
establishing policies for the hiring of employees and former employees of the independent registered public accounting firm.
|
• |
reviewing the performance of the Chief Executive Officer and executive management;
|
• |
assisting the BigBear Board in developing and evaluating potential candidates for executive positions (including Chief Executive Officer);
|
• |
reviewing and approving goals and objectives relevant to the Chief Executive Officer and other executive officer compensation, evaluating the Chief Executive Officer’s and other executive officers’ performance in light of these corporate goals and objectives, and setting Chief Executive Officer and other executive officer compensation levels consistent with its evaluation and the Company’s philosophy;
|
• |
approving the salaries, bonus and other compensation for all executive officers;
|
• |
reviewing and approving compensation packages for new corporate officers and termination packages for corporate officers as requested by management;
|
• |
reviewing and discussing with the BigBear Board and senior officers plans for officer development and corporate succession plans for the Chief Executive Officer and other senior officers;
|
• |
reviewing and making recommendations concerning executive compensation policies and plans;
|
• |
reviewing and recommending to the BigBear Board the adoption of or changes to the compensation of the Company’s directors;
|
• |
reviewing and approving the awards made under any executive officer bonus plan, and providing an appropriate report to the BigBear Board;
|
• |
reviewing and making recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans, and, except as otherwise delegated by the Board, acting as the “Plan Administrator” for equity-based and employee benefit plans;
|
• |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for the Company’s executive officers and employees;
|
• |
reviewing periodic reports from management on matters relating to the Company’s personnel appointments and practices;
|
• |
assisting management in complying with the Company’s proxy statement and annual report disclosure requirements;
|
• |
issuing an annual Report of the Compensation Committee on Executive Compensation for the Company’s annual proxy statement in compliance with applicable SEC rules and regulations;
|
• |
annually evaluating the Committee’s performance and the committee’s charter and recommending to the BigBear Board any proposed changes to the charter or the committee; and
|
• |
undertaking all further actions and discharging all further responsibilities imposed upon the committee from time to time by the Board, the federal securities laws or the rules and regulations of the SEC.
|
• |
developing and recommending to the BigBear Board the criteria for appointment as a director;
|
• |
identifying, considering, recruiting and recommending candidates to fill new positions on the Board;
|
• |
reviewing candidates recommended by stockholders;
|
• |
conducting the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates; and
|
• |
recommending director nominees for approval by the BigBear Board and election by the stockholders at the next annual meeting.
|
Name and Principal Position
|
Year
|
Salary
|
Bonus
|
All Other
Compensation
(5)
|
Total
|
|||||||||||||||
Dr. Reginald Brothers,
|
2020 | $ | 159,231 |
(1)
|
$ | 245,000 | $ | — | $ | 404,231 | ||||||||||
Chief Executive Officer
|
||||||||||||||||||||
Joshua Kinley,
|
2020 | $ | 429,865 |
(2)
|
$ | — |
(4)
|
$ | 56,824 | $ | 486,689 | |||||||||
Chief Financial Officer
|
||||||||||||||||||||
Sean Battle,
|
2020 | $ | 432,867 |
(3)
|
$ | — |
(4)
|
$ | 48,410 | $ | 481,277 | |||||||||
Chief Strategy Officer
|
(1) |
Dr. Brothers commenced employment on June 19, 2020 and, as such, the salary amount reported represents salary amounts actually paid to Dr. Brothers for the portion of the year during which he was employed.
|
(2) |
Consists of $385,197 for services provided to PCI prior to its acquisition on October 23, 2020 and $44,688 for services provided to BigBear and its affiliates following such acquisition.
|
(3) |
Consists of $385,877 for services provided to PCI prior to its acquisition on October 23, 2020 and $46,990 for services provided to BigBear and its affiliates following such acquisition.
|
(4) |
Messrs. Kinley and Battle did not receive bonus payments in fiscal year 2020 due to their commencement of employment with BigBear, in each case, on October 23, 2020.
|
(5) |
The amounts reported in the All Other Compensation column consist of the following:
|
Name
|
Company 401(k)
Matching Contributions
(a)
|
Term Life
Insurance Premiums
(b)
|
Long-Term
Disability Premiums
(b)
|
Dental, Vision
and Medical Care Premiums
(b)
|
Supplemental
Accidental Death and Dismemberment Insurance Premiums
(b)
|
Tax Return
Preparation Services |
||||||||||||||||||
Joshua Kinley
|
17,100 | 710 | 7,856 | 28,342 | 750 | 867 | ||||||||||||||||||
Sean Battle
|
17,100 | — | 4,171 | 24,323 | 750 | 867 |
(a) |
See below under “
—Additional Narrative Disclosure—Retirement Benefits
|
(b) |
Represents the Company portion of premiums for coverage under benefit plans available only to certain executives.
|
Shares Beneficially
Owned Prior to the Offering |
Shares
Being
Offered
|
Warrants
Being Offered |
Shares Beneficially
Owned After the Offering |
|||||||||||||||||||||
Name of Selling Stockholder
|
Shares
|
%
|
Shares
|
%
|
||||||||||||||||||||
AE Industrial Partners
(1)
|
113,250,000 | 83.5 | % | 113,250,000 | — | — | — | |||||||||||||||||
GigAcquisitions4, LLC
(2)(3)(4)(9)
|
9,835,333 | 7.2 | % | 9,835,333 | 283,333 | — | — | |||||||||||||||||
Dr. Raluca Dinu
(2)(4)(9)
|
9,835,333 | 7.2 | % | 9,835,333 | — | — | — | |||||||||||||||||
Dorothy D. Hayes
(2)
|
12,000 | * | 12,000 | — | — | — | ||||||||||||||||||
Dr. Avi S. Katz
(2)(3)(9)
|
9,835,333 | 7.2 | % | 9,835,333 | — | — | — | |||||||||||||||||
Brad Weightman
(2)
(10)
|
6,000 | * | 6,000 | — | — | — | ||||||||||||||||||
Oppenheimer & Co. Inc.†
(5)(9)
|
1,100,096 | * | 1,100,096 | 66,560 | — | — | ||||||||||||||||||
William Blair & Company, L.L.C.†
(6)
|
313,000 | * | 313,000 | — | — | — | ||||||||||||||||||
BMO Capital Markets Corp.†
(7)
|
248,000 | * | 248,000 | — | — | — | ||||||||||||||||||
Nomura Securities International, Inc.†
(8)(9)
|
167,024 | * | 167,024 | 16,640 | — | — |
* |
Less than 1%
|
† |
Registered broker-dealer or affiliate of broker-dealer.
|
(1) |
BBAI Ultimate Holdings, LLC and AE BBAI Aggregator, LP are controlled by AE Industrial Partners Fund II, LP, AE Industrial Partners Fund
II-A,
LP and AE Industrial Partners Fund
II-B,
LP (collectively, the “
AE Partners Funds
|
(2) |
The business address for this person is 1731 Embarcadero Road, Suite 200, Palo Alto, California 94303.
|
(3) |
Represents shares held by GigAcquisitions4, LLC. The shares held by GigAcquisitions4, LLC are beneficially owned by Dr. Avi Katz, who has sole voting and dispositive power over the shares held by GigAcquisitions4, LLC.
|
(4) |
Represents shares held by GigAcquisitions4, LLC. Dr. Dinu is a member of GigFounders, LLC, which has a financial and voting interest in GigAcquisitions4, LLC as a member of GigAcquisitions4, LLC and that entitles this partnership to participate in any economic return of GigAcquisitions4, LLC in accordance with terms negotiated with the other holders of financial and voting interests in GigAcquisitions4, LLC. Accordingly, the shares of Common Stock held by GigAcquisitions4, LLC, subject to the interests of such other holders, are indirectly and beneficially owned by Dr. Dinu by virtue of her financial interest in GigFounders, LLC.
|
(5) |
The business address for this entity is 85 Broad Street, New York, New York 10004.
|
(6) |
The business address for this entity is 150 N. Riverside Plaza, 43rd Floor, Chicago, Illinois 60606.
|
(7) |
The business address for this entity is 151 West 42nd Street, 32nd Floor, New York, New York 10036.
|
(8) |
The business address for this entity is Worldwide Plaza, 309 West 49th Street, New York, New York 10019-7316.
|
(9) |
Includes shares of Common Stock underlying warrants that are exercisable within 60 days.
|
(10) |
Mr. Weightman was the Chief Financial Officer of GigCapital4 prior to the Closing of the Business Combination. He is the Chief Financial Officer of GigInternational1, Inc., as well as the Treasurer and Chief Financial Officer of GigCapital5, Inc. and GigCapital6, Inc.
|
2026 Convertible Notes
Beneficially Owned Prior to this Offering |
Principal
Amount of 2026 Convertible Notes to be sold in this offering |
Maximum
Shares of
Common Stock Issuable Upon Conversion of the Principal Amount of 2026 Convertible Notes That May be Sold
(1)
|
2026
Convertible Notes Beneficially Owned After this Offering |
|||||||||||||||||
Name of Selling Noteholder
|
Principal
Amount of 2026 Convertible Notes |
%
|
||||||||||||||||||
Alberta Investment Management Corporation
(2)
|
$ | 5,000,000.00 | 2.50 | % | $ | 5,000,000.00 | 576,462 | — | ||||||||||||
Bancroft Fund Ltd.
(3)
|
$ | 2,000,000.00 | 1.00 | % | $ | 2,000,000.00 | 230,585 | — | ||||||||||||
Capital Ventures International
(4)
|
$ | 2,000,000.00 | 1.00 | % | $ | 2,000,000.00 | 230,585 | — | ||||||||||||
DBSO TRG Fund (A) L.P.
(5)
|
$ | 1,374,000.00 | 0.69 | % | $ | 1,374,000.00 | 158,412 | — | ||||||||||||
Drawbridge Special Opportunities Fund
LP
(6)
|
$ | 28,626,000.00 | 14.31 | % | $ | 28,626,000.00 | 3,300,362 | — | ||||||||||||
Drawbridge Special Opportunities Fund Ltd.
(7)
|
$ | 5,095,000.00 | 2.55 | % | $ | 5,095,000.00 | 587,415 | — | ||||||||||||
Ellsworth Growth & Income Fund Ltd.
(8)
|
$ | 2,000,000.00 | 1.00 | % | $ | 2,000,000.00 | 230,585 | — | ||||||||||||
Fortress Vintage Securities Fund L.P.
(9)
|
$ | 2,405,000.00 | 1.20 | % | $ | 2,405,000.00 | 277,278 | — | ||||||||||||
Gabelli Convertible & Income Securities Fund
(10)
|
$ | 1,000,000.00 | 0.50 | % | $ | 1,000,000.00 | 115,292 | — | ||||||||||||
Highbridge Capital Management,
LLC
(11)
|
$ | 33,000,000.00 | 16.50 | % | $ | 33,000,000.00 | 3,804,651 | — | ||||||||||||
III Select Credit Hub Fund Ltd.
(12)
|
$ | 400,000.00 | 0.20 | % | $ | 400,000.00 | 46,117 | — | ||||||||||||
IMAP Cayman i3 LP
(13)
|
$ | 1,600,000.00 | 0.80 | % | $ | 1,600,000.00 | 184,468 | — | ||||||||||||
Intrepid Income Fund
(14)
|
$ | 4,000,000.00 | 2.00 | % | $ | 4,000,000.00 | 461,170 | — |
2026 Convertible Notes
Beneficially Owned Prior to this Offering |
Principal
Amount of 2026 Convertible Notes to be sold in this offering |
Maximum
Shares of Common Stock Issuable Upon Conversion of the Principal Amount of 2026 Convertible Notes That May be Sold
(1)
|
2026
Convertible Notes Beneficially Owned After this Offering |
|||||||||||||||||
Name of Selling Noteholder
|
Principal
Amount of 2026 Convertible Notes |
%
|
||||||||||||||||||
LMR CCSA Master Fund Limited
(15)
|
$ | 5,000,000.00 | 2.50 | % | $ | 5,000,000.00 | 576,462 | — | ||||||||||||
LMR Master Fund Limited
(16)
|
$ | 5,000,000.00 | 2.50 | % | $ | 5,000,000.00 | 576,462 | — | ||||||||||||
Marathon Blue Grass Credit Fund LP
(17)
|
$ | 9,403,000.00 | 4.70 | % | $ | 9,403,000.00 | 1,084,095 | — | ||||||||||||
Marathon Centre Street Partnership
LP
(18)
|
$ | 25,956,000.00 | 12.98 | % | $ | 25,956,000.00 | 2,992,531 | — | ||||||||||||
Osterweis Growth and Income Fund
(19)
|
$ | 650,000.00 | 0.33 | % | $ | 650,000.00 | 74,940 | — | ||||||||||||
Osterweis Strategic Income Fund
(20)
|
$ | 28,350,000.00 | 14.18 | % | $ | 28,350,000.00 | 3,268,542 | — | ||||||||||||
Polar Capital Funds — Global Absolute Return Fund
(21)
|
$ | 3,500,000.00 | 1.75 | % | $ | 3,500,000.00 | 403,524 | — | ||||||||||||
Polar Capital Funds PLC — Global Convertible Fund
(22)
|
$ | 9,000,000.00 | 4.50 | % | $ | 9,000,000.00 | 1,037,632 | — | ||||||||||||
Polygon Convertible Opportunity Master Fund
(23)
|
$ | 10,000,000.00 | 5.00 | % | $ | 10,000,000.00 | 1,152,925 | — | ||||||||||||
Riva Ridge Master Fund, Ltd.
(24)
|
$ | 1,000,000.00 | 0.50 | % | $ | 1,000,000.00 | 115,292 | — | ||||||||||||
Skaana Partners L.P.
(25)
|
$ | 2,500,000.00 | 1.25 | % | $ | 2,500,000.00 | 288,231 | — | ||||||||||||
TRS Credit Fund LP
(26)
|
$ | 11,141,000.00 | 5.57 | % | $ | 11,141,000.00 | 1,284,473 | — |
(1) |
Calculated at an initial conversion price of 102.2495 shares of common stock per $1,000 principal amount of 2026 Convertible Notes. The initial conversion rate is of the 2026 Convertible Notes is 86.9565 shares of Common Stock per $1,000 principal amount of the 2026 Convertible Notes, which may be adjusted to up to 102.2495 per $1,000 principal amount of the 2026 Convertible Notes. The 2026 Convertible Notes are initially convertible into 17,391,304 shares of Common Stock, which may be adjusted to up to 23,058,494 as more fully described in this Registration Statement.
|
(2) |
Alberta Investment Management Corporation is a body corporate established as an agent of the Crown in right of the Province of Alberta and manages the funds on behalf of a diverse set of Alberta public sector clients for which it serves as its investment manager. The business address of this entity is 1600-10250 101 ST NW, Edmonton, Alberta T5J 3P4, Canada.
|
(3) |
Gabelli Funds, LLC (“
Gabelli Funds
GBL
Advisers Act
|
(4) |
Susquehanna Advisors Group, Inc., the authorized agent of Capital Ventures International (“
CVI
|
(5) |
DBSO TRG Fund (A) Advisors LLC (“
TRG Advisors
TRG
TRG GP
|
address of each of the foregoing entities and persons is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105. |
(6) |
Drawbridge Special Opportunities Advisors LLC, a Delaware limited liability company (“
DBSO Advisors
DBSO
|
(7) |
Drawbridge Special Opportunities Advisors LLC, a Delaware limited liability company (“
DBSO Advisors
DBSO Ltd
|
(8) |
Gabelli Funds, a wholly owned subsidiary of GBL, is a limited liability company and an investment adviser registered under the Advisers Act. Gabelli Funds provides advisory services for Ellsworth Growth & Income Fund Ltd., a registered investment company. The business address of each of the foregoing entities is One Corporate Center, Rye, New York 10580.
|
(9) |
Fortress Vintage Securities Fund Advisors LLC (“
Vintage Advisors
Vintage
Vintage GP
|
(10) |
Gabelli Funds, a wholly owned subsidiary of GBL, is a limited liability company and an investment adviser registered under the Advisers Act. Gabelli Funds provides advisory services for Gabelli Convertible and Income Securities Fund, a registered investment company. The business address of each of the foregoing entities is One Corporate Center, Rye, New York 10580.
|
(11) |
Ownership of the 2026 Convertible Notes before the offering includes (i) $10,900,000 aggregate principal amount of 2026 Convertible Notes held by Highbridge Convertible Dislocation Fund, L.P. (“
CDF
SOF
TCF
Highbridge Funds
HCM
|
(12) |
Voting and investment power over the 2026 Convertible Notes held by this entity resides with its investment manager, III Capital Management. Mr. Scott Wyler is the Chief Executive Officer of III Capital Management, but he disclaims any beneficial ownership of the 2026 Convertible Notes held by such entity, as does III Capital Management itself. The address of the foregoing individual and entity is c/o III Capital Management, 777 Yamato Road, Suite 300, Boca Raton, Florida 33431.
|
(13) |
Voting and investment power over the 2026 Convertible Notes held by this entity resides with its investment manager, III Capital Management. Mr. Scott Wyler is the Chief Executive Officer of III Capital Management, but he disclaims any beneficial ownership of the 2026 Convertible Notes held by such entity,
|
as does III Capital Management itself. The address of the foregoing individual and entity is c/o III Capital Management, 777 Yamato Road, Suite 300, Boca Raton, Florida 33431. |
(14) |
Investment decisions for Intrepid Income Fund regarding the 2026 Convertible Notes listed above are made by its Vice President and Portfolio Manager, Mr. Hunter Hayes. The address of Intrepid Income Fund and Mr. Hunter Hayes is 1400 March Landing Parkway, Suite 106, Jacksonville Beach, Florida 32250.
|
(15) |
LMR Partners LLP (“
LMR Partners
LMR Securityholders
|
(16) |
LMR Partners is the investment manager of the LMR Securityholders. Vincent Olekhnovitch is a portfolio manager of LMR Partners, and Pearse Griffith, Benjamin Levine, Torsten de Santos and Mark Eberle are directors of the LMR Securityholders, and, accordingly, they have shared voting and dispositive power of the 2026 Convertible Notes held by the LMR Securityholders. The address of LMR Partners is 9th Floor, Devonshire House, 1 Mayfair Place, London W1J 8AJ, United Kingdom. The address of the LMR Securityholders is P.O. Box 309, Ugland House, George Town, Grand Cayman KY1-1104 Cayman Islands.
|
(17) |
Marathon Asset Management, L.P. is the manager of Marathon Blue Grass Credit Fund LP. The general partner of Marathon Asset Management, L.P. is Marathon Asset Management GP, L.L.C. Bruce Richards and Louis Hanover are the managing members of Marathon Asset Management GP, L.L.C.; however, this shall not be deemed to be an admission that any of the foregoing entities nor Messrs. Richards or Hanover are the beneficial owner of the 2026 Convertible Notes reported herein for purposes of Section 13 of the Securities Exchange Act of 1934, or for any other purpose. The business address of the foregoing persons and entities is One Bryant Park, 38th Floor, New York, New York 10036.
|
(18) |
Marathon Asset Management, L.P. is the manager of Marathon Centre Street Partnership LP. The general partner of Marathon Asset Management, L.P. is Marathon Asset Management GP, L.L.C. Bruce Richards and Louis Hanover are the managing members of Marathon Asset Management GP, L.L.C.; however, this shall not be deemed to be an admission that any of the foregoing entities nor Messrs. Richards or Hanover are the beneficial owner of the 2026 Convertible Notes reported herein for purposes of Section 13 of the Securities Exchange Act of 1934, or for any other purpose. The business address of the foregoing persons and entities is One Bryant Park, 38th Floor, New York, New York 10036.
|
(19) |
Carl Kaufman, the co-lead Portfolio Manager and Managing Director of Fixed Income of the investment manager, has voting or investment power over the 2026 Convertible Notes reported herein that are held by this entity. John Osterweis is also co-lead Portfolio Manager. Mr. Kaufman and Mr. Osterweis each disclaim beneficial ownership in the 2026 Convertible Notes reported herein except to the extent of his pecuniary interest therein. The principal business address of the forgoing persons and entities is c/o Osterweis Capital Management, 1 Maritime Plaza, Suite 800, San Francisco, California 94111.
|
(20) |
Carl Kaufman, the lead Portfolio Manager and Managing Director of Fixed Income of the investment manager, has voting or investment power over the 2026 Convertible Notes reported herein that are held by this entity. Mr. Kaufman disclaims beneficial ownership in the 2026 Convertible Notes reported herein except to the extent of his pecuniary interest therein. The principal business address of the forgoing person and entities is c/o Osterweis Capital Management, 1 Maritime Plaza, Suite 800, San Francisco, California 94111.
|
(21) |
Voting and investment power over the 2026 Convertible Notes resides with this entity’s investment manager, Polar Capital LLP, an FCA and SEC regulated fund manager/investment advisor. Polar Capital Partners Limited is the controlling partner of Polar Capital LLP. Polar Capital Partners Limited is 100% owned by Polar Capital Holdings Plc, a listed LSE AIM holding company. Certain directors/employees are beneficial owners of Polar Capital Holdings plc but each such individual disclaims any beneficial ownership of the reported 2026 Convertible Notes, other than to the extent they may or may not hold 2026 Convertible Notes directly of the Polar Capital Funds plc Global Absolute Return Fund. The address for the investment manager is 16 Palace Street, London, United Kingdom, SW1E 5JD.
|
(22) |
Voting and investment power over the 2026 Convertible Notes resides with this entity’s investment manager, Polar Capital LLP, an FCA and SEC regulated fund manager/investment advisor. Polar Capital Partners Limited is the controlling partner of Polar Capital LLP. Polar Capital Partners Limited is 100% owned by Polar Capital Holdings Plc, a listed LSE AIM holding company. Certain directors/employees are beneficial owners of Polar Capital Holdings plc but each such individual disclaims any beneficial ownership of the reported 2026 Convertible Notes, other than to the extent they may or may not hold 2026 Convertible Notes directly of the Polar Capital Funds plc Global Convertible Fund. The address for the investment manager is 16 Palace Street, London, United Kingdom, SW1E 5JD.
|
(23) |
The 2026 Convertible Notes listed above are held directly by Polygon Convertible Opportunity Master Fund. TFG Asset Management L.P., Polygon Global Partners LP, Polygon Global Partners LLP and Polygon Management Ltd. have voting and dispositive power over the 2026 Convertible Notes held by the Polygon Convertible Opportunity Master Fund. Patrick G. G. Dear and Reade E. Griffith control TFG Asset Management L.P., Polygon Global Partners LP, Polygon Global Partners LLP and Polygon Management Ltd. The business address of Polygon Convertible Opportunity Master Fund, Polygon Management Ltd. and TFG Asset Management L.P. is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104 Cayman Islands. The business address of Polygon Global Partners LP is 399 Park Avenue, 22nd Floor, New York, New York 10022. The business address of Polygon Global Partners LLP and Messrs. Dear and Griffith is c/o Polygon Global Partners LLP, 4 Sloane Terrace, London, X0 SW1X9DQ, United Kingdom.
|
(24) |
Stephen Golden has voting and investment power over the securities as the Managing Member of Riva Ridge Master Fund, Ltd. The business address of Riva Ridge Master Fund, Ltd. is 55th Fifth Avenue, 18th Floor, New York, New York 10003.
|
(25) |
Voting and investment power over the 2026 Convertible Notes held by this entity reside with its investment manager, Skaana Management L.P. Daniel Katzner is the Chief Investment Officer of Skaana Management L.P. and may be deemed to be the beneficial owner of the 2026 Convertible Notes held by such entities. Mr. Katzner, however, disclaims any beneficial ownership of the 2026 Convertible Notes held by such entity. The address of the foregoing individual and entities is c/o 921 President Street Brooklyn, New York 11215.
|
(26) |
Marathon Asset Management, L.P. is the manager of TRS Credit Fund LP. The general partner of Marathon Asset Management, L.P. is Marathon Asset Management GP, L.L.C. Bruce Richards and Louis Hanover are the managing members of Marathon Asset Management GP, L.L.C.; however, this shall not be deemed to be an admission that any of the foregoing entities nor Messrs. Richards or Hanover are the beneficial owner of the 2026 Convertible Notes reported herein for purposes of Section 13 of the Securities Exchange Act of 1934, or for any other purpose. The business address of the foregoing persons and entities is One Bryant Park, 38th Floor, New York, New York 10036.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the
30-day
redemption period; and
|
• |
if, and only if, the last reported sale price of the Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
• |
rank pari passu in right of payment with all existing and future senior indebtedness of the Company;
|
• |
are effectively senior to all of the Company’s subordinated indebtedness; and
|
• |
are guaranteed on a senior basis by the Guarantors (as defined below).
|
• |
rank pari passu in right of payment with all existing and future senior indebtedness of such Guarantor; and
|
• |
are effectively senior to all of such Guarantor’s subordinated indebtedness.
|
• |
make restricted payments;
|
• |
incur or guarantee indebtedness or issue disqualified stock;
|
• |
create, incur or assume any Lien;
|
• |
make any payment to, or sell, lease, transfer or otherwise dispose of properties or assets or enter into transactions with any Affiliate of the Company;
|
• |
sell or transfer interest in its Material Intellectual Property; or
|
• |
merge or consolidate with other companies or transfer all or substantially all of the Company’s assets.
|
• |
upon a sale, transfer, exchange or other disposition (including by way of consolidation or merger) of Capital Stock of such Guarantor following which the applicable Guarantor ceases to be a Subsidiary or the sale, transfer, exchange or other disposition of all or substantially all the properties and assets of the applicable Guarantor (other than to the other Guarantors) otherwise not prohibited by the Indenture;
|
• |
upon the release or discharge of such Guarantor’s obligations under the Credit Agreement or other Indebtedness that resulted in the creation of such Guarantee other than, in each case, a release or discharge through payment thereon;
|
• |
upon the merger, amalgamation or consolidation of any Guarantor with and into the Company or another Guarantor or upon the liquidation of such Guarantor, in each case, in compliance with the Indenture;
|
• |
upon the satisfaction and discharge of the 2026 Convertible Notes; or
|
• |
as permitted by Article 10 of the Indenture.
|
CR
1
= CR
0
×
|
OS
1
|
|||
OS
0
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the open of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable; | |
CR
1
=
|
the Conversion Rate in effect immediately after the open of business on such Record Date or Effective Date, as applicable; | |
OS
0
=
|
the number of shares of Common Stock outstanding immediately prior to the open of business on such Record Date or Effective Date, as applicable, before giving effect to such dividend, distribution, share split or share combination; and | |
OS
1
=
|
the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable. |
CR
1
= CR
0
×
|
OS
0
+ X
|
|||
OS
0
+ Y
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the open of business on the Record Date for such issuance; | |
CR
1
=
|
the Conversion Rate in effect immediately after the open of business on such Record Date; | |
OS
0
=
|
the number of shares of Common Stock outstanding immediately prior to the open of business on such Record Date; | |
X = | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and |
Y = |
the number of shares of Common Stock equal to (i) the aggregate price payable to exercise such rights, options or warrants,
divided by
|
CR
1
= CR
0
×
|
SP
0
|
|||
SP
0
– FMV
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the open of business on the Record Date for such distribution; | |
CR
1
=
|
the Conversion Rate in effect immediately after the open of business on such Record Date; | |
SP
0
=
|
the average of the Last Reported Sale Prices of the Common Stock over the ten (10) consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Record Date for such distribution; and | |
FMV = | the fair market value (as determined by the Board of Directors of the Company in good faith) of the Distributed Property with respect to each outstanding share of the Common Stock on the Record Date for such distribution. |
CR
1
= CR
0
×
|
FMV
0
+ MP
0
|
|||
MP
0
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the end of the Valuation Period; | |
CR
1
=
|
the Conversion Rate in effect immediately after the end of the Valuation Period; | |
FMV
0
=
|
the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in the Definitions section of the Indenture as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first ten (10) consecutive Trading Day period after, and including, the Record Date of the
Spin-Off
(the “
Valuation Period
|
|
MP
0
=
|
the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
(i) |
are deemed to be transferred with such shares of the Common Stock;
|
(ii) |
are not exercisable; and
|
(iii) |
are also issued in respect of future issuances of the Common Stock,
|
CR
1
= CR
0
×
|
SP
0
|
|||
SP
0
– C
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the open of business on the Record Date for such dividend or distribution; | |
CR
1
=
|
the Conversion Rate in effect immediately after the open of business on the Record Date for such dividend or distribution; | |
SP
0
=
|
the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Record Date for such dividend or distribution; and | |
C = | the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock. |
CR
1
= CR
0
|
AC + (SP
1
x OS
1
)
|
|||
OS
0
x SP
1
|
CR
0
=
|
the Conversion Rate in effect immediately prior to the close of business on the tenth (10
th
) Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires (the date such tender offer or exchange offer expires, the “
Expiration Date
|
|
CR
1
=
|
the Conversion Rate in effect immediately after the close of business on the tenth (10
th
) Trading Day immediately following, and including, the Trading Day next succeeding the Expiration Date;
|
|
AC = | the aggregate value of all cash and any other consideration (as determined by the Board of Directors of the Company in good faith) paid or payable for shares of Common Stock purchased in such tender or exchange offer; | |
OS
0
=
|
the number of shares of Common Stock outstanding immediately prior to the Expiration Date (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); |
OS
1
=
|
the number of shares of Common Stock outstanding immediately after the Expiration Date (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and | |
SP
1
=
|
the average of the Last Reported Sale Prices of the Common Stock over the ten (10) consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration Date. |
• |
1% of the total number of shares of Common Stock then outstanding; or
|
• |
the average weekly reported trading volume of the Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form
8-K
reports; and
|
• |
at least one year has elapsed from the time that the issuer filed current Form
10-type
information with the SEC reflecting its status as an entity that is not a shell company.
|
• |
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “
interested stockholder
|
• |
an affiliate of an interested stockholder; or
|
• |
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.
|
• |
the BigBear Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
|
• |
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Common Stock; or
|
• |
on or subsequent to the date of the transaction, the business combination is approved by the BigBear Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least
two-thirds
of the outstanding voting stock not owned by the interested stockholder.
|
• |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
• |
block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
|
• |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
• |
an exchange distribution in accordance with the rules of the applicable exchange;
|
• |
privately negotiated transactions;
|
• |
in underwritten transactions;
|
• |
short sales;
|
• |
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
• |
broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price;
|
• |
distribution to members, limited partners or stockholders of Selling Stockholders;
|
• |
“at the market” or through market makers or into an existing market for the shares;
|
• |
a combination of any such methods of sale; and
|
• |
any other method permitted pursuant to applicable law.
|
• |
each person who is, or is expected to be, the beneficial owner of more than 5% of the outstanding shares of our Common Stock;
|
• |
each of our current officers and directors; and
|
• |
all current executive officers and directors of the Company, as a group.
|
Name and Address of Beneficial Owner
|
Amount and nature of
Beneficial Ownership |
Approximate
Percentage of Outstanding Shares of Common Stock |
||||||
AE Industrial Partners
(1)
|
113,250,000 | 83.5 | % | |||||
GigAcquisitions4, LLC
(2)(3)(5)(6)
|
9,835,333 | 7.2 | % | |||||
Sean Battle
(4)
|
— | — | ||||||
Pamela Braden
(4)
.
|
— | — | ||||||
Dr. Reginald Brothers
(4)
|
— | — | ||||||
Peter Cannito
(4)
.
|
— | — | ||||||
Dr. Raluca Dinu
(2)(5)(6)
|
9,835,333 | 7.2 | % | |||||
Jeffry R. Dyer
(4)
|
— | — | ||||||
Brian Frutchey
(4)
|
— | — | ||||||
Paul Fulchino
(4)
|
— | — | ||||||
Samuel J. Gordy
(4)
.
|
— | — | ||||||
Jeffrey Hart
(4)
.
|
— | — | ||||||
Dorothy D. Hayes
(2)
.
|
12,000 | * | ||||||
Raanan I. Horowitz
(2)
|
— | — | ||||||
Dr. Avi S. Katz
(2)(3)(6)
|
9,835,333 | 7.2 | % | |||||
Joshua Kinley
(4)
|
— | — | ||||||
Kirk Konert
(4)
|
— | — | ||||||
All directors and officers as a group (15 individuals)
|
9,847,333 |
* |
Less than one percent.
|
(1) |
BBAI Ultimate Holdings, LLC and AE BBAI Aggregator, LP are controlled by AE Industrial Partners Fund II, LP, AE Industrial Partners Fund
II-A,
LP and AE Industrial Partners Fund
II-B,
LP (collectively, the “
AE Partners Funds
|
Greene and Rowe make all voting and investment decisions with respect to the securities held by AE Industrial Partners. Each of the entities and individuals named above disclaims beneficial ownership of the BigBear securities held of record by BBAI Ultimate Holdings, LLC, except to the extent of its pecuniary interest therein. The business address of each of the foregoing entities and persons is 2500 N. Military Trail, Suite 470, Boca Raton, Florida 33431. |
(2) |
The business address for this person is 1731 Embarcadero Road, Suite 200, Palo Alto, California.
|
(3) |
Represents shares held by GigAcquisitions4, LLC. The shares held by GigAcquisitions4, LLC are beneficially owned by Dr. Avi Katz, who has sole voting and dispositive power over the shares held by GigAcquisitions4, LLC.
|
(4) |
The business address for this person is 6811 Benjamin Franklin Drive, Suite 200, Columbia, Maryland 21046.
|
(5) |
Represents shares held by GigAcquisitions4, LLC. Dr. Dinu is a member of GigFounders, LLC, which has a financial and voting interest in GigAcquisitions4, LLC as a member of GigAcquisitions4, LLC and that entitles this partnership to participate in any economic return of GigAcquisitions4, LLC in accordance with terms negotiated with the other holders of financial and voting interests in GigAcquisitions4, LLC. Accordingly, the shares of Common Stock held by GigAcquisitions4, LLC, subject to the interests of such other holders, are indirectly and beneficially owned by Dr. Dinu by virtue of her financial interest in GigFounders, LLC.
|
(6) |
Includes 283,333 shares of Common Stock underlying warrants that are exercisable within 60 days.
|
• |
whether the transaction was undertaken in the ordinary course of business of the Company;
|
• |
whether the Related Party transaction was initiated by the Company or the related party;
|
• |
the availability of other sources of comparable products or services;
|
• |
whether the transaction with the related party is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party;
|
• |
the purpose of, and the potential benefits to the Company of, the related party transaction;
|
• |
the approximate dollar value of the amount involved in the related party transaction, particularly as it relates to the related party;
|
• |
the related party’s interest in the related party transaction; and
|
• |
any other information regarding the related party transaction or the related party that would be material to investors in light of the circumstances of the particular transaction.
|
GigCapital4, Inc.—Financial Statements as of December 31, 2020 for the period from December 4, 2020
(Date of Inception) through December 31, 2020
|
||
F-3 | ||
Financial Statements:
|
||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 | ||
F-8 to F-17
|
||
GigCapital4, Inc.—Financial Statements (Unaudited) as of September 30, 2021
|
||
Financial Statements:
|
||
F-18 | ||
F-19 | ||
F-20 | ||
F-21 | ||
F-22 to
F-40
|
||
BigBear.ai.Holdings, LLC—Financial Statements as of and for the period ended December 31, 2020,
December 31, 2019 and December 31, 2018
|
||
F-41 | ||
Financial Statements:
|
||
F-42 | ||
F-43 | ||
F-44 | ||
F-45 | ||
F-46 | ||
F-47 to F-75
|
||
BigBear.ai.Holdings, LLC—Unaudited Financial Statements for the nine months ended September 30,
2021
and for the year ended December 31, 2020
|
||
Financial Statements:
|
||
F-76 | ||
F-77 | ||
F-78 | ||
F-79 | ||
F-80 to F-98
|
NuWave Solutions, LLC—Financial Statements as of June 18, 2020 and for the year ended December 31,
2019
|
||
F-99 | ||
Financial Statements:
|
||
F-100 | ||
F-101 | ||
F-102 | ||
F-103 | ||
F-104 to F-115 | ||
Open Solutions Group, LLC—Financial Statements as of December 1, 2020
|
||
F-116 | ||
Financial Statements:
|
||
F-117 | ||
F-118 | ||
F-119 | ||
F-120 | ||
F-121 to F-133
|
||
ProModel (a carve out of ProModel Government Solutions Inc.)—Financial Statements as of
December 20, 2020
|
||
F-134 | ||
Financial Statements:
|
||
F-135 | ||
F-136 | ||
F-137 | ||
F-138 | ||
F-139 to F-151 |
December 31,
2020 |
||||
ASSETS
|
||||
Current Assets
|
||||
Cash
|
$ | 150,000 | ||
Deferred offering costs
|
230,653 | |||
|
|
|||
TOTAL ASSETS
|
$ | 380,653 | ||
|
|
|||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||
Current liabilities
|
||||
Accounts payable
|
$ | 34,395 | ||
Note payable to related parties
|
125,000 | |||
Payable to related parties
|
21 | |||
Accrued liabilities
|
230,333 | |||
|
|
|||
Total liabilities
|
389,749 | |||
|
|
|||
Commitments (Note 4—Related Party Transactions)
|
||||
Stockholders’ deficit
|
||||
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; none issued or outstanding
|
— | |||
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized; 8,952,000 shares issued and outstanding(1)(2)
|
895 | |||
Additional
paid-in
capital
|
24,105 | |||
Accumulated deficit
|
(34,096 | ) | ||
|
|
|||
Total stockholders’ deficit
|
(9,096 | ) | ||
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$ | 380,653 | ||
|
|
(1) |
This number includes up to 1,170,000 founder shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
(2) |
Share amounts have been retroactively adjusted to reflect the 1.2:1 stock split effected on February 8, 2021 (see Note 8).
|
Period from
December 4, 2020
(date of inception)
through
December 31, 2020
|
||||
Revenues
|
$ | — | ||
General and administrative expenses
|
34,096 | |||
|
|
|||
Net loss and comprehensive loss
|
$ | (34,096 | ) | |
|
|
|||
Weighted-average common shares outstanding, basic and diluted (1)(2)
|
2,501,357 | |||
|
|
|||
Net loss per share common share, basic and diluted
|
$ | (0.01 | ) | |
|
|
(1) |
This number includes up to
1,170,000
founder shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
(2) |
Share amounts have been retroactively adjusted to reflect the
1.2:1
stock split effected on February 8, 2021 (see Note 8).
|
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Stockholders’
Equity
(Deficit) |
|||||||||||||||||
Period from December 4, 2020 (date of inception) through
December 31, 2020 |
Shares
|
Amount
|
||||||||||||||||||
Balance as of December 4, 2020 (date of inception)
|
— | $ | — | $ | — | $ | — | $ | — | |||||||||||
Sale of common stock to Founder at $0.0027927 per share (1)(2)
|
8,952,000 | 895 | 24,105 | — | 25,000 | |||||||||||||||
Net loss
|
— | — | — | (34,096 | ) | (34,096 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2020
|
8,952,000 | $ | 895 | $ | 24,105 | $ | (34,096 | ) | $ | (9,096 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
(1) |
This number includes up to 1,170,000 founder shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
(2) |
Share amounts have been retroactively adjusted to reflect the 1.2:1 stock split effected on February 8, 2021 (see Note 8).
|
Level 1: |
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3: |
Unobservable inputs which are supported by little or no market activity and which are significant to the fair value of the assets or liabilities.
|
Period from
December 4,
2020
(date of
inception)
through
December 31,
2020 |
||||
Domestic
|
$ | (34,096 | ) | |
Foreign
|
— | |||
|
|
|||
Total
|
$ | (34,096 | ) | |
|
|
Period from
December 4,
2020
(date of
inception)
through
December 31,
2020 |
||||
Statutory income tax benefit
|
$ | (7,160 | ) | |
State income taxes, net of federal
|
(2,381 | ) | ||
Valuation allowance on
start-up
costs
|
9,541 | |||
|
|
|||
Provision for income taxes
|
$ | — | ||
|
|
December 31,
2020 |
||||
Deferred Tax Assets:
|
||||
Start-up
costs
|
$ | 9,541 | ||
Valuation allowance
|
(9,541 | ) | ||
|
|
|||
Net deferred tax assets
|
$ | — | ||
|
|
(1) |
The December 31, 2020 share number excludes the 1,170,000 Founder shares subject to forfeiture if the over-allotment option was not exercised in full or in part by the Underwriters.
|
(2) |
December 31, 2020 share amounts have been retroactively adjusted to reflect the 1.2:1 stock split effected on February 8, 2021 (see Note 1).
|
For the Three
Months Ended
September 30, 2021 |
For the Nine
Months Ended
September 30, 2021 |
|||||||
Revenues
|
$ | — | $ | — | ||||
General and administrative expenses
|
1,964,218 | 4,097,263 | ||||||
|
|
|
|
|||||
Loss from operations
|
(1,964,218 | ) | (4,097,263 | ) | ||||
Other income (expense)
|
||||||||
Interest income on cash and marketable securities held in Trust Account
|
9,045 | 20,160 | ||||||
Other income (expense)
|
32,989 | (196,973 | ) | |||||
|
|
|
|
|||||
Loss before provision for income taxes
|
(1,922,184 | ) | (4,274,076 | ) | ||||
Provision for income taxes
|
2,699 | 6,016 | ||||||
|
|
|
|
|||||
Net loss and comprehensive loss
|
$ | (1,924,883 | ) | $ | (4,280,092 | ) | ||
|
|
|
|
|||||
Net income attributable to common stock subject to possible redemption
|
$ | 6,346 | $ | 14,144 | ||||
|
|
|
|
|||||
Basic and diluted weighted-average shares outstanding, common stock subject to possible redemption
|
35,880,000 | 30,491,429 | ||||||
|
|
|
|
|||||
Basic and diluted net income per share, common stock subject to possible redemption
|
$ | 0.00 | $ | 0.00 | ||||
|
|
|
|
|||||
Net loss attributable to
non-redeemable
common stock
|
$ | (1,931,229 | ) | $ | (4,294,236 | ) | ||
|
|
|
|
|||||
Weighted-average
non-redeemable
common shares outstanding, basic and diluted
|
10,051,600 | 9,886,459 | ||||||
|
|
|
|
|||||
Net loss per share,
non-redeemable
common stock, basic and diluted
|
$ | (0.19 | ) | $ | (0.43 | ) | ||
|
|
|
|
Common Stock
|
Additional
Paid-In
Capital
|
Accumulated
Deficit |
Stockholders’
Equity (Deficit)
|
|||||||||||||||||
Three Months Ended September 30, 2021
|
Shares
|
Amount
|
||||||||||||||||||
Balance as of June 30, 2021
|
11,765,012 | $ | 1,177 | $ | 7,388,136 | $ | (2,389,305 | ) | $ | 5,000,008 | ||||||||||
Shares subject to redemption
|
(1,695,412 | ) | (170 | ) | (16,968,094 | ) | — | (16,968,264 | ) | |||||||||||
Reclass of negative additional
paid-in
capital to accumulated deficit
|
— | — | 9,579,958 | (9,579,958 | ) | — | ||||||||||||||
Net loss
|
— | — | — | (1,924,883 | ) | (1,924,883 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of September 30, 2021
|
10,069,600 | $ | 1,007 | $ | — | $ | (13,894,146 | ) | $ | (13,893,139 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
Common Stock
|
Additional
Paid-In Capital
|
Accumulated
Deficit
|
Stockholders’
Deficit
|
|||||||||||||||||
Nine Months Ended September 30, 2021
|
Shares
|
Amount
|
||||||||||||||||||
Balance as of December 31, 2020(1)
|
8,952,000 | $ | 895 | $ | 24,105 | $ | (34,096 | ) | $ | (9,096 | ) | |||||||||
Sale of common stock to Founder in private placement at $10 per share
|
850,000 | 85 | 8,499,915 | — | 8,500,000 | |||||||||||||||
Sale of common stock to Underwriters in private placement at $10 per share
|
249,600 | 25 | 2,495,975 | — | 2,496,000 | |||||||||||||||
Issuance of common stock to Insiders for no consideration
|
18,000 | 2 | (2 | ) | — | — | ||||||||||||||
Sale of common stock in initial public offering, net of offering costs
|
35,880,000 | 3,588 | 338,398,513 | — | 338,402,101 | |||||||||||||||
Fair value of warrants
|
— | — | (187,908 | ) | — | (187,908 | ) | |||||||||||||
Shares subject to redemption
|
(35,880,000 | ) | (3,588 | ) | (358,810,556 | ) | — | (358,814,144 | ) | |||||||||||
Reclass of negative additional
paid-in
capital to accumulated deficit
|
— | — | 9,579,958 | (9,579,958 | ) | — | ||||||||||||||
Net loss
|
— | — | — | (4,280,092 | ) | (4,280,092 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of September 30, 2021
|
10,069,600 | $ | 1,007 | $ | — | $ | (13,894,146 | ) | $ | (13,893,139 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
(1) |
The December 31, 2020 share amounts have been retroactively adjusted to reflect the 1.2:1 stock split effected on February 8, 2021 (see Note 1).
|
For the Three
Months Ended
September 30, 2021 |
For the Nine
Months Ended
September 30, 2021 |
|||||||
Common stock subject to possible redemption
|
||||||||
Numerator: Earnings allocable to common stock subject to redemption
|
||||||||
Interest earned on marketable securities held in Trust Account, net of taxes
|
$ | 6,346 | $ | 14,144 | ||||
|
|
|
|
|||||
Net income attributable to common stock subject to possible redemption
|
$ | 6,346 | $ | 14,144 | ||||
|
|
|
|
|||||
Denominator: Weighted-average common shares subject to redemption
|
||||||||
Basic and diluted weighted-average shares outstanding, common stock subject to possible redemption
|
35,880,000 | 30,491,429 | ||||||
|
|
|
|
|||||
Basic and diluted net income per share, common stock subject to possible redemption
|
$ | 0.00 | $ | 0.00 | ||||
|
|
|
|
|||||
Non-Redeemable
common stock
|
||||||||
Numerator: Net loss minus net earnings—Basic and diluted
|
||||||||
Net loss
|
$ | (1,924,883 | ) | $ | (4,280,092 | ) | ||
Less: net income attributable to common stock subject to redemption
|
(6,346 | ) | (14,144 | ) | ||||
|
|
|
|
|||||
Net loss attributable to
non-redeemable
common stock
|
$ | (1,931,229 | ) | $ | (4,294,236 | ) | ||
|
|
|
|
|||||
Denominator: Weighted-average
non-redeemable
common shares
|
||||||||
Weighted-average
non-redeemable
common shares outstanding, basic and diluted
|
10,051,600 | 9,886,459 | ||||||
|
|
|
|
|||||
Net loss per share,
non-redeemable
common stock, basic and diluted
|
$ | (0.19 | ) | $ | (0.43 | ) | ||
|
|
|
|
Description:
|
Level
|
September 30,
2021 |
||||||
Assets:
|
||||||||
Cash and marketable securities held in Trust Account
|
1 | $ | 358,817,210 | |||||
|
|
|||||||
Liabilities:
|
||||||||
Warrant liability
|
2 | $ | 384,881 | |||||
|
|
Upon Issuance
|
||||
Stock Price
|
$ | 9.83 | ||
Volatility
|
10.00 | % | ||
Risk free interest rate
|
0.62 | % | ||
Exercise price
|
$ | 11.50 | ||
Time to maturity—years
|
6.0 |
For the Nine
Months Ended
September 30, 2021 |
||||
Fair value—beginning of period
|
$ | — | ||
Additions
|
187,908 | |||
Change in fair value
|
229,962 | |||
Transfers out of level 3 to level 2
|
(417,870 | ) | ||
|
|
|||
Fair value—end of period
|
$ | — | ||
|
|
|
|
Successor
|
|
|
|
|
|
|
|
|
Predecessor
|
|
||||
|
December 31,
2020 |
|
|
|
|
|
|
|
|
December 31,
2019 |
|
|||||
Assets
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
9,704 |
|
|
|
|
$
|
1,644 | |||||||
Accounts receivable, less allowance for doubtful accounts of $43 as of December 31, 2020 and $0 as of December 31, 2019
|
21,426 | 13,528 | ||||||||||||||
Contract assets
|
2,575 | 269 | ||||||||||||||
Prepaid expenses and other current assets
|
641 | 310 | ||||||||||||||
|
|
|
|
|||||||||||||
Total current assets
|
|
34,346
|
|
|
15,751
|
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-current
assets:
|
||||||||||||||||
Property and equipment, net
|
863 | 149 | ||||||||||||||
Goodwill
|
91,271 | — | ||||||||||||||
Intangible assets, net
|
90,498 | — | ||||||||||||||
Deferred tax assets
|
794 | — | ||||||||||||||
Other
non-current
assets
|
593 | 48 | ||||||||||||||
|
|
|
|
|||||||||||||
Total Assets
|
$
|
218,365
|
|
$
|
15,948
|
|
||||||||||
|
|
|
|
|||||||||||||
Liabilities and members’ equity
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable
|
$ | 2,731 | $ | 1,080 | ||||||||||||
Short-term debt, including current portion of long-term debt
|
1,100 | — | ||||||||||||||
Accrued liabilities
|
7,270 | 3,054 | ||||||||||||||
Contract liabilities
|
541 | — | ||||||||||||||
Other current liabilities
|
413 | 120 | ||||||||||||||
|
|
|
|
|||||||||||||
Total current liabilities
|
|
12,055
|
|
|
4,254
|
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-current
liabilities:
|
||||||||||||||||
Long-term debt
|
105,894 | — | ||||||||||||||
Deferred tax liabilities
|
— | 19 | ||||||||||||||
Other
non-current
liabilities
|
19 | — | ||||||||||||||
|
|
|
|
|||||||||||||
Total liabilities
|
|
117,968
|
|
|
4,273
|
|
||||||||||
|
|
|
|
|||||||||||||
Commitments and contingencies (Note L)
|
||||||||||||||||
Equity:
|
||||||||||||||||
Members’ contribution
|
108,235 | 4,998 | ||||||||||||||
(Accumulated deficit) / retained earnings
|
(7,838 | ) | 6,677 | |||||||||||||
|
|
|
|
|||||||||||||
Total equity
|
|
100,397
|
|
|
11,675
|
|
||||||||||
|
|
|
|
|||||||||||||
Total liabilities and members’ equity
|
$
|
218,365
|
|
$
|
15,948
|
|
||||||||||
|
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Period from May 22,
2020 through December 31, 2020 |
Period from January 1,
2020 through October 22, 2020 |
Year ended
December 31, 2019 |
Year ended
December 31, 2018 |
|||||||||||||||||||||
Revenues
|
$ | 31,552 | $ | 59,765 | $ | 73,626 | $ | 49,439 | ||||||||||||||||
Cost of revenues
|
22,877 | 46,755 | 56,130 | 37,702 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Gross margin
|
|
8,675
|
|
|
13,010
|
|
|
17,496
|
|
|
11,737
|
|
||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Selling, general and administrative
|
7,909 | 7,632 | 11,004 | 7,820 | ||||||||||||||||||||
Research and development
|
530 | 85 | 110 | — | ||||||||||||||||||||
Transaction expenses
|
10,091 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Operating (loss) income
|
|
(9,855
|
)
|
|
5,293
|
|
|
6,382
|
|
|
3,917
|
|
||||||||||||
Interest expense
|
616 | 1 | 127 | 42 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
(Loss) income before taxes
|
|
(10,471
|
)
|
|
5,292
|
|
|
6,255
|
|
|
3,875
|
|
||||||||||||
Income tax (benefit) expense
|
(2,633 | ) | 3 | 9 | 12 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income
|
$
|
(7,838
|
)
|
$
|
5,289
|
|
$
|
6,246
|
|
$
|
3,863
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Basic net loss per Unit
|
$ | (78 | ) | |||||||||||||||||||||
Diluted net loss per Unit
|
$ | (78 | ) | |||||||||||||||||||||
Weighted-average Units outstanding:
|
||||||||||||||||||||||||
Basic
|
100 | |||||||||||||||||||||||
Diluted
|
100 |
Class A
Units |
Class B
Units |
Members’
contribution |
Retained
earnings |
Total members’
equity |
||||||||||||||||
As of December 31, 2017 (Predecessor)
|
|
900
|
|
|
—
|
|
$
|
4,894
|
|
$
|
—
|
|
$
|
4,894
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
— | — | — | 3,863 | 3,863 | |||||||||||||||
Distribution
|
— | — | — | (2,593 | ) | (2,593 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As of December 31, 2018 (Predecessor)
|
|
900
|
|
|
—
|
|
|
4,894
|
|
|
1,270
|
|
|
6,164
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
— | — | — | 6,246 | 6,246 | |||||||||||||||
Class B Units vested
|
— | 10 | — | — | — | |||||||||||||||
Equity-based compensation expense
|
— | — | 104 | — | 104 | |||||||||||||||
Distribution
|
— | — | — | (839 | ) | (839 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As of December 31, 2019 (Predecessor)
|
|
900
|
|
|
10
|
|
|
4,998
|
|
|
6,677
|
|
|
11,675
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
— | — | — | 5,289 | 5,289 | |||||||||||||||
Equity-based compensation expense
|
— | — | 80 | — | 80 | |||||||||||||||
Distribution
|
— | — | — | (9,773 | ) | (9,773 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
As of October 22, 2020 (Predecessor)
|
|
900
|
|
|
10
|
|
$
|
5,078
|
|
$
|
2,193
|
|
$
|
7,271
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Units
|
Members’
contribution |
Accumulated
deficit
|
Total members’
equity |
|||||||||||||
As of May 22, 2020 (Successor)
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
||||
Net (loss)
|
— | — | (7,838 | ) | (7,838 | ) | ||||||||||
Parent’s contributions for acquisitions
|
— | 13,188 | — | 13,188 | ||||||||||||
Parent’s contributions
|
100 | 95,047 | — | 95,047 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
As of December 31, 2020 (Successor)
|
|
100
|
|
$
|
108,235
|
|
$
|
(7,838
|
)
|
$
|
100,397
|
|
||||
|
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Period from
May 22, 2020 through December 31, 2020 |
Period from
January 1, 2020 through October 22, 2020 |
Year ended
December 31, 2019 |
Year ended
December 31, 2018 |
|||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||||||
Net (loss) income
|
$ | (7,838 | ) | $ | 5,289 | $ | 6,246 | $ | 3,863 | |||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||||||||||||||
Depreciation and amortization expense
|
1,028 | 52 | 50 | 50 | ||||||||||||||||||||
Amortization of debt issuance costs
|
17 | — | — | — | ||||||||||||||||||||
Equity-based compensation expense
|
— | 80 | 104 | — | ||||||||||||||||||||
Provision for doubtful accounts
|
43 | — | — | — | ||||||||||||||||||||
Deferred income tax (benefit) expense
|
(2,637 | ) | (8 | ) | (2 | ) | 7 | |||||||||||||||||
Changes in assets and liabilities:
|
||||||||||||||||||||||||
Accounts receivable
|
(4,000 | ) | 6,818 | (2,488 | ) | (3,492 | ) | |||||||||||||||||
Contract assets
|
3,868 | (4,300 | ) | (127 | ) | (129 | ) | |||||||||||||||||
Prepaid expenses and other assets
|
(453 | ) | (29 | ) | (59 | ) | (47 | ) | ||||||||||||||||
Accounts payable
|
1,111 | 51 | (349 | ) | 581 | |||||||||||||||||||
Accrued liabilities
|
1,224 | 504 | 735 | 954 | ||||||||||||||||||||
Contract liabilities
|
40 | — | — | — | ||||||||||||||||||||
Other liabilities
|
181 | 157 | 11 | 97 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net cash (used in) provided by operating activities
|
|
(7,416
|
)
|
|
8,614
|
|
|
4,121
|
|
|
1,884
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||||
Acquisition of businesses, net of cash acquired
|
(184,714 | ) | — | — | — | |||||||||||||||||||
Purchases of property and equipment
|
(155 | ) | (121 | ) | (18 | ) | (60 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net cash used in investing activities
|
|
(184,869
|
)
|
|
(121
|
)
|
|
(18
|
)
|
|
(60
|
)
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||||
Proceeds from term loan
|
107,249 | — | — | — | ||||||||||||||||||||
Proceeds from promissory notes
|
91,283 | — | — | — | ||||||||||||||||||||
Repayment of promissory notes
|
(91,283 | ) | — | — | — | |||||||||||||||||||
Proceeds from short-term borrowings
|
4,000 | 2,000 | — | 2,000 | ||||||||||||||||||||
Repayment of short-term borrowings
|
(4,000 | ) | (2,000 | ) | (2,000 | ) | (2,000 | ) | ||||||||||||||||
Payment of debt issuance costs to third parties
|
(307 | ) | — | — | — | |||||||||||||||||||
Distributions to members
|
— | (9,773 | ) | (839 | ) | (2,593 | ) | |||||||||||||||||
Parent’s contribution
|
95,047 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net cash provided by (used in) financing activities
|
|
201,989
|
|
|
(9,773
|
)
|
|
(2,839
|
)
|
|
(2,593
|
)
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net increase (decrease) in cash and cash equivalents
|
9,704 | (1,280 | ) | 1,264 | (769 | ) | ||||||||||||||||||
Cash and cash equivalents at beginning of year
|
— | 1,644 | 380 | 1,149 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash and cash equivalents at end of year
|
$
|
9,704
|
|
$
|
364
|
|
$
|
1,644
|
|
$
|
380
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Cash paid during the period for:
|
||||||||||||||||||||||||
Interest
|
$ | 384 | $ | 1 | $ | 127 | $ | 42 | ||||||||||||||||
Income taxes
|
$ | — | $ | 9 | $ | 5 | $ | 2 | ||||||||||||||||
Supplemental
disclosures—non-cash
activities:
|
||||||||||||||||||||||||
Non-cash
investing activity:
|
||||||||||||||||||||||||
Parent units issued for acquisitions
|
$ | 13,188 | $ | — | $ | — | $ | — | ||||||||||||||||
|
|
|
|
|
|
|
|
1. |
Observe – helps customers collect, normalize and curate data from a variety of sources in real-time.
|
2. |
Orient – uses low code, composable, distributed, and event-driven predictive analytics to uncover hidden items in raw data and make sense of incomplete data.
|
3. |
Dominate – helps customers turn data into insights by recommending and evaluating multiple courses of action through data visualization and descriptive analytics.
|
Property and equipment
|
Estimated useful life in
years |
|
Computer equipment
|
3 | |
Furniture and fixtures
|
7 | |
Laboratory equipment
|
5-10
|
|
Software
|
3-5
|
|
Leasehold improvements
|
5 or lease term |
June 19, 2020
|
||||
Cash paid
|
$ | 27,881 | ||
Equity issued
|
2,900 | |||
|
|
|||
Purchase consideration
|
$ | 30,781 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 1,038 | ||
Accounts receivable
|
3,018 | |||
Other current assets
|
112 | |||
Contract assets
|
1,095 | |||
Deposits
|
27 | |||
Property and equipment
|
77 | |||
Intangible assets
|
16,200 | |||
|
|
|||
$ | 21,567 | |||
|
|
|||
Liabilities:
|
||||
Accounts payable
|
$ | 365 | ||
Accrued liabilities
|
364 | |||
Deferred tax liability
|
476 | |||
|
|
|||
$ | 1,205 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
20,362 | |||
|
|
|||
Goodwill
|
$ | 10,419 | ||
|
|
June 19, 2020
|
||||
Technology
|
$ | 5,400 | ||
Customer relationships
|
10,800 | |||
|
|
|||
Total intangible assets
|
$ | 16,200 | ||
|
|
October 23, 2020
|
||||
Cash paid
|
$ | 55,932 | ||
Equity issued
|
8,143 | |||
|
|
|||
Purchase consideration
|
$ | 64,075 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 364 | ||
Accounts receivable
|
6,710 | |||
Contract assets
|
4,569 | |||
Prepaid expenses and other current assets
|
383 | |||
Property and equipment
|
218 | |||
Other
non-current
assets
|
5 | |||
Intangible assets
|
22,800 | |||
|
|
|||
$ | 35,049 | |||
|
|
|||
Liabilities:
|
||||
Accounts payable
|
$ | 1,131 | ||
Deferred tax liability
|
1,033 | |||
Accrued liabilities
|
3,776 | |||
|
|
|||
$ | 5,940 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
29,109 | |||
|
|
|||
Goodwill
|
$ | 34,966 | ||
|
|
October 23, 2020
|
||||
Customer relationships
|
$ | 22,800 | ||
|
|
December 2, 2020
|
||||
Cash paid
|
$ | 60,715 | ||
Equity issued
|
2,145 | |||
|
|
|||
Purchase consideration
|
$ | 62,860 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 63 | ||
Accounts receivable
|
6,127 | |||
Prepaid expenses and other current assets
|
89 | |||
Property and equipment
|
305 | |||
Other
non-current
assets
|
48 | |||
Intangible assets
|
30,800 | |||
|
|
|||
$ | 37,432 | |||
|
|
|||
Liabilities:
|
||||
Accounts payable
|
$ | 122 | ||
Accrued liabilities
|
946 | |||
Deferred tax liability
|
334 | |||
Other
non-current
liabilities
|
27 | |||
|
|
|||
$ | 1,429 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
36,003 | |||
|
|
|||
Goodwill
|
$ | 26,857 | ||
|
|
December 2, 2020
|
||||
Technology
|
$ | 10,300 | ||
Customer relationships
|
20,500 | |||
|
|
|||
Total intangible assets
|
$ | 30,800 | ||
|
|
December 21, 2020
|
||||
Cash paid
|
$ | 43,718 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 1,843 | ||
Accounts receivable
|
907 | |||
Other receivables
|
707 | |||
Contract assets
|
779 | |||
Prepaid expenses and other current assets
|
64 | |||
Property and equipment
|
134 | |||
Other
non-current
assets
|
18 | |||
Intangible assets
|
21,700 | |||
|
|
|||
$ | 26,152 | |||
|
|
|||
Liabilities:
|
||||
Accounts payable
|
$ | 2 | ||
Contract liabilities
|
501 | |||
Accrued liabilities
|
960 | |||
|
|
|||
$ | 1,463 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
24,689 | |||
|
|
|||
Goodwill
|
$ | 19,029 | ||
|
|
December 21, 2020
|
||||
Technology
|
$ | 7,000 | ||
Customer relationships
|
14,700 | |||
|
|
|||
Total intangible assets
|
$ | 21,700 | ||
|
|
Pro forma for the year ended
|
||||||||
December 31, 2020
|
December 31, 2019
|
|||||||
Net revenue
|
$ | 138,992 | $ | 121,231 | ||||
Net income
|
3,903 | 11,772 |
Successor
|
Predecessor
|
|||||||||||||||
December 31, 2020
|
December 31, 2019
|
|||||||||||||||
Computer equipment
|
$ | 307 | $ | 226 | ||||||||||||
Furniture and fixtures
|
400 | 249 | ||||||||||||||
Office equipment
|
— | 31 | ||||||||||||||
Software
|
102 | 2 | ||||||||||||||
Leasehold improvements
|
80 | 95 | ||||||||||||||
Vehicles
|
— | 140 | ||||||||||||||
Less: accumulated depreciation
|
(26 | ) | (594 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Property and equipment, net
|
$
|
863
|
|
$
|
149
|
|
||||||||||
|
|
|
|
Cyber and
Engineering |
Analytics
|
Total
|
||||||||||
As of May 22, 2020
|
$ | — | $ | — | $ | — | ||||||
Goodwill arising from the PCI acquisition
|
34,966 | — | 34,966 | |||||||||
Goodwill arising from the NuWave acquisition
|
— | 10,419 | 10,419 | |||||||||
Goodwill arising from the Open Solutions acquisition
|
— | 26,857 | 26,857 | |||||||||
Goodwill arising from the ProModel acquisition
|
— | 19,029 | 19,029 | |||||||||
|
|
|
|
|
|
|||||||
As of December 31, 2020
|
$
|
34,966
|
|
$
|
56,305
|
|
$
|
91,271
|
|
|||
|
|
|
|
|
|
Successor
|
||||||||||||||||
December 31, 2020
|
||||||||||||||||
Gross
carrying
amount
|
Accumulated
amortization
|
Net
carrying
amount
|
Weighted
average
useful
life in years
|
|||||||||||||
Customer relationships
|
$ | 68,800 | $ | (610 | ) | 68,190 | 20 | |||||||||
Technology
|
22,700 | (392 | ) | $ | 22,308 | 7 | ||||||||||
|
|
|
|
|
|
|||||||||||
Total
|
$ | 91,500 | $ | (1,002 | ) | $ | 90,498 | |||||||||
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||
December 31, 2020
|
December 31, 2019
|
|||||||||||||||
Payroll accruals
|
$ | 6,741 | $ | 2,971 | ||||||||||||
Other accrued expenses
|
529 | 83 | ||||||||||||||
|
|
|
|
|||||||||||||
Total
|
$
|
7,270
|
|
$
|
3,054
|
|
||||||||||
|
|
|
|
(i) |
A $110.0 million term loan (the “
Antares Capital Term Loan
|
(ii) |
A $15.0 million revolving credit facility (the “
Antares Capital Revolving Credit Facility
|
(i) |
For LIBOR rate loans, the interest payable is the higher of (a) 1.00% per annum and (b) LIBOR rate plus 5.00% (as applicable margin).
|
(ii) |
For Base rate loans, the interest payable is the Base Rate plus 4.00% (as applicable margin). Base Rate is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the Prime Rate and
(c) one-month
Eurocurrency Rate plus 1.00%
|
Successor
|
Predecessor
|
|||||||||||||||
December 31, 2020
|
December 31, 2019
|
|||||||||||||||
Term Loan
|
$ | 110,000 | $ | — | ||||||||||||
Revolver
|
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total debt
|
$ | 110,000 | $ | — | ||||||||||||
|
|
|
|
|||||||||||||
Less: unamortized issuance costs
|
3,006 | — | ||||||||||||||
|
|
|
|
|||||||||||||
Total debt, net
|
$ | 106,994 | $ | — | ||||||||||||
|
|
|
|
|||||||||||||
Less: current portion
|
1,100 | — | ||||||||||||||
|
|
|
|
|||||||||||||
Long-term debt, net
|
$ | 105,894 | $ | — | ||||||||||||
|
|
|
|
|
|
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
Thereafter
|
|||||||||||||||||||
Term Loan
|
$ | 1,100 | $ | 1,100 | $ | 1,100 | $ | 1,100 | $ | 1,100 | $ | 104,500 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total
|
$
|
1,100
|
|
$
|
1,100
|
|
$
|
1,100
|
|
$
|
1,100
|
|
$
|
1,100
|
|
$
|
104,500
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2022
|
2023
|
2024
|
2025
|
Thereafter
|
Total
|
||||||||
Future annual minimum lease payments
|
$1,449
|
$1,010
|
$703
|
$527
|
$460
|
$431
|
$4,580
|
|||||||
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Period from
May 22, 2020 through December 31, 2020 |
Period from
January 1, 2020 through October 22, 2020 |
Year ended
December 31, 2019 |
Year ended
December 31, 2018 |
|||||||||||||||||||||
Income tax (benefit) expense
|
||||||||||||||||||||||||
Federal:
|
||||||||||||||||||||||||
Current
|
$ | — | $ | — | $ | $ | — | |||||||||||||||||
Deferred
|
(2,047 | ) | — | — | — | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
(2,047 | ) | — | — | — | ||||||||||||||||||||
State:
|
||||||||||||||||||||||||
Current
|
4 | 11 | 11 | 5 | ||||||||||||||||||||
Deferred
|
(590 | ) | (8 | ) | (2 | ) | 7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
(586 | ) | 3 | 9 | 12 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Income tax (benefit) expense
|
$ | (2,663 | ) | $ | 3 | $ | 9 | $ | 12 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Period from
May 22, 2020 through December 31, 2020 |
Period from
January 1, 2020 through October 22, 2020 |
Year ended
December 31, 2019 |
Year ended
December 31, 2018 |
|||||||||||||||||||||
Tax (benefit) expense at federal statutory rates
|
$ | (2,199 | ) | $ | — | $ | — | $ | — | |||||||||||||||
State income tax, net of federal tax benefit
|
(628 | ) | 3 | 9 | 12 | |||||||||||||||||||
Transaction expenses
|
119 | — | — | — | ||||||||||||||||||||
Other Permanent Differences
|
75 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Income tax (benefit) expense
|
$ | (2,633 | ) | $ | 3 | $ | 9 | $ | 12 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
|
|
|
|
|
|
Predecessor
|
|
||||
|
|
December 31,
2020 |
|
|
|
|
|
|
|
|
December 31,
2019 |
|
||||
Deferred tax assets:
|
|
|
|
|
||||||||||||
Net operating loss carryforwards
|
|
$
|
891
|
|
|
|
|
$
|
—
|
|
||||||
Interest carryforwards
|
|
|
161
|
|
|
|
|
|
—
|
|
||||||
Accrued expenses
|
|
|
86
|
|
|
|
|
|
—
|
|
||||||
Deferred rent
|
|
|
20
|
|
|
|
|
|
—
|
|
||||||
Other assets
|
|
|
20
|
|
|
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Total deferred tax assets
|
|
|
1,178
|
|
|
|
|
|
—
|
|
||||||
Valuation allowance
|
|
|
—
|
|
|
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Net deferred tax assets
|
|
|
1,178
|
|
|
|
|
|
—
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
|
204
|
|
|
|
|
|
—
|
|
||||||
Prepaid expenses
|
|
|
137
|
|
|
|
|
|
—
|
|
||||||
Deferred revenue
|
|
|
43
|
|
|
|
|
|
19
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
384
|
|
|
|
|
|
19
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Net deferred tax assets (liabilities)
|
|
$
|
794
|
|
|
|
|
$
|
(19
|
)
|
||||||
|
|
|
|
|
|
|
|
|
As of June 11, 2019
|
||||
Volatility
|
25.8 | % | ||
Risk-free interest rate
|
1.89 | % | ||
Expected time to exit (years)
|
2.5 |
Balance as of January 1, 2019
|
— | |||
|
|
|||
Granted during the year
|
100 | |||
Vested during the year
|
(10 | ) | ||
Forfeited during the year
|
— | |||
|
|
|||
Unvested as of December 31, 2019
|
90 | |||
|
|
|||
Unvested as of October 22, 2020
|
90 | |||
|
|
Successor
|
||||
Basic and diluted net loss per unit
|
Period from
May 22, 2020 to December 31, 2020 |
|||
Numerator:
|
||||
Net loss
|
$ | (7,838 | ) | |
Denominator:
|
||||
Weighted average Units outstanding—basic and diluted
|
100 | |||
Basic and diluted net loss per Unit
|
$ | (78 | ) |
Successor
|
Predecessor
|
|||||||||||||||||||||||
Period from
May 22, 2020 to December 31, 2020 |
January 1,
2020 to October 22, 2020 |
Year ended
December 31, 2019 |
Year ended
December 31, 2018 |
|||||||||||||||||||||
Firm fixed price
|
$ | 6,938 | $ | 2,216 | $ | 3,753 | $ | 3,265 | ||||||||||||||||
Time and materials
|
24,614 | 57,549 | 69,873 | 46,174 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Total revenues
|
$
|
31,552
|
|
$
|
59,765
|
|
$
|
73,626
|
|
$
|
49,439
|
|
||||||||||||
|
|
|
|
|
|
|
|
Cyber &
Engineering |
Analytics
|
Total
|
Percent of total
revenues |
|||||||||||||
Customer A
|
$ | 8,075 | $ | — | $ | 8,075 | 26 | % | ||||||||
Customer B
|
3,495 | — | 3,495 | 11 | % | |||||||||||
Customer C
|
— | 5,498 | 5,498 | 17 | % | |||||||||||
Customer D
|
— | 5,494 | 5,494 | 17 | % | |||||||||||
All others
|
4,014 | 4,976 | 8,990 | 29 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
$
|
15,584
|
$
|
15,968
|
$
|
31,552
|
100
|
%
|
||||||||
|
|
|
|
|
|
|
|
Total*
|
Percent of total
revenues |
|||||||
Customer A
|
$ | 26,049 | 44 | % | ||||
Customer B
|
12,282 | 21 | % | |||||
All others
|
21,434 | 35 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
59,765
|
100
|
%
|
||||
|
|
|
|
Total*
|
Percent of total
revenues |
|||||||
Customer A
|
$ | 34,137 | 46 | % | ||||
Customer B
|
21,386 | 29 | % | |||||
All others
|
18,103 | 25 | % | |||||
|
|
|
|
|||||
Total revenues
|
$ |
73,626
|
100
|
%
|
||||
|
|
|
|
Total*
|
Percent of total
revenues |
|||||||
Customer A
|
$ | 21,878 | 44 | % | ||||
Customer B
|
13,612 | 28 | % | |||||
Customer C
|
5,510 | 11 | % | |||||
All others
|
8,439 | 17 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
49,439
|
100
|
%
|
||||
|
|
|
|
*
|
The Predecessor 2020 Period, Predecessor 2019 Period, and Predecessor 2018 Period each comprise a single reportable segment. As a result, segment reporting for those periods is not presented.
|
Successor
|
||||||||||||
Period from May 22, 2020 through
December 31, 2020 |
||||||||||||
Cyber &
Engineering |
Analytics
|
Total
|
||||||||||
Revenues
|
$ | 15,584 | $ | 15,968 | $ | 31,552 | ||||||
Segment adjusted gross margin
|
|
3,570
|
|
|
7,799
|
|
|
11,369
|
|
|||
23% | 49% | 36% | ||||||||||
Research and development costs excluded from segment adjusted gross margin
|
(2,694 | ) | ||||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative
|
7,909 | |||||||||||
Research and development
|
530 | |||||||||||
Transaction expenses
|
10,091 | |||||||||||
|
|
|||||||||||
Operating loss
|
|
(9,855
|
)
|
|||||||||
Interest expens
e
|
616 | |||||||||||
|
|
|||||||||||
Loss before taxes
|
$
|
(10,471
|
)
|
Successor
|
||||||||
As of
September 30, 2021 |
As of
December 31, 2020 |
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 10,776 | $ | 9,704 | ||||
Accounts receivable, less allowance for doubtful accounts of $43 as of September 30, 2021 and December 31, 2020
|
21,263 | 21,426 | ||||||
Contract assets
|
2,863 | 2,575 | ||||||
Prepaid expenses and other current assets
|
6,420 | 641 | ||||||
|
|
|
|
|||||
Total current assets
|
|
41,322
|
|
|
34,346
|
|
||
|
|
|
|
|||||
Non-current
assets:
|
||||||||
Property and equipment, net
|
1,213 | 863 | ||||||
Goodwill
|
91,636 | 91,271 | ||||||
Intangible assets, net
|
85,317 | 90,498 | ||||||
Deferred tax assets
|
4,135 | 794 | ||||||
Other
non-current
assets
|
592 | 593 | ||||||
|
|
|
|
|||||
Total assets
|
$
|
224,215
|
|
$
|
218,365
|
|
||
|
|
|
|
|||||
Liabilities and members’ equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 9,468 | $ | 2,731 | ||||
Short-term debt, including current portion of long-term debt
|
2,600 | 1,100 | ||||||
Accrued liabilities
|
12,368 | 7,270 | ||||||
Contract liabilities
|
2,136 | 541 | ||||||
Other current liabilities
|
464 | 413 | ||||||
|
|
|
|
|||||
Total current liabilities
|
|
27,036
|
|
|
12,055
|
|
||
|
|
|
|
|||||
Non-current
liabilities:
|
||||||||
Long-term debt
|
105,447 | 105,894 | ||||||
Other
non-current
liabilities
|
7 | 19 | ||||||
|
|
|
|
|||||
Total liabilities
|
|
132,490
|
|
|
117,968
|
|
||
|
|
|
|
|||||
Commitments and contingencies (Note J)
|
||||||||
Equity:
|
||||||||
Members’ contribution
|
108,321 | 108,235 | ||||||
Accumulated deficit
|
(16,596 | ) | (7,838 | ) | ||||
|
|
|
|
|||||
Total equity
|
|
91,725
|
|
|
100,397
|
|
||
|
|
|
|
|||||
Total liabilities and members’ equity
|
$
|
224,215
|
|
$
|
218,365
|
|
||
|
|
|
|
Successor
|
Predecessor
|
|||||||||||||||||||||||
Three months
ended September 30, 2021 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2021 |
Period from
May 22, 2020 through September 30, 2020 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2020 |
|||||||||||||||||||
Revenues
|
$ | 40,219 | $ | 7,802 | $ | 112,100 | $ | 9,183 | $ | 17,899 | $ | 55,093 | ||||||||||||
Cost of revenues
|
29,421 | 5,584 | 81,859 | 6,325 | 13,972 | 43,088 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross margin
|
|
10,798
|
|
|
2,218
|
|
|
30,241
|
|
|
2,858
|
|
|
3,927
|
|
|
12,005
|
|
||||||
Operating expenses:
|
||||||||||||||||||||||||
Selling, general and administrative
|
12,038 | 1,910 | 32,557 | 2,024 | 2,426 | 7,183 | ||||||||||||||||||
Research and development
|
1,363 | 184 | 4,158 | 258 | 41 | 77 | ||||||||||||||||||
Transaction expenses
|
— | — | — | 1,662 | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating (loss) income
|
|
(2,603
|
)
|
|
124
|
|
|
(6,474
|
)
|
|
(1,086
|
)
|
|
1,460
|
|
|
4,745
|
|
||||||
Interest expense
|
1,870 | 65 | 5,579 | 65 | — | 1 | ||||||||||||||||||
Other income, net
|
— | — | (1 | ) | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss) income before taxes
|
|
(4,473
|
)
|
|
59
|
|
|
(12,052
|
)
|
|
(1,151
|
)
|
|
1,460
|
|
|
4,744
|
|
||||||
Income tax (benefit) expense
|
(1,327 | ) | (14 | ) | (3,294 | ) | (296 | ) | — | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income
|
$
|
(3,146
|
)
|
$
|
73
|
|
$
|
(8,758
|
)
|
$
|
(855
|
)
|
$
|
1,460
|
|
$
|
4,737
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic net (loss) income per Unit
|
$ | (31.46 | ) | $ | 0.73 | $ | (87.58 | ) | $ | (8.55 | ) | |||||||||||||
Diluted net (loss) income per Unit
|
$ | (31.46 | ) | $ | 0.73 | $ | (87.58 | ) | $ | (8.55 | ) | |||||||||||||
Weighted-average Units outstanding:
|
||||||||||||||||||||||||
Basic
|
100 | 100 | 100 | 100 | ||||||||||||||||||||
Diluted
|
100 | 100 | 100 | 100 |
Class A
Units |
Members’
contribution |
Accumulated
deficit
|
Total
members’ equity |
|||||||||||||
Balance at December 31, 2020 (Successor)
|
|
100
|
|
$
|
108,235
|
|
$
|
(7,838
|
)
|
$
|
100,397
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
— | — | (8,758 | ) |
|
(8,758
|
)
|
|||||||||
Equity-based compensation expense
|
— | 86 | — |
|
86
|
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2021 (Successor)
|
|
100
|
|
$
|
108,321
|
|
$
|
(16,596
|
)
|
$
|
91,725
|
|
||||
|
|
|
|
|
|
|
|
Class A
Units |
Members’
contribution |
Accumulated
deficit
|
Total
members’ equity |
|||||||||||||
Balance at May 22, 2020 (Successor)
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Parent’s contributions
|
100 | 15,298 | — |
|
15,298
|
|
||||||||||
Parent’s contributions for acquisitions
|
— | 2,900 | — |
|
2,900
|
|
||||||||||
Net loss
|
— | — | (855 | ) |
|
(855
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 30, 2020 (Successor)
|
|
100
|
|
$
|
18,198
|
|
$
|
(855
|
)
|
$
|
17,343
|
|
||||
|
|
|
|
|
|
|
|
Class A
Units |
Class B
Units |
Members’
contribution |
Accumulated
deficit
|
Total
members’ equity |
||||||||||||||||
Balance at December 31, 2019 (Predecessor)
|
|
900
|
|
|
10
|
|
$
|
4,998
|
|
$
|
6,677
|
|
$
|
11,675
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income
|
— | — | — | 4,737 |
|
4,737
|
|
|||||||||||||
Equity-based compensation expense
|
— | — | 74 | — |
|
74
|
|
|||||||||||||
Distributions
|
— | — | — | (4,011 | ) |
|
(4,011
|
)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 30, 2020 (Predecessor)
|
|
900
|
|
|
10
|
|
$
|
5,047
|
|
$
|
7,403
|
|
$
|
12,475
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|||||||||||
Nine months
ended September 30, 2021 |
Period from
May 22, 2020 through September 30, 2020 |
Nine months
ended September 30, 2020 |
||||||||||
Cash flows from operating activities:
|
|
|||||||||||
Net (loss) income
|
$ | (8,758 | ) | $ | (855 | ) | $ | 4,737 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|||||||||||
Depreciation and amortization expense
|
5,432 | 374 | 48 | |||||||||
Amortization of debt issuance costs and discount
|
429 | — | — | |||||||||
Equity-based compensation expense
|
86 | — | 74 | |||||||||
Deferred income tax benefit
|
(3,341 | ) | (372 | ) | (5 | ) | ||||||
Changes in assets and liabilities:
|
|
|||||||||||
Accounts receivable
|
163 | (1,410 | ) | 88 | ||||||||
Contract assets
|
(288 | ) | 526 | (269 | ) | |||||||
Prepaid expenses and other assets
|
(5,829 | ) | 70 | 1 | ||||||||
Accounts payable
|
6,737 | 1,427 | 840 | |||||||||
Accrued liabilities
|
4,733 | 321 | 1,313 | |||||||||
Contract liabilities
|
1,595 | 25 | — | |||||||||
Other liabilities
|
263 | 76 | (5 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
|
1,222
|
|
|
182
|
|
|
6,822
|
|
|||
|
|
|
|
|
|
|||||||
Cash flows from investing activities:
|
||||||||||||
Acquisition of businesses, net of cash acquired
|
(224 | ) | (26,843 | ) | — | |||||||
Purchases of property and equipment
|
(601 | ) | (57 | ) | (115 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities
|
|
(825
|
)
|
|
(26,900
|
)
|
|
(115
|
)
|
|||
|
|
|
|
|
|
|||||||
Cash flows from financing activities:
|
||||||||||||
Parent’s contribution
|
— | 15,298 | — | |||||||||
Proceeds from promissory notes
|
— | 15,219 | — | |||||||||
Repayment of term loan
|
(825 | ) | — | — | ||||||||
Proceeds from revolving credit facility
|
1,500 | — | — | |||||||||
Distributions to members
|
— | — | (4,011 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used in) financing activities
|
|
675
|
|
|
30,517
|
|
|
(4,011
|
)
|
|||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents
|
1,072 | 3,799 | 2,696 | |||||||||
Cash and cash equivalents at beginning of period
|
9,704 | — | 1,644 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period
|
$
|
10,776
|
|
$
|
3,799
|
|
$
|
4,340
|
|
|||
|
|
|
|
|
|
June 19,
2020 |
||||
Cash paid
|
$ | 27,881 | ||
Equity issued
|
2,900 | |||
|
|
|||
Purchase consideration
|
$ | 30,781 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 1,038 | ||
Accounts receivable
|
3,018 | |||
Other current assets
|
112 | |||
Contract assets
|
1,095 | |||
Deposits
|
27 | |||
Property and equipment
|
77 | |||
Intangible assets
|
16,200 | |||
|
|
|||
$21,567 | ||||
|
|
Liabilities:
|
||||
Accounts payable
|
$ | 365 | ||
Accrued liabilities
|
364 | |||
Deferred tax liability
|
476 | |||
|
|
|||
$ | 1,205 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
20,362 | |||
|
|
|||
Goodwill
|
$ | 10,419 | ||
|
|
June 19,
2020 |
||||
Technology
|
$ | 5,400 | ||
Customer relationships
|
10,800 | |||
|
|
|||
Total intangible assets
|
$ | 16,200 | ||
|
|
October 23,
2020 |
||||
Cash paid
|
$ | 55,932 | ||
Equity issued
|
8,143 | |||
|
|
|||
Purchase consideration
|
$ | 64,075 | ||
|
|
|||
Assets:
|
||||
Cash
|
$ | 364 | ||
Accounts receivable
|
6,710 | |||
Contract assets
|
4,569 | |||
Prepaid expenses and other current assets
|
383 | |||
Property and equipment
|
218 | |||
Other
non-current
assets
|
5 | |||
Intangible assets
|
22,800 | |||
|
|
|||
$ | 35,049 | |||
|
|
Liabilities:
|
||||
Accounts payable
|
$ | 1,131 | ||
Deferred tax liability
|
1,033 | |||
Accrued liabilities
|
4,062 | |||
|
|
|||
$ | 6,226 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
28,823 | |||
|
|
|||
Goodwill
|
$ | 35,252 | ||
|
|
October 23,
2020 |
||||
Customer relationships
|
$ | 22,800 | ||
|
|
December 2,
2020 |
||||
Cash paid
|
$ | 60,715 | ||
Equity issued
|
2,145 | |||
|
|
|||
Purchase consideration
|
$ | 62,860 | ||
|
|
Assets:
|
||||
Cash
|
$ | 63 | ||
Accounts receivable
|
6,127 | |||
Prepaid expenses and other current assets
|
89 | |||
Property and equipment
|
305 | |||
Other
non-current
assets
|
48 | |||
Intangible assets
|
30,800 | |||
|
|
|||
$ | 37,432 | |||
|
|
Liabilities:
|
||||
Accounts payable
|
$ | 122 | ||
Accrued liabilities
|
946 | |||
Deferred tax liability
|
334 | |||
Other
non-current
liabilities
|
27 | |||
|
|
|||
$ | 1,429 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
36,003 | |||
|
|
|||
Goodwill
|
$ | 26,857 | ||
|
|
December 2,
2020 |
||||
Technology
|
$ | 10,300 | ||
Customer relationships
|
20,500 | |||
|
|
|||
Total intangible assets
|
$ | 30,800 | ||
|
|
December 21,
2020 |
||||
Cash paid
|
$ | 43,718 | ||
|
|
Assets:
|
||||
Cash
|
$ | 1,843 | ||
Accounts receivable
|
907 | |||
Other receivables
|
707 | |||
Contract assets
|
779 | |||
Prepaid expenses and other current assets
|
64 | |||
Property and equipment
|
134 | |||
Other
non-current
assets
|
18 | |||
Intangible assets
|
21,700 | |||
|
|
|||
$ | 26,152 | |||
|
|
|||
Liabilities:
|
||||
Accounts payable
|
$ | 2 | ||
Contract liabilities
|
501 | |||
Accrued liabilities
|
1,039 | |||
|
|
|||
$ | 1,542 | |||
|
|
|||
Fair value of net identifiable assets acquired
|
24,610 | |||
|
|
|||
Goodwill
|
$ | 19,108 | ||
|
|
December 21,
2020 |
||||
Technology
|
$ | 7,000 | ||
Customer relationships
|
14,700 | |||
|
|
|||
Total intangible assets
|
$ | 21,700 | ||
|
|
Pro forma for
the three months ended September 30, 2020 |
Pro forma for
the nine months ended September 30, 2020 |
|||||||
Revenues
|
$ | 36,035 | $ | 105,749 | ||||
Net income
|
2,844 | 11,029 |
Successor
|
||||||||
September 30,
2021 |
December 31,
2020 |
|||||||
Capitalized advisory costs
1
|
$ | 4,471 | $ | — | ||||
Prepaid expenses
|
1,704 | 586 | ||||||
Pre-contract
costs
2
|
245 | — | ||||||
Other current assets
|
— | 55 | ||||||
|
|
|
|
|||||
Total
|
$
|
6,420
|
|
$
|
641
|
|
||
|
|
|
|
1
|
The anticipated Merger between GigCapital4, Inc. and BigBear will be accounted for as a reverse recapitalization in which GigCapital4 is treated as the acquired company. Accordingly, any direct and incremental costs associated with the Merger, including but not limited to, certain legal, financial advisor, and accounting costs are capitalized as assets and will be reclassified as a reduction to additional
paid-in
capital upon completion of the Merger. Capitalized advisory costs were $4,471 at September 30, 2021 and $0 at December 31, 2020.
|
2
|
Costs incurred to fulfill a contract in advance of the contract being awarded are included in prepaid expenses and other current assets if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and the contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as
pre-contract
costs).
|
Successor
|
||||||||
September 30,
2021 |
December 31,
2020 |
|||||||
Accrued payroll
|
$ | 9,892 | $ | 6,741 | ||||
Accrued advisory fees
|
2,161 | — | ||||||
Other accrued expenses
|
315 | 529 | ||||||
|
|
|
|
|||||
Total
|
$
|
12,368
|
|
$
|
7,270
|
|
||
|
|
|
|
(i) |
A $110.0 million term loan (the “
Antares Capital Term Loan
|
(ii) |
A $15.0 million revolving credit facility (the “
Antares Capital Revolving Credit Facility
|
(i) |
For LIBOR rate loans, the interest payable is the higher of (a) 1.00% per annum and (b) LIBOR rate plus 5.00% (as applicable margin).
|
(ii) |
For Base rate loans, the interest payable is the Base Rate plus 4.00% (as applicable margin). Base Rate is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the Prime Rate and
(c) one-month
Eurocurrency Rate plus 1.00%
|
Successor
|
||||||||
September 30,
2021 |
December 31,
2020 |
|||||||
Term Loan
|
$ | 109,175 | $ | 110,000 | ||||
Revolver
|
1,500 | — | ||||||
|
|
|
|
|||||
Total debt
|
$ | 110,675 | $ | 110,000 | ||||
Less: unamortized discounts and issuance costs
|
2,628 | 3,006 | ||||||
|
|
|
|
|||||
Total debt, net
|
$ | 108,047 | $ | 106,994 | ||||
Less: current portion
|
2,600 | 1,100 | ||||||
|
|
|
|
|||||
Long-term debt, net
|
$
|
105,447
|
|
$
|
105,894
|
|
||
|
|
|
|
Volatility
|
57 | % | ||
Risk-free rate
|
0.1 | % | ||
Time to exit (years)
|
1.6 |
Incentive
Units |
||||
Unvested and outstanding as of December 31, 2020
|
|
—
|
|
|
|
|
|||
Granted
|
9,650,000 | |||
Forfeited
|
(250,000 | ) | ||
|
|
|||
Unvested and outstanding as of September 30, 2021
|
|
9,400,000
|
|
|
|
|
Volatility
|
46 | % | ||
Risk-free rate
|
0.2 | % | ||
Time to exit (years)
|
1.2 |
Successor
|
||||||||||||||||
Basic and diluted net (loss) income per Unit
|
Three months
ended September 30, 2021 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2021 |
Period from
May 22, 2020 through September 30, 2020 |
||||||||||||
Numerator:
|
||||||||||||||||
Net (loss) income:
|
$ | (3,146 | ) | $ | 73 | $ | (8,758 | ) | $ | (855 | ) | |||||
Denominator:
|
||||||||||||||||
Weighted average Units outstanding – basic and diluted
|
100 | 100 | 100 | 100 | ||||||||||||
Basic and diluted net (loss) income per Unit
|
$ | (31.46 | ) | $ | 0.73 | $ | (87.58 | ) | $ | (8.55 | ) |
Successor
|
Predecessor
|
|||||||||||||||||||||||
Three months
ended September 30, 2021 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2021 |
Period from
May 22, 2020 through September 30, 2020 |
Three months
ended September 30, 2020 |
Nine months
ended September 30, 2020 |
|||||||||||||||||||
Firm fixed price
|
$ | 17,340 | $ | 3,922 | $ | 32,260 | $ | 4,070 | $ | 639 | $ | 1,883 | ||||||||||||
Time and materials
|
22,879 | 3,880 | 79,840 | 5,113 | 17,260 | 53,210 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues
|
$
|
40,219
|
|
$
|
7,802
|
|
$
|
112,100
|
|
$
|
9,183
|
|
$
|
17,899
|
|
$
|
55,093
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cyber &
Engineering |
Analytics
|
Total
|
Percent
of total revenues |
|||||||||||||
Customer A
|
$ | 7,994 | $ | — | $ | 7,994 | 20 | % | ||||||||
Customer B
(1)
|
3,783 | — | 3,783 | 9 | % | |||||||||||
Customer C
(1)
|
— | 6,010 | 6,010 | 15 | % | |||||||||||
All others
|
7,452 | 14,980 | 22,432 | 56 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
$
|
19,229
|
|
$
|
20,990
|
|
$
|
40,219
|
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
Total
(2)
|
Percent
of total revenues |
|||||||
Customer A
|
$ | 3,837 | 49 | % | ||||
Customer B
|
2,688 | 34 | % | |||||
All others
|
1,277 | 17 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
7,802
|
|
|
100
|
%
|
||
|
|
|
|
Total
(2)
|
Percent
of total revenues |
|||||||
Customer A
|
$ | 13,719 | 77 | % | ||||
Customer B
|
3,276 | 18 | % | |||||
All others
|
904 | 5 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
17,899
|
|
|
100
|
%
|
||
|
|
|
|
Cyber &
Engineering |
Analytics
|
Total
|
Percent
of total revenues |
|||||||||||||
Customer A
|
$ | 24,503 | $ | — | $ | 24,503 | 22 | % | ||||||||
Customer B
(1)
|
11,202 | — | 11,202 | 10 | % | |||||||||||
Customer C
(1)
|
— | 6,010 | 6,010 | 5 | % | |||||||||||
All others
|
22,334 | 48,051 | 70,385 | 63 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
$
|
58,039
|
|
$
|
54,061
|
|
$
|
112,100
|
|
|
100
|
%
|
||||
|
|
|
|
|
|
|
|
Total
(2)
|
Percent
of total revenues |
|||||||
Customer A
|
$ | 3,957 | 43 | % | ||||
Customer B
|
3,045 | 33 | % | |||||
All others
|
2,181 | 24 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
9,183
|
|
|
100
|
%
|
||
|
|
|
|
Total
(2)
|
Percent
of total revenues |
|||||||
Customer A
|
$ | 31,091 | 56 | % | ||||
Customer B
|
20,593 | 37 | % | |||||
All others
|
3,409 | 7 | % | |||||
|
|
|
|
|||||
Total revenues
|
$
|
55,093
|
|
|
100
|
%
|
||
|
|
|
|
(1)
|
Customers that contributed in excess of 10% of consolidated revenues in any period presented have been included in all periods presented within a given fiscal year for comparability.
|
(2)
|
The Successor 2020 Q3 Period, Predecessor 2020 Q3 Period, Successor 2020 Period, and Predecessor Period each comprise a single reportable segment. As a result, segment reporting for those periods is not presented.
|
Successor
|
||||||||||||
Three months ended
September 30, 2021
|
||||||||||||
Cyber &
Engineering |
Analytics
|
Total
|
||||||||||
Revenues
|
$ | 19,229 | $ | 20,990 | $ | 40,219 | ||||||
Segment adjusted gross margin
|
|
4,126
|
|
|
10,317
|
|
|
14,443
|
|
|||
21 | % | 49 | % | 36 | % | |||||||
Research and development costs excluded from segment gross margin
|
(3,645 | ) | ||||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative
|
12,038 | |||||||||||
Research and development
|
1,363 | |||||||||||
|
|
|||||||||||
Operating loss
|
|
(2,603
|
)
|
|||||||||
Interest expense
|
1,870 | |||||||||||
Other income
|
— | |||||||||||
|
|
|||||||||||
Loss before taxes
|
$
|
(4,473
|
)
|
|||||||||
|
|
Successor
|
||||||||||||
Nine months ended
September 30, 2021
|
||||||||||||
Cyber &
Engineering |
Analytics
|
Total
|
||||||||||
Revenues
|
$ | 58,039 | $ | 54,061 | $ | 112,100 | ||||||
Segment adjusted gross margin
|
|
12,701
|
|
|
26,042
|
|
|
38,743
|
|
|||
22 | % | 48 | % | 35 | % | |||||||
Research and development costs excluded from segment gross margin
|
(8,502 | ) | ||||||||||
Operating expenses:
|
||||||||||||
Selling, general and administrative
|
32,557 | |||||||||||
Research and development
|
4,158 | |||||||||||
|
|
|||||||||||
Operating loss
|
|
(6,474
|
)
|
|||||||||
Interest expens
e
|
5,579 | |||||||||||
Other income
|
1 | |||||||||||
|
|
|||||||||||
Loss before taxes
|
$
|
(12,052
|
)
|
|||||||||
|
|
As of June 18,
2020 |
As of December 31,
2019 |
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,038 | $ | 331 | ||||
Accounts receivable
|
3,018 | 2,626 | ||||||
Contract assets
|
1,096 | 1 | ||||||
Prepaid expenses and other current assets
|
112 | 57 | ||||||
|
|
|
|
|||||
Total current assets
|
|
5,264
|
|
|
3,015
|
|
||
|
|
|
|
|||||
Non-current
assets:
|
||||||||
Property and equipment, net
|
77 | 89 | ||||||
Other
non-current
assets
|
27 | 27 | ||||||
|
|
|
|
|||||
Total assets
|
$
|
5,368
|
|
$
|
3,131
|
|
||
|
|
|
|
|||||
Liabilities and equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 758 | $ | 265 | ||||
Accrued liabilities
|
364 | 274 | ||||||
Deferred rent
|
61 | 28 | ||||||
Contract liabilities
|
— | 34 | ||||||
Other current liabilities
|
5 | 14 | ||||||
|
|
|
|
|||||
Total current liabilities
|
|
1,188
|
|
|
615
|
|
||
|
|
|
|
|||||
Non-current
liabilities:
|
||||||||
Deferred tax liabilities
|
11 | 21 | ||||||
|
|
|
|
|||||
Total liabilities
|
|
1,199
|
|
|
636
|
|
||
|
|
|
|
|||||
Commitments and contingencies (Note 8)
|
||||||||
Equity:
|
||||||||
Members’ equity
|
4,169 | 2,495 | ||||||
|
|
|
|
|||||
Total equity
|
|
4,169
|
|
|
2,495
|
|
||
|
|
|
|
|||||
Total liabilities and equity
|
$
|
5,368
|
|
$
|
3,131
|
|
||
|
|
|
|
Period from
January 1, 2020 through June 18, 2020 |
Year ended
December 31, 2019 |
|||||||
Revenues
|
$ | 10,809 | $ | 14,332 | ||||
Cost of revenues
|
5,436 | 9,588 | ||||||
|
|
|
|
|||||
Gross profit
|
|
5,373
|
|
|
4,744
|
|
||
Operating expenses:
|
||||||||
Selling, general and administrative expenses
|
3,266 | 3,334 | ||||||
Loss on disposal of property and equipment
|
— | 27 | ||||||
|
|
|
|
|||||
Operating income
|
|
2,107
|
|
|
1,383
|
|
||
Income tax (benefit) expense
|
(6 | ) | 18 | |||||
|
|
|
|
|||||
Net income
|
$
|
2,113
|
|
$
|
1,365
|
|
||
|
|
|
|
Members’ equity
|
||||
As of January 1, 2019
|
$
|
2,313
|
|
|
Net income
|
1,365 | |||
Distribution
|
(1,183 | ) | ||
|
|
|||
As of December 31, 2019
|
$
|
2,495
|
|
|
Net income
|
2,113 | |||
Distribution
|
(439 | ) | ||
|
|
|||
As of June 18, 2020
|
$
|
4,169
|
|
|
|
|
Period from
January 1, 2020 through June 18, 2020 |
Year ended
December 31, 2019 |
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 2,113 | $ | 1,365 | ||||
Adjustments to reconcile net income to net cash by operating activities:
|
||||||||
Depreciation and amortization
|
12 | 26 | ||||||
Loss on sale of property and equipment
|
— | 27 | ||||||
Deferred rent
|
33 | 16 | ||||||
Deferred income tax (benefit) expense
|
(10 | ) | 4 | |||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(392 | ) | (567 | ) | ||||
Contract assets
|
(1,095 | ) | — | |||||
Prepaid expenses and other current assets
|
(55 | ) | 168 | |||||
Accounts payable
|
493 | (41 | ) | |||||
Accrued liabilities
|
90 | 73 | ||||||
Contract liabilities
|
(34 | ) | 34 | |||||
Other current liabilities
|
(9 | ) | 14 | |||||
|
|
|
|
|||||
Net cash provided by operating activities
|
|
1,146
|
|
|
1,119
|
|
||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
— | (55 | ) | |||||
Proceeds from sale of property and equipment
|
— | 13 | ||||||
|
|
|
|
|||||
Net cash used in investing activities
|
|
—
|
|
|
(42
|
)
|
||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Distribution to members
|
(439 | ) | (1,183 | ) | ||||
|
|
|
|
|||||
Net cash used in financing activities
|
|
(439
|
)
|
|
(1,183
|
)
|
||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
707 | (106 | ) | |||||
Cash and cash equivalents—beginning of the period
|
331 | 437 | ||||||
|
|
|
|
|||||
Cash and cash equivalents—end of the period
|
$
|
1,038
|
|
$
|
331
|
|
||
|
|
|
|
|||||
Cash paid during the period for:
|
||||||||
Income taxes
|
$ | 12 | $ | 31 |
Period from
January 1, 2020 to June 18, 2020 |
Year ended
December 31, 2019 |
|||||||
Firm fixed price
|
$ | 4,276 | $ | 5,917 | ||||
Time and materials
|
6,492 | 8,046 | ||||||
Others
|
41 | 369 | ||||||
|
|
|
|
|||||
Total revenue
|
$
|
10,809
|
|
$
|
14,332
|
|
||
|
|
|
|
As of June 18,
2020 |
As of December 31,
2019 |
|||||||
Computer equipment & software
|
$ | 74 | $ | 74 | ||||
Furniture
|
60 | 60 | ||||||
Accumulated depreciation
|
(57 | ) | (45 | ) | ||||
|
|
|
|
|||||
Property and equipment, net
|
$ | 77 | $ | 89 | ||||
|
|
|
|
As of June 18,
2020 |
As of December 31,
2019 |
|||||||
Payroll accruals
|
$ | 358 | $ | 268 | ||||
Other accrued expenses
|
6 | 6 | ||||||
|
|
|
|
|||||
Total
|
$
|
364
|
|
$
|
274
|
|
||
|
|
|
|
Period from January 1,
2020 through
June 18, 2020
|
Period from January 1,
2019 through
December 31, 2019
|
|||||||
Income tax expense (benefit):
|
||||||||
Federal:
|
||||||||
Current
|
$ | $ | ||||||
Deferred
|
— | — | ||||||
|
|
|
|
|||||
— | — | |||||||
State:
|
||||||||
Current
|
4 | 14 | ||||||
Deferred
|
(10 | ) | 4 | |||||
|
|
|
|
|||||
(6 | ) | 18 | ||||||
|
|
|
|
|||||
Income tax (benefit) expense
|
$ | (6 | ) | $ | 18 | |||
|
|
|
|
June 18, 2020
|
December 31, 2019
|
|||||||
Total deferred tax assets
|
$ | — | $ | — | ||||
Valuation allowance
|
— | — | ||||||
|
|
|
|
|||||
Net deferred tax assets
|
$ | — | $ | — | ||||
Deferred tax liabilities:
|
||||||||
Accrual to cash differences
|
$ | 11 | $ | 20 | ||||
Depreciation and amortization
|
— | 1 | ||||||
|
|
|
|
|||||
Total deferred tax liabilities
|
11 | 21 | ||||||
|
|
|
|
|||||
Net deferred tax liabilities
|
$ | 11 | $ | 21 | ||||
|
|
|
|
2020*
|
2021
|
2022
|
2023
|
2024
|
2025
|
Total
|
||||||||||||||||||||||
Future annual minimum lease payments
|
$
|
86
|
|
$
|
164
|
|
$
|
169
|
|
$
|
163
|
|
$
|
117
|
|
$
|
40
|
|
$
|
739
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
period following June
18, 2020
|
As of
December 1, 2020
|
||||
Assets
|
||||
Current assets:
|
||||
Cash and cash equivalents
|
$ | 63 | ||
Accounts receivable
|
6,127 | |||
Prepaid expenses and other current assets
|
113 | |||
|
|
|||
Total current assets
|
|
6,303
|
|
|
|
|
|||
Non-current
assets:
|
||||
Property and equipment, net
|
281 | |||
Other
non-current
assets
|
48 | |||
|
|
|||
Total assets
|
$
|
6,632
|
|
|
|
|
|||
Liabilities and Equity
|
||||
Current liabilities:
|
||||
Accounts payable
|
$ | 122 | ||
Payroll accruals
|
911 | |||
Equity-based compensation liabilities
|
2,477 | |||
Other current liabilities
|
92 | |||
|
|
|||
Total current liabilities
|
|
3,602
|
|
|
|
|
|||
Non-current
liabilities:
|
||||
Deferred tax liabilities
|
64 | |||
Other
non-current
liabilities
|
27 | |||
|
|
|||
Total liabilities
|
|
3,693
|
|
|
|
|
|||
Commitments and contingencies (Note 8)
|
||||
Equity:
|
||||
Members’ equity
|
2,939 | |||
|
|
|||
Total equity
|
|
2,939
|
|
|
|
|
|||
Total liabilities and equity
|
$
|
6,632
|
|
|
|
|
Period from
January 1, 2020 through December 1, 2020 |
||||
Revenues
|
$ | 22,693 | ||
Cost of revenues
|
13,183 | |||
|
|
|||
Gross profit
|
|
9,510
|
|
|
Operating expenses:
|
||||
Selling, general and administrative expenses
|
4,192 | |||
|
|
|||
Operating income
|
|
5,318
|
|
|
Other income:
|
||||
Interest income
|
3 | |||
|
|
|||
Net income before taxes
|
|
5,321
|
|
|
Income tax expense
|
61 | |||
|
|
|||
Net income
|
$
|
5,260
|
|
|
|
|
Members’ equity
|
||||
As of January 1, 2020
|
$
|
4,295
|
|
|
Net income
|
5,260 | |||
Equity-based compensation expense
|
223 | |||
Distributions
|
(6,839 | ) | ||
|
|
|||
As of December 1, 2020
|
$
|
2,939
|
|
|
|
|
Period from January 1,
2020 through December 1, 2020 |
||||
Cash flows from operating activities:
|
||||
Net income
|
$ | 5,260 | ||
Adjustments to reconcile net income to net cash by operating activities:
|
||||
Depreciation and amortization
|
148 | |||
Equity-based compensation (equity classified) expense
|
223 | |||
Equity-based compensation (liability classified) expense
|
794 | |||
Deferred income tax expense
|
3 | |||
Changes in assets and liabilities:
|
||||
Accounts receivable
|
(2,086 | ) | ||
Prepaid expenses and other assets
|
(13 | ) | ||
Accounts payable
|
(18 | ) | ||
Payroll accruals
|
406 | |||
Deferred rent
|
(8 | ) | ||
Other liabilities
|
(53 | ) | ||
|
|
|||
Net cash provided by operating activities
|
|
4,656
|
|
|
|
|
|||
Cash flows from investing activities:
|
||||
Purchases of property and equipment
|
(67 | ) | ||
|
|
|||
Net cash used in investing activities
|
|
(67
|
)
|
|
|
|
|||
Cash flows from financing activities:
|
||||
Distribution to members
|
(6,839 | ) | ||
|
|
|||
Net cash used in financing activities
|
|
(6,839
|
)
|
|
|
|
|||
Net decrease in cash and cash equivalents
|
(2,250 | ) | ||
Cash and cash equivalents—beginning of the period
|
2,313 | |||
|
|
|||
Cash and cash equivalents—end of the period
|
$
|
63
|
|
|
|
|
|||
Cash paid during the period for:
|
||||
Income taxes
|
$ | 29 |
For the period from
January 1, 2020 through December 1, 2020 |
||||
Cost-plus
|
$ | 1,166 | ||
Time and materials
|
21,527 | |||
|
|
|||
Total revenue
|
$
|
22,693
|
|
|
|
|
As of December 1,
2020 |
||||
Computer equipment
|
$ | 875 | ||
Furniture & fixtures
|
242 | |||
Leasehold improvements
|
166 | |||
Computer software
|
13 | |||
Accumulated depreciation
|
(1,015 | ) | ||
|
|
|||
Property and equipment, net
|
$
|
281
|
|
|
|
|
Period from
January 1, 2020 through December 1, 2020 |
||||
Income tax expense:
|
||||
Federal:
|
||||
Current
|
$ | — | ||
|
|
|||
Deferred
|
— | |||
|
|
|||
State:
|
||||
Current
|
58 | |||
Deferred
|
3 | |||
|
|
|||
61 | ||||
|
|
|||
Income tax expense
|
$ | 61 | ||
|
|
Period From
January 1, 2020 Through December 1, 2020 |
||||
Tax (benefit) expense at federal statutory rates
|
$ | — | ||
State income tax, net of federal tax benefit
|
80 | |||
Change in state tax rate
|
(19 | ) | ||
|
|
|||
Income tax expense
|
$ | 61 | ||
|
|
December 1, 2020
|
||||
Deferred tax assets:
|
||||
Depreciation and amortization
|
$ | 1 | ||
|
|
|||
Total deferred tax assets
|
1 | |||
|
|
|||
Valuation allowance
|
— | |||
|
|
|||
Net deferred tax assets
|
$ | 1 | ||
|
|
|||
Deferred tax liabilities:
|
||||
Accrual to cash differences
|
$ | (65 | ) | |
|
|
|||
Total deferred tax liabilities
|
(65 | ) | ||
|
|
|||
Net deferred tax liabilities
|
$ | (64 | ) | |
|
|
Unvested
|
Vested
|
|||||||||||||||
Number
|
Weighted-
average Exercise Price |
Number
|
Weighted-
average Exercise Price |
|||||||||||||
Outstanding as of January 1, 2020
|
|
27,109
|
|
|
0.75
|
|
|
94,541
|
|
|
0.74
|
|
||||
Vested
|
(16,883 | ) | 0.74 | 16,883 | 0.74 | |||||||||||
Exercised and
bought-out
during the period
|
— | — | (1,957 | ) | 0.76 | |||||||||||
Forfeited
|
(543 | ) | 0.76 | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding as of December 1, 2020
|
|
9,683
|
|
|
0.75
|
|
|
109,467
|
|
|
0.74
|
|
||||
|
|
|
|
|
|
|
|
Vested
|
Unvested
|
|||||||
Fair value as of December 1, 2020
|
2,477 | 219 | ||||||
Weighted-average remaining contractual term, in months
|
— | 11 |
Number of
Vested Stock |
Number of
Unvested Stock |
|||||||
Outstanding as of January 1, 2020
|
|
156,868
|
|
|
26,782
|
|
||
Vested
|
26,782 | (26,782 | ) | |||||
|
|
|
|
|||||
Outstanding as of December 1, 2020
|
|
183,650
|
|
|
—
|
|
||
|
|
|
|
2020*
|
2021
|
2022
|
Total
|
|||||||||||||
Future annual minimum lease payments
|
$
|
41
|
|
$
|
480
|
|
$
|
207
|
|
$
|
728
|
|
||||
|
|
|
|
|
|
|
|
* |
period following December
1, 2020
|
As of December 20,
2020 |
||||
Assets
|
||||
Current assets:
|
||||
Cash and cash equivalents
|
$ | 1,843 | ||
Accounts receivable
|
907 | |||
Contract assets
|
1,486 | |||
Prepaid expenses
|
64 | |||
|
|
|||
Total current assets
|
|
4,300
|
|
|
|
|
|||
Non-current
assets:
|
||||
Property and equipment, net
|
134 | |||
Deferred tax assets
|
87 | |||
Other
non-current
assets
|
18 | |||
|
|
|||
Total assets
|
$
|
4,539
|
|
|
|
|
|||
Liabilities and equity
|
||||
Current liabilities:
|
||||
Accrued liabilities
|
$ | 963 | ||
Contract liabilities
|
501 | |||
Income tax payable
|
1,202 | |||
Deferred rent
|
3 | |||
|
|
|||
Total current liabilities
|
|
2,669
|
|
|
|
|
|||
Commitments and contingencies (Note 7)
|
||||
Equity:
|
||||
Parent’s investment
|
1,870 | |||
|
|
|||
Total equity
|
|
1,870
|
|
|
|
|
|||
Total liabilities and equity
|
$
|
4,539
|
|
|
|
|
Period from
January 1, 2020 through December 20, 2020 |
||||
Revenues
|
$ | 15,782 | ||
Cost of revenues
|
9,491 | |||
|
|
|||
Gross profit
|
|
6,291
|
|
|
Operating expenses:
|
||||
Selling, general and administrative expenses
|
1,555 | |||
|
|
|||
Operating income
|
|
4,736
|
|
|
Income tax expense
|
1,169 | |||
|
|
|||
Net income
|
$
|
3,567
|
|
|
|
|
Parent’s Investment
|
||||
As of January 1, 2020
|
$
|
3,830
|
|
|
Net income
|
3,567 | |||
Net transfers to Parent
|
(5,527 | ) | ||
|
|
|||
As of December 20, 2020
|
$
|
1,870
|
|
|
|
|
Period from January 1,
2020 through
December 20, 2020
|
||||
Cash flows from operating activities:
|
||||
Net income
|
$ | 3,567 | ||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||
Depreciation and amortization
|
69 | |||
Deferred income tax benefit
|
(33 | ) | ||
Changes in assets and liabilities:
|
||||
Accounts receivable
|
1,413 | |||
Contract assets
|
(1,223 | ) | ||
Prepaid expenses and other assets
|
3 | |||
Accrued liabilities
|
295 | |||
Contract liabilities
|
292 | |||
Income tax payable
|
1,202 | |||
Deferred rent
|
(1 | ) | ||
|
|
|||
Net cash provided by operating activities
|
|
5,584
|
|
|
|
|
|||
Cash flows from investing activities:
|
||||
Purchases of property and equipment
|
(42 | ) | ||
|
|
|||
Net cash used in investing activities
|
|
(42
|
)
|
|
|
|
|||
Cash flows from financing activities:
|
||||
Net transfers to Parent
|
(5,527 | ) | ||
|
|
|||
Net cash used in financing activities
|
|
(5,527
|
)
|
|
|
|
|||
Net increase in cash and cash equivalents:
|
15 | |||
Cash and cash equivalents—beginning of the period
|
1,828 | |||
|
|
|||
Cash and cash equivalents—end of the period
|
$
|
1,843
|
|
|
|
|
Period from
January 1, 2020 through December 20, 2020 |
||||
Firm fixed price
|
$ | 10,113 | ||
Time and materials
|
5,669 | |||
|
|
|||
Total revenue
|
$
|
15,782
|
|
|
|
|
As of December 20,
2020 |
||||
Equipment
|
$ | 315 | ||
Software
|
28 | |||
Furniture
|
70 | |||
Leasehold Improvements
|
30 | |||
Accumulated depreciation
|
(309 | ) | ||
|
|
|||
Property and equipment, net
|
$
|
134
|
|
|
|
|
As of December 20,
2020 |
||||
Payroll accruals
|
$ | 901 | ||
Other accrued expenses
|
62 | |||
|
|
|||
Total
|
$
|
963
|
|
|
|
|
Period from
January 1, 2020 through
December 20, 2020
|
||||
Income tax expense:
|
||||
Federal:
|
||||
Current
|
$ | 978 | ||
Deferred
|
(27 | ) | ||
|
|
|||
951 | ||||
State:
|
||||
Current
|
224 | |||
Deferred
|
(6 | ) | ||
|
|
|||
218 | ||||
|
|
|||
Income tax expense
|
$ | 1,169 | ||
|
|
Period from January 1,
2020 through
December 20, 2020
|
||||
Tax expense (benefit) at federal statutory rates
|
$ | 995 | ||
State income tax, net of federal tax benefit
|
172 | |||
Permanent Differences
|
2 | |||
|
|
|||
Income tax expense
|
$ | 1,169 | ||
|
|
As of December 20,
2020 |
||||
Deferred tax assets:
|
||||
Accrued vacation
|
$ | 104 | ||
Deferred rent
|
1 | |||
|
|
|||
Total deferred tax assets
|
105 | |||
|
|
|||
Valuation allowance
|
— | |||
|
|
|||
Net deferred tax assets
|
$ | 105 | ||
Deferred tax liabilities:
|
||||
Prepaid expenses
|
$ | 16 | ||
Depreciation and amortization
|
2 | |||
|
|
|||
Total deferred tax liabilities
|
18 | |||
|
|
|||
Net deferred tax assets
|
$ | 87 | ||
|
|
2020*
|
2021
|
2022
|
2023
|
Total
|
||||||||||||||||
Future annual minimum lease payments
|
$
|
36
|
|
$
|
152
|
|
$
|
108
|
|
$
|
58
|
|
$
|
354
|
|
|||||
|
|
|
|
|
|
|
|
|
|
* |
period following December
20, 2020
|
For the period from
January 1, 2020 through December 20, 2020 |
||||
General financing activities
|
$ | 4,639 | ||
Corporate allocations
|
888 | |||
|
|
|||
Total net transfers to Parent
|
$
|
5,527
|
|
|
|
|
Securities and Exchange Commission registration fee
|
$ | 124,098 | ||
Accounting fees and expenses
|
70,000 | |||
Legal fees and expenses
|
200,000 | |||
Financial printing and miscellaneous expenses
|
180,000 | |||
|
|
|||
Total
|
$ | 574,098 | ||
|
|
Cash
|
Number of
Shares of Stock |
|||||||
Oppenheimer
|
$ | 8,338,560.00 | 833,856 | |||||
BMO
|
$ | 2,480,000.00 | 248,000 | |||||
Nomura
|
$ | 1,004,640.00 | 100,464 | |||||
William Blair
|
$ | 3,130,000.00 | 313,000 |
Exhibit
Number
|
Description
|
|
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) |
# |
Indicates a management contract or compensatory plan, contract or arrangement.
|
† |
Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such omitted materials to the SEC upon request.
|
* |
To be filed by amendment.
|
(1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
(a) |
To include any registration statement required by Section 10(a)(3) of the Securities Act;
|
(b) |
To reflect in the registration statement any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of registration statement filed with the Securities and Exchange Commission (the “
Commission
|
(c) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
|
(2) |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
(3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
(4) |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
(i) |
any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
|
(ii) |
any “free writing prospectus” relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
(iii) |
the portion of any other “free writing prospectus” relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned registrant; and
|
(iv) |
any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
(5) |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions set forth or described in Item 14 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
|
BIGBEAR.AI HOLDINGS, INC.
|
||||
By: |
/s/ Joshua Kinley
|
|||
Name: | Joshua Kinley | |||
Title: | Chief Financial Officer |
Signature
|
Position
|
Date
|
||
/s/ Dr. Reginald Brothers
Dr. Reginald Brothers
|
Chief Executive Officer and Director (Principal Executive Officer) | December 23, 2021 | ||
/s/ Joshua Kinley
Joshua Kinley
|
Chief Financial Officer
(Principal Financial Officer)
|
December 23, 2021
|
||
/s/ Sean Ricker
Sean Ricker
|
Corporate Controller
(Principal Accounting Officer)
|
December 23, 2021
|
||
/s/ Sean Battle
Sean Battle
|
Director
|
December 23, 2021
|
||
/s/ Pamela Braden
Pamela Braden
|
Director
|
December 23, 2021
|
||
/s/ Peter Cannito
Peter Cannito
|
Director
|
December 23, 2021
|
||
/s/ Dr. Raluca Dinu
Dr. Raluca Dinu
|
Director
|
December 23, 2021
|
||
/s/ Paul Fulchino
Paul Fulchino
|
Director
|
December 23, 2021
|
Signature
|
Position
|
Date
|
||
/s/ Jeffrey Hart
Jeffrey Hart
|
Director
|
December 23, 2021
|
||
/s/ Dorothy D. Hayes
Dorothy D. Hayes
|
Director
|
December 23, 2021 | ||
/s/ Ranaan I. Horowitz
Ranaan I. Horowitz
|
Director
|
December 23, 2021 | ||
/s/ Dr. Avi Katz
Dr. Avi Katz
|
Director
|
December 23, 2021 | ||
/s/ Kirk Konert
Kirk Konert
|
Director
|
December 23, 2021 |
Exhibit 21.1
Subsidiaries of Registrant
Name | Jurisdiction of Formation | |
BigBear.ai Intermediate Holdings, LLC | Delaware | |
BigBear.ai, LLC | Delaware | |
NuWave Solutions, L.L.C. | Maryland | |
PCI Strategic Management, LLC | Maryland | |
ProModel Government Solutions, Inc. | Utah | |
Open Solutions Group, LLC | Virginia |
Exhibit 22.1
Guarantor Subsidiaries of BigBear.ai Holdings, Inc.
Set forth is a list of the guarantor subsidiaries of BigBear.ai Holdings, Inc. as of December 20, 2021 and their respective jurisdictions of organization.
Name | Jurisdiction of Formation | |
BigBear.ai Intermediate Holdings, LLC | Delaware | |
BigBear.ai, LLC | Delaware | |
NuWave Solutions, L.L.C. | Maryland | |
PCI Strategic Management, LLC | Maryland | |
ProModel Government Solutions, Inc. | Utah | |
Open Solutions Group, LLC | Virginia |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our report dated August 6, 2021, with respect to the consolidated financial statements of BigBear.ai Holdings, LLC and Subsidiaries contained in the Registration Statement and Preliminary Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Preliminary Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Grant Thornton LLP
Arlington, Virginia
December 23, 2021
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of our report dated March 31, 2021, relating to the financial statements of GigCapital4, Inc., which appears in such Registration Statement. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ BPM LLP
San Jose, California
December 22, 2021
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 6, 2021, with respect to the financial statements of NuWave Solutions, LLC contained in the Registration Statement and Preliminary Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Preliminary Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Grant Thornton LLP
Arlington, Virginia
December 23, 2021
Exhibit 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 6, 2021 with respect to the financial statements of Open Solutions, LLC contained in the Registration Statement and Preliminary Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Preliminary Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Grant Thornton LLP
Arlington, Virginia
December 23, 2021
Exhibit 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 6, 2021 with respect to the financial statements of ProModel (a carve out of ProModel Government Solutions, Inc.) contained in the Registration Statement and Preliminary Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Preliminary Prospectus, and to the use of our name as it appears under the caption Experts.
/s/ Grant Thornton LLP
Arlington, Virginia
December 23, 2021
Exhibit 25.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
☐ |
Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) |
WILMINGTON TRUST, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
16-1486454
(I.R.S. employer identification no.)
1100 North Market Street
Wilmington, DE 19890-0001
(Address of principal executive offices)
Karin Meis
Vice President
1100 North Market Street
Wilmington, Delaware 19890-0001
(302) 651-8311
(Name, address and telephone number of agent for service)
BigBear.ai Holdings, Inc.1
(Exact name of obligor as specified in its charter)
Delaware | 85-4164597 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046
(Address of principal executive offices, including zip code)
6.00% Convertible Senior Notes due 2026
(Title of the indenture securities)
1 |
SEE TABLE OF ADDITIONAL OBLIGORS |
TABLE OF ADDITIONAL OBLIGORS
Exact Name of Additional Obligors |
Jurisdiction of
Incorporation or Formation |
Principal Executive Offices |
Primary
Standard Industrial Classification Code Number |
I.R.S.
Employer Identification No. |
||||
BigBear.ai Intermediate Holdings, LLC |
DE |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 85-1242144 | ||||
BigBear.ai, LLC |
DE |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 85-1259867 | ||||
NuWave Solutions, L.L.C. |
MD |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 52-2195680 | ||||
PCI Strategic Management, LLC |
MD |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 85-3441283 | ||||
ProModel Government Solutions, Inc. |
UT |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 87-0458395 | ||||
Open Solutions Group, LLC |
VA |
6811 Benjamin Franklin Drive, Suite 200
Columbia, Maryland 21046 |
7372 | 26-2253724 |
ITEM 1. |
GENERAL INFORMATION. |
Furnish the following information as to the trustee:
(a) |
Name and address of each examining or supervising authority to which it is subject. |
Comptroller of Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) |
Whether it is authorized to exercise corporate trust powers. |
The trustee is authorized to exercise corporate trust powers.
ITEM 2. |
AFFILIATIONS WITH THE OBLIGOR. |
If the obligor is an affiliate of the trustee, describe each affiliation:
Based upon an examination of the books and records of the trustee and information available to the trustee, the obligor is not an affiliate of the trustee.
ITEM 3 |
15. |
Not applicable.
ITEM 16. |
LIST OF EXHIBITS. |
Listed below are all exhibits filed as part of this Statement of Eligibility and Qualification.
1. |
A copy of the Charter for Wilmington Trust, National Association. |
2. |
The authority of Wilmington Trust, National Association to commence business was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 above. |
3. |
The authorization to exercise corporate trust powers was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 above. |
4. |
A copy of the existing By-Laws of Trustee, as now in effect, incorporated herein by reference to Exhibit 4 of this Form T-1. |
5. |
Not applicable. |
6. |
The consent of Wilmington Trust, National Association as required by Section 321(b) of the Trust Indenture Act of 1939, attached hereto as Exhibit 6 of this Form T-1. |
7. |
Current Report of the Condition of Wilmington Trust, National Association, published pursuant to law or the requirements of its supervising or examining authority, attached hereto as Exhibit 7 of this Form T-1. |
8. |
Not applicable. |
9. |
Not applicable. |
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wilmington Trust, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Minneapolis and State of Minnesota on the 23rd day of December, 2021.
WILMINGTON TRUST, NATIONAL ASSOCIATION | ||
By: | /s/ Quinton M. DePompolo | |
Name: | Quinton M. DePompolo | |
Title: | Banking Officer |
EXHIBIT 1
CHARTER OF WILMINGTON TRUST, NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION
OF
WILMINGTON TRUST, NATIONAL ASSOCIATION
For the purpose of organizing an association to perform any lawful activities of national banks, the undersigned do enter into the following articles of association:
FIRST. The title of this association shall be Wilmington Trust, National Association.
SECOND. The main office of the association shall be in the City of Wilmington, County of New Castle, State of Delaware. The general business of the association shall be conducted at its main office and its branches.
THIRD. The board of directors of this association shall consist of not less than five nor more than twenty-five persons, unless the OCC has exempted the bank from the 25-member limit. The exact number is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the association or of a holding company owning the association, with an aggregate par, fair market or equity value $1,000. Determination of these values may be based as of either (i) the date of purchase or (ii) the date the person became a director, whichever value is greater. Any combination of common or preferred stock of the association or holding company may be used.
Any vacancy in the board of directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The board of directors may not increase the number of directors between meetings of shareholders to a number which:
1) |
exceeds by more than two the number of directors last elected by shareholders where the number was 15 or less; or |
2) |
exceeds by more than four the number of directors last elected by shareholders where the number was 16 or more, but in no event shall the number of directors exceed 25, unless the OCC has exempted the bank from the 25-member limit. |
Directors shall be elected for terms of one year and until their successors are elected and qualified. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a directors term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the board of directors, without voting power or power of final decision in matters concerning the business of the association, may be appointed by resolution of a majority of the full board of directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to determine the number of directors of the association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares.
FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefor in the bylaws, or, if that day falls on a legal holiday in the state in which the association is located, on the next following banking day. If no election is held on the day fixed, or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases at least 10 days advance notice of the time, place and purpose of a shareholders meeting shall be given to the shareholders by first class mail, unless the OCC determines that an emergency circumstance exists. The sole shareholder of the bank is permitted to waive notice of the shareholders meeting.
In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares such shareholder owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. If, after the first ballot, subsequent ballots are necessary to elect directors, a shareholder may not vote shares that he or she has already fully cumulated and voted in favor of a successful candidate. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by him or her.
Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for election of directors. Nominations other than those made by or on behalf of the existing management shall be made in writing and be delivered or mailed to the president of the association not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days notice of the meeting is given to shareholders, such nominations shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder:
1) |
The name and address of each proposed nominee. |
2) |
The principal occupation of each proposed nominee. |
3) |
The total number of shares of capital stock of the association that will be voted for each proposed nominee. |
4) |
The name and residence address of the notifying shareholder. |
5) |
The number of shares of capital stock of the association owned by the notifying shareholder. |
Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and the vote tellers may disregard all votes cast for each such nominee. No bylaw may unreasonably restrict the nomination of directors by shareholders.
A director may resign at any time by delivering written notice to the board of directors, its chairperson, or to the association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date.
A director may be removed by shareholders at a meeting called to remove the director, when notice of the meeting stating that the purpose or one of the purposes is to remove the director is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause; provided, however, that a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the directors removal.
FIFTH. The authorized amount of capital stock of this association shall be ten thousand shares of common stock of the par value of one hundred dollars ($100) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the association, whether now or hereafter authorized, or to any obligations convertible into stock of the association, issued, or sold, nor any right of subscription to any thereof other than such, if any, as the board of directors, in its discretion, may from time to time determine and at such price as the board of directors may from time to time fix. Preemptive rights also must be approved by a vote of holders of two-thirds of the banks outstanding voting shares. Unless otherwise specified in these articles of association or required by law, (1) all matters requiring shareholder action, including amendments to the articles of association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share.
Unless otherwise specified in these articles of association or required by law, all shares of voting stock shall be voted together as a class, on any matters requiring shareholder approval. If a proposed amendment would affect two or more classes or series in the same or a substantially similar way, all the classes or series so affected must vote together as a single voting group on the proposed amendment.
Shares of one class or series may be issued as a dividend for shares of the same class or series on a pro rata basis and without consideration. Shares of one class or series may be issued as share dividends for a different class or series of stock if approved by a majority of the votes entitled to be cast by the class or series to be issued, unless there are no outstanding shares of the class or series to be issued. Unless otherwise provided by the board of directors, the record date for determining shareholders entitled to a share dividend shall be the date authorized by the board of directors for the share dividend.
Unless otherwise provided in the bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting.
If a shareholder is entitled to fractional shares pursuant to a stock dividend, consolidation or merger, reverse stock split or otherwise, the association may: (a) issue fractional shares; (b) in lieu of the issuance of fractional shares, issue script or warrants entitling the holder to receive a full share upon surrendering enough script or warrants to equal a full share; (c) if there is an established and active market in the associations stock, make reasonable arrangements to provide the shareholder with an opportunity to realize a fair price through sale of the fraction, or purchase of the additional fraction required for a full share; (d) remit the cash equivalent of the fraction to the shareholder; or (e) sell full shares representing all the fractions at public auction or to the highest bidder after having solicited and received sealed bids from at least three licensed stock brokers; and distribute the proceeds pro rata to shareholders who otherwise would be entitled to the fractional shares. The holder of a fractional share is entitled to exercise the rights for shareholder, including the right to vote, to receive dividends, and to participate in the assets of the association upon liquidation, in proportion to the fractional interest. The holder of script or warrants is not entitled to any of these rights unless the script or warrants explicitly provide for such rights. The script or warrants may be subject to such additional conditions as: (1) that the script or warrants will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the script or warrants are exchangeable may be sold at the option of the association and the proceeds paid to scriptholders.
The association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Obligations classified as debt, whether or not subordinated, which may be issued by the association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series.
SIXTH. The board of directors shall appoint one of its members president of this association, and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors and shareholders meetings and be responsible for authenticating the records of the association, and such other officers and employees as may be required to transact the business of this association.
A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the bylaws.
The board of directors shall have the power to:
1) |
Define the duties of the officers, employees, and agents of the association. |
2) |
Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the association. |
3) |
Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law. |
4) |
Dismiss officers and employees. |
5) |
Require bonds from officers and employees and to fix the penalty thereof. |
6) |
Ratify written policies authorized by the associations management or committees of the board. |
7) |
Regulate the manner in which any increase or decrease of the capital of the association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the association in accordance with law, and nothing shall raise or lower from two-thirds the percentage required for shareholder approval to increase or reduce the capital. |
8) |
Manage and administer the business and affairs of the association. |
9) |
Adopt initial bylaws, not inconsistent with law or the articles of association, for managing the business and regulating the affairs of the association. |
10) |
Amend or repeal bylaws, except to the extent that the articles of association reserve this power in whole or in part to shareholders. |
11) |
Make contracts. |
12) |
Generally perform all acts that are legal for a board of directors to perform. |
SEVENTH. The board of directors shall have the power to change the location of the main office to any other place within the limits of Wilmington, Delaware, without the approval of the shareholders, or with a vote of shareholders owning two-thirds of the stock of such association for a relocation outside such limits and upon receipt of a certificate of approval from the Comptroller of the Currency, to any other location within or outside the limits of Wilmington Delaware, but not more than 30 miles beyond such limits. The board of directors shall have the power to establish or change the location of any branch or branches of the association to any other location permitted under applicable law, without approval of shareholders, subject to approval by the Comptroller of the Currency.
EIGHTH. The corporate existence of this association shall continue until termination according to the laws of the United States.
NINTH. The board of directors of this association, or any one or more shareholders owning, in the aggregate, not less than 50 percent of the stock of this association, may call a special meeting of shareholders at any time. Unless otherwise provided by the bylaws or the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given at least 10 days prior to the meeting by first-class mail, unless the OCC determines that an emergency circumstance exists. If the association is a wholly-owned subsidiary, the sole shareholder may waive notice of the shareholders meeting. Unless otherwise provided by the bylaws or these articles, any action requiring approval of shareholders must be effected at a duly called annual or special meeting.
TENTH. For purposes of this Article Tenth, the term institution-affiliated party shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).
Any institution-affiliated party (or his or her heirs, executors or administrators) may be indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or other payments incurred. The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.
Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association. In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or
proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution-affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these articles of association and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.
In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.
In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.
To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these articles of association, (b) shall continue to exist after any restrictive amendment of these articles of association with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.
The rights of indemnification and to the advancement of expenses provided in these articles of association shall not, to the extent permitted under applicable law, be deemed exclusive of any other rights to which any such institution affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in these articles of association, the bylaws, a resolution of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these articles of association shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.
If this Article Tenth or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Article Tenth shall remain fully enforceable.
The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these articles of association; provided, however, that no such insurance shall include coverage to pay or reimburse any institution-affiliated party for the cost of any judgment or civil money penalty assessed against such person in an administrative proceeding or civil action commenced by any federal banking agency. Such insurance may, but need not, be for the benefit of all institution-affiliated parties.
ELEVENTH. These articles of association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The associations board of directors may propose one or more amendments to the articles of association for submission to the shareholders.
EXHIBIT 4
BY-LAWS OF WILMINGTON TRUST, NATIONAL ASSOCIATION
AMENDED AND RESTATED BYLAWS
OF
WILMINGTON TRUST, NATIONAL ASSOCIATION
(Effective as of April 17, 2018)
ARTICLE I
Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders to elect directors and transact whatever other business may properly come before the meeting shall be held at the main office of the association, Rodney Square North, 1100 Market Street, City of Wilmington, State of Delaware, at 1:00 oclock p.m. on the first Tuesday in March of each year, or at such other place and time as the board of directors may designate, or if that date falls on a legal holiday in Delaware, on the next following banking day. Notice of the meeting shall be mailed by first class mail, postage prepaid, at least 10 days and no more than 60 days prior to the date thereof, addressed to each shareholder at his/her address appearing on the books of the association. If, for any cause, an election of directors is not made on that date, or in the event of a legal holiday, on the next following banking day, an election may be held on any subsequent day within 60 days of the date fixed, to be designated by the board of directors, or, if the directors fail to fix the date, by shareholders representing two-thirds of the shares. In these circumstances, at least 10 days notice must be given by first class mail to shareholders.
Section 2. Special Meetings. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the board of directors or by any one or more shareholders owning, in the aggregate, not less than fifty percent of the stock of the association. Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than 10 days nor more than 60 days prior to the date fixed for the meeting, to each shareholder at the address appearing on the books of the association a notice stating the purpose of the meeting.
The board of directors may fix a record date for determining shareholders entitled to notice and to vote at any meeting, in reasonable proximity to the date of giving notice to the shareholders of such meeting. The record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs a demand for the meeting describing the purpose or purposes for which it is to be held.
A special meeting may be called by shareholders or the board of directors to amend the articles of association or bylaws, whether or not such bylaws may be amended by the board of directors in the absence of shareholder approval.
If an annual or special shareholders meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time or place, if the new date, time or place is announced at the meeting before adjournment, unless any additional items of business are to be considered, or the association becomes aware of an intervening event materially affecting any matter to be voted on more than 10 days prior to the date to which the meeting is adjourned. If a new record date for the adjourned meeting is fixed, however, notice of the adjourned meeting must be given to persons who are shareholders as of the new record date. If, however, the meeting to elect the directors is adjourned before the election takes place, at least ten days notice of the new election must be given to the shareholders by first-class mail.
Section 3. Nominations of Directors. Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the association, shall be made in writing and shall be delivered or mailed to the president of the association and the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder:
(1) |
The name and address of each proposed nominee; |
(2) |
The principal occupation of each proposed nominee; |
(3) |
The total number of shares of capital stock of the association that will be voted for each proposed nominee; |
(4) |
The name and residence of the notifying shareholder; and |
(5) |
The number of shares of capital stock of the association owned by the notifying shareholder. |
Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and upon his/her instructions, the vote tellers may disregard all votes cast for each such nominee.
Section 4. Proxies. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this association shall act as proxy. Proxies shall be valid only for one meeting, to be specified therein, and any adjournments of such meeting. Proxies shall be dated and filed with the records of the meeting. Proxies with facsimile signatures may be used and unexecuted proxies may be counted upon receipt of a written confirmation from the shareholder. Proxies meeting the above requirements submitted at any time during a meeting shall be accepted.
Section 5. Quorum. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law, or by the shareholders or directors pursuant to Article IX, Section 2, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the articles of association, or by the shareholders or directors pursuant to Article IX, Section 2. If a meeting for the election of directors is not held on the fixed date, at least 10 days notice must be given by first-class mail to the shareholders.
ARTICLE II
Directors
Section 1. Board of Directors. The board of directors shall have the power to manage and administer the business and affairs of the association. Except as expressly limited by law, all corporate powers of the association shall be vested in and may be exercised by the board of directors.
Section 2. Number. The board of directors shall consist of not less than five nor more than twenty-five members, unless the OCC has exempted the bank from the 25-member limit. The exact number within such minimum and maximum limits is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any meeting thereof.
Section 3. Organization Meeting. The secretary or treasurer, upon receiving the certificate of the judges of the result of any election, shall notify the directors-elect of their election and of the time at which they are required to meet at the main office of the association, or at such other place in the cities of Wilmington, Delaware or Buffalo, New York, to organize the new board of directors and elect and appoint officers of the association for the succeeding year. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within 30 days thereof. If, at the time fixed for such meeting, there shall not be a quorum, the directors present may adjourn the meeting, from time to time, until a quorum is obtained.
Section 4. Regular Meetings. The Board of Directors may, at any time and from time to time, by resolution designate the place, date and hour for the holding of a regular meeting, but in the absence of any such designation, regular meetings of the board of directors shall be held, without notice, on the first Tuesday of each March, June and September, and on the second Tuesday of each December at the main office or other such place as the board of directors may designate. When any regular meeting of the board of directors falls upon a holiday, the meeting shall be held on the next banking business day unless the board of directors shall designate another day.
Section 5. Special Meetings. Special meetings of the board of directors may be called by the Chairman of the Board of the association, or at the request of two or more directors. Each member of the board of directors shall be given notice by telegram, first class mail, or in person stating the time and place of each special meeting.
Section 6. Quorum. A majority of the entire board then in office shall constitute a quorum at any meeting, except when otherwise provided by law or these bylaws, but a lesser number may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. If the number of directors present at the meeting is reduced below the number that would constitute a quorum, no business may be transacted, except selecting directors to fill vacancies in conformance with Article II, Section 7. If a quorum is present, the board of directors may take action through the vote of a majority of the directors who are in attendance.
Section 7. Meetings by Conference Telephone. Any one or more members of the board of directors or any committee thereof may participate in a meeting of such board or committees by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.
Section 8. Procedures. The order of business and all other matters of procedure at every meeting of the board of directors may be determined by the person presiding at the meeting.
Section 9. Removal of Directors. Any director may be removed for cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by vote of the stockholders. Any director may be removed without cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by the vote of the holders of a majority of the shares of the Corporation entitled to vote. Any director may be removed for cause, at any meeting of the directors notice of which shall have referred to the proposed action, by vote of a majority of the entire Board of Directors.
Section 10. Vacancies. When any vacancy occurs among the directors, a majority of the remaining members of the board of directors, according to the laws of the United States, may appoint a director to fill such vacancy at any regular meeting of the board of directors, or at a special meeting called for that purpose at which a quorum is present, or if the directors remaining in office constitute fewer than a quorum of the board of directors, by the affirmative vote of a majority of all the directors remaining in office, or by shareholders at a special meeting called for that purpose in conformance with Section 2 of Article I. At any such shareholder meeting, each shareholder entitled to vote shall have the right to multiply the number of votes he or she is entitled to cast by the number of vacancies being filled and cast the product for a single candidate or distribute the product among two or more candidates. A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
ARTICLE III
Committees of the Board
The board of directors has power over and is solely responsible for the management, supervision, and administration of the association. The board of directors may delegate its power, but none of its responsibilities, to such persons or committees as the board may determine.
The board of directors must formally ratify written policies authorized by committees of the board of directors before such policies become effective. Each committee must have one or more member(s), and who may be an officer of the association or an officer or director of any affiliate of the association, who serve at the pleasure of the board of directors. Provisions of the articles of association and these bylaws governing place of meetings, notice of meeting, quorum and voting requirements of the board of directors, apply to committees and their members as well. The creation of a committee and appointment of members to it must be approved by the board of directors.
Section 1. Loan Committee. There shall be a loan committee composed of not less than 2 directors, appointed by the board of directors annually or more often. The loan committee, on behalf of the bank, shall have power to discount and purchase bills, notes and other evidences of debt, to buy and sell bills of exchange, to examine and approve loans and discounts, to exercise authority regarding loans and discounts, and to exercise, when the board of directors is not in session, all other powers of the board of directors that may lawfully be delegated. The loan committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.
Section 2. Investment Committee. There shall be an investment committee composed of not less than 2 directors, appointed by the board of directors annually or more often. The investment committee, on behalf of the bank, shall have the power to ensure adherence to the investment policy, to recommend amendments thereto, to purchase and sell securities, to exercise authority regarding investments and to exercise, when the board of directors is not in session, all other powers of the board of directors regarding investment securities that may be lawfully delegated. The investment committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.
Section 3. Examining Committee. There shall be an examining committee composed of not less than 2 directors, exclusive of any active officers, appointed by the board of directors annually or more often. The duty of that committee shall be to examine at least once during each calendar year and within 15 months of the last examination the affairs of the association or cause suitable examinations to be made by auditors responsible only to the board of directors and to report the result of such examination in writing to the board of directors at the next regular meeting thereafter. Such report shall state whether the association is in a sound condition, and whether adequate internal controls and procedures are being maintained and shall recommend to the board of directors such changes in the manner of conducting the affairs of the association as shall be deemed advisable.
Notwithstanding the provisions of the first paragraph of this section 3, the responsibility and authority of the Examining Committee may, if authorized by law, be given over to a duly constituted audit committee of the associations parent corporation by a resolution duly adopted by the board of directors.
Section 4. Trust Audit Committee. There shall be a trust audit committee in conformance with Section 1 of Article V.
Section 5. Other Committees. The board of directors may appoint, from time to time, from its own members, compensation, special litigation and other committees of one or more persons, for such purposes and with such powers as the board of directors may determine.
However, a committee may not:
(1) |
Authorize distributions of assets or dividends; |
(2) |
Approve action required to be approved by shareholders; |
(3) |
Fill vacancies on the board of directors or any of its committees; |
(5) |
Amend articles of association; |
(6) |
Adopt, amend or repeal bylaws; or |
(6) |
Authorize or approve issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares. |
Section 6. Committee Members Fees. Committee members may receive a fee for their services as committee members and traveling and other out-of-pocket expenses incurred in attending any meeting of a committee of which they are a member. The fee may be a fixed sum to be paid for attending each meeting or a fixed sum to be paid quarterly, or semiannually, irrespective of the number of meetings attended or not attended. The amount of the fee and the basis on which it shall be paid shall be determined by the board of directors.
ARTICLE IV
Officers and Employees
Section 1. Officers. The board of directors shall annually, at the Annual Reorganization Meeting of the board of directors following the annual meeting of the shareholders, appoint or elect a Chairperson of the Board, a Chief Executive Officer and a President, and one or more Vice Presidents, a Corporate Secretary, a Treasurer, a General Auditor, and such other officers as it may determine. At the Annual Reorganization Meeting, the board of directors shall also elect or reelect all of the officers of the association to hold office until the next Annual Reorganization Meeting. In the interim between Annual Reorganization Meetings, the board of directors may also elect or appoint a Chief Executive Officer, a President or such additional officers to the rank of Vice President, including (without limitation as to title or number) one or more Administrative Vice Presidents, Group Vice Presidents, Senior Vice Presidents and Executive Vice Presidents, and any other officer positions as they deem necessary and appropriate. The Chief Executive Officer of M&T Bank, the head of the Human Resources Department of M&T Bank, and any one executive Vice Chairman of M&T Bank, acting jointly, may appoint one or more officers to the rank of Executive Vice President or Senior Vice President. The head of the Human Resources Department of M&T Bank or his or her designee or designees, may appoint other officers up to the rank of Group Vice President, including (without limitation as to title or number) one or more Administrative Vice Presidents, Vice Presidents, Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Auditors, and any other officer positions as they deem necessary and appropriate. Each such person elected or appointed by the board of directors, the Chief Executive Officer of M&T Bank, the head of the Human Resources Department of M&T Bank, and an executive Vice Chairman of M&T Bank, acting jointly, or the head of the Human Resources Department of M&T Bank or his or her designee or designees, in between Annual Reorganization Meetings shall hold office until the next Annual Reorganization Meeting unless otherwise determined by the board of directors or such authorized officers.
Section 2. Chairperson of the Board. The board of directors shall appoint one of its members to be the chairperson of the board to serve at its pleasure. Such person shall preside at all meetings of the board of directors. The chairperson of the board shall supervise the carrying out of the policies adopted or approved by the board of directors; shall have general executive powers, as well as the specific powers conferred by these bylaws; and shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned by the board of directors.
Section 3. President. The board of directors shall appoint one of its members to be the president of the association. In the absence of the chairperson, the president shall preside at any meeting of the board of directors. The president shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice to the office of president, or imposed by these bylaws. The president shall also have and may exercise such further powers and duties as from time to time may be conferred or assigned by the board of directors.
Section 4. Vice President. The board of directors may appoint one or more vice presidents. Each vice president shall have such powers and duties as may be assigned by the board of directors. One vice president shall be designated by the board of directors, in the absence of the president, to perform all the duties of the president.
Section 5. Secretary. The board of directors shall appoint a secretary, treasurer, or other designated officer who shall be secretary of the board of directors and of the association and who shall keep accurate minutes of all meetings. The secretary shall attend to the giving of all notices required by
these bylaws; shall be custodian of the corporate seal, records, documents and papers of the association; shall provide for the keeping of proper records of all transactions of the association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of treasurer, or imposed by these bylaws; and shall also perform such other duties as may be assigned from time to time, by the board of directors.
Section 6. Other Officers. The board of directors may appoint one or more assistant vice presidents, one or more trust officers, one or more assistant secretaries, one or more assistant treasurers, one or more managers and assistant managers of branches and such other officers and attorneys in fact as from time to time may appear to the board of directors to be required or desirable to transact the business of the association. Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by the board of directors, the chairperson of the board, or the president. The board of directors may authorize an officer to appoint one or more officers or assistant officers.
Section 7. Tenure of Office. The president and all other officers shall hold office for the current year for which the board of directors was elected, unless they shall resign, become disqualified, or be removed; and any vacancy occurring in the office of president shall be filled promptly by the board of directors.
Section 8. Resignation. An officer may resign at any time by delivering notice to the association. A resignation is effective when the notice is given unless the notice specifies a later effective date.
ARTICLE V
Fiduciary Activities
Section 1. Trust Audit Committee. There shall be a Trust Audit Committee composed of not less than 2 directors, appointed by the board of directors, which shall, at least once during each calendar year make suitable audits of the associations fiduciary activities or cause suitable audits to be made by auditors responsible only to the board, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles. Such committee: (1) must not include any officers of the bank or an affiliate who participate significantly in the administration of the banks fiduciary activities; and (2) must consist of a majority of members who are not also members of any committee to which the board of directors has delegated power to manage and control the fiduciary activities of the bank.
Notwithstanding the provisions of the first paragraph of this section 1, the responsibility and authority of the Trust Audit Committee may, if authorized by law, be given over to a duly constituted audit committee of the associations parent corporation by a resolution duly adopted by the board of directors.
Section 2. Fiduciary Files. There shall be maintained by the association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged.
Section 3. Trust Investments. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and applicable law. Where such instrument does not specify the character and class of investments to be made, but does vest in the association investment discretion, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under applicable law.
ARTICLE VI
Stock and Stock Certificates
Section 1. Transfers. Shares of stock shall be transferable on the books of the association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall in proportion to such shareholders shares, succeed to all rights of the prior holder of such shares. The board of directors may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the association with respect to stock transfers, voting at shareholder meetings and related matters and to protect it against fraudulent transfers.
Section 2. Stock Certificates. Certificates of stock shall bear the signature of the president (which may be engraved, printed or impressed) and shall be signed manually or by facsimile process by the secretary, assistant secretary, treasurer, assistant treasurer, or any other officer appointed by the board of directors for that purpose, to be known as an authorized officer, and the seal of the association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the association properly endorsed.
The board of directors may adopt or use procedures for replacing lost, stolen, or destroyed stock certificates as permitted by law.
The association may establish a procedure through which the beneficial owner of shares that are registered in the name of a nominee may be recognized by the association as the shareholder. The procedure may set forth:
(1) |
The types of nominees to which it applies; |
(2) |
The rights or privileges that the association recognizes in a beneficial owner; |
(3) |
How the nominee may request the association to recognize the beneficial owner as the shareholder; |
(4) |
The information that must be provided when the procedure is selected; |
(5) |
The period over which the association will continue to recognize the beneficial owner as the shareholder; |
(6) |
Other aspects of the rights and duties created. |
ARTICLE VII
Corporate Seal
Section 1. Seal. The seal of the association shall be in such form as may be determined from time to time by the board of directors. The president, the treasurer, the secretary or any assistant treasurer or assistant secretary, or other officer thereunto designated by the board of directors shall have authority to affix the corporate seal to any document requiring such seal and to attest the same. The seal on any corporate obligation for the payment of money may be facsimile.
ARTICLE VIII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the association shall be the calendar year.
Section 2. Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted on behalf of the association by the chairperson of the board, or the president, or any vice president, or the secretary, or the treasurer, or, if in connection with the exercise of fiduciary powers of the association, by any of those offices or by any trust officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted on behalf of the association in such other manner and by such other officers as the board of directors may from time to time direct. The provisions of this section 2 are supplementary to any other provision of these bylaws.
Section 3. Records. The articles of association, the bylaws and the proceedings of all meetings of the shareholders, the board of directors, and standing committees of the board of directors shall be recorded in appropriate minute books provided for that purpose. The minutes of each meeting shall be signed by the secretary, treasurer or other officer appointed to act as secretary of the meeting.
Section 4. Corporate Governance Procedures. To the extent not inconsistent with federal banking statutes and regulations, or safe and sound banking practices, the association may follow the Delaware General Corporation Law, Del. Code Ann. tit. 8 (1991, as amended 1994, and as amended thereafter) with respect to matters of corporate governance procedures.
Section 5. Indemnification. For purposes of this Section 5 of Article VIII, the term institution-affiliated party shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).
Any institution-affiliated party (or his or her heirs, executors or administrators) may be indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or other payments incurred. The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.
Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or
proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association. In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution- affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these bylaws and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.
In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met. If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.
In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met. If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.
To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these bylaws, (b) shall continue to exist after any restrictive amendment of these bylaws with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.
The rights of indemnification and to the advancement of expenses provided in these bylaws shall not, to the extent permitted under applicable law, be deemed exclusive of any other rights to which any such institution-affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in the associations articles of association, these bylaws, a resolution
of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these bylaws shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.
If this Section 5 of Article VIII or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Section 5 of Article VIII shall remain fully enforceable.
The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these bylaws; provided, however, that no such insurance shall include coverage for a final order assessing civil money penalties against such persons by a bank regulatory agency. Such insurance may, but need not, be for the benefit of all institution- affiliated parties.
ARTICLE IX
Inspection and Amendments
Section 1. Inspection. A copy of the bylaws of the association, with all amendments, shall at all times be kept in a convenient place at the main office of the association, and shall be open for inspection to all shareholders during banking hours.
Section 2. Amendments. The bylaws of the association may be amended, altered or repealed, at any regular meeting of the board of directors, by a vote of a majority of the total number of the directors except as provided below, and provided that the following language accompany any such change.
I, , certify that: (1) I am the duly constituted (secretary or treasurer) of and secretary of its board of directors, and as such officer am the official custodian of its records; (2) the foregoing bylaws are the bylaws of the association, and all of them are now lawfully in force and effect.
I have hereunto affixed my official signature on this day of .
(Secretary or Treasurer) |
The associations shareholders may amend or repeal the bylaws even though the bylaws also may be amended or repealed by the board of directors.
EXHIBIT 6
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, Wilmington Trust, National Association hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST, NATIONAL ASSOCIATION | ||||||
Dated: December 23, 2021 | By: | /s/ Quinton M. DePompolo | ||||
Name: Quinton M. DePompolo | ||||||
Title: Banking Officer |
EXHIBIT 7
REPORT OF CONDITION
WILMINGTON TRUST, NATIONAL ASSOCIATION
As of the close of business on September 30, 2021
Thousands of Dollars | ||||
ASSETS |
||||
Cash and balances due from depository institutions: |
9,603,463 | |||
Securities: |
5,982 | |||
Federal funds sold and securities purchased under agreement to resell: |
0 | |||
Loans and leases held for sale: |
0 | |||
Loans and leases net of unearned income, allowance: |
96,024 | |||
Premises and fixed asset |
25,601 | |||
Other real estate owned: |
348 | |||
Investments in unconsolidated subsidiaries and associated companies: |
0 | |||
Direct and indirect investments in real estate ventures: |
0 | |||
Intangible assets: |
202 | |||
Other assets: |
69,334 | |||
Total Assets: |
9,800,954 | |||
Thousands of Dollars | ||||
LIABILITIES |
||||
Deposits |
9,005,595 | |||
Federal funds purchased and securities sold under agreements to repurchase |
0 | |||
Other borrowed money: |
0 | |||
Other Liabilities: |
83,299 | |||
Total Liabilities |
9,088,894 | |||
Thousands of Dollars | ||||
EQUITY CAPITAL |
||||
Common Stock |
1,000 | |||
Surplus |
462,585 | |||
Retained Earnings |
248,572 | |||
Accumulated other comprehensive income |
(97 | ) | ||
Total Equity Capital |
712,060 | |||
Total Liabilities and Equity Capital |
9,800,954 |