10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ______

Commission File Number 0-29923

Orbital Energy Group, Inc.

(Exact name of registrant as specified in its charter)

Colorado	84-1463284
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1924 Aldine Western

Houston, Texas 77038

(Address of principal executive offices and zip code)

(832) 467-1420

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES  ☒ NO  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES  ☒  NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer ☐
Non-accelerated filer  ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ☐  NO  ☒

There were 52,220,786 shares of the registrant's common stock, par value $0.001 per share, outstanding as of May 17, 2021.

Securities registered pursuant to Section 12(b) of the Act.:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value.	OEG	Nasdaq Capital Market

INDEX

		Page
	Part I
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets (Unaudited)	2
	Condensed Consolidated Statements of Operations (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income and Loss (Unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	6
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Overview	32
	Results of Operations	33
	Liquidity and Capital Resources	37
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	40
Item 4.	Controls and Procedures	42
	Part II
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds. Common Stock Issued	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
	Exhibit Index	44
	Signatures	45

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Orbital Energy Group, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
(in thousands, except share and per share amounts)	2021			2020
Assets:
Current Assets:
Cash and cash equivalents	$	34,733		$	3,046
Restricted cash - current		153			452
Trade accounts receivable, net of allowance of $1,208 and $1,227 at March 31, 2021 and December 31, 2020, respectively		6,840			8,487
Inventories		974			1,123
Contract assets		4,200			7,860
Note receivable, current portion		520			44
Prepaid expenses and other current assets		3,016			3,786
Total current assets		50,436			24,798
Property and equipment, less accumulated depreciation of $2,484 and $2,158 at March 31, 2021 and December 31, 2020, respectively		8,669			6,395
Investment		1,063			1,063
Right of use assets - Operating leases		9,264			7,054
Goodwill		7,006			7,006
Other intangible assets, net		14,221			13,697
Restricted cash		1,026			1,026
Note receivable		3,091			3,602
Deposits and other assets		170			1,404
Total assets	$	94,946		$	66,045
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable	$	4,141		$	9,913
Notes payable, current		16,798			12,246
Line of credit		—			441
Operating lease obligations - current portion		2,348			1,784
Accrued expenses		4,703			5,882
Contract liabilities		4,024			6,810
Total current liabilities		32,014			37,076
Notes payable, less current portion		8,756			5,056
Operating lease obligations, less current portion		6,636			5,211
Contingent consideration		720			720
Other long-term liabilities		2,720			835
Total liabilities		50,846			48,898
Commitments and contingencies
Stockholders' Equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized; no shares issued at March 31, 2021 or December 31, 2020		—			—
Common stock, par value $0.001; 325,000,000 shares authorized; 46,839,982 shares issued and 46,486,919 shares outstanding at March 31, 2021 and 31,029,642 shares issued and 30,676,579 shares outstanding at December 31, 2020		47			31
Additional paid-in capital		216,527			171,616
Treasury stock at cost; 353,063 shares held at March 31, 2021 and December 31, 2020		(413	)		(413	)
Accumulated deficit		(167,633	)		(149,681	)
Accumulated other comprehensive loss		(4,428	)		(4,406	)
Total stockholders' equity		44,100			17,147
Total liabilities and stockholders' equity	$	94,946		$	66,045

See accompanying notes to condensed consolidated financial statements

2

Orbital Energy Group, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	For the Three Months
(in thousands, except share and per share amounts)	Ended March 31,
	2021			2020
Revenues	$	9,491		$	5,688
Cost of revenues		10,797			5,129
Gross profit (loss)		(1,306	)		559
Operating expenses:
Selling, general and administrative expense		14,460			7,192
Depreciation and amortization		1,515			407
Research and development		1			17
(Recovery) provision for bad debt		(19	)		6
Total operating expenses		15,957			7,622
Loss from operations		(17,263	)		(7,063	)
Other income (expense)		63			(1,032	)
Interest expense		(736	)		(11	)
Loss from continuing operations before income taxes and net loss of affiliate		(17,936	)		(8,106	)
Net loss of affiliate		—			(446	)
Loss from continuing operations before income taxes		(17,936	)		(8,552	)
Income tax expense (benefit)		16			(1,600	)
Loss from continuing operations, net of income taxes		(17,952	)		(6,952	)
Discontinued operations (Note 3)
Loss from operations of discontinued power and electromechanical components businesses		—			(486	)
Income tax benefit		—			(57	)
Income from discontinued operations, net of income taxes		—			(429	)
Net loss	$	(17,952	)	$	(7,381	)
Basic and diluted weighted average common shares outstanding		44,564,868			28,420,730
Loss from continuing operations per common share - basic and diluted	$	(0.40	)	$	(0.24	)
Income from discontinued operations - basic and diluted		0.00			(0.02	)
Loss per common share - basic and diluted	$	(0.40	)	$	(0.26	)

See accompanying notes to condensed consolidated financial statements

3

Orbital Energy Group, Inc.

Condensed Consolidated Statements of Comprehensive Income and Loss

(Unaudited)

	For the Three Months
(in thousands)	Ended March 31,
	2021			2020
Net loss	$	(17,952	)	$	(7,381	)
Other comprehensive income (loss)
Foreign currency translation adjustment		(22	)		415
Comprehensive loss	$	(17,974	)	$	(6,966	)

See accompanying notes to condensed consolidated financial statements

4

Orbital Energy Group, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2021 and 2020

(Unaudited)

(in thousands, except share amounts)	Common Stock						Treasury Stock
	Shares		Amount		Additional Paid-in Capital		Shares			Amount			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance, December 31, 2020		31,029,642	$	31	$	171,616		(353,063	)	$	(413	)	$	(149,681	)	$	(4,406	)	$	17,147
Issuance of common stock via equity raises		15,555,556		16		42,360		—			—			—			—			42,376
Common stock issued for cashless exercises of stock options		214,596		—		—		—			—			—			—			—
Common stock issued and vesting of restricted stock for compensation, services and royalty payments		40,188		—		2,551		—			—			—			—			2,551
Net loss		—		—		—		—			—			(17,952	)		—			(17,952	)
Other comprehensive income		—		—		—		—			—			—			(22	)		(22	)
Balance, March 31, 2021		46,839,982	$	47	$	216,527		(353,063	)	$	(413	)	$	(167,633	)	$	(4,428	)	$	44,100

(in thousands, except share amounts)	Common Stock						Treasury Stock
	Shares		Amount		Additional Paid-in Capital		Shares			Amount			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance, December 31, 2019		28,736,436	$	29	$	170,106		(353,063	)	$	(413	)	$	(122,234	)	$	(4,371	)	$	43,117
Common stock issued for royalty payments		37,312		—		9		—			—			—			—			9
Net loss		—		—		—		—			—			(7,381	)		—			(7,381	)
Other comprehensive income		—		—		—		—			—			—			415			415
Balance, March 31, 2020		28,773,748	$	29	$	170,115		(353,063	)	$	(413	)	$	(129,615	)	$	(3,956	)	$	36,160

See accompanying notes to condensed consolidated financial statements

5

Orbital Energy Group, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months
(in thousands)	Ended March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,952	)	$	(7,381	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		316			154
Amortization of intangibles		1,431			332
Amortization of note receivable discount		(74	)		(69	)
Stock issued and stock to be issued for compensation, royalties and services		2,559			3
Change in fair value related to stock appreciation rights		1,908			—
Amortization of debt discount		140			—
Loss on extinguishment of debt		250			—
Non-cash loss on equity method investment in affiliate		—			446
(Recovery) provision for bad debt		(19	)		6
Deferred income taxes		—			10
Inventory reserve		(72	)		(113	)
Non-cash unrealized foreign currency (gains) losses		(100	)		1,256
Change in operating assets and liabilities:
Trade accounts receivable		1,689			1,502
Inventories		225			(1,839	)
Contract assets		156			(480	)
Prepaid expenses and other current assets		783			(875	)
Right of use assets - Operating leases		(2,209	)		(703	)
Deposits and other assets		—			(874	)
Accounts payable		(4,343	)		301
Operating lease liabilities		1,987			581
Accrued expenses		1,286			(245	)
Contract liabilities		(1,443	)		264
NET CASH USED IN OPERATING ACTIVITIES		(13,482	)		(7,724	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(2,946	)		(1,278	)
Cash paid for working capital adjustment on Power group disposition		—			(2,804	)
Purchase of other intangible assets		(692	)		(4	)
Purchase of convertible notes receivable		—			(200	)
Cash paid for related party note receivable		—			(3,000	)
Purchase of investment		—			(97	)
Proceeds from notes receivable		100			—
NET CASH USED IN INVESTING ACTIVITIES		(3,538	)		(7,383	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit		(441	)		—
Payments on financing lease obligations		(1	)		(1	)
Proceeds from notes payable		9,701			—
Payments on notes payable		(3,238	)		(428	)
Proceeds from sales of common stock		42,376			—
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		48,397			(429	)
Effect of exchange rate changes on cash		11			(48	)
Net increase (decrease) in cash, cash equivalents and restricted cash		31,388			(15,584	)
Cash, cash equivalents and restricted cash at beginning of period		4,524			23,351
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	35,912		$	7,767

See accompanying notes to condensed consolidated financial statements

6

Orbital Energy Group, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(Unaudited)

	For the Three Months
(in thousands)	Ended March 31,
	2021			2020
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid (net refunded)	$	(570	)	$	19
Interest paid	$	499		$	12
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Financing note payable issued for payment on certain insurance policies	$	—		$	921
Accrued property and equipment purchases	$	291		$	16

See accompanying notes to condensed consolidated financial statements

7

Orbital Energy Group, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND COMPANY CONDITIONS

Nature of Operations

Orbital Energy Group, Inc. (Orbital Energy Group, "OEG," "The Company") is a platform company composed of three segments, the Electric Power and Solar Infrastructure Services segment, the Integrated Energy Infrastructure Solutions and Services segment, and the Other segment. In 2019, the Company divested of most of its previous Power and Electromechanical segment and the remaining portion of that segment was divested in 2020. 

The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility-scale solar construction. The Company serves a wide variety of project types, including commercial, substation, solar farms and public utility projects. Services performed by Orbital Power Services generally include the design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services, including the repair of infrastructure damaged by inclement weather. Eclipse Foundation Group, which began operations in January 2021, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation (drilled piers), industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains.

The Company’s Integrated Energy Infrastructure Solutions and Services segment is made up of Orbital Gas Systems Ltd. (Orbital-UK) and Orbital Gas Systems, North America, Inc. (Orbital North America), collectively referred to as ("Orbital Gas Systems"). Orbital-UK is based in the United Kingdom and Orbital North America is based in Houston, Texas. Orbital Gas Systems is a provider of natural gas infrastructure and advanced technology, including metering, odorization, remote telemetry units (‘‘RTU’’) and provides a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. GasPT® and VE Technology® products are sold through Orbital Gas Systems.

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes condensed consolidated financial statements. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position and results of operations and should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2020. The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

It is management's opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. All intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are not necessarily indicative of the results to be expected for the remaining quarters or year ending December 31, 2021.

8

Reconciliation of Cash, Cash Equivalents, and Restricted Cash on Condensed Consolidated Statements of Cash Flows

	For the Three Months
(in thousands)	Ended March 31,
	2021		2020
Cash and cash equivalents at beginning of period	$	3,046	$	23,351
Restricted cash at beginning of period (1)		1,478		—
Cash, cash equivalents and restricted cash at beginning of period	$	4,524	$	23,351
Cash and cash equivalents at end of period	$	34,733	$	6,740
Restricted cash at end of period (1)		1,179		1,027
Cash, cash equivalents and restricted cash at end of period	$	35,912	$	7,767

(1) Restrictions on cash at March 31, 2021 and March 31, 2020 relate to collateral for several bank-issued letters of credit for contract guaranties. 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company’s impairments and estimations of long-lived assets, revenue recognition on cost-to-cost-method type contracts, inventory valuation, warranty reserves, valuations of non-cash capital stock issuances, valuation for acquisitions, the valuation allowance on deferred tax assets, note receivable interest imputation, and the incremental borrowing rate used in determining the value of right of use assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different conditions.

Reclassifications

Certain reclassifications have been made to the 2020 segment classifications in order to conform to the 2021 presentation.

Goodwill

Upon acquisition of Reach Construction Group, LLC, (name changed to Orbital Solar Services) the Company recorded $7.0 million of goodwill. Goodwill was valued as of April 1, 2020 by a third-party valuation expert and was recorded following the recognition of Orbital Solar Service's tangible assets and liabilities and $13.7 million of finite-lived identifiable intangible assets. Factors that contributed to the Company's goodwill are Orbital Solar Service's skilled workforce and reputation within its industry. The Company also expected to achieve future synergies between the Orbital Solar Services and Orbital Power Services businesses. These synergies were expected to be achieved in the form of power line work necessary when bringing new solar power systems online. Management completed a qualitative analysis to determine whether it was more likely than not that the fair value of its reporting unit was less than its carrying amount, including goodwill. To complete the qualitative review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. During management's review of goodwill as of March 31, 2021, the Company determined that there were not indicators present to suggest that it was more likely than not that the fair value of the Orbital Solar Services reporting unit was less than its carrying amount and thus no impairment was necessary.  

Company Conditions

Orbital Solar Services has seen increasing customer opportunities including its recently announced association with the new Black Sunrise Investment fund. The fund has identified through its investors and others, several projects of scale and for which Orbital Solar Services will be awarded significant work. Orbital Power Services began operations during the first quarter of 2020 with work progressing under master service agreements with several new customers. Eclipse Foundation Group began operations in January 2021 and has begun work on projects for utility customers. Orbital Gas Systems, Ltd. continues to face issues surrounding COVID-19, Brexit and the overall economy in the United Kingdom. Orbital Gas Systems, North America, Inc. has experienced a significant delay in customer projects and orders related to COVID-19 and the impact of pricing pressure on oil and gas industry customers.   

The Company had a net loss of $18.0 million, a negative gross margin of  $1.3 million, and cash used in operating activities of $13.5 million during the three months ended March 31, 2021. As of March 31, 2021, our accumulated deficit is $167.6 million and we had working capital of $18.4 million.

COVID-19 Assessment and Liquidity

In March 2020, the World Health Organization categorized the current coronavirus disease (“COVID-19”) as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects can be severe. While the Company expects the effects of the pandemic to negatively impact its results from operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related financial impact cannot be reasonably estimated at this time. The Company has experienced customer delays and extensions for projects, supply chain delays, furloughs of personnel, increased utilization of telework, increased safety protocols to address COVID-19 risks, decreased field service work and other impacts from the COVID-19 pandemic.  The Company is proactively working to adjust its operations to properly reflect the market environment during the immediate pandemic while maintaining sufficient resources for the expected rebound later this year. Events and changes in circumstances arising after March 31, 2021, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

9

Management believes the Company's present cash flows will meet its obligations for twelve months from the date these financial statements are available to be issued. Including our cash balance, we continue to manage working capital primarily related to trade accounts receivable, notes receivable, prepaid assets, contract assets and our inventory less current liabilities that we will manage during the next twelve months. In 2020 and the first three months of 2021, the Company has entered into various long and short-term debt agreements (Note 16. Notes Payable). In addition, the Company has secured funding and has an available S-3 registration statement allowing the Company to issue various types of securities including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million. Considering these above factors, management believes the Company can meet its obligations for the twelve-month period from the date the financial statements are available to be issued. 

The Company’s available capital may be consumed faster than anticipated due to other events, including the length and severity of the global novel coronavirus disease pandemic and measures taken to control the spread of COVID-19, as well as changes in and progress of our development activities and the impact of commercialization efforts due to the COVID-19 pandemic. The Company may seek to obtain additional capital as needed through equity financings, debt or other financing arrangements, but given the impact of COVID-19 on the U.S. and global financial markets, the Company may be unable to access further equity or debt financing when needed. As such, there can be no assurance that the Company will be able to raise additional capital when needed or under acceptable terms, if at all. The sale of additional equity may dilute existing shareholders and newly issued shares may contain senior rights and preferences compared to currently outstanding common shares.

Restructuring Charges

During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of September 30, 2020.  In conjunction with the 2019 sale, it was concluded that should the remaining power and electromechanical operations not sell, the Company will fulfill its backlog obligations and wind down the remaining operations of CUI-Canada during 2020. As of December 31, 2020, the Company had remaining an accrued liability for estimated employee termination costs of $0.4 million related to the discontinued operations. The Company paid out an additional $0.2 million of termination benefits in the first three months of 2021 and expect the remaining $0.2 million to be paid out during the remainder of 2021. 

Activity in the termination benefit liability in 2021 is as follows:

CUI-Canada termination benefits (in thousands)
December 31, 2020	$	371
Severance payouts		(190	)
Translation		3
March 31, 2021	$	184
Estimated total termination benefits paid and to be paid	$	2,822

10

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are detailed in "Note 2 Summary of Significant Accounting Policies" within Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 30, 2021. Changes to the Company's accounting policies are discussed below:

Adoption of new accounting standards

On January 1, 2021, the Company adopted ASU No. 2020-04, "Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU 2020-04 also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of March 12, 2020 through December 31, 2022. There is not a material effect on the Company's financial statements due to the Company not having any current financial instruments that are affected by this new guidance.

On January 1, 2021, the Company adopted ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. ASU 2020-01 clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU 2020-01 are effective for the Company's 2021 fiscal year, including interim periods. The new guidance does not currently have a material impact on the Company's consolidated financial statements due to the Company currently not having any equity-method investments or any derivative instruments.

On January 1, 2021, the Company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's 2021 fiscal year, including interim periods. The ASU does not have a material impact on the Company's consolidated financial statements.

11

3. DISCONTINUED OPERATIONS AND SALE OF A BUSINESS

As part of the Company’s previously stated strategy to transform Orbital Energy Group, Inc. into a diversified infrastructure services platform serving North American and U.K. customers, in 2019 the Company’s Board of Directors made the decision to divest of its Power and Electromechanical businesses. On September 30, 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, CUI, Inc. ("Seller"), a wholly owned subsidiary of the Company ("Parent"), and Back Porch International, Inc. ("Buyer") to sell the Company’s Electromechanical business to a management led group. In November 2019, Orbital Energy Group, Inc. entered into an asset sale agreement by and among, the Seller and Bel Fuse, Inc. to sell the domestic Power supply business. Both sales closed in 2019. On September 30, 2020, the Company sold the CUI Japan operations to Back Porch International for approximately $163 thousand. The assets of the Company's CUI-Canada subsidiary were divested in the fourth quarter of 2020. 

The associated results of operations of the discontinued Power and Electromechanical segment are separately reported as Discontinued Operations for 2020 on the Condensed Consolidated Statements of Operations. Cash flows from these discontinued businesses are included in the Condensed Consolidated Cash Flow statements. See below for additional information on operating and investing cash flows of the discontinued operations. Results from continuing operations for the Company and segment highlights exclude the former Power and Electromechanical segment, which is included in these discontinued operations.

The former Power and Electromechanical segment consisted of the wholly owned subsidiaries: CUI, Inc. (CUI), based in Tualatin, Oregon; CUI Japan, based in Tokyo, Japan; CUI-Canada, based in Toronto, Canada; and the entity that previously held the corporate building, CUI Properties. The subsidiaries were providers of power and electromechanical components for Original Equipment Manufacturers (OEMs).

Selected data for these discontinued businesses consisted of the following:

Reconciliation of the Major Classes of Line Items Constituting Pretax Income from

Discontinued Operations to the After-Tax Income from Discontinued Operations That Are

Presented in the Condensed Consolidated Statement of Operations

(Unaudited)

(in thousands)		For the Three Months
	Ended March 31,
Major classes of line items constituting pretax profit (loss) of discontinued operations:	2021		2020
Revenues	$	—	$	2,033
Cost of revenues		—		(1,986	)
Selling, general and administrative expense		—		(385	)
Other expense		—		(148	)
Pretax loss of discontinued operations related to major classes of pretax loss		—		(486	)
Income tax benefit		—		(57	)
Total loss from discontinued operations that is presented in the statement of operations	$	—	$	(429	)

Net cash used in operating activities of discontinued operations for the three months ended March 31, 2020 was $1.1 million.

There was zero net cash provided by or (used in) investing activities of discontinued operations for the three months ended March 31, 2020.

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4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Electric Power and Solar Infrastructure Services segment and Integrated Energy Infrastructure and Services segment

The Electric Power and Solar Infrastructure Services segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group, and Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar and community solar construction.

The  Integrated Energy Infrastructure Solutions and Services segment subsidiaries, collectively referred to as Orbital Gas Systems, generate their revenue from a portfolio of products, services and resources that offer a diverse range of personalized gas engineering solutions to the gas utilities, power generation, petrochemical, emissions, manufacturing and automotive industries among others. 

Orbital Gas Systems accounts for a majority of its contract revenue proportionately over time. For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided.

For our construction contracts, revenue is generally recognized over time. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

The timing of revenue recognition for Integrated Energy Infrastructure products also depends on the payment terms of the contract, as our performance does not create an asset with an alternative use to us. For those contracts where the Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced or for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. As discussed above, these performance obligations use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. However, for those contracts for which we do not have a right, at all times, to payment for performance completed to date and we are not enhancing a customer controlled asset, we recognize revenue at the point in time when control is transferred to the customer, generally when the product is shipped.

For our service contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term.

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

Product-type contracts (for example, sale of GasPT units) for which revenue does not qualify to be recognized over time are recognized at a point in time. Revenues from extended warranty and maintenance activities are recognized ratably over the term of the warranty and maintenance period. Extended warranties are not a material portion of our revenue.

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Accounts Receivable, Contract Assets and Contract Liabilities

Accounts receivable are recognized in the period when our right to consideration is unconditional. We also assess our customer's ability and intention to pay, which is based on a variety of factors, including our historical payment experience with and the financial condition of our customers. Payment terms and conditions vary by contract, although our standard terms include a requirement of payment within 30 days. Accounts receivable are recognized net of an allowance for doubtful accounts. 

The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenue recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Also included in contract assets are retainage receivables and amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to both scope and/or price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do not include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Condensed Consolidated Balance Sheets.

Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts and provision for future contract losses for those contracts estimated to close in a gross loss position. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue.

Balances and activity in the current contract liabilities as of and for the three months ended March 31, 2021 and 2020 was as follows:

	For the Three Months
	Ended March 31,
(in thousands)		2021			2020
Total contract liabilities - beginning of period (1)	$	6,996		$	1,860
Contract additions, net		1,924			696
Revenue recognized		(1,616	)		(431	)
Orbital Solar contract settlements		(3,129	)		—
Translation		13			(88	)
Total contract liabilities - end of period	$	4,188		$	2,037

	As of March 31,
(in thousands)		2021		2020
Current contract liabilities	$	4,024	$	1,849
Long-term contract liabilities (2)		164		188
Total contract liabilities	$	4,188	$	2,037

⁽¹⁾  For the beginning balance in 2021 and 2020, total contract liabilities included $186 thousand and $192 thousand, respectively that were classified as long term.

⁽²⁾ Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

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Performance Obligations

Remaining Performance Obligations

Remaining performance obligations represents the transaction price of contracts with customers for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts. As of March 31, 2021, the Company's remaining performance obligations are generally expected to be filled within the next 12 months.

Any adjustments to net revenues, cost of revenues, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks. Changes in estimates of net revenues, cost of revenues and the related impact to operating income are recognized on a cumulative catch-up basis in the period they become known, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. For separately priced extended warranty or product maintenance performance obligations, when estimates of total costs to be incurred on the performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

Performance Obligations Satisfied Over Time

To determine the proper revenue recognition method for our contracts, we evaluate whether a single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to separate the single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period.

For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In cases where we do, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized customer specific solution, and in these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

Performance Obligations Satisfied at a Point in Time

Revenue from goods and services transferred to customers at a single point in time accounted for 20% and 35% of revenues for the three month periods ended March 31, 2021 and 2020, respectively. Revenue on these contracts is recognized when the product is shipped and the customer takes control of the product. Determination of control transfer is typically determined by shipping terms delineated on the customer purchase orders and is generally when shipped.

Variable Consideration

The nature of our contracts gives rise to several types of variable consideration. In rare instances, we include in our contract estimates, additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. These amounts are included in our calculation of net revenue recorded for our contracts and the associated remaining performance obligations. Additionally, if the contract has a provision for liquidated damages in the case that the Company misses a timing target, or fails to meet any other contract benchmarks, we account for those estimated liquidated damages as variable consideration and will adjust revenue accordingly with periodic updates to the estimated variable consideration as the job progresses. Liquidated damages are recognized as variable consideration only when we estimate that they will be a factor in the performance of the contract and are not common.

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Significant Judgments

Our contracts with certain customers may be subject to contract cancellation clauses. Contracts with other cancellation provisions may require judgment in determining the contract term, including the existence of material rights, transaction price and identifying the performance obligations and whether a contract should be accounted for over time or on a completed contract basis. Revenue is recognized for certain projects over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

At times, customers may request changes that either amend, replace or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts require the changes to be accounted for as a separate contract or as a modification. Generally, contract modifications containing additional goods and services that are determined to be distinct and sold at their stand-alone selling price are accounted for as a separate contract. For contract modifications where goods and services are not determined to be distinct and sold at their stand-alone selling price, the original contract is updated and the required adjustments to revenue and contract assets, liabilities, and other accounts will be made accordingly.

Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together may require significant judgment. For, example, we consider many of our contracts that coordinate multiple products into an integrated system to be a single performance obligation, while the same products would be considered separate performance obligations if not so integrated.

In contracts where there are timing differences between when we transfer a promised good or service to the customer and when the customer pays for that good or service, we have determined that, our contracts do not include a significant financing component.

The following tables present the Company's revenues disaggregated by timing of revenue recognition:

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
Revenues recognized at point in time	$	—	$	1,868	$	1,868	$	—	$	1,979	$	1,979
Revenues recognized over time		5,561		2,062		7,623		399		3,310		3,709
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

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The following tables present the Company's revenues disaggregated by region:

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
North America	$	5,561	$	1,452	$	7,013	$	399	$	2,843	$	3,242
Europe		—		2,451		2,451		—		2,326		2,326
Other		—		27		27		—		120		120
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

5. OTHER INTANGIBLE ASSETS

In January 2021, the Company completed the acquisition of the VE Technology rights, which it has previously utilized the VE Technology through a licensing agreement with Endet Ltd. Orbital Gas Systems has the existing proprietary knowledge for the marketing, engineering and production of the VE Technology based solutions. The VE Technology, amortized over ten years, is the basis for a patented sampling system product line marketed by Orbital Gas Systems and utilized in many of its integrated solutions.

In 2020, the Company entered into an agreement to acquire the intellectual property rights and know-how associated with the VE Technology including patents for 1.5 million British pounds ("GBP"), or approximately $1.8 million. The completion of the acquisition was made upon the final payment towards this agreement. In June 2020, the parties to the agreement mutually agreed to extend the payments until January 15, 2021 in consideration of the financial consequences created by the COVID-19 pandemic in exchange for a technology fee of an additional 100,000 GBP. As of March 31, 2021, the Company paid the remaining 500,000 GBP in January 2021. The $1.9 million paid was recorded as an intangible asset upon making the final payment in January 2021 with $0.7 million paid in 2021 and $1.2 million reclassified from long-term deposits.

6. INVENTORIES

Inventories consist of raw materials, work-in-process and finished goods and are stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method. At March 31, 2021 and December 31, 2020, accrued liabilities included $0.2 million and $0.1 million of accrued inventory payable, respectively. At March 31, 2021 and December 31, 2020, inventory by category is valued net of reserves and consists of:

	As of March 31,		As of December 31,
(in thousands)	2021		2020
Finished goods	$	258	$	255
Raw materials		186		217
Work-in-process		530		651
Total inventories	$	974	$	1,123

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7. INVESTMENTS

As of March 31, 2021, the Company had a minority ownership in Virtual Power Systems ("VPS"). Prior to the third quarter of 2020, based on its equity ownership and that the Company maintains a board seat and participated in operational activities of VPS, the Company maintained significant influence to account for the investment as an equity-method investment. Under the equity method of accounting, results are not consolidated, but the Company records a proportionate percentage of the profit or loss of VPS as an addition to or a subtraction from the VPS investment asset balance. During the three months ended March 31, 2020, the Company recorded a $0.4 million loss on its equity method investment in VPS. The VPS investment basis at March 31, 2021 and December 31, 2020 was $1.1 million and $1.1 million, respectively, as reflected on the consolidated balance sheets. With the decrease in ownership percentage following a Q3 2020 equity raise by VPS and additional board seats placed, OEG no longer has sufficient influence to recognize the investment under the equity method. The investment is held at March 31, 2021 under the cost method of accounting for investments. 

The Company made a purchase of a convertible note receivable for $200 thousand from VPS in the three months ended March 31, 2020, which is reflected in investing cash flows on the consolidated statement of cash flows.

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8. LEASES

Consolidated total lease costs were $0.8 million for the three months ended March 31, 2021 and is included in cost of sales; selling, general and administrative expense; and other income (expense), on the condensed consolidated statement of operations.

Future minimum operating lease obligations at March 31, 2021 are as follows for the years ended December 31:

(in thousands)
2021	$	2,176
2022		2,666
2023		1,585
2024		1,056
2025		1,023
Thereafter		2,075
Interest portion		(1,597	)
Total operating lease obligations	$	8,984

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Total lease cost and other lease information is as follows:

	For the Three Months Ended March 31,
(in thousands)	2021			2020
Operating lease cost	$	706		$	320
Short-term lease cost		19			46
Variable lease cost		148			46
Sublease income		(113	)		(98	)
Total lease cost	$	760		$	314

Other information (in thousands)	Three Months Ended March 31,
	2021			2020
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from operating leases (includes discontinued operations in 2020)	$	(982	)	$	(378	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	2,783		$	1,073
Weighted-average remaining lease term - operating leases (in years)		5.0			6.6
Weighted-average discount rate - operating leases		6.5	%		6.4	%

Variable lease costs primarily include common area maintenance costs, real estate taxes and insurance costs passed through to the Company from lessors.

9. STOCK-BASED PAYMENTS FOR COMPENSATION, SERVICES AND ROYALTIES

The Company records its stock-based compensation expense on options issued in the past under its stock option plans and the Company also issues stock for services and royalties. The Company's current stock option plan was approved in 2020 following the expiration of its previous stock option plan in 2018. The Company did not issue any stock options during the three months ended March 31, 2021 or 2020. A detailed description of the awards under these plans and the respective accounting treatment is included in the “Notes to the Consolidated Financial Statements” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC on March 30, 2021. For the three months ended March 31, 2021 and 2020, the Company recorded stock-based compensation expense of $2.6 million and $3 thousand, respectively. Stock-based payments for compensation, services and royalties for the three months ended March 31, 2021 is summarized below.

(dollars in thousands)
Date of issuance	Type of issuance	Stock issuance recipient	Reason for issuance	Total no. of shares issued		Fair value expense recorded in the three months ended March 31, 2021
January 2021	Common stock	Four directors	Director compensation		23,148	$	50
January 2021	Common stock	Employee	Employee bonus		11,415		25
February 2021	Common stock	Consultant	Services		5,625		22
February 2021	Common stock	Employee	Stock option exercise		214,596		—	(1)
March 2021	Restricted stock	Employee	Employee compensation		—		2,015	(2)
March 2021	Common stock	Four directors	Director compensation		—		437	(3)
March 2021	Common stock	Royalty recipient	Royalties		—		10	(4)
Total stock-based payments for compensation, services and royalties					254,784	$	2,559

(1)  The cashless exercise consisted of an exercise of 552,663 shares for which 338,067 of those share options were returned to the Company in return for the 214,596 shares issued. Expense related to these stock options were recorded in prior periods as they were fully vested.

(2)  In March 2021, the Company granted 3 million restricted shares for employee compensation with an aggregate fair value of $16.4 million with a graded vesting schedule. One-third of which were vested and issued in April 2021, one third of which will vest in April 2022, and one-third of which will vest in April 2023. The Company recorded $2.0 million in compensation expense related to the partial vesting of these grants in the three months ended March 31, 2021, and will record the remaining $14.4 million of stock-based compensation related to these shares over the remaining vesting period. 

(3)  The Company granted 80,000 fully vested shares to four directors in March. These shares were issued in April 2021.

(4)  The Company granted 2,292 fully vested shares for the payment of accrued royalties. These shares will be issued in May 2021.

In addition to stock-based compensation settled in stock, the Company also has cash settled stock appreciation rights ("SARs") which were granted in June 2020 as described in the Company's Form 10-K filed March 30, 2021. Accrued SARs at March 31, 2021 and December 31, 2020 were $2.6 million and $0.6 million, respectively and were recorded in accrued expenses within the condensed consolidated balance sheets. Vesting expense for the three months ended March 31, 2021 was $1.9 million and was recorded within selling, general and administrative expense within the condensed consolidated statements of operations. 

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10. SEGMENT REPORTING

Operating segments are defined in accordance with ASC 280-10 as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The measurement basis of segment profit or loss is income (loss) from operations. Management has identified three operating segments based on the activities of the Company in accordance with ASC 280-10. These operating segments have been aggregated into three reportable segments. The three reportable segments are Electric Power and Solar Infrastructure Services, Integrated Energy Infrastructure Solutions and Services, and Other.

The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. 

The Integrated Energy Infrastructure Solutions and Services segment is focused on the operations of Orbital Gas Systems Ltd. in the UK and Orbital Gas Systems, North America, Inc. which includes gas related test and measurement systems, including the GasPT.

The Other segment represents the remaining activities that are not included as part of the other reportable segments and represent primarily corporate activity. In 2019, the Company sold its domestic power and electromechanical businesses and reclassified the income of the former Power and Electromechanical segment to income from discontinued operations. The Company sold the remaining portions of the Power and Electromechanical segment in 2020.

The following information represents segment activity for the three months ended March 31, 2021:

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	5,561		$	3,930		$	—		$	9,491
Depreciation and amortization (1)		1,305			432			10			1,747
Interest expense		16			2			718			736
Loss from operations		(9,589	)		(1,756	)		(5,918	)		(17,263	)
Expenditures for long-lived assets (2)		2,920			705			13			3,638

 

⁽¹⁾ For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $0.2 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

⁽²⁾  Includes purchases of property, plant and equipment and other intangible assets. 

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The following information represents selected balance sheet items by segment as of March 31, 2021:

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	33,888	$	18,072	$	42,986	$	94,946
Goodwill		7,006		—		—		7,006
Other intangible assets, net		9,487		4,731		3		14,221

The following information represents segment activity for the three months ended March 31, 2020:

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	399		$	5,289		$	—		$	5,688
Depreciation and amortization (1)		79			399			8			486
Interest expense		7			—			4			11
Loss from operations		(2,058	)		(1,843	)		(3,162	)		(7,063	)
Expenditures for long-lived assets (2)		1,221			6			55			1,282

⁽¹⁾ For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $79 thousand, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

⁽²⁾  Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.

22

The following information represents selected balance sheet items by segment as of December 31, 2020:

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	35,825	$	17,094	$	13,126	$	66,045
Goodwill		7,006		—		—		7,006
Other intangibles assets, net		10,550		3,144		3		13,697

The following represents revenue by country:

(dollars in thousands)	For the Three Months Ended March 31,
	2021					2020
	Amount		%			Amount		%
USA	$	7,013		74	%	$	3,241		57	%
United Kingdom		1,988		21	%		2,221		39	%
All Others		490		5	%		226		4	%
Total	$	9,491		100	%	$	5,688		100	%

 

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11. RECENT ACCOUNTING PRONOUNCEMENTS

There were no recent accounting pronouncements for which the Company determined would be material to its balance sheet or statement of operations. 

12. FAIR VALUE MEASUREMENTS

The Company’s fair value hierarchy for its contingent consideration and convertible note payable as of March 31, 2021 and December 31, 2020 was as follows:

(in thousands)
March 31, 2021	Level 1		Level 2		Level 3		Total
Contingent consideration	$	—	$	—	$	720	$	720
Total liabilities	$	—	$	—	$	720	$	720

December 31, 2020	Level 1		Level 2		Level 3		Total
Convertible note payable	$	—	$	—	$	1,955	$	1,955
Contingent consideration		—		—		720		720
Total liabilities	$	—	$	—	$	2,675	$	2,675

Changes in Fair Value Measurements

Using Significant Unobservable Inputs (Level 3)

(in thousands)	Convertible note payable
Balance at December 31, 2020	$	1,955
Loss on extinguishment on amendment to remove convertible feature		250
Amortization of original issue discount		40
Accrued interest		57
Extinguishment of note		(2,302	)
Balance at March 31, 2021	$	—

There were no transfers between Level 3 and Level 2 in the three months ended March 31, 2021 as determined at the end of the reporting period.

In the three months ended March 31, 2020, the Company invested $200 thousand in a convertible note receivable with VPS. This note was increased by $60 thousand from accrued interest and transition services provided by the Company. The $260 thousand note was converted to equity in VPS during Q3 2020 and accounted for as a cost method investment.  

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13. LOSS PER COMMON SHARE

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 260 (“FASB ASC 260”), “Earnings per Share,” Basic loss from continuing operations per share, basic income from discontinued operations per share and basic net income (loss) per share that is available to shareholders is computed by dividing the income or loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the respective loss available to common stockholders by the weighted average number of diluted shares outstanding during the period calculated using the treasury stock method. Due to the Company’s loss from continuing operations in the three months ended March 31, 2021 and March 31, 2020, the assumed exercise of stock options and the unvested restricted stock that would otherwise increase diluted shares using the treasury stock method would have had an antidilutive effect and therefore 0.2 million shares related to stock options outstanding at March 31, 2021 and 3 million shares of restricted stock were excluded from the computation of diluted net loss per share for the three months ended March 31, 2021 and 0.8 million shares related to stock options outstanding at March 31, 2020 were excluded for the three months ended March 31, 2020. Accordingly, diluted earnings (loss) per share for continuing operations, discontinued operations and net income is the same as basic earnings (loss) per share for continuing operations, discontinued operations and net income for the three months ended March 31, 2021 and 2020.

	For the Three Months
(in thousands, except share and per share amounts)	Ended March 31,
	2021			2020
Loss from continuing operations, net of income taxes	$	(17,952	)	$	(6,952	)
Income from discontinued operations, net of income taxes		—			(429	)
Net loss	$	(17,952	)	$	(7,381	)
Basic and diluted weighted average number of shares outstanding		44,564,868			28,420,730
Loss from continuing operations per common share - basic and diluted	$	(0.40	)	$	(0.24	)
Loss from discontinued operations - basic and diluted		0.00			(0.02	)
Loss per common share - basic and diluted	$	(0.40	)	$	(0.26	)

14. INCOME TAXES

The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and foreign net deferred tax assets as it is not more likely than not that the Company will realize a benefit from these assets in a future period. In future periods, tax benefits and related deferred tax assets will be recognized when management concludes realization of such amounts is more likely than not.

Net income tax expense of $16 thousand was recorded to the income tax provision from continuing operations for the three months ended March 31, 2021, resulting in an effective tax rate of 0.1%. The income tax expense from continuing operations for the three months ended March 31, 2021 was due to domestic state minimum taxes. All of the Company’s domestic and foreign net deferred tax assets were reduced by a full valuation allowance.

Total net income tax benefit of $1.7 million for the three months ended March 31, 2020 is being allocated under ASC 740-20-45-7 to more than one financial statement component other than continuing operations.

A net income tax benefit of $1.6 million was recorded to the income tax provision from continuing operations for the three months ended March 31, 2020, resulting in an effective tax rate of 18.7%. A net income tax benefit of $57 thousand was recorded to the income tax provision from discontinued operations for the three ended March 31, 2020. The income tax benefit from continuing operations for the three ended March 31, 2020 was due to application of ASC 740-20-45-7, domestic state minimum taxes and benefits from refundable tax credits from our United Kingdom operations. All of the Company’s USA and the foreign net deferred tax assets were reduced by a valuation allowance.

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15. ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows:

(in thousands)	As of March 31, 2021			As of December 31, 2020
Foreign currency translation adjustment	$	(4,428	)	$	(4,406	)
Accumulated other comprehensive loss	$	(4,428	)	$	(4,406	)

16. NOTES PAYABLE 

Notes payable is summarized as follows:

(in thousands)	As of March 31, 2021			As of December 31, 2020
Notes Payable - Insurance Financing notes (1)	$	383		$	1,163
Pay-check protection loans (2)		1,924			1,924
Seller Financed notes payable - Reach Construction Group, LLC acquisition (3)		5,480			6,480
Vehicle and equipment loans (4)		173			195
Non-recourse payable agreements (5)		1,187			2,699
Notes payable - Financing notes (6)		13,038			2,245
Conditional settlement notes payable agreement (7)		4,500			3,500
Unamortized discount and deferred debt issuance costs		(1,131	)		(904	)
Less short-term notes and current maturities of long term notes payable		(16,798	)		(12,246	)
Notes payable, less current portion	$	8,756		$	5,056

(1)	Note payable with an original balance for $1.4 million to First Insurance Funding was executed in July 2020 by the Company for the purposes of financing a portion of the Company's insurance coverage. The Note has an annual percentage rate of 3.35% with nine monthly payments of approximately $159 thousand and will be paid off by April 1, 2021. The Company financed two additional insurance policies in the fourth quarter of 2020 for $0.1 million and $0.4 million, respectively. The smaller of which will mature in April 2021 and the other of which will mature in September 2021, and for which had annual interest rates of 3.35% and 4.35%, respectively.
(2)	On April 30, 2020 and May 2, 2020, the Company entered into unsecured loans in the aggregate principal amount of approximately $1.9 million (the “Loans”) pursuant to the Paycheck Protection Program (the “PPP”), sponsored by the Small Business Administration (the “SBA”) as guarantor of loans under the PPP.  The Loans, and interest accrued thereon, is forgivable, partially or in full, if certain conditions are met. The Loans are evidenced by four promissory notes, three with Bank of America, NA which are dated as of April 30, 2020 and one with Dogwood State Bank dated May 2, 2020. The Bank of America notes mature two years from funding date of the notes and the Dogwood State Bank note matures two years from the note date. Each of the notes bear interest at a fixed rate of 1.0% per annum with payments deferred. The Loans may be prepaid at any time prior to maturity with no prepayment penalties.
(3)	Includes two seller financed notes payable, one for $5 million and the second for $1.5 million. The $5 million note was amended from its original 18-month term to provide for installments of $1 million paid on March 3, 2021, a second $1 million payment to be made on October 31, 2021 and a final principal payment of $3 million on March 31, 2022.  The original payment terms called for the full $5 million principal to be paid no later than November 1, 2021 without separate installments. The second seller financed note payable is due 36-months from the April 1, 2020 acquisition date. Both notes have an interest rate of 6% per annum.
(4)	Includes vehicle and equipment loans with interest rates ranging from 6.79% to 8.99%.
(5)	To refinance an earlier non-recourse note and to provide the Company with additional capital, the Company took out two non-recourse agreements with C6 Capital for the sale of future revenues in the total amount of $3.5 million. These agreements had no stated interest rate and the original issue discount including upfront fees are being amortized using an effective interest rate of approximately 117%. After combined weekly payments of approximately $54 thousand for the first four weeks, the combined payments increased to approximately $116 thousand until June 2021. As of March 31, 2021, the future payments for these financing agreements was approximately $1.2 million ($1.1 million net of discount).
(6)	On November 13, 2020, the Company completed a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue to the Investor an unsecured convertible instrument in the principal amount of $2.2 million (the “Convertible Security” or “Note”) to purchase shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) against the payment of the applicable consideration therefore. Upon the closing on November 13, 2020, the Company received gross proceeds of $2.2 million before fees and other expenses associated with the transaction, including but not limited to, a $0.2 million original issue discount payable to the Investor. The net proceeds received by the Company was used primarily for working capital, debt repayment and general corporate purposes. The Note is payable in full within eighteen (18) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of ten percent (10%) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. Company has the right to prepay all or any portion of the outstanding balance in an amount equal to 115% multiplied by the portion of the outstanding balance to be prepaid. The creditor may request payment of up to $250 thousand per month beginning 6 months after initial issuance. Original issue discount is amortized over the expected life of the investment at an effective interest rate of approximately 29%. The Company elected the fair value option for this note and as a result did not bifurcate any potential embedded derivatives. In February 2021, the Company negotiated modified terms which effectively removed the convertible option from the note and the Company recorded a $250 thousand loss on extinguishment and its carrying value was $2.3 million at March 31, 2021. See Note 12 for more information on the fair value of this note payable. On March 23, 2021, the Company completed a second note payable with the same institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 19.6% an original issue discount of $1.0 million and a carrying value of $9.7 million at March 31, 2021. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1 million per month beginning 6 months after initial issuance.

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⁽⁷⁾ In October 2020, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $3.5 million at zero interest over three years. In January 2021, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $1.4 million over approximately 5 months at 12% annual interest rate with the final payment on or before June 30, 2021. There is $1.0 million outstanding on this note at March 31, 2021.

17. CONCENTRATIONS

The Company's major product lines are energy infrastructure services including natural gas infrastructure solutions and services through Orbital Gas Systems; full-service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group; and engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar construction through Orbital Solar Services. The Company had the following revenue concentrations by customer greater than 10% of consolidated revenue:

For the Three Months Ended March 31,
Customer	2021			2020
Customer 1		23	%	<10%
Customer 2		16	%	<10%
Customer 3	<10%				18	%
Total concentrations		39	%		18	%

The Company had the following geographic revenue concentrations outside the U.S.A. greater than 10% of consolidated revenue:

For the Three Months Ended March 31,
Country	2021			2020
United Kingdom		21	%		39	%
Total concentrations		21	%		39	%

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The Company had the following gross trade accounts receivable concentrations by customer greater than 10% of gross trade accounts receivable:

	As of March 31,			As of December 31,
Customer	2021			2020
Customer 4		23	%	19		%
Customer 5		14	%	12		%
Customer 2	<10%				11	%
Total concentrations		37	%		42	%

 

The Company had the following geographic concentrations of gross trade accounts receivable outside of the U.S.A. greater than 10% of gross trade accounts receivable:

	As of March 31,			As of December 31,
Country	2021			2020
United Kingdom		32	%		21	%
Total concentrations		32	%		21	%

 

There were no supplier concentrations greater than 10% during the three months ended March 31, 2021 or three months ended March 31, 2020.

18. OTHER EQUITY TRANSACTIONS

S-3 registration

The Company filed an S-3 registration statement on July 17, 2020 containing a prospectus that was effective in September 2020. The Company utilized this filing in January 2021 to issue common stock for $45 million before costs of $2.6 million for net proceeds of $42.4 million in two separate equity raises. The Company has used and plans to use the remaining funds for general corporate purposes, which may include operating expenses, working capital to improve and promote our commercially available products and service offerings, advance product and service offering candidates, future acquisitions or share repurchases, expand our market presence and commercialization, general capital expenditures and satisfaction of debt obligations. The Company filed a new S-3 shelf registration in January 2021, which, as amended, became effective in April 2021. With this filing, Orbital Energy Group may from time to time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million.

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19. ACQUISITION OF REACH CONSTRUCTION GROUP, LLC

Effective April 1, 2020, the Company entered into an equity purchase agreement to acquire 100% of the assets of Reach Construction Group, LLC (Renamed "Orbital Solar Services"), an, industry-leading solar construction company. Headquartered in Sanford, NC, Orbital Solar Services is an engineering, procurement and construction (“EPC”) company with expertise in the renewable energy industry. The acquisition was effectuated pursuant to the Equity Purchase Agreement (the “Agreement”), dated as of April 1, 2020, between Orbital Energy Group and Brandon S. Martin (the "Seller").  Orbital Energy Group issued 2,000,000 shares of restricted common stock issued to the Seller ($1.2 million estimated fair value as of April 1, 2020) along with two seller notes for a combined total of $35 million (Adjusted to $6.5 million following preliminary working capital adjustment as of April 1, 2020) and an earn-out not in excess of $30 million ($0.7 million estimated fair value as of April 1, 2020.) The seller notes were subject to a $28.5 million preliminary working capital adjustment.

The purchase consideration is as follows:

(in thousands)

Purchase Consideration
Orbital Energy Stock issued - 2 million shares	$	1,224
18-Month Seller Note		5,000
3-year Seller Note		1,480
Contingent consideration		720
Cash payment		3,000
Total	$	11,424

The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.

(in thousands)

Purchase price	$	11,424
Cash and cash equivalents	$	19
Trade accounts receivable, net of allowance		6,972
Contract assets		3,299
Prepaid expenses and other current assets		427
Property and equipment		382
Right of use assets - Operating leases		890
Goodwill		7,006
Intangible, customer relationships & backlog		8,647
Intangible, trade name		1,878
Intangible, non-compete agreements		3,212
Deferred tax liability		(1,570	)
Liabilities assumed		(19,738	)
Purchase price allocation	$	11,424

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20. COMMITMENTS AND CONTINGENCIES

Off-Balance Sheet Arrangements

Performance and Payment Bonds and Parent Guarantees

In the ordinary course of business, Orbital Energy Group and its subsidiaries are required by certain customers to provide performance and payment bonds for contractual commitments related to its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer may demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. Certain bonds are for open-ended contracts with multiple work orders so the value may increase as the work progresses and more work orders are started. The bonds will remain in place as the Company completes projects and resolves any disputed matters with the customers, vendors and subcontractors related to the bonded projects. As of March 31, 2021 the total amount of the outstanding performance and payment bonds was approximately $1.9 million. The estimated cost to complete bonded projects was approximately $0.9 million as of March 31, 2021.  

Additionally, from time to time, we guarantee certain obligations and liabilities of our subsidiaries that may arise in connection with, among other things, contracts with customers, equipment lease obligations, and contractor licenses. These guarantees may cover all of the subsidiary’s unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. For example, with respect to customer contracts, a guarantee may cover a variety of obligations and liabilities arising during the ordinary course of the subsidiary’s business or operations, including, among other things, warranty and breach of contract claims, third-party and environmental liabilities arising from the subsidiary’s work and for which it is responsible, liquidated damages, or indemnity claims.

Contingent Liabilities

Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.

Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Other than the reserve on the item described below, the Company currently has no such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. Except as otherwise stated below, none of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.’s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.

21. SUBSEQUENT EVENTS

Acquisition

Orbital Energy Group, Inc. (NASDAQ: OEG) (“OEG” or “Company”) entered into and closed upon a Share Purchase Agreement dated April 13, 2021 (“SPA”) by and among the Company and the owners of the capital stock of Gibson Technical Services, Inc. (“GTS”).  GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and will become a wholly owned subsidiary of the Company.

Subject to the terms and conditions set forth in the SPA, the base purchase price for 100% of the equity ownership of GTS is $48,000,000, with the consideration structured as follows:

● $22,000,000 in cash paid at closing; and

● 4,651,162 shares of restricted common stock issued to the GTS shareholders with an aggregate value of $26,000,000 based upon a per share value of $5.59. Of the newly issued shares, 2,232,569 of the shares are subject to a one (1) year restricted period and 2,418,593 are subject to a two (2) year restricted period.

● The SPA provides for the issuance of additional shares of OEG restricted common stock to the GTS shareholders valued at $5.59 as a post-closing adjustment for the excess net working capital above a 2-1 ratio within 45 days after the closing date of April 13, 2021.

The SPA contains various customary representations, warranties and covenants. In connection with the SPA, the Company entered into employment agreements with three (3) key employees of GTS with base compensation agreements ranging from $165,000 to $300,000, plus incentive compensation arrangements tied to the performance of GTS.

Debt Agreement

On May 11, 2021, Orbital Energy Group, Inc. (the “Company”) completed a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor an unsecured instrument in the principal amount of $10,715,000 (the “Note”). Upon the closing on May 11, 2021, the Company received gross proceeds of $10,715,000, before fees and other expenses associated with the transaction, including but not limited to, a $700,000 original issue discount payable to the Investor. The net proceeds received by the Company will be used primarily for working capital, future acquisitions, and general corporate purposes.

The Note is payable in full within eighteen (18) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of nine percent (9%) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. The Company has the right to prepay all or any portion of the outstanding balance in an amount equal to 115% multiplied by the portion of the outstanding balance to be prepaid.

Beginning six (6) months from the purchase price date, Investor has the right, in its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption Amount”) subject to the maximum monthly redemption amount of $1,000,000 per calendar month, by providing Company with a “Redemption Notice."

The Note Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties thereto, and termination provisions.

The foregoing does not purport to be a complete description of the Note Purchase Agreement and is qualified in its entirety by reference to the full text of such documents and attachments which are attached as Exhibits to this Report and are incorporated by reference herein.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Important Note about Forward-Looking Statements

The following discussion and analysis should be read in conjunction with the Company’s unaudited condensed consolidated financial statements as of March 31, 2021 and notes thereto included in this document and the audited consolidated financial statements in the Company’s 10-K filing for the period ended December 31, 2020 and the notes thereto. In addition to historical information, the following discussion and other parts of this Form 10-Q contain forward-looking information that involves risks and uncertainties. The Company’s actual results could differ materially from those anticipated by such forward-looking information due to factors discussed elsewhere in this Form 10-Q.

The statements that are not historical constitute “forward-looking statements.” Said forward-looking statements involve risks and uncertainties that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements, express or implied by such forward-looking statements. These forward-looking statements are identified by their use of such terms and phrases as "expects,” “intends,” “goals,” “estimates,” “projects,” “plans,” “anticipates,” “should,” “future,” “believes,” and “scheduled.”

The variables which may cause differences include, but are not limited to, the following: general economic and business conditions; changes in regulatory environment; extraordinary external events such as the current pandemic health event resulting from COVID-19; competition; success of operating initiatives; operating costs; advertising and promotional efforts; the existence or absence of adverse publicity; changes in business strategy or development plans; the ability to retain management; availability, terms and deployment of capital; business abilities and judgment of personnel; availability of qualified personnel; labor and employment benefit costs; availability and costs of raw materials and supplies; and changes in, or failure to comply with various government regulations. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate; therefore, there can be no assurance that the forward-looking statements included in this Form 10-Q will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any person that the objectives and expectations of the Company will be achieved.

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Overview

Orbital Energy Group is a platform company dedicated to maximizing shareholder value through the acquisition and development of innovative companies to create a diversified infrastructure services platform. Orbital Energy Group’s Electric Power and Solar Infrastructure Services segment provides comprehensive network solutions to customers in the electric power and solar industries. This segment includes Orbital Solar Services, Orbital Power Services and the Eclipse Foundation Group, Inc subsidiary launched during the quarter. Orbital Solar Services (formerly Reach Construction Group, LLC) was acquired by the Company as of April 1, 2020 and provides engineering, procurement and construction services that support the development of renewable energy generation focused on utility scale solar and community solar projects. The Company started its Orbital Power Services operations during the first three months of 2020 as a full-service provider of building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America. Eclipse Foundation Group, Inc., which began operations in January 2021, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains. Ramp-up costs at Orbital Power Services and start-up costs at Eclipse Foundation Group, Inc. contributed to lower margins and increased SG&A in the Electric Power and Solar Infrastructure Services segment during the three months ended March 31, 2021. The Company also continued to incur professional fees related to mergers and acquisitions as the Company pursues both organic and growth through acquisitions. The Company's Integrated Energy Infrastructure Solutions and Services Segment include subsidiaries, Orbital Gas Systems, Ltd., and Orbital Gas Systems, North America, Inc., which are leaders in innovative gas solutions with more than 30 years of experience in design, installation and the commissioning of industrial gas sampling, measurement and delivery systems providing solutions to the energy, power and processing markets. Orbital Gas Systems manufactures and delivers a broad range of technologies including environmental monitoring, gas metering, process control, telemetry, gas sampling and BioMethane. The three-month period ended March 31, 2021 for both segments were negatively affected by generally lower economic activity due to the COVID-19 pandemic that has caused economic slowdowns throughout the world.

In the first quarter of 2020, the Company launched Orbital Power Services. The first three months of 2020 included set up costs related to Orbital Power Services and the establishment of the Company's shared services center in Dallas, Texas as well as elevated professional fees related to mergers and acquisitions as the Company pivoted from its legacy Power and Electromechanical business that was divested in the second half of 2019 with the remaining Canada and Japan business being divested in 2020. The second half of the quarter was affected by generally lower economic activity due to the COVID-19 pandemic that caused economic slowdowns throughout the world, which slowed the Company's growth and has hampered growth in its electric power and solar infrastructure ventures. The first three months of 2020 also included a $0.4 million net loss of affiliate in Virtual Power Systems ("VPS"). 

For the three months ended March 31, 2021, Orbital Energy Group, Inc. had consolidated loss from operations of $17.3 million compared to consolidated loss from operations in the three months ended March 31, 2020 of $7.1 million. During the three months ended March 31, 2021, Orbital Energy Group, Inc. had a consolidated loss from continuing operations of $18.0 million compared to a loss of $7.0 million in the comparable prior year period.

During the three months ended March 31, 2021, Orbital Energy Group, Inc. had a consolidated net loss of $18.0 million compared to a consolidated net loss in the three months ended March 31, 2020 of $7.4 million. The higher net loss for the three months ended March 31, 2021, was primarily the result of higher cost of revenue and selling, general and administrative expense ("SG&A") in the Electric Power and Solar Infrastructure Services and Other segments. Cost increases were associated with the inclusion of the Orbital Solar Services business, acquired April 1, 2020, including amortization costs on Orbital Solar Service's acquisition intangibles, the ramp up of the Orbital Power Services business, and stock-based compensation. As the Company adds new service crews in the Orbital Power Services business, there is a certain amount of upfront costs related to that, including equipment and training before the new crews can start generating income for the Company. As the Company aggressively has ramped up the Orbital Power Services business, it has absorbed more of these type set-up costs than it will need to once all teams are in place and operating at full capacity. SG&A cost increases in the Other segment relate to mark to market adjustments on cash-based executive stock appreciation rights and employee performance bonus payments as well as continuing merger and acquisition costs. Partially offsetting the increased costs were decreased costs in the Integrated Infrastructure Solutions and Services segment related to lower sales volume and cost saving measures.

Revenues from continuing operations increased for the three months ended March 31, 2021 due to the continued ramp-up of Orbital Power Services and the addition of Orbital Solar Services. These increases were partially offset by lower sales in the Integrated Energy Infrastructure Solutions and Services segment. This is a result of the U.K.'s top line continuing to be affected by headwinds from Brexit and the COVID-19 pandemic and the effect of  the COVID-19 pandemic and related economic slow down on North American operations.

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Continuing Results of Operations

The following tables set forth, for the period indicated, certain financial information regarding revenue and costs by segment.

For the Three Months Ended March 31, 2021:

(dollars in thousands)	Electric Power and Solar Infrastructure Services			Percent of Segment Revenues			Integrated Energy Infrastructure Solutions and Services			Percent of Segment Revenues			Other			Percent of Segment Revenues			Total			Percent of Total Revenues
	$			%			$			%			$			%			$			%
Revenues	$	5,561			100.0	%	$	3,930			100.0	%	$	—			—	%	$	9,491			100.0	%
Cost of revenue		8,118			146.0	%		2,715			69.1	%		(36	)		—	%		10,797			113.8	%
Gross profit (loss)		(2,557	)		(46.0	)%		1,215			30.9	%		36			—	%		(1,306	)		-13.8	%
Operating expenses:
Selling, general and administrative		5,959			107.2	%		2,557			65.1	%		5,944			—	%		14,460			152.3	%
Depreciation and amortization		1,073			19.3	%		432			11.0	%		10			—	%		1,515			16.0	%
Research and development		—			—	%		1			—	%		—			—	%		1			—	%
Provision for bad debt		—			—	%		(19	)		(0.5	)%		—			—	%		(19	)		(0.2	)%
Total operating expenses		7,032			126.5	%		2,971			75.6	%		5,954			—	%		15,957			168.1	%
Loss from operations	$	(9,589	)		(172.5	)%	$	(1,756	)		(44.7	)%	$	(5,918	)		—	%	$	(17,263	)		(181.9	)%

For the Three Months Ended March 31, 2020:

(dollars in thousands)	Electric Power and Solar Infrastructure Services			Percent of Segment Revenues			Integrated Energy Infrastructure Solutions and Services			Percent of Segment Revenues			Other			Percent of Segment Revenues			Total			Percent of Total Revenues
	$			%			$			%			$			%			$			%
Revenues	$	399			100.0	%	$	5,289			100.0	%	$	—			—	%	$	5,688			100.0	%
Cost of revenue		1,382			346.4	%		3,747			70.8	%		—			—	%		5,129			90.2	%
Gross profit		(983	)		(246.4	)%		1,542			29.2	%		—			—	%		559			9.8	%
Operating expenses:
Selling, general and administrative		1,075			269.4	%		2,963			56.0	%		3,154			—	%		7,192			126.4	%
Depreciation and amortization		—			0.0	%		399			7.6	%		8			—	%		407			7.2	%
Research and development		—			0.0	%		17			0.3	%		—			—	%		17			0.3	%
Provision for bad debt		—			0.0	%		6			0.1	%		—			—	%		6			0.1	%
Other operating expenses		—			0.0	%		—			0.0	%		—			—	%		—			0.0	%
Total operating expenses		1,075			269.4	%		3,385			64.0	%		3,162			—	%		7,622			134.0	%
Loss from operations	$	(2,058	)		(515.8	)%	$	(1,843	)		(34.8	)%	$	(3,162	)		—	%	$	(7,063	)		(124.2	)%

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Revenue

(dollars in thousands)

	For the Three Months Ended
Revenues by Segment	March 31,
	2021		2020		$ Change			% Change
Electric Power and Solar Infrastructure Services	$	5,561	$	399	$	5,162			1293.7	%
Integrated Energy Infrastructure Solutions and Services		3,930		5,289		(1,359	)		(25.7	)%
Total revenues	$	9,491	$	5,688	$	3,803			66.9	%

The revenues for the three months ended March 31, 2021 increased compared to the 2020 comparable period due to the addition of Orbital Solar Services, the ramp up of Orbital Power Services and the start-up of Eclipse Foundation Group, Inc. in the Electric Power and Solar Infrastructure Services segment. This increase was partially offset by lower integration revenues in the Orbital Gas Systems operations during the quarter. The U.K. market continues to face headwinds surrounding COVID-19, Brexit, and the impact of the political environment on investment within the sector while the U.S. markets also continue to face headwinds surrounding COVID-19. Revenues will fluctuate generally around the timing of customer project delivery schedules.

The Electric Power and Solar Infrastructure Services Segment held backlogs of customer orders of approximately $48.3 million as of March 31, 2021 and $30.3 million at December 31, 2020. Increases to the backlog are due to the ramp up of the Orbital Power Services business partially offset by a decrease in the Orbital Solar Services backlog compared to December 31, 2020. The Integrated Energy Infrastructure Solutions and Services segment held backlogs of customer orders of approximately $13.9 million as of March 31, 2021, an increase from the  December 31, 2020 backlog of $10.1 million due to the slow improvement in the business climate in both the U.S. and U.K. markets. 

Cost of revenues

(dollars in thousands)

	For the Three Months Ended
Cost of revenues by Segment	March 31,
	2021			2020		$ Change			% Change
Electric Power and Solar Infrastructure Services	$	8,118		$	1,382	$	6,736			487.4	%
Integrated Energy Infrastructure Solutions and Services		2,715			3,747		(1,032	)		(27.5	)%
Other		(36	)		—		(36	)		(100.0	)%
Total cost of revenues	$	10,797		$	5,129	$	5,668			110.5	%

For the three months ended March 31, 2021, the cost of revenues as a percentage of revenue increased to 114% from 90%, from the prior-year period. This increase was attributable to ramp-up costs at the Company's Orbital Power Services group, start-up costs at Eclipse Foundation Group, Inc. and lower margin projects during the period for Orbital Solar Services. Additionally, adverse weather negatively impacted several of Orbital Power Services' fixed price jobs, which are now complete. Margin percentages will vary based upon the mix of natural gas systems sold, proprietary technology included in projects, contract labor necessary to complete gas related projects, mix of Orbital Power Services projects including emergency response services, new crew onboarding costs, Orbital Solar Services solar projects, the competitive markets in which the Company competes, and foreign exchange rates. The three months ended March 31, 2020 were also affected negatively by the COVID-19 pandemic and the resulting world-wide economic slowdown.

The Company expects improvement in margins during 2021 as Orbital Power Services continues to gain efficiencies and increase revenues, companies continue to learn to cope with the COVID-19 pandemic, and several large Orbital Solar Services solar projects begin. 

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Selling, General and Administrative Expenses

(dollars in thousands)

	For the Three Months Ended
Selling, general, and administrative expense by Segment	March 31,
	2021		2020		$ Change			% Change
Electric Power and Solar Infrastructure Services	$	5,959	$	1,075	$	4,884			454.3	%
Integrated Energy Infrastructure Solutions and Services		2,557		2,963		(406	)		(13.7	)%
Other		5,944		3,154		2,790			88.5	%
Total selling, general and administrative expense	$	14,460	$	7,192	$	7,268			101.1	%

Selling, General and Administrative (SG&A) expenses include such items as wages, commissions, consulting, general office expenses, business promotion expenses and costs of being a public company, including legal and accounting fees, insurance and investor relations. SG&A expenses are generally associated with the ongoing activities to reach new customers, promote new product and service lines including Orbital Solar Services, Orbital Power Services, Orbital Gas Systems, Orbital Telecom Services and other new product and service introductions.

During the three months ended March 31, 2021, SG&A increased $7.3 million compared to the prior-year comparative period. The increase in SG&A for the quarter was due to increased SG&A costs in the Electric Power and Solar Infrastructure Services segment primarily due to ramp-up costs at Orbital Power Services group, which included increased payroll and insurance costs and start-up costs at Eclipse Foundation Group, as well as $2.0 million of employee stock-based compensation vesting expense. Also contributing to the increase were increased corporate costs in the Other segment due to an increase in the mark to market adjustment to the executive cash-based stock appreciation rights and employee performance bonuses. The addition of Orbital Solar Services compared to the first three months of 2020, which was prior to Orbital Solar Service's acquisition, also contributed to the increase in SG&A costs. These increases were partially offset by decreased SG&A costs in the Integrated Energy Infrastructure Solutions and Services segment due to cost saving measures.

Depreciation and Amortization

(dollars in thousands)

	For the Three Months Ended
Depreciation and amortization expense by Segment	March 31,
	2021		2020		$ Change		% Change
Electric Power and Solar Infrastructure Services	$	1,305	$	79	$	1,226		1551.9	%
Integrated Energy Infrastructure Solutions and Services		432		399		33		8.3	%
Other		10		8		2		25.0	%
Total depreciation and amortization	$	1,747	$	486	$	1,261		259.5	%

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Depreciation and amortization expenses are associated with depreciation on buildings, furniture, equipment, vehicles, and amortization of intangible assets over the estimated useful lives of the related assets.

Depreciation and amortization expense in the three months ended March 31, 2021 were up compared to the three months ended March 31, 2020 primarily due to the amortization of Orbital Solar Services acquisition intangibles and depreciation of equipment used by Orbital Power Services and Eclipse Foundation Group, Inc, which began operations in the first quarter of 2020, and 2021, respectively. 

Equity Method/Cost Method Investment

The Company owns a cost-basis investment in VPS with a book value at March 31, 2021 of $1.1 million. Through June 30, 2020, the Company accounted for its investment in VPS under the equity method of accounting and accordingly recorded income or loss of affiliate based on the equity method of accounting. The Company recorded losses in the first three months of 2020 of $0.4 million, related to its share of VPS's loss. Due to additional outside investments into VPS during the third quarter of 2020, which diluted OEG's ownership percentage coupled with increased board seats reducing OEG's board influence, the Company's management determined that it no longer met the qualification of having significant influence necessary to record its investment under the equity method of accounting. Following this change, the Company has recorded its investment under the cost method of accounting. There were no changes in the basis in the Company's investment in the first three months of 2021.

Other Income (Expense), net

(dollars in thousands)

	For the Three Months Ended
Other Income (Expense), net	March 31,
	2021			2020			$ Change			% Change
Foreign exchange gain (loss)	$	95		$	(1,200	)	$	1,295			(107.9	)%
Interest income		81			70			11			15.7	%
Rental income		113			98			15			15.3	%
Loss on Extinguishment of debt		(250	)		—			(250	)		(100.0	)%
Other income		24			—			24			100.0	%
Total Other income (expense)	$	63		$	(1,032	)	$	1,095			(106.1	)%

Other income (expense) changes were primarily the result of foreign currency gain/loss fluctuations principally related to the fluctuations in the U.K. pound, partially offset by the loss on the extinguishment of debt due to the amendment to remove the convertible equity feature of its convertible debt during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. During the first three months ended 2020 the primary driver of Other income (expense) was the loss on foreign exchange primarily related to the weakening of the British Pound.

Interest Expense

For the three months ended March 31, 2021 and 2020, the Company incurred interest expense of $0.7 million compared to interest for the three months ended March 31, 2020 of $11 thousand. The increase in interest expense in 2021 is related to the increase in notes payable outstanding in the three months ended March 31, 2021 compared to the three months ended March 31, 2020. See note 16 for more information on the Company's notes payable.

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Income Tax Expense (Benefit)

The Company is subject to taxation in the U.S., various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and United Kingdom net deferred tax assets and partial valuation allowance against the Company’s Canada net deferred tax assets, as it is not more likely than not that the Company will realize a benefit from these assets in a future period.

The income tax expense for the three months ended March 31, 2021 include domestic state minimum taxes.

For the three months ended March 31, 2020, the Company is allocating income tax expense (benefit) in accordance to ASC 740-20-45-7 to more than one financial statement component other than continuing operations. Prior period comparative allocations have also been made.

In the three months ended March 31, 2020, as a result of HM Revenue & Customs review, the Company recorded a $1.6 million tax benefit for estimated prior year taxes related to refunds for the surrender for cash, United Kingdom net operating losses generated related to enhanced research and development deduction claims.

For additional analysis, see Note 14, "Income Taxes," of the condensed consolidated financial statements in Part I - Item I, "Financial Statements."

Restructuring Charges

During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of September 30, 2020 and completed the disposal of Canada's assets in the fourth quarter of 2020. The Company recorded an accrued liability of $4.0 million Canadian dollars ($3.1 million US dollars at December 31, 2019) for estimated employee termination costs. This accrual was adjusted down by $0.3 million Canadian dollars ($0.2 million US dollars) in 2020 based on updated estimates. The termination costs began to be paid out in the third quarter of 2020 and the majority of the remaining accrual was paid in the fourth quarter of 2020. The Company paid out an additional $0.2 million of termination benefits in the first three months of 2021 and expect to pay the remaining $0.2 million during the remainder of 2021. For more information on the Company's restructuring charges, see Note 1 Nature of Operations, Basis of Presentation and Company Conditions under the Restructuring Charges subheading.

Liquidity and Capital Resources

General

As of March 31, 2021, the Company held Cash and cash equivalents of $34.7 million and Restricted cash of $1.2 million. Operations, investments, and equipment have been funded through cash on hand, the issuance of common stock authorized by its July 2020 S-3 filing, seller financing, the issuance of debt and financing through the sale of future revenues. The Company's cash used in operations was more in the first three months of 2021 than in the first three months of 2020 primarily driven by a larger net loss in the first three months of 2021 compared to the first three months of 2020. Major uses of cash in the first three months of 2021 included purchases of property and equipment, completion of the purchase of the VE Technology and changes in working capital. The Company continues to work to improve its short-term liquidity through management of its working capital. Long-term liquidity is expected to benefit from revenue growth and earnings through its existing operations. Overall volume growth in the Company's businesses both organically and through acquisitions are expected to benefit cash flows as well. In addition, the Company filed an S-3 in February of 2021 which became effective in April 2021 for the possible issuance of additional stock or public debt.

Cash Used in Operations

Cash used in operations of $13.5 million was a $5.8 million increase in cash used compared to the three-month period in 2020. Cash used in operations for the three months ended March 31, 2021 were approximately $6.5 million in the other segment, $5.7 million in the Electric Power and Solar Infrastructure Services segment and $1.3 million in the Integrated Energy Infrastructure Solutions and Services segment. Included in the Other segment is a $0.3 million source of cash related to the former discontinued operations of the Power and Electromechanical segment, which was primarily the collection of trade accounts receivable. This compares to prior year three-month-period cash used of approximately $4.0 million used in the Other segment, $1.7 million used for the Electric Power and Solar Infrastructure Services segment $0.9 million for the Integrated Energy Infrastructure Solutions and Services segment and $1.1 million related to the discontinued Power and Electromechanical segment.

Increased uses of cash in the first three months of 2021 are primarily for merger and acquisition activity in the Other segment in addition to normal administrative costs, cash usage in the Electric Power and Solar Infrastructure Services segment primarily related to ramp-up costs on the Company's Orbital Power Services group, start-up costs by Eclipse Foundation Group, Inc. and cash used by Orbital Solar Services operations. While the Company saw an initial cost increase from Orbital Power Services and Eclipse Foundation Group, Inc., management expects these groups to become cash flow positive, as the business environment normalizes and the Company continues to increase revenue-generating service crews deployed. The Company believes overall cash used in operations will improve through revenue growth associated with new customers and larger projects, the additional cash expected from operations of Orbital Solar Services when it starts gaining contracts with solar developers including performing as company "of choice" for the recently-formed Black Sunrise Century Fund, which over the next three years is expected to build over 1 gigawatt of solar power. 

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The change in cash used in operating activities, exclusive of net loss, is primarily the result of the following line items: payment towards accounts payable of $4.3 million was mostly due to timing of payments following increased liquidity after the issuance of $45 million of common stock in January 2021, increased cash used for right of use assets, which are partially offset by increased lease liabilities, related to the ramp up of the Orbital Power Services group and start-up of the Eclipse Foundation Group, Inc. This use of cash was partially offset by an increase of $1.3 million of accrued payables, which included increased accrued compensation of $0.8 million, which included employee performance bonuses. In addition, there was a $1.9 million non-cash fair value adjustment to the cash-settled executive stock appreciation rights. Timing of cash receipts on trade accounts receivable was a $1.7 million source of cash, which related to sources of cash at Orbital Solar Services, Orbital Power Services, and receipts of final sales at CUI-Canada, partially offset by a buildup of receivables at both Orbital Gas Systems and Eclipse Foundation Group. Changes in prepaid expenses of $0.8 million was a source of cash and were due to timing of payments primarily related to changes in prepaid expenses at Orbital-UK, Orbital Power Services, and the Other segment. 

During the three months ended March 31, 2021 and 2020, the Company recorded a total of $2.6 million and $3 thousand, respectively, for share-based compensation related to equity given, or to be given to directors, employees and consultants for services provided and as payment for royalties earned. The increase in expense during the first three months of 2021 compared to the first three months of 2020 is primarily due to employee stock-based bonuses and increased director stock-based compensation in 2021 compared to director stock-based compensation in the first three months of 2020 when director compensation was being accrued as cash compensation while the structure of their compensation was being evaluated. 

S-3 registration

The Company filed an S-3 registration statement on July 17, 2020 containing a prospectus that was effective in September 2020. The Company utilized this filing in January 2021 to issue common stock for $45 million before costs. The Company filed a new S-3 shelf registration in January 2021, which, as amended, became effective in April 2021. With this filing, Orbital Energy Group may from time to time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of $150 million.

As the Company focuses on growing its infrastructure services market presence both organically and through strategic acquisitions, technology development, product and service line additions, and increasing Orbital’s market presence, it will fund these activities together with related operating, sales and marketing efforts for its various product offerings with cash on hand, and possible proceeds from future issuances of equity through the S-3 registration statement, and available debt.

Orbital Energy Group may raise additional capital needed to fund the further development and marketing of its products and services as well as payment of its debt obligations.

See the section entitled Recent Sales of Unregistered Securities for a complete listing of all unregistered securities transactions.

Capital Expenditures and Investments

During the first three months of 2021 and 2020, Orbital Energy Group invested $2.9 million and $1.3 million, respectively, in property and equipment. These purchases in 2021 were primarily for capital assets associated with the Company's Orbital Power Services group and Eclipse Foundation Group. These investments typically include additions to equipment including vehicles and equipment for powerline service and maintenance, engineering and research and development, furniture, computer equipment for office personnel, facilities improvements and other fixed assets as needed for operations. The Company anticipates further investment in fixed assets during 2021 in support of its on-going business and continued development of product lines, technologies and services.

The Company entered into a $3 million note receivable with Orbital Solar Services during the three months ended March 31, 2020 prior to the April 1 acquisition. This payment became part of the Company's purchase consideration upon the close of the acquisition.

Also during the first three months ended March 31, 2020, the Company made an additional $0.2 million investment in a convertible note receivable from Virtual Power Systems ("VPS"). 

During the three months ended March 31, 2021 and 2020, Orbital Energy Group invested $0.7 million and $4 thousand, respectively, in other intangible assets. These investments typically include patents, intellectual property rights, capitalized website development, software for engineering and research and development and software upgrades for office personnel. The $0.7 million payment in 2021 was the final payment to acquire the intellectual property rights and know-how associated with the VE Technology.

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The Company also paid out $2.8 million in the three months ended March 31, 2020 related to a working capital adjustment on the disposition of the domestic power business to Bel Fuse, Inc in accordance with the sale agreement.

Financing Activities

In the three months ended March 31, 2021, the Company issued a total of 15.6 million shares of commons stock in two separate equity raises with a face amount of $45.0 million for which the Company netted $42.4 million after expenses. For the three months ended March 31, 2021, the Company received cash proceeds of $9.7 million for the issuance of debt with a face value of $10.7 million and a stated interest rate of 9% and an estimated effective rate of 19.6%. In the three months ended March 31, 2021 and 2020 the Company made payments on notes payable of $3.2 million and $0.4 million, respectively, including $1.0 million in 2021 toward the seller notes payable related to the April 2020 acquisition of Orbital Solar Services. See Note 16 for more information on the Company's notes payable. In addition, the Company paid $0.4 million in the three months ended March 31, 2021 to close its line of credit that was acquired with the Orbital Solar Services business.

Recap of Liquidity and Capital Resources

At March 31, 2021, the Company had unrestricted cash and cash equivalents balances of $34.7 million. At March 31, 2021, the Company had $1.1 million of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposits programs and $0.1 million and $79 thousand, at foreign financial institutions covered under the United Kingdom Financial Services Compensation (FSC) and Canada Deposit Insurance Corporation (CDIC), respectively. At March 31, 2021, the Company had cash and cash equivalents of $1.4 million in European bank accounts and $86 thousand in Canadian bank accounts.

The Company had a net loss of $18.0 million and cash used in operating activities of $13.5 million during the three months ended March 31, 2021. As of March 31, 2021, the Company's accumulated deficit is $167.6 million.

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The Company expects the revenues from its continuing operations, and cash on hand, to cover operating and other expenses for the next twelve months of operations. However, in the short-term, the Company expects to continue to need cash support as the Company's businesses increase their market positions and revenue. The Company may issue additional debt or equity to support continuing operations in 2021.

Critical Accounting Policies

The Company has adopted various accounting policies to prepare the consolidated financial statements in accordance with Generally Accepted Accounting Principals, ("GAAP"). Certain of the Company's accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. In the Company's 2020 Annual Report on Form 10-K filed on March 30, 2021, the Company identified the critical accounting policies that affect the Company's more significant estimates and assumptions used in preparing the Company's consolidated financial statements.

Adoption of new accounting standards

See Note 2 Summary of Significant Accounting Policies - Update of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of recent accounting pronouncement adoptions, including the dates of adoption and effects on financial position, results of operations and cash flows if any.

Recent Accounting Pronouncements

See Note 11 Recent Accounting Pronouncements of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects on financial position, results of operations and cash flows.

Off-Balance Sheet Arrangements

See Note 20 Commitments and Contingencies of the condensed consolidated financial statements in Part I—Item I, “Financial Statements” for a description of the Company's off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

The Company is exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact the Company’s financial position due to adverse changes in financial market prices and rates. This market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates. The Company neither holds nor issues financial instruments for trading purposes.

The following sections provide quantitative information on the Company’s exposure to foreign currency exchange rate risk. The Company makes use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

Foreign Currency Exchange Rates

The Company conducts continuing operations in two principal currencies: the U.S. dollar and the British pound sterling. These currencies operate primarily as the functional currency for the Company’s U.S. and U.K. operations, respectively. Cash is managed centrally within each of the two regions.

Because of fluctuations in currency exchange rates, the Company is subject to currency translation exposure on the results of its operations. Foreign currency translation risk is the risk that exchange rate gains or losses arise from translating foreign entities’ statements of earnings and balance sheets from functional currency to the Company’s reporting currency, the U.S. dollar, for consolidation purposes. As currency exchange rates fluctuate, translation of the Company’s statements of operations into U.S. dollars affects the comparability of revenues and operating expenses between years.

Revenues and operating expenses from continuing operations are primarily denominated in the currencies of the countries in which the Company’s operations are located, the U.S. and U.K. The Company’s consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates.

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The tables below detail the percentage of revenues and expenses from continuing operations by the two principal currencies:

				British Pound
	U.S. Dollar			Sterling
For the Three Months Ended March 31, 2021
Revenues		73	%		27	%
Operating expenses		89	%		11	%
For the Three Months Ended March 31, 2020
Revenues		49	%		51	%
Operating expenses		74	%		26	%

To date, the Company has not entered into any hedging arrangements with respect to foreign currency risk and have limited activity with forward foreign currency contracts or other similar derivative instruments. The Company believes that during the three months ended March 31, 2021, the effect of a hypothetical 100 basis point shift in foreign currency exchange rates applicable to the Company’s business would not have had a material impact on the Company’s condensed consolidated financial statements.

Brexit Risk

On January 31, 2020, the United Kingdom (“UK”) formally withdrew from the European Union (“EU”), entering a transitional period which came to an end on December 31, 2020. During this transitional period, EU law continued to apply in the UK while providing time for the UK and EU to negotiate the details of their future relationship. Now that the transition has ended, the two sides are free to negotiate new trade agreements. The impact of the withdrawal may adversely affect business activity, political stability and economic conditions in the UK, the European Union and elsewhere. The economic conditions and outlook could be further adversely affected by the uncertainty concerning new or modified trading arrangements between the UK and other countries. Any of these developments could negatively affect economic growth or business activity in the UK, the European Union and elsewhere, and could materially and adversely affect our business and results of operations. We continue to closely monitor the negotiations and the impact to foreign currency markets, however we cannot predict the direction of Brexit-related developments or the impact of those developments on our UK operations and the economies of the markets in which we operate.

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Investment Risk

The Company has an Investment Policy that, among other things, provides an internal control structure that takes into consideration safety (credit risk and interest rate risk), liquidity and yield. The Company’s investment committee consists of two independent Directors and the CFO, who oversee the investment portfolio and compile a quarterly analysis of the investment portfolio, if any investments exist during the period.

Investments made by the Company are subject to Investment committee Charter and investment policy, which limits the Company’s risk of loss exposure by setting appropriate credit quality requirements for investments held, limiting maturities to be 1 year or less, and also setting appropriate concentration levels to prevent concentrations. This includes a requirement that no more than 3% of the portfolio, or $0.5 million, whichever is greater, may be invested in one particular issue. In 2019, since the equity-method investment in VPS was considered a strategic investment, the board and management reviewed and approved the investment above the board set limit for individual issuers.

Cash and cash equivalents are diversified and maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.

The Company has trade receivable and revenues concentrations with large customers. Additionally, the Company has a large concentration of cash, trade receivables and revenues in foreign countries including the United Kingdom and Canada. Owning assets in a foreign country exposes the Company to foreign currency risk coupled with liquidity risk. Foreign owned assets may be difficult to timely convert to U.S. dollars if necessary.

Item 4. Controls and Procedures. 

Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer (CEO) and its Chief Financial Officer (CFO), evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management is required to apply their judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon that evaluation, the Company's management, including the CEO and the CFO, concluded that, as of March 31, 2021, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There were no significant changes in the Company’s internal control over financial reporting during the three months ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART ll – OTHER INFORMATION

Item 1. Legal Proceedings.

Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.

Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. The Company currently has no such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. None of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.’s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management’s judgment may prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.

Item 1A. Risk Factors.

There are no material changes from Risk Factors as previously disclosed in the Company’s Form 10-K filed with the Commission on March 30, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. Common Stock Issued.

During the three months ended March 31, 2021, the Company issued the following shares of common stock, which were not registered under the Securities Act. The Company relied on Section 4(2) of the Securities Act of 1933 as the basis for an exemption from registration for the following issuances.

Date of issuance	Type of issuance	Expense/Prepaid/Cash	Stock issuance recipient	Reason for issuance	Total no. of shares		Grant date fair value recorded at issuance (in thousands)
January 2021	Common stock	Expense	Four directors	Director compensation		23,148	$	50
January 2021	Common stock	Expense	Employee	Employee bonus		11,415		25
February 2021	Common stock	Expense	Consultant	Services		5,625		22
February 2021	Common stock	Cashless exercise	Employee	Stock option exercise		214,596		—
						254,784	$	97

Item 5. Other Information.

Debt Agreement

On May 11, 2021, Orbital Energy Group, Inc. (the “Company”) completed a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor an unsecured instrument in the principal amount of $10,715,000 (the “Note”). Upon the closing on May 11, 2021, the Company received gross proceeds of $10,715,000, before fees and other expenses associated with the transaction, including but not limited to, a $700,000 original issue discount payable to the Investor. The net proceeds received by the Company will be used primarily for working capital, future acquisitions, and general corporate purposes.

The Note is payable in full within eighteen (18) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of nine percent (9%) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. The Company has the right to prepay all or any portion of the outstanding balance in an amount equal to 115% multiplied by the portion of the outstanding balance to be prepaid.

Beginning six (6) months from the purchase price date, Investor has the right, in its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption Amount”) subject to the maximum monthly redemption amount of $1,000,000 per calendar month, by providing Company with a “Redemption Notice."

The Note Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties thereto, and termination provisions.

The foregoing does not purport to be a complete description of the Note Purchase Agreement and is qualified in its entirety by reference to the full text of such documents and attachments which are attached as Exhibits to this Report and are incorporated by reference herein.

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Item 6. Exhibits.

The following exhibits are included as part of this Form 10-Q.

Exhibit No.	Description
10.112 1	Note Purchase Agreement with institutional investor for issuance of note payable dated May 11, 2021
31.1 1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
31.2 1	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934
32.1 1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
32.2 1	Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350
101.INS 1	XBRL Instance Document
101.SCH 1	XBRL Taxonomy Extension Schema Document

101.CAL 1	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF 1	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB 1	XBRL Taxonomy Extension Label Linkbase Document
101.PRE 1	XBRL Taxonomy Extension Presentation Linkbase Document

Footnotes to Exhibits:

¹Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Signed and submitted this 17th day of May, 2021.

	Orbital Energy Group, Inc.
By:	/s/ James F. O'Neil
	James F. O'Neil,
	Chief Executive Officer
	(Principle Executive Officer)
By:	/s/ Daniel N. Ford
	Daniel N. Ford,
	Chief Financial Officer
	(Principle Financial Officer)

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EX-10.112

Exhibit 10.112

NO T E PU R C H A S E AG R E E M E N T

THIS NOTE PURCHASE AGREEMENT (this “Agreement”), dated as of May 11, 2021, is entered into by and between ORBITAL ENERGY GROUP, INC., a Colorado corporation (“Company”), and STREETERVILLE CAPITAL, LLC, a Utah limited liability company, its successors and/or assigns (“Investor”).

A.    Company and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by the United States Securities and Exchange Commission (the “SEC”).

B.    Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a Promissory Note, in the form attached hereto as Exhibit A, in the original principal amount of $10,715,000.00 (the “Note”).

C.    This Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction Documents”.

NOW, THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Company and Investor hereby agree as follows:

1. Purchase and Sale of Note.

1.1.    Purchase of Note. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration thereof, Investor shall pay the Purchase Price (as defined below) to Company.

1.2.    Form of Payment. On the Closing Date (as defined below), Investor shall pay the Purchase Price to Company via wire transfer of immediately available funds against delivery of the Note.

1.3.    Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be May 11, 2021, or another mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.

1.4.    Collateral for the Note. The Note shall be unsecured.

1.5.    Original Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $700,000.00 (the “OID”). In addition, Company agrees to pay $15,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of the Note (the “Transaction Expense Amount”), all of which amount is included in the initial principal balance of the Note. The “Purchase Price”, therefore, shall be $10,000,000.00, computed as follows: $10,715,000.00 initial principal balance, less the OID, less the Transaction Expense Amount.

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2.    Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i) this Agreement has been duly and validly authorized; (ii) this Agreement constitutes a valid and binding agreement of Investor enforceable in accordance with its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

3.    Company’s Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary; (iii) Company has registered its Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of the Note in accordance with the terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any listing agreement for the Common Stock, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment, or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender of Company is required to be obtained by Company for the issuance of the Note to Investor or the entering into of the Transaction Documents; (viii) none of Company’s filings with the SEC contained, at the time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration of any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company before or by any governmental authority or non- governmental department, commission, board, bureau, agency or instrumentality or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which would adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under, any of the Transaction Documents; (xi) Company has not consummated any financing transaction that has not been disclosed in a periodic filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors, members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section 8.2 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; and (xvii) Company has performed due diligence and background research on Investor and its affiliates including, without limitation, John M. Fife, and, to its satisfaction, has made inquiries with respect to all matters Company may consider relevant to the undertakings and relationships contemplated by the Transaction Documents including, among other things, the following: http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC; SEC Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D. Ill.); and FINRA Case #2011029203701. In addition, various affiliates of Investor are involved in ongoing litigation with the SEC regarding broker-dealer registration (see SEC Civil Case No. 1:20-cv-05227 (N.D. Ill.)). Company, being aware of the matters described in subsection (xvii) above, acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use any such information as a defense to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify or reduce such obligations.

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4.    Company Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full, or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so long as Investor beneficially owns the Note and for at least twenty (20) Trading Days (as defined in the Note) thereafter, Company will timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination; (ii) the Common Stock shall be listed or quoted for trading on either NYSE or Nasdaq; (iii) trading in Company’s Common Stock will not be suspended, halted, chilled, frozen, reach zero bid or otherwise cease trading on Company’s principal trading market; (iv) Company will not make any Restricted Issuance (as defined below) where Company receives net proceeds in an amount less $20,000,000.00 without Investor’s prior written consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; and (vi) Company will not enter into any financing transaction with John Kirkland or any entity owned by or affiliated with John Kirkland. For purposes hereof, the term “Restricted Issuance” means any issuance of any Company securities that (A) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common Stock, or (B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible following an event of default, the passage of time, or another trigger event or condition. For avoidance of doubt, the issuance of shares of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument, whether convertible or not, is deemed a Restricted Issuance for purposes hereof if the number of shares of Common Stock to be issued is based upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange.

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5.    Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Note to Investor at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:

5.1.     Investor shall have executed this Agreement and delivered the same to Company.

5.2.    Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.

6.    Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note at the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:

6.1.    Company shall have executed this Agreement and the Note and delivered the same to Investor.

6.2.    Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as Exhibit B evidencing Company’s approval of the Transaction Documents.

6.3.    Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company herein or therein.

7.    Terms of Future Financings. So long as the Note is outstanding, upon any issuance by Company of any security with any term or condition more favorable to the holder of such security or with a term in favor of the holder of such security that was not similarly provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more favorable term and such term, at Investor’s option, shall become a part of the Transaction Documents for the benefit of Investor. Additionally, if Company fails to notify Investor of any such additional or more favorable term, but Investor becomes aware that Company has granted such a term to any third party, Investor may notify Company of such additional or more favorable term and such term shall become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable third party. The types of terms contained in another security that may be more favorable to the holder of such security include, but are not limited to, terms addressing conversion rights, interest rates, original issue discounts, stock sale price, conversion price per share, warrant coverage, warrant exercise price, and anti-dilution/conversion and exercise price resets.

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8.    Miscellaneous. The provisions set forth in this Section 8 shall apply to this Agreement, as well as all other Transaction Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth in this Section 8 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.

8.1.    Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit C) arising under this Agreement or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C attached hereto (the “Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section 8.3 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding the Arbitration Provisions.

8.2.    Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 8.9 below prior to bringing or filing, any action that is related in any way to the Transaction Documents or any transaction contemplated herein or therein, and further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing law and venue provisions set forth in this Section 8.2 are material terms to induce Investor to enter into the Transaction Documents and that but for Company’s agreements set forth in this Section 8.2 Investor would not have entered into the Transaction Documents.

8.3.    Specific Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition to any other remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically agrees that following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its common or preferred stock to any party unless the Note is being paid in full simultaneously with such issuance. Company specifically acknowledges that Investor’s right to obtain specific performance constitutes bargained for leverage and that the loss of such leverage would result in irreparable harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain an injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document, such action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in equity, including without limitation its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall Investor’s pursuit of an injunction prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing other Claims in the future in a separate arbitration.

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8.4.    Counterparts. Each Transaction Document may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties acknowledge and agree that this Agreement and all other Transaction Documents may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. The parties hereto confirm that any electronic copy of another party’s executed counterpart of a Transaction Document (or such party’s signature page thereof) will be deemed to be an executed original thereof.

8.5.    Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

8.6.    Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

8.7.    Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents shall govern.

8.8.    Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties hereto.

8.9.    Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):

If to Company:

Orbital Energy Group, Inc. Attn: James O’Neil

1924 Aldine Western

Houston, Texas 77038

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If to Investor:

Streeterville Capital, LLC Attn: John Fife

303 East Wacker Drive, Suite 1040

Chicago, Illinois 60601

With a copy to (which copy shall not constitute notice): Hansen Black Anderson Ashcraft PLLC

Attn: Jonathan Hansen

3051 West Maple Loop Drive, Suite 325 Lehi, Utah 84043

8.10.    Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties hereunder, whether directly or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation shall be null and void.

8.11.    Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

8.12.    Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

8.13.    Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order as Investor may deem expedient.

8.14.    Attorneys’ Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the other to interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing party all costs and expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The “prevailing party” shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on all claims asserted by such party and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments are entered in favor of and against both parties, then the arbitrator shall determine the “prevailing party” by taking into account the relative dollar amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value of such relief. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for frivolous or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes action to collect amounts due under the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization, receivership of Borrower or other proceedings affecting Borrower’s creditors’ rights and involving a claim under the Note; then Borrower shall pay the costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and disbursements.

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8.15.    Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

8.16.    Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

8.17.    Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the other Transaction Documents.

8.18.    Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or undue influence by Investor or anyone else.

8.19.    Document Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments, documents, and items and records governing, arising from or relating to any of Borrower’s loans, including, without limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed to be of the same force and effect as the original manually executed document.

[Remainder of page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.

SUBSCRIPTION AMOUNT:

Principal Amount of Note:	$10,715,000.00
Purchase Price:	$10,000,000.00

INVESTOR:
STREETERVILLE CAPITAL, LLC
By:	/s/ John M. Fife,
	John M. Fife, President

COMPANY: ORBITAL ENERGY GROUP, INC.
By:	/s/ William Clough
Printed Name:	William Clough
Title:	Executive Chairman

[Signature Page to Note Purchase Agreement]

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P R O M I S S O R Y N O T E

Effective Date: May 11, 2021  U.S. $10,715,000.00

FOR VALUE RECEIVED, ORBITAL ENERGY GROUP, INC., a Colorado corporation (“Borrower”), promises to pay to STREETERVILLE CAPITAL, LLC, a Utah limited liability company, or its successors or assigns (“Lender”), $10,715,000.00 and any interest, fees, charges, and late fees accrued hereunder on the date that is eighteen (18) months after the Purchase Price Date (the “Maturity Date”) in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of nine percent (9%) per annum from the Purchase Price Date (as defined below) until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30)    day months, shall compound daily and shall be payable in accordance with the terms of this Note. This Promissory Note (this “Note”) is issued and made effective as of May 11, 2021 (the “Effective Date”). This Note is issued pursuant to that certain Note Purchase Agreement dated May 11, 2021, as the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

This Note carries an OID of $700,000.00. In addition, Borrower agrees to pay $15,000.00 to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note (the “Transaction Expense Amount”), all of which amount is included in the initial principal balance of this Note. The purchase price for this Note shall be $10,000,000.00 (the “Purchase Price”), computed as follows: $10,715,000.00 original principal balance, less the OID, less the Transaction Expense Amount.

1. Payment; Prepayment; Credit Risk Premium.

1.1.    Payment. All payments owing hereunder shall be in lawful money of the United States of America and delivered to Lender at the address or bank account furnished by Lender to Borrower for that purpose. All payments shall be applied first to (a) Lender’s reasonable costs of collection, if any, then to (b) fees and charges hereunder, if any, then to (c) accrued and unpaid interest hereunder, and thereafter, to (d) principal hereunder.

1.2.    Prepayment. Borrower may pay all or any portion of the Outstanding Balance earlier than it is due; provided that in the event Borrower elects to prepay all or any portion of the Outstanding Balance, it shall pay to Lender 115% of the portion of the Outstanding Balance Borrower elects to prepay. Early payments of less than all principal, fees and interest outstanding will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s remaining obligations hereunder.

1.3.    Credit Risk Premium. If Borrower’s Market Capitalization on the date that is twelve (12) months from the Effective Date is less than twenty (20%) of the Market Capitalization on the Effective Date, then the Outstanding Balance will automatically and without further action increase by twenty percent (20%). For the avoidance of doubt, such decrease in the Market Capitalization shall not be considered an Event of Default (as defined below) hereunder.

2. Security. This Note is unsecured.

3.    Redemption. Beginning on the date that is six (6) months after the Purchase Price Date, Lender shall have the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of this Note up to $1,000,000.00 (such amount, the “Redemption Amount”) per calendar month by providing written notice to Borrower (each, a “Redemption Notice”). For the avoidance of doubt, Lender may submit to Borrower one (1) or more Redemption Notices in any given calendar month so long as the aggregate amount being redeemed in such month does not exceed $1,000,000.00. Upon receipt of any Redemption Notice, Borrower shall pay the applicable Redemption Amount in cash to Lender within three (3) Trading Day of Borrower’s receipt of such Redemption Notice.

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4. Trigger Events; Defaults; Remedies.

4.1.    Trigger Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to pay any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) a receiver, trustee or other similar official shall be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; (c) Borrower becomes insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable grace periods, if any; (d) Borrower makes a general assignment for the benefit of creditors; (e) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced or filed against Borrower; (g) Borrower or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant, obligation, condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document (as defined in the Purchase Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the Purchase Agreement; (h) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor, trustor, or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect, incomplete or misleading in any material respect when made or furnished; (i) the occurrence of a Fundamental Transaction without Lender’s prior written consent; (j) Borrower effectuates a reverse split of its Common Stock without twenty (20) Trading Days prior written notice to Lender; (k) any money judgment, writ or similar process is entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than $500,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented to by Lender; (l) Borrower fails to observe or perform any covenant set forth in Section 4 of the Purchase Agreement; or (m) Borrower, any affiliate of Borrower, or any pledgor, trustor, or guarantor of this Note breaches any covenant or other term or condition contained in any Other Agreements.

4.2.    Trigger Event Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance by applying the Trigger Effect (subject to the limitation set forth below).

4.3.    Defaults. At any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that Borrower cure the Trigger Event within five (5) Trading Days. If Borrower fails to cure the Trigger Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of default hereunder (each, an “Event of Default”).

4.4.    Default Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses (b), (c), (d), (e) or (f) of Section 4.1, an Event of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event shall become immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender for the Trigger Event to become an Event of Default. At any time following the occurrence of any Event of Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred at an interest rate equal to the lesser of twenty-two percent (22%) per annum or the maximum rate permitted under applicable law (“Default Interest”). In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment pursuant to this Section 4.4. No such rescission or annulment shall affect any subsequent Trigger Event or Event of Default or impair any right consequent thereon.

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5.    Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note.

6.    Waiver. No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.

7.    Governing Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this reference.

8.    Arbitration of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

9.    Cancellation. After repayment of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

10.    Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

11.    Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold, assigned or transferred by Lender to any of its affiliates without the consent of Borrower, so long as such transfer is in accordance with applicable federal and state securities laws.

12.    Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with the subsection of the Purchase Agreement titled “Notices.”

13.    Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not penalties but instead are intended by the parties to be, and shall be deemed, liquidated damages.

14.    Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.

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IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Restatement Date.

BORROWER: ORBITAL ENERGY GROUP, INC.
By:	/s/ William Clough
Name:	William Clough
Title:	Executive Chairman

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ACKNOWLEDGED, ACCEPTED AND AGREED:

LENDER:

STREETERVILLE CAPITAL, LLC

By:         /s/ John M. Fife                                                                    

John M. Fife, President

[Signature Page to Promissory Note]

ATTACHMENT 1

DEFINITIONS

For purposes of this Note, the following terms shall have the following meanings:

A1. “Fundamental Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation) any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement or other business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or reclassify the Common Stock, other than an increase in the number of authorized shares of Borrower’s Common Stock, or reverse splits of its outstanding and authorized shares of Common Stock to meet Nasdaq listing requirements or (b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding voting stock of Borrower.

A2.         “Major Trigger Event” means any Trigger Event occurring under Sections 4.1(a) or 4.1(l).

A3. “Mandatory Default Amount” means the Outstanding Balance following the application of the Trigger Effect.

A4. “Market Capitalization” means a number equal to (a) the average VWAP of the Common Stock for the immediately preceding fifteen (15) Trading Days, multiplied by (b) the aggregate number of outstanding Common Stock as reported on Borrower’s most recently filed Form 10-Q or Form 10-K.

A5. “Minor Trigger Event” means any Trigger Event that is not a Major Trigger Event. A6. “OID” means an original issue discount.

A7. “Other Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower (or an affiliate), on the one hand, and Lender (or an affiliate), on the other hand, and

(b) any financing agreement or a material agreement that affects Borrower’s ongoing business operations.

A8. “Outstanding Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to the terms hereof for payment, offset, or otherwise, plus the OID, the Transaction Expense Amount, accrued but unpaid interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and fees incurred under this Note.

A9. “Purchase Price Date” means the date the Purchase Price is delivered by Lender to Borrower. A10.

“Trigger Effect” means multiplying the Outstanding Balance as of the date the applicable Trigger Event occurred by (a) fifteen percent (15%) for each occurrence of any Major Trigger Event, or (b) five percent (5%) for each occurrence of any Minor Trigger Event, and then adding the resulting product to the Outstanding Balance as of the date the applicable Trigger Event occurred, with the sum of the foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Trigger Event occurred; provided that the Trigger Effect may only be applied three (3) times hereunder with respect to Major Trigger Events and three (3) times hereunder with respect to Minor Trigger Events.

EXHIBIT C

ARBITRATION PROVISIONS

1.    Dispute Resolution. For purposes of this Exhibit C, the term “Claims” means any disputes, claims, demands, causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s pursuit of an injunction or other Claim pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the doctrines of claim preclusion, issue preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate arbitration in the future. The parties to this Agreement (the “parties”) hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The term “Claims” specifically excludes a dispute over Calculations. The parties to the Agreement hereby agree that the arbitration provisions set forth in this Exhibit C (“Arbitration Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable for any reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any termination or expiration of the Agreement. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.

2.    Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”) to be conducted exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for in the Note, “Default Interest”) (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake County, Utah.

3.    The Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict with or vary from these Arbitration Provisions.

4. Arbitration Proceedings. Arbitration between the parties will be subject to the following:

4.1    Initiation of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section 8.9 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 8.9 of the Agreement (the “Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or fax pursuant to Section 8.9 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.

4.2 Selection and Payment of Arbitrator.

(a)    Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three (3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written notice of such selection to Company.

(b)    If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph (a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company may select the arbitrator from its three

(3) previously selected Proposed Arbitrators by providing written notice of such selection to Investor.

(c)    If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this Paragraph 4.2.

(d)    The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.

(e)    Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.

4.3    Applicability of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the Utah Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The Utah Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing, it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these Arbitration Provisions shall control.

4.4    Answer and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration Notice, against a party that fails to submit an answer within such time period.

4.5    Related Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation Proceedings pursuant to the Arbitration Act.

4.6    Discovery. Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:

(a)    Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof, and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited as follows:

(i) To facts directly connected with the transactions contemplated by the Agreement.

(ii)    To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or less expensive than in the manner requested.

(b) No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice, then such party shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must pay the party defending the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated attorneys’ fees are unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken in Utah.

(c)    All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure. The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests and a written challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires the requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’ fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests (as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.

(d)    In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.

(e)    Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following: (i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name and qualifications, including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii) the compensation to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert witness one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter not fairly disclosed in the expert report.

4.6    Dispositive Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules of Civil Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion shall proceed regardless.

4.7    Confidentiality. All information disclosed by either party (or such party’s agents) during the Arbitration process (including without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information upon the written request of either party.

4.8    Authorization; Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.

4.9    Relief. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the arbitrator may not award exemplary or punitive damages.

4.10    Fees and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration, and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.

5. Arbitration Appeal.

5.1    Initiation of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have a period of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph 4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee, the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award. If no party delivers an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described in this Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of the parties’ agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.

5.2    Selection and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3) person arbitration panel (the “Appeal Panel”).

(a)    Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.

(b)    If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice of such selection to the Appellee.

(c)    If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators who have already agreed to serve shall remain on the Appeal Panel.

(d) The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph

5.2    agree in writing (including via email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.

(d) Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the

Appellant.

5.3    Appeal Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the Arbitration Award.

5.4 Timing.

(a)    Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may, but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7) calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final. If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and the Appeal shall proceed regardless.

(b)    Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).

5.5    Appeal Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d) be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees, including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.

5.6    Relief. The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal Panel may not award exemplary or punitive damages.

5.7    Fees and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration and the Appeal Panel, and

(b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including without limitation in connection with the Appeal).

6. Miscellaneous.

6.1    Severability. If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration Provisions shall remain unaffected and in full force and effect.

6.2    Governing Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict of laws principles therein.

6.3    Interpretation. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of, or affect the interpretation of, these Arbitration Provisions.

6.4    Waiver. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed by the party granting the waiver.

6.5    Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.

[Remainder of page intentionally left blank]

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James F. O'Neil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Orbital Energy Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ James F. O'Neil	Dated: May 17, 2021
James F. O'Neil,
Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14(a) of the Securities Exchange Act of 1934, as Amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Daniel N. Ford, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Orbital Energy Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:      /s/ Daniel N. Ford	Dated: May 17, 2021
Daniel N. Ford
Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Orbital Energy Group, Inc. (the "Company"), on Form 10-Q of the quarter ended March 31, 2021, I hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The quarterly report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:      /s/ James F. O'Neil	Dated: May 17, 2021
James F. O'Neil,
Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Orbital Energy Group, Inc. (the "Company"), on Form 10-Q of the quarter ended March 31, 2021, I hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The quarterly report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and

(2) The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:      /s/ Daniel N. Ford	Dated: May 17, 2021
Daniel N. Ford
Chief Financial Officer

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 17, 2021
Document Information [Line Items]
Entity Registrant Name	Orbital Energy Group, Inc.
Entity Central Index Key	0001108967
Trading Symbol	oeg
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		52,220,786
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(b) Security	Common Stock, $0.001 par value

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current Assets:
Cash and cash equivalents	$ 34,733	$ 3,046
Restricted cash - current	153	452
Trade accounts receivable, net of allowance of $1,208 and $1,227 at March 31, 2021 and December 31, 2020, respectively	6,840	8,487
Inventories	974	1,123
Contract assets	4,200	7,860
Note receivable, current portion	520	44
Prepaid expenses and other current assets	3,016	3,786
Total current assets	50,436	24,798
Property and equipment, less accumulated depreciation of $2,484 and $2,158 at March 31, 2021 and December 31, 2020, respectively	8,669	6,395
Investment	1,063	1,063
Right of use assets - Operating leases	9,264	7,054
Goodwill	7,006	7,006
Other intangible assets, net	14,221	13,697
Restricted cash	1,026	1,026
Note receivable	3,091	3,602
Deposits and other assets	170	1,404
Total assets	94,946	66,045
Current Liabilities:
Accounts payable	4,141	9,913
Notes payable, current	16,798	12,246
Line of credit		441
Operating lease obligations - current portion	2,348	1,784
Accrued expenses	4,703	5,882
Contract liabilities	4,024	6,810
Total current liabilities	32,014	37,076
Notes payable, less current portion	8,756	5,056
Operating lease obligations, less current portion	6,636	5,211
Contingent consideration	720	720
Other long-term liabilities	2,720	835
Total liabilities	50,846	48,898
Commitments and contingencies
Stockholders' Equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized; no shares issued at March 31, 2021 or December 31, 2020
Common stock, par value $0.001; 325,000,000 shares authorized; 46,839,982 shares issued and 46,486,919 shares outstanding at March 31, 2021 and 31,029,642 shares issued and 30,676,579 shares outstanding at December 31, 2020	47	31
Additional paid-in capital	216,527	171,616
Treasury stock at cost; 353,063 shares held at March 31, 2021 and December 31, 2020	(413)	(413)
Accumulated deficit	(167,633)	(149,681)
Accumulated other comprehensive loss	(4,428)	(4,406)
Total stockholders' equity	44,100	17,147
Total liabilities and stockholders' equity	$ 94,946	$ 66,045

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Trade accounts receivable, allowance	$ 1,208	$ 1,227
Accumulated depreciation	$ 2,484	$ 2,158
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	325,000,000	325,000,000
Common stock, shares issued (in shares)	46,839,982	31,029,642
Common stock, shares outstanding (in shares)	46,486,919	30,676,579
Treasury stock, shares (in shares)	353,063	353,063

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues	$ 9,491	$ 5,688
Cost of revenues	10,797	5,129
Gross profit (loss)	(1,306)	559
Operating expenses:
Selling, general and administrative expense	14,460	7,192
Depreciation and amortization	1,515	407
Research and development	1	17
(Recovery) provision for bad debt	(19)	6
Total operating expenses	15,957	7,622
Loss from operations	(17,263)	(7,063)
Other income (expense)	63	(1,032)
Interest expense	(736)	(11)
Loss from continuing operations before income taxes and net loss of affiliate	(17,936)	(8,106)
Net loss of affiliate		(446)
Loss from continuing operations before income taxes	(17,936)	(8,552)
Income tax expense (benefit)	16	(1,600)
Loss from continuing operations, net of income taxes	(17,952)	(6,952)
Discontinued operations (Note 3)
Loss from operations of discontinued power and electromechanical components businesses		(486)
Income tax benefit		(57)
Income from discontinued operations, net of income taxes		(429)
Net loss	$ (17,952)	$ (7,381)
Basic and diluted weighted average common shares outstanding (in shares)	44,564,868	28,420,730
Loss from continuing operations per common share - basic and diluted (in dollars per share)	$ (0.40)	$ (0.24)
Income from discontinued operations - basic and diluted (in dollars per share)	0	(0.02)
Loss per common share - basic and diluted (in dollars per share)	$ (0.40)	$ (0.26)

XML

Condensed Consolidated Statements of Comprehensive Income and Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net loss	$ (17,952)	$ (7,381)
Foreign currency translation adjustment	(22)	415
Comprehensive loss	$ (17,974)	$ (6,966)

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2019	28,736,436		(353,063)
Balance at Dec. 31, 2019	$ 29	$ 170,106	$ (413)	$ (122,234)	$ (4,371)	$ 43,117
Common stock issued and vesting of restricted stock for compensation, services and royalty payments (in shares)	37,312
Common stock issued and vesting of restricted stock for compensation, services and royalty payments		9				9
Net loss				(7,381)		(7,381)
Other comprehensive income (loss)					415	415
Balance (in shares) at Mar. 31, 2020	28,773,748		(353,063)
Balance at Mar. 31, 2020	$ 29	170,115	$ (413)	(129,615)	(3,956)	36,160
Balance (in shares) at Dec. 31, 2020	31,029,642		(353,063)
Balance at Dec. 31, 2020	$ 31	171,616	$ (413)	(149,681)	(4,406)	17,147
Issuance of common stock via equity raises (in shares)	15,555,556
Issuance of common stock via equity raises	$ 16	42,360				$ 42,376
Common stock issued for cashless exercises of stock options (in shares)	214,596					214,596
Common stock issued for cashless exercises of stock options
Common stock issued and vesting of restricted stock for compensation, services and royalty payments (in shares)	40,188
Common stock issued and vesting of restricted stock for compensation, services and royalty payments		2,551				2,551
Net loss				(17,952)		(17,952)
Other comprehensive income (loss)					(22)	(22)
Balance (in shares) at Mar. 31, 2021	46,839,982		(353,063)
Balance at Mar. 31, 2021	$ 47	$ 216,527	$ (413)	$ (167,633)	$ (4,428)	$ 44,100

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (17,952)	$ (7,381)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	316	154
Amortization of intangibles	1,431	332
Amortization of note receivable discount	(74)	(69)
Stock issued and stock to be issued for compensation, royalties and services	2,559	3
Change in fair value related to stock appreciation rights	1,908
Amortization of debt discount	140
Loss on extinguishment of debt	250
Non-cash loss on equity method investment in affiliate		446
(Recovery) provision for bad debt	(19)	6
Deferred income taxes		10
Inventory reserve	(72)	(113)
Non-cash unrealized foreign currency (gains) losses	(100)	1,256
Change in operating assets and liabilities:
Trade accounts receivable	1,689	1,502
Inventories	225	(1,839)
Contract assets	156	(480)
Prepaid expenses and other current assets	783	(875)
Right of use assets - Operating leases	(2,209)	(703)
Deposits and other assets		(874)
Accounts payable	(4,343)	301
Operating lease liabilities	1,987	581
Accrued expenses	1,286	(245)
Contract liabilities	(1,443)	264
NET CASH USED IN OPERATING ACTIVITIES	(13,482)	(7,724)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(2,946)	(1,278)
Cash paid for working capital adjustment on Power group disposition		(2,804)
Purchase of other intangible assets	(692)	(4)
Purchase of convertible notes receivable		(200)
Cash paid for related party note receivable		(3,000)
Purchase of investment		(97)
Proceeds from notes receivable	100
NET CASH USED IN INVESTING ACTIVITIES	(3,538)	(7,383)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on line of credit	(441)
Payments on financing lease obligations	(1)	(1)
Proceeds from notes payable	9,701
Payments on notes payable	(3,238)	(428)
Proceeds from sales of common stock	42,376
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	48,397	(429)
Effect of exchange rate changes on cash	11	(48)
Net increase (decrease) in cash, cash equivalents and restricted cash	31,388	(15,584)
Cash, cash equivalents and restricted cash at beginning of period	4,524	23,351
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	35,912	7,767
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid (net refunded)	(570)	19
Interest paid	499	12
Financing note payable issued for payment on certain insurance policies		921
Accrued property and equipment purchases	$ 291	$ 16

XML

Note 1 - Nature of Operations, Basis of Presentation and Company Conditions

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND COMPANY CONDITIONS

Nature of Operations

Orbital Energy Group, Inc. (Orbital Energy Group, "OEG," "The Company") is a platform company composed of

three

segments, the Electric Power and Solar Infrastructure Services segment, the Integrated Energy Infrastructure Solutions and Services segment, and the Other segment. In

2019,

the Company divested of most of its previous Power and Electromechanical segment and the remaining portion of that segment was divested in

2020.

 

The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility-scale solar construction. The Company serves a wide variety of project types, including commercial, substation, solar farms and public utility projects. Services performed by Orbital Power Services generally include the design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services, including the repair of infrastructure damaged by inclement weather. Eclipse Foundation Group, which began operations in

January 2021,

is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation (drilled piers), industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains.

The Company's Integrated Energy Infrastructure Solutions and Services segment is made up of Orbital Gas Systems Ltd. (Orbital-UK) and Orbital Gas Systems, North America, Inc. (Orbital North America), collectively referred to as ("Orbital Gas Systems"). Orbital-UK is based in the United Kingdom and Orbital North America is based in Houston, Texas. Orbital Gas Systems is a provider of natural gas infrastructure and advanced technology, including metering, odorization, remote telemetry units (‘‘RTU'') and provides a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. GasPT® and VE 

Technology

® products are sold through Orbital Gas Systems.

Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information, which includes condensed consolidated financial statements. Accordingly, they do

not

include all the information and notes necessary for a comprehensive presentation of financial position and results of operations and should be read in conjunction with the Company's Annual Report on Form

10

-K for the year ended

December 31, 2020

. The condensed consolidated balance sheet as of 

December 31, 2020

has been derived from the audited financial statements as of that date included in the Company's Annual Report on Form

10

-K for the year ended

December 31, 2020

.

It is management's opinion that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair financial statement presentation. All intercompany accounts and transactions have been eliminated in consolidation. The results for the interim period are

not

necessarily indicative of the results to be expected for the remaining quarters or year ending

December 31, 2021

.

Reconciliation of Cash, Cash Equivalents, and Restricted Cash on Condensed Consolidated Statements of Cash Flows

	For the Three Months
(in thousands)	Ended March 31,
	2021		2020
Cash and cash equivalents at beginning of period	$	3,046	$	23,351
Restricted cash at beginning of period (1)		1,478		—
Cash, cash equivalents and restricted cash at beginning of period	$	4,524	$	23,351
Cash and cash equivalents at end of period	$	34,733	$	6,740
Restricted cash at end of period (1)		1,179		1,027
Cash, cash equivalents and restricted cash at end of period	$	35,912	$	7,767

(

1

) Restrictions on cash at 

March 31, 2021

and

March 31, 2020

relate to collateral for several bank-issued letters of credit for contract guaranties. 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include estimates used to review the Company's impairments and estimations of long-lived assets, revenue recognition on cost-to-cost-method type contracts, inventory valuation, warranty reserves, valuations of non-cash capital stock issuances, valuation for acquisitions, the valuation allowance on deferred tax assets, note receivable interest imputation, and the incremental borrowing rate used in determining the value of right of use assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are

not

readily apparent from other sources. Actual results

may

differ from these estimates under different conditions.

Reclassifications

Certain reclassifications have been made to the

2020

segment classifications in order to conform to the

2021

 presentation.

Goodwill

Upon acquisition of Reach Construction Group, LLC, (name changed to Orbital Solar Services) the Company recorded 

$7.0

 million of goodwill. Goodwill was valued as of

April 1, 2020

by a

third

-party valuation expert and was recorded following the recognition of Orbital Solar Service's tangible assets and liabilities and

$13.7

million of finite-lived identifiable intangible assets. Factors that contributed to the Company's goodwill are Orbital Solar Service's skilled workforce and reputation within its industry. The Company also expected to achieve future synergies between the Orbital Solar Services and Orbital Power Services businesses. These synergies were expected to be achieved in the form of power line work necessary when bringing new solar power systems online. Management completed a qualitative analysis to determine whether it was more likely than

not

that the fair value of its reporting unit was less than its carrying amount, including goodwill. To complete the qualitative review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. During management's review of goodwill as of

March 31, 2021,

the Company determined that there were

not

indicators present to suggest that it was more likely than

not

that the fair value of the Orbital Solar Services reporting unit was less than its carrying amount and thus 

no

impairment was necessary.  

Company Conditions

Orbital Solar Services has seen increasing customer opportunities including its recently announced association with the new Black Sunrise Investment fund. The fund has identified through its investors and others, several projects of scale and for which Orbital Solar Services will be awarded significant work. Orbital Power Services began operations during the

first

quarter of

2020

with work progressing under master service agreements with several new customers. Eclipse Foundation Group began operations in

January 2021

and has begun work on projects for utility customers. Orbital Gas Systems, Ltd. continues to face issues surrounding COVID-

19,

Brexit and the overall economy in the United Kingdom. Orbital Gas Systems, North America, Inc. has experienced a significant delay in customer projects and orders related to COVID-

19

and the impact of pricing pressure on oil and gas industry customers.   

The Company had a net loss of 

$18.0

 million, a negative gross margin of 

$1.3

million, and cash used in operating activities of 

$13.5

 million during the

three

months ended

March 31, 2021.

As of

March 31, 2021,

our accumulated deficit is 

$167.6

million and we had working capital of

$18.4

 million.

COVID-

19

Assessment and Liquidity

In

March 2020,

the World Health Organization categorized the current coronavirus disease (“COVID-

19”

) as a pandemic, and the President of the United States declared the COVID-

19

outbreak a national emergency. COVID-

19

continues to spread throughout the United States and other countries across the world, and the duration and severity of its effects can be severe. While the Company expects the effects of the pandemic to negatively impact its results from operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-

19

means the related financial impact cannot be reasonably estimated at this time. The Company has experienced customer delays and extensions for projects, supply chain delays, furloughs of personnel, increased utilization of telework, increased safety protocols to address COVID-

19

risks, decreased field service work and other impacts from the COVID-

19

pandemic.  The Company is proactively working to adjust its operations to properly reflect the market environment during the immediate pandemic while maintaining sufficient resources for the expected rebound later this year. Events and changes in circumstances arising after

March 31, 2021

, including those resulting from the impacts of COVID-

19,

will be reflected in management's estimates for future periods.

Management believes the Company's present cash flows will meet its obligations for

twelve

months from the date these financial statements are available to be issued. Including our cash balance, we continue to manage working capital primarily related to trade accounts receivable, notes receivable, prepaid assets, contract assets and our inventory less current liabilities that we will manage during the next

twelve

 months. In

2020

and the

first

three

months of

2021,

the Company has entered into various long and short-term debt agreements (Note

16.

Notes Payable). In addition, the Company has secured funding and has an available S-

3

registration statement allowing the Company to issue various types of securities including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of

$150

million. Considering these above factors, management believes the Company can meet its obligations for the

twelve

-month period from the date the financial statements are available to be issued. 

The Company's available capital

may

be consumed faster than anticipated due to other events, including the length and severity of the global novel coronavirus disease pandemic and measures taken to control the spread of COVID-

19,

as well as changes in and progress of our development activities and the impact of commercialization efforts due to the COVID-

19

pandemic. The Company

may

seek to obtain additional capital as needed through equity financings, debt or other financing arrangements, but given the impact of COVID-

19

on the U.S. and global financial markets, the Company

may

be unable to access further equity or debt financing when needed. As such, there can be

no

assurance that the Company will be able to raise additional capital when needed or under acceptable terms, if at all. The sale of additional equity

may

dilute existing shareholders and newly issued shares

may

contain senior rights and preferences compared to currently outstanding common shares.

Restructuring Charges

During the

fourth

quarter of

2019,

the Company completed the sale of its largest group within the Power and Electromechanical segment. The Company completed the sale of its Japan operations as of

September 30, 2020. 

In conjunction with the

2019

sale, it was concluded that should the remaining power and electromechanical operations

not

sell, the Company will fulfill its backlog obligations and wind down the remaining operations of CUI-Canada during

2020.

 As of

December 31, 2020,

the Company had remaining an accrued liability for estimated employee termination costs of

$0.4

million related to the discontinued operations. The Company paid out an additional

$0.2

million of termination benefits in the

first

three

months of

2021

and expect the remaining

$0.2

million to be paid out during the remainder of

2021.

 

Activity in the termination benefit liability in

2021

 is as follows:

CUI-Canada termination benefits (in thousands)
December 31, 2020	$	371
Severance payouts		(190	)
Translation		3
March 31, 2021	$	184
Estimated total termination benefits paid and to be paid	$	2,822

XML

Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Our significant accounting policies are detailed in "Note

2

Summary of Significant Accounting Policies" within Item

8

of the Company's Annual Report on Form

10

-K for the year ended 

December 31, 2020

filed with the SEC on

March 30, 2021.

Changes to the Company's accounting policies are discussed below:

Adoption of new accounting standards

On

January 1, 2021,

the Company adopted ASU 

No.

2020

-

04,

"

Reference Rate Reform (Topic

848

) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

" ASU

2020

-

04

provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does

not

require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU

2020

-

04

also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of

March 12, 2020

through

December 31, 2022.

There is

not

a material effect on the Company's financial statements due to the Company

not

having any current financial instruments that are affected by this new guidance.

On

January 1, 2021,

the Company adopted ASU 

2020

-

01,

 

Investments - Equity Securities (Topic

321

), Investments - Equity Method and Joint Ventures (Topic

323

), and Derivatives and Hedging (Topic

815

): Clarifying the Interactions between Topic

321,

Topic

323,

and Topic

815.

 ASU

2020

-

01

clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU

2020

-

01

are effective for the Company's

2021

fiscal year, including interim periods. The new guidance does

not

currently have a material impact on the Company's consolidated financial statements due to the Company currently

not

having any equity-method investments or any derivative instruments.

On

January 1, 2021,

the Company adopted ASU

2019

-

12,

 

Simplifying the Accounting for Income Taxes

, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC

740

and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's

2021

fiscal year, including interim periods. The ASU does

not

have a material impact on the Company's consolidated financial statements.

XML

Note 3 - Discontinued Operations and Sale of a Business

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3. DISCONTINUED OPERATIONS AND SALE OF A BUSINESS

As part of the Company's previously stated strategy to transform Orbital Energy Group, Inc. into a diversified infrastructure services platform serving North American and U.K. customers, in

2019

the Company's Board of Directors made the decision to divest of its Power and Electromechanical businesses. On

September 30, 2019,

Orbital Energy Group, Inc. entered into an asset sale agreement by and among, CUI, Inc. ("Seller"), a wholly owned subsidiary of the Company ("Parent"), and Back Porch International, Inc. ("Buyer") to sell the Company's Electromechanical business to a management led group. In

November 2019,

Orbital Energy Group, Inc. entered into an asset sale agreement by and among, the Seller and Bel Fuse, Inc. to sell the domestic Power supply business. Both sales closed in

2019.

On 

September 30, 2020,

the Company sold the CUI Japan operations to Back Porch International for approximately

$163

thousand. The assets of the Company's CUI-Canada subsidiary were divested in the

fourth

quarter of

2020.

 

The associated results of operations of the discontinued Power and Electromechanical segment are separately reported as Discontinued Operations for

2020

on the Condensed Consolidated Statements of Operations. Cash flows from these discontinued businesses are included in the Condensed Consolidated Cash Flow statements. See below for additional information on operating and investing cash flows of the discontinued operations. Results from continuing operations for the Company and segment highlights exclude the former Power and Electromechanical segment, which is included in these discontinued operations.

The former Power and Electromechanical segment consisted of the wholly owned subsidiaries: CUI, Inc. (CUI), based in Tualatin, Oregon; CUI Japan, based in Tokyo, Japan; CUI-Canada, based in Toronto, Canada; and the entity that previously held the corporate building, CUI Properties. The subsidiaries were providers of power and electromechanical components for Original Equipment Manufacturers (OEMs).

Selected data for these discontinued businesses consisted of the following:

Reconciliation of the Major Classes of Line Items Constituting Pretax Income from

Discontinued Operations to the After-Tax Income from Discontinued Operations That Are

Presented in the Condensed Consolidated Statement of Operations

(Unaudited)

(in thousands)		For the Three Months
	Ended March 31,
Major classes of line items constituting pretax profit (loss) of discontinued operations:	2021		2020
Revenues	$	—	$	2,033
Cost of revenues		—		(1,986	)
Selling, general and administrative expense		—		(385	)
Other expense		—		(148	)
Pretax loss of discontinued operations related to major classes of pretax loss		—		(486	)
Income tax benefit		—		(57	)
Total loss from discontinued operations that is presented in the statement of operations	$	—	$	(429	)

Net cash used in operating activities of discontinued operations for the 

three

months ended

March 31, 2020

was

$1.1

 million.

There was 

zero

net cash provided by or (used in) investing activities of discontinued operations for the 

three

months ended

March 31, 

2020.

XML

Note 4 - Revenue From Contracts With Customers

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Electric Power and Solar Infrastructure Services segment and Integrated Energy Infrastructure and Services segment

The Electric Power and Solar Infrastructure Services segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group, and Orbital Solar Services provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar and community solar construction.

The  Integrated Energy Infrastructure Solutions and Services segment subsidiaries, collectively referred to as Orbital Gas Systems, generate their revenue from a portfolio of products, services and resources that offer a diverse range of personalized gas engineering solutions to the gas utilities, power generation, petrochemical, emissions, manufacturing and automotive industries among others. 

Orbital Gas Systems accounts for a majority of its contract revenue proportionately over time. For our performance obligations satisfied over time, we recognize revenue by measuring the progress toward complete satisfaction of that performance obligation. The selection of the method to measure progress towards completion can be either an input method or an output method and requires judgment based on the nature of the goods or services to be provided.

For our construction contracts, revenue is generally recognized over time. Our fixed price construction projects generally use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

The timing of revenue recognition for Integrated Energy Infrastructure products also depends on the payment terms of the contract, as our performance does

not

create an asset with an alternative use to us. For those contracts where the Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced or for which we have a right to payment for performance completed to date at all times throughout our performance, inclusive of a cancellation, we recognize revenue over time. As discussed above, these performance obligations use a cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer. However, for those contracts for which we do 

not

have a right, at all times, to payment for performance completed to date and we are

not

enhancing a customer controlled asset, we recognize revenue at the point in time when control is transferred to the customer, generally when the product is shipped.

For our service contracts, revenue is also generally recognized over time as the customer simultaneously receives and consumes the benefits of our performance as we perform the service. For our fixed price service contracts with specified service periods, revenue is generally recognized on a straight-line basis over such service period when our inputs are expended evenly, and the customer receives and consumes the benefits of our performance throughout the contract term.

Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. For those performance obligations for which revenue is recognized using a cost-to-cost input method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident.

Product-type contracts (for example, sale of GasPT units) for which revenue does

not

qualify to be recognized over time are recognized at a point in time. Revenues from extended warranty and maintenance activities are recognized ratably over the term of the warranty and maintenance period. Extended warranties are

not

a material portion of our revenue.

Accounts Receivable, Contract Assets and Contract Liabilities

Accounts receivable are recognized in the period when our right to consideration is unconditional. We also assess our customer's ability and intention to pay, which is based on a variety of factors, including our historical payment experience with and the financial condition of our customers. Payment terms and conditions vary by contract, although our standard terms include a requirement of payment within

30

days. Accounts receivable are recognized net of an allowance for doubtful accounts. 

The timing of revenue recognition

may

differ from the timing of invoicing to customers. Contract assets include unbilled amounts from our construction projects when revenue recognized under the cost-to-cost measure of progress exceed the amounts invoiced to our customers, as the amounts cannot be billed under the terms of our contracts. Such amounts are recoverable from our customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract. Also included in contract assets are retainage receivables and amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders or modifications in dispute or unapproved as to both scope and/or price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Our contract assets do

not

include capitalized costs to obtain and fulfill a contract. Contract assets are generally classified as current within the Condensed Consolidated Balance Sheets.

Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts and provision for future contract losses for those contracts estimated to close in a gross loss position. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and are recorded as either current or long-term, depending upon when we expect to recognize such revenue.

Balances and activity in the current contract liabilities as of and for the 

three

months ended

March 31, 2021

and

2020

was as follows:

	For the Three Months
	Ended March 31,
(in thousands)		2021			2020
Total contract liabilities - beginning of period (1)	$	6,996		$	1,860
Contract additions, net		1,924			696
Revenue recognized		(1,616	)		(431	)
Orbital Solar contract settlements		(3,129	)		—
Translation		13			(88	)
Total contract liabilities - end of period	$	4,188		$	2,037

	As of March 31,
(in thousands)		2021		2020
Current contract liabilities	$	4,024	$	1,849
Long-term contract liabilities (2)		164		188
Total contract liabilities	$	4,188	$	2,037

(

1

)  

For the beginning balance in

2021

and

2020,

total contract liabilities included

$186

thousand and

$192

thousand, respectively that were classified as long term.

(

2

)

Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

Performance Obligations

Remaining Performance Obligations

Remaining performance obligations represents the transaction price of contracts with customers for which work has

not

been performed and excludes unexercised contract options and potential orders under ordering-type contracts. As of 

March 31, 2021

, the Company's remaining performance obligations are generally expected to be filled within the next

12

months.

Any adjustments to net revenues, cost of revenues, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments

may

result from positive program performance, and

may

result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations. Likewise, these adjustments

may

result in a decrease in operating income if we determine we will

not

be successful in mitigating these risks. Changes in estimates of net revenues, cost of revenues and the related impact to operating income are recognized on a cumulative catch-up basis in the period they become known, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation's percentage of completion. A significant change in

one

or more of these estimates could affect the profitability of

one

or more of our performance obligations. For separately priced extended warranty or product maintenance performance obligations, when estimates of total costs to be incurred on the performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

Performance Obligations Satisfied Over Time

To determine the proper revenue recognition method for our contracts, we evaluate whether a single contract should be accounted for as more than

one

performance obligation. This evaluation requires significant judgment and the decision to separate the single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period.

For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single project or capability (even if that single project results in the delivery of multiple units). Hence, the entire contract is accounted for as

one

performance obligation. Less commonly, however, we

may

promise to provide distinct goods or services within a contract in which case we separate the contract into more than

one

performance obligation. If a contract is separated into more than

one

performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We infrequently sell standard products with observable standalone sales. In cases where we do, the observable standalone sales are used to determine the standalone selling price. More frequently, we sell a customized customer specific solution, and in these cases we typically use the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

Performance Obligations Satisfied at a Point in Time

Revenue from goods and services transferred to customers at a single point in time accounted for

20%

 and

35%

of revenues for the 

three

month periods ended

March 31, 2021

and

2020

, respectively. Revenue on these contracts is recognized when the product is shipped and the customer takes control of the product. Determination of control transfer is typically determined by shipping terms delineated on the customer purchase orders and is generally when shipped.

Variable Consideration

The nature of our contracts gives rise to several types of variable consideration. In rare instances, we include in our contract estimates, additional revenue for submitted contract modifications or claims against the customer when we believe we have an enforceable right to the modification or claim, the amount can be estimated reliably and its realization is probable. In evaluating these criteria, we consider the contractual/legal basis for the claim, the cause of any additional costs incurred, the reasonableness of those costs and the objective evidence available to support the claim. These amounts are included in our calculation of net revenue recorded for our contracts and the associated remaining performance obligations. Additionally, if the contract has a provision for liquidated damages in the case that the Company misses a timing target, or fails to meet any other contract benchmarks, we account for those estimated liquidated damages as variable consideration and will adjust revenue accordingly with periodic updates to the estimated variable consideration as the job progresses. Liquidated damages are recognized as variable consideration only when we estimate that they will be a factor in the performance of the contract and are

not

common.

Significant Judgments

Our contracts with certain customers

may

be subject to contract cancellation clauses. Contracts with other cancellation provisions

may

require judgment in determining the contract term, including the existence of material rights, transaction price and identifying the performance obligations and whether a contract should be accounted for over time or on a completed contract basis. Revenue is recognized for certain projects over time using cost-based input methods, in which significant judgement is required to evaluate assumptions including the amount of total estimated costs to determine our progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

At times, customers

may

request changes that either amend, replace or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts require the changes to be accounted for as a separate contract or as a modification. Generally, contract modifications containing additional goods and services that are determined to be distinct and sold at their stand-alone selling price are accounted for as a separate contract. For contract modifications where goods and services are

not

determined to be distinct and sold at their stand-alone selling price, the original contract is updated and the required adjustments to revenue and contract assets, liabilities, and other accounts will be made accordingly.

Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately rather than together

may

require significant judgment. For, example, we consider many of our contracts that coordinate multiple products into an integrated system to be a single performance obligation, while the same products would be considered separate performance obligations if

not

so integrated.

In contracts where there are timing differences between when we transfer a promised good or service to the customer and when the customer pays for that good or service, we have determined that, our contracts do

not

include a significant financing component.

The following tables present the Company's revenues disaggregated by timing of revenue recognition:

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
Revenues recognized at point in time	$	—	$	1,868	$	1,868	$	—	$	1,979	$	1,979
Revenues recognized over time		5,561		2,062		7,623		399		3,310		3,709
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

The following tables present the Company's revenues disaggregated by region:

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
North America	$	5,561	$	1,452	$	7,013	$	399	$	2,843	$	3,242
Europe		—		2,451		2,451		—		2,326		2,326
Other		—		27		27		—		120		120
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

XML

Note 5 - Other Intangible Assets

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5. OTHER INTANGIBLE ASSETS

In

January 2021,

the Company completed the acquisition of the VE

Technology

rights, which it has previously utilized the VE T

echnology

through a licensing agreement with Endet Ltd. Orbital Gas Systems has the existing proprietary knowledge for the marketing, engineering and production of the VE

Technology

based solutions. The VE

Technology,

amortized over

ten

years

, 

is the basis for a patented sampling system product line marketed by Orbital Gas Systems and utilized in many of its integrated solutions.

In

2020,

the Company entered into an agreement to acquire the intellectual property rights and know-how associated with the VE

Technology

including patents for

1.5

million British pounds ("GBP"), or approximately

$1.8

 million. The completion of the acquisition was made upon the final payment towards this agreement. In

June 2020,

the parties to the agreement mutually agreed to extend the payments until

January 15, 2021

in consideration of the financial consequences created by the COVID-

19

pandemic in exchange for a technology fee of an additional

100,000

GBP. As of

March 31, 2021

, the Company paid the remaining

500,000

 GBP in 

January 2021. 

The

$1.9

 million paid was recorded as an intangible asset upon making the final payment in

January 2021

with

$0.7

million paid in

2021

and

$1.2

million reclassified from long-term deposits.

XML

Note 6 - Inventories

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Inventory Disclosure [Text Block]

6. INVENTORIES

Inventories consist of raw materials, work-in-process and finished goods and are stated at the lower of cost or net realizable value using the

first

-in,

first

-out (FIFO) method as a cost flow convention or through the moving average cost method. At

March 31, 2021

and

December 31, 2020

, accrued liabilities included

$0.2

 million and

$0.1

 million of accrued inventory payable, respectively. At

March 31, 2021

and

December 31, 2020

, inventory by category is valued net of reserves and consists of:

	As of March 31,		As of December 31,
(in thousands)	2021		2020
Finished goods	$	258	$	255
Raw materials		186		217
Work-in-process		530		651
Total inventories	$	974	$	1,123

XML

Note 7 - Investments

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Investment [Text Block]

7. INVESTMENTS

As of

March 31, 2021,

the Company had a minority ownership in Virtual Power Systems ("VPS"). Prior to the

third

quarter of

2020,

based on its equity ownership and that the Company maintains a board seat and participated in operational activities of VPS, the Company maintained significant influence to account for the investment as an equity-method investment. Under the equity method of accounting, results are

not

consolidated, but the Company records a proportionate percentage of the profit or loss of VPS as an addition to or a subtraction from the VPS investment asset balance. During the

three

 months ended

March 31, 2020, 

the Company recorded a

$0.4

 million loss on its equity method investment in VPS. The VPS investment basis at 

March 31, 2021

and

December 31, 2020

was

$1.1

 million and

$1.1

 million, respectively, as reflected on the consolidated balance sheets. With the decrease in ownership percentage following a

Q3

2020

equity raise by VPS and additional board seats placed, OEG 

no

longer has sufficient influence to recognize the investment under the equity method. The investment is held at 

March 31, 2021 

under the cost method of accounting for investments. 

The Company made a purchase of a convertible note receivable for

$200

thousand from VPS in the

three

months ended

March 31, 2020,

which is reflected in investing cash flows on the consolidated statement of cash flows.

XML

Note 8 - Leases

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Lease Disclosure [Text Block]

8. LEASES

Consolidated total lease costs were 

$0.8

million for the 

three

months ended

March 31, 2021

and is included in cost of sales; selling, general and administrative expense; and other income (expense), on the condensed consolidated statement of operations.

Future minimum operating lease obligations at

March 31, 2021

are as follows for the years ended

December 31:

(in thousands)
2021	$	2,176
2022		2,666
2023		1,585
2024		1,056
2025		1,023
Thereafter		2,075
Interest portion		(1,597	)
Total operating lease obligations	$	8,984

Total lease cost and other lease information is as follows:

	For the Three Months Ended March 31,
(in thousands)	2021			2020
Operating lease cost	$	706		$	320
Short-term lease cost		19			46
Variable lease cost		148			46
Sublease income		(113	)		(98	)
Total lease cost	$	760		$	314

Other information (in thousands)	Three Months Ended March 31,
	2021			2020
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from operating leases (includes discontinued operations in 2020)	$	(982	)	$	(378	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	2,783		$	1,073
Weighted-average remaining lease term - operating leases (in years)		5.0			6.6
Weighted-average discount rate - operating leases		6.5	%		6.4	%

Variable lease costs primarily include common area maintenance costs, real estate taxes and insurance costs passed through to the Company from lessors.

XML

Note 9 - Stock-based Payments for Compensation, Services and Royalties

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

9. STOCK-BASED PAYMENTS FOR COMPENSATION, SERVICES AND ROYALTIES

The Company records its stock-based compensation expense on options issued in the past under its stock option plans and the Company also issues stock for services and royalties. The Company's current stock option plan was approved in

2020

following the expiration of its previous stock option plan in

2018.

The Company did

not

issue any stock options during the

three

months ended

March 31, 2021

or

2020.

 A detailed description of the awards under these plans and the respective accounting treatment is included in the “Notes to the Consolidated Financial Statements” included in the Company's Annual Report on Form

10

-K for the year ended 

December 31, 2020

and filed with the SEC on

March 30, 2021.

For the

three

months ended

March 31, 2021

and

2020

, the Company recorded stock-based compensation expense of

$2.6

million and

$3

 thousand, respectively. Stock-based payments for compensation, services and royalties for the

three

months ended

March 31, 2021

is summarized below.

(dollars in thousands)
Date of issuance	Type of issuance	Stock issuance recipient	Reason for issuance	Total no. of shares issued		Fair value expense recorded in the three months ended March 31, 2021
January 2021	Common stock	Four directors	Director compensation		23,148	$	50
January 2021	Common stock	Employee	Employee bonus		11,415		25
February 2021	Common stock	Consultant	Services		5,625		22
February 2021	Common stock	Employee	Stock option exercise		214,596		—	(1)
March 2021	Restricted stock	Employee	Employee compensation		—		2,015	(2)
March 2021	Common stock	Four directors	Director compensation		—		437	(3)
March 2021	Common stock	Royalty recipient	Royalties		—		10	(4)
Total stock-based payments for compensation, services and royalties					254,784	$	2,559

(

1

)  The cashless exercise consisted of an exercise of

552,663

shares for which

338,067

of those share options were returned to the Company in return for the

214,596

shares issued. Expense related to these stock options were recorded in prior periods as they were fully vested.

(

2

)  In

March 2021,

the Company granted

3

million restricted shares for employee compensation with an aggregate fair value of

$16.4

million with a graded vesting schedule. One-

third

of which were vested and issued in

April 2021,

one

third

of which will vest in

April 2022,

and

one

-

third

 of which will vest in

April 2023. 

The Company recorded

$2.0

million in compensation expense related to the partial vesting of these grants in the

three

months ended

March 31, 2021,

and will record the remaining

$14.4

million of stock-based compensation related to these shares over the remaining vesting period. 

(

3

)  The Company granted

80,000

fully vested shares to

four

directors in

March.

These shares were issued in 

April 2021.

(

4

)  The Company granted

2,292

fully vested shares for the payment of accrued royalties. These shares will be issued in 

May 2021.

In addition to stock-based compensation settled in stock, the Company also has cash settled stock appreciation rights ("SARs") which were granted in

June 2020

as described in the Company's Form

10

-K filed

March 30, 2021.

Accrued SARs at

March 31, 2021

and

December 31, 2020

were

$2.6

 million and

$0.6

million, respectively and were recorded in accrued expenses within the condensed consolidated balance sheets. Vesting expense for the

three

months ended

March 31, 2021

was

$1.9

million and was recorded within selling, general and administrative expense within the condensed consolidated statements of operations. 

XML

Note 10 - Segment Reporting

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

10. SEGMENT REPORTING

Operating segments are defined in accordance with ASC

280

-

10

as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The measurement basis of segment profit or loss is income (loss) from operations. Management has identified

three

 operating segments based on the activities of the Company in accordance with ASC

280

-

10.

These operating segments have been aggregated into

three

 reportable segments. The

three

 reportable segments are Electric Power and Solar Infrastructure Services, Integrated Energy Infrastructure Solutions and Services, and Other.

The Electric Power and Solar Infrastructure Services segment consists of Orbital Solar Services based in Sanford, North Carolina, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive network solutions to customers in the electric power, telecom and solar industries. 

The Integrated Energy Infrastructure Solutions and Services segment is focused on the operations of Orbital Gas Systems Ltd. in the UK and Orbital Gas Systems, North America, Inc. which includes gas related test and measurement systems, including the GasPT.

The Other segment represents the remaining activities that are

not

included as part of the other reportable segments and represent primarily corporate activity. In

2019,

the Company sold its domestic power and electromechanical businesses and reclassified the income of the former Power and Electromechanical segment to income from discontinued operations. The Company sold the remaining portions of the Power and Electromechanical segment in

2020.

The following information represents segment activity for the

three

months ended

March 31, 2021

:

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	5,561		$	3,930		$	—		$	9,491
Depreciation and amortization (1)		1,305			432			10			1,747
Interest expense		16			2			718			736
Loss from operations		(9,589	)		(1,756	)		(5,918	)		(17,263	)
Expenditures for long-lived assets (2)		2,920			705			13			3,638

 

(

1

)

For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes

$0.2

million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

(

2

)  

Includes purchases of property, plant and equipment and other intangible assets. 

The following information represents selected balance sheet items by segment as of

March 31, 2021

:

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	33,888	$	18,072	$	42,986	$	94,946
Goodwill		7,006		—		—		7,006
Other intangible assets, net		9,487		4,731		3		14,221

The following information represents segment activity for the

three

months ended

March 31, 2020

:

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	399		$	5,289		$	—		$	5,688
Depreciation and amortization (1)		79			399			8			486
Interest expense		7			—			4			11
Loss from operations		(2,058	)		(1,843	)		(3,162	)		(7,063	)
Expenditures for long-lived assets (2)		1,221			6			55			1,282

(

1

)

For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes

$79

thousand, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

(

2

)

  Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.

The following information represents selected balance sheet items by segment as of

December 31, 2020:

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	35,825	$	17,094	$	13,126	$	66,045
Goodwill		7,006		—		—		7,006
Other intangibles assets, net		10,550		3,144		3		13,697

The following represents revenue by country:

(dollars in thousands)	For the Three Months Ended March 31,
	2021					2020
	Amount		%			Amount		%
USA	$	7,013		74	%	$	3,241		57	%
United Kingdom		1,988		21	%		2,221		39	%
All Others		490		5	%		226		4	%
Total	$	9,491		100	%	$	5,688		100	%

 

XML

Note 11 - Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

11. RECENT ACCOUNTING PRONOUNCEMENTS

There were

no

recent accounting pronouncements for which the Company determined would be material to its balance sheet or statement of operations. 

XML

Note 12 - Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Fair Value Disclosures [Text Block]

12. FAIR VALUE MEASUREMENTS

The Company's fair value hierarchy for its contingent consideration and convertible note payable as of

March 31, 2021

and

December 31, 2020

 was as follows:

(in thousands)
March 31, 2021	Level 1		Level 2		Level 3		Total
Contingent consideration	$	—	$	—	$	720	$	720
Total liabilities	$	—	$	—	$	720	$	720

December 31, 2020	Level 1		Level 2		Level 3		Total
Convertible note payable	$	—	$	—	$	1,955	$	1,955
Contingent consideration		—		—		720		720
Total liabilities	$	—	$	—	$	2,675	$	2,675

Changes in Fair Value Measurements

Using Significant Unobservable Inputs (Level

3

)

(in thousands)	Convertible note payable
Balance at December 31, 2020	$	1,955
Loss on extinguishment on amendment to remove convertible feature		250
Amortization of original issue discount		40
Accrued interest		57
Extinguishment of note		(2,302	)
Balance at March 31, 2021	$	—

There were

no

transfers between Level

3

and Level

2

in the

three

months ended

March 31, 2021 

as determined at the end of the reporting period.

In the

three

months ended

March 31, 2020,

the Company invested

$200

thousand in a convertible note receivable with VPS. This note was increased by

$60

thousand from accrued interest and transition services provided by the Company. The

$260

thousand note was converted to equity in VPS during

Q3

2020

and accounted for as a cost method investment.  

XML

Note 13 - Loss Per Common Share

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Earnings Per Share [Text Block]

13. LOSS PER COMMON SHARE

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic

260

(“FASB ASC

260”

), “Earnings per Share,” Basic loss from continuing operations per share, basic income from discontinued operations per share and basic net income (loss) per share that is available to shareholders is computed by dividing the income or loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the respective loss available to common stockholders by the weighted average number of diluted shares outstanding during the period calculated using the treasury stock method. Due to the Company's loss from continuing operations in the 

three

months ended

March 31, 2021

and

March 31, 2020

, the assumed exercise of stock options and the unvested restricted stock that would otherwise increase diluted shares using the treasury stock method would have had an antidilutive effect and therefore

0.2

 million shares related to stock options outstanding at

March 31, 2021 

and

3

million shares of restricted stock were excluded from the computation of diluted net loss per share for the 

three

months ended

March 31, 2021

and

0.8

 million shares related to stock options outstanding at

March 31, 2020

were excluded for the

three

months ended

March 31, 2020

. Accordingly, diluted earnings (loss) per share for continuing operations, discontinued operations and net income is the same as basic earnings (loss) per share for continuing operations, discontinued operations and net income for the

three

months ended

March 31, 2021

and

2020

.

	For the Three Months
(in thousands, except share and per share amounts)	Ended March 31,
	2021			2020
Loss from continuing operations, net of income taxes	$	(17,952	)	$	(6,952	)
Income from discontinued operations, net of income taxes		—			(429	)
Net loss	$	(17,952	)	$	(7,381	)
Basic and diluted weighted average number of shares outstanding		44,564,868			28,420,730
Loss from continuing operations per common share - basic and diluted	$	(0.40	)	$	(0.24	)
Loss from discontinued operations - basic and diluted		0.00			(0.02	)
Loss per common share - basic and diluted	$	(0.40	)	$	(0.26	)

XML

Note 14 - Income Taxes

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. INCOME TAXES

The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions. The Company continues to record a full valuation allowance against the Company's U.S. and foreign net deferred tax assets as it is

not

more likely than

not

that the Company will realize a benefit from these assets in a future period. In future periods, tax benefits and related deferred tax assets will be recognized when management concludes realization of such amounts is more likely than

not.

Net income tax expense of

$16

thousand was recorded to the income tax provision from continuing operations for the

three

months ended

March 31, 2021,

resulting in an effective tax rate of

0.1%.

 The income tax expense from continuing operations for the 

three

months ended

March 31, 2021

was due to domestic state minimum taxes. All of the Company's domestic and foreign net deferred tax assets were reduced by a full valuation allowance.

Total net income tax benefit of

$1.7

million for the

three

months ended

March 31, 2020

is being allocated under ASC

740

-

20

-

45

-

7

to more than

one

financial statement component other than continuing operations.

A net income tax benefit of

$1.6

million was recorded to the income tax provision from continuing operations for the

three

months ended

March 31, 2020,

resulting in an effective tax rate of

18.7%.

A net income tax benefit of

$57

 thousand was recorded to the income tax provision from discontinued operations for the

three

ended

March 31, 2020. 

The income tax benefit from continuing operations for the

three

ended

March 31, 2020

was due to application of ASC

740

-

20

-

45

-

7,

domestic state minimum taxes and benefits from refundable tax credits from our United Kingdom operations. All of the Company's USA and the foreign net deferred tax assets were reduced by a valuation allowance.

XML

Note 15 - Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

15. ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows:

(in thousands)	As of March 31, 2021			As of December 31, 2020
Foreign currency translation adjustment	$	(4,428	)	$	(4,406	)
Accumulated other comprehensive loss	$	(4,428	)	$	(4,406	)

XML

Note 16 - Notes Payable

3 Months Ended

Mar. 31, 2021

Future Revenue Payable [Member]

Notes to Financial Statements

Debt Disclosure [Text Block]

16. NOTES PAYABLE 

Notes payable is summarized as follows:

(in thousands)	As of March 31, 2021			As of December 31, 2020
Notes Payable - Insurance Financing notes (1)	$	383		$	1,163
Pay-check protection loans (2)		1,924			1,924
Seller Financed notes payable - Reach Construction Group, LLC acquisition (3)		5,480			6,480
Vehicle and equipment loans (4)		173			195
Non-recourse payable agreements (5)		1,187			2,699
Notes payable - Financing notes (6)		13,038			2,245
Conditional settlement notes payable agreement (7)		4,500			3,500
Unamortized discount and deferred debt issuance costs		(1,131	)		(904	)
Less short-term notes and current maturities of long term notes payable		(16,798	)		(12,246	)
Notes payable, less current portion	$	8,756		$	5,056

( 1 )	Note payable with an original balance for $1.4  million to First Insurance Funding was executed in July  2020 by the Company for the purposes of financing a portion of the Company's insurance coverage. The Note has an annual percentage rate of 3.35% with nine monthly payments of approximately $159  thousand and will be paid off by April 1, 2021.  The Company financed two additional insurance policies in the fourth quarter of 2020 for $0.1 million and $0.4 million, respectively. The smaller of which will mature in April 2021 and the other of which will mature in September 2021, and for which had annual interest rates of 3.35% and 4.35%, respectively.
( 2 )	On April 30, 2020 and May 2, 2020, the Company entered into unsecured loans in the aggregate principal amount of approximately $1.9 million (the “Loans”) pursuant to the Paycheck Protection Program (the “PPP”), sponsored by the Small Business Administration (the “SBA”) as guarantor of loans under the PPP.  The Loans, and interest accrued thereon, is forgivable, partially or in full, if certain conditions are met. The Loans are evidenced by four promissory notes, three with Bank of America, NA which are dated as of April 30, 2020 and one with Dogwood State Bank dated May 2, 2020.  The Bank of America notes mature two years from funding date of the notes and the Dogwood State Bank note matures two years from the note date. Each of the notes bear interest at a fixed rate of 1.0%  per annum with payments deferred. The Loans may be prepaid at any time prior to maturity with no prepayment penalties.
( 3 )	Includes two seller financed notes payable, one for $5 million and the second for $1.5 million. The $5 million note was amended from its original 18 -month term to provide for installments of $1 million paid on March 3, 2021, a second $1 million payment to be made on October 31, 2021 and a final principal payment of $3 million on March 31, 2022.  The original payment terms called for the full $5 million principal to be paid no later than November 1, 2021 without separate installments. The second seller financed note payable is due 36 -months from the April 1, 2020  acquisition date. Both notes have an interest rate of 6% per annum.
( 4 )	Includes vehicle and equipment loans with interest rates ranging from 6.79% to 8.99%.
( 5 )	To refinance an earlier non-recourse note and to provide the Company with additional capital, the Company took out two non-recourse agreements with C6 Capital for the sale of future revenues in the total amount of $3.5 million. These agreements had no stated interest rate and the original issue discount including upfront fees are being amortized using an effective interest rate of approximately 117%. After combined weekly payments of approximately $54 thousand for the first four weeks, the combined payments increased to approximately $116 thousand until June 2021. As of March 31, 2021, the future payments for these financing agreements was approximately $1.2 million ( $1.1 million net of discount).
( 6 )	On November 13, 2020, the Company completed a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue to the Investor an unsecured convertible instrument in the principal amount of $2.2 million (the “Convertible Security” or “Note”) to purchase shares of the Company's common stock, $0.001 par value per share (the “Common Stock”) against the payment of the applicable consideration therefore. Upon the closing on November 13, 2020, the Company received gross proceeds of $2.2 million before fees and other expenses associated with the transaction, including but not limited to, a $0.2 million original issue discount payable to the Investor. The net proceeds received by the Company was used primarily for working capital, debt repayment and general corporate purposes. The Note is payable in full within eighteen ( 18 ) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of ten percent ( 10% ) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. Company has the right to prepay all or any portion of the outstanding balance in an amount equal to 115% multiplied by the portion of the outstanding balance to be prepaid. The creditor may request payment of up to $250 thousand per month beginning 6 months after initial issuance. Original issue discount is amortized over the expected life of the investment at an effective interest rate of approximately 29%. The Company elected the fair value option for this note and as a result did not bifurcate any potential embedded derivatives. In February 2021, the Company negotiated modified terms which effectively removed the convertible option from the note and the Company recorded a $250 thousand loss on extinguishment and its carrying value was $2.3 million at March 31, 2021. See Note 12 for more information on the fair value of this note payable. On March 23, 2021, the Company completed a second note payable with the same institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 19.6% an original issue discount of $1.0 million and a carrying value of $9.7 million at March 31, 2021. The note payable is payable within eighteen ( 18 ) months after the purchase date and the creditor may request payment of up to $1 million per month beginning 6 months after initial issuance.

( 7 ) In October 2020, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $3.5 million at zero interest over three years. In January 2021, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $1.4 million over approximately 5 months at 12% annual interest rate with the final payment on or before June 30, 2021. There is $1.0 million outstanding on this note at March 31, 2021.

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Note 17 - Concentrations

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

17. CONCENTRATIONS

The Company's major product lines are energy infrastructure services including natural gas infrastructure solutions and services through Orbital Gas Systems; full-service building, maintenance and support to the electrical power distribution, transmission, substation, renewables, and emergency response sectors of North America through Orbital Power Services and Eclipse Foundation Group; and engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility scale solar construction through Orbital Solar Services. The Company had the following revenue concentrations by customer greater than

10%

of consolidated revenue:

For the Three Months Ended March 31,
Customer	2021			2020
Customer 1		23	%	<10%
Customer 2		16	%	<10%
Customer 3	<10%				18	%
Total concentrations		39	%		18	%

The Company had the following geographic revenue concentrations outside the U.S.A. greater than

10%

of consolidated revenue:

For the Three Months Ended March 31,
Country	2021			2020
United Kingdom		21	%		39	%
Total concentrations		21	%		39	%

The Company had the following gross trade accounts receivable concentrations by customer greater than

10%

of gross trade accounts receivable:

	As of March 31,			As of December 31,
Customer	2021			2020
Customer 4		23	%	19		%
Customer 5		14	%	12		%
Customer 2	<10%				11	%
Total concentrations		37	%		42	%

 

The Company had the following geographic concentrations of gross trade accounts receivable outside of the U.S.A. greater than

10%

of gross trade accounts receivable:

	As of March 31,			As of December 31,
Country	2021			2020
United Kingdom		32	%		21	%
Total concentrations		32	%		21	%

 

There were

no

supplier concentrations greater than

10%

during the 

three

months ended

March 31, 2021

or

three

months ended

March 31, 2020

.

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Note 18 - Other Equity Transactions

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

18. OTHER EQUITY TRANSACTIONS

S-

3

registration

The Company filed an S-

3

registration statement on

July 17, 2020

containing a prospectus that was effective in

September 

2020.

The Company utilized this filing in

January 2021

to issue common stock for

$45

million before costs of

$2.6

million for net proceeds of

$42.4

million in

two

separate equity raises. The Company has used and plans to use the remaining funds for general corporate purposes, which

may

include operating expenses, working capital to improve and promote our commercially available products and service offerings, advance product and service offering candidates, future acquisitions or share repurchases, expand our market presence and commercialization, general capital expenditures and satisfaction of debt obligations. The Company filed a new S-

3

shelf registration in

January 2021,

which, as amended, became effective in

April 2021.

With this filing, Orbital Energy Group

may

from time to time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of

$150

million.

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Note 19 - Acquisition of Reach Construction Group, LLC

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Business Combination Disclosure [Text Block]

19. ACQUISITION OF REACH CONSTRUCTION GROUP, LLC

Effective

April 1, 2020,

the Company entered into an equity purchase agreement to acquire

100%

of the assets of Reach Construction Group, LLC (Renamed "Orbital Solar Services"), an, industry-leading solar construction company. Headquartered in Sanford, NC, Orbital Solar Services is an engineering, procurement and construction (“EPC”) company with expertise in the renewable energy industry. The acquisition was effectuated pursuant to the Equity Purchase Agreement (the “Agreement”), dated as of

April 1, 2020,

between Orbital Energy Group and Brandon S. Martin (the "Seller").  Orbital Energy Group issued

2,000,000

shares of restricted common stock issued to the Seller (

$1.2

 million estimated fair value as of

April 1, 2020)

along with

two

seller notes for a combined total of

$35

million (Adjusted to

$6.5

 million following preliminary working capital adjustment as of

April 1, 2020)

and an earn-out

not

in excess of

$30

million (

$0.7

million estimated fair value as of 

April 1, 2020.) 

The seller notes were subject to a

$28.5

 million preliminary working capital adjustment.

The purchase consideration is as follows:

(in thousands)

Purchase Consideration
Orbital Energy Stock issued - 2 million shares	$	1,224
18-Month Seller Note		5,000
3-year Seller Note		1,480
Contingent consideration		720
Cash payment		3,000
Total	$	11,424

The acquisition was accounted for using the purchase method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated preliminary fair values at the date of acquisition.

(in thousands)

Purchase price	$	11,424
Cash and cash equivalents	$	19
Trade accounts receivable, net of allowance		6,972
Contract assets		3,299
Prepaid expenses and other current assets		427
Property and equipment		382
Right of use assets - Operating leases		890
Goodwill		7,006
Intangible, customer relationships & backlog		8,647
Intangible, trade name		1,878
Intangible, non-compete agreements		3,212
Deferred tax liability		(1,570	)
Liabilities assumed		(19,738	)
Purchase price allocation	$	11,424

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Note 20 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

20. COMMITMENTS AND CONTINGENCIES

Off-Balance Sheet Arrangements

Performance and Payment Bonds and Parent Guarantees

In the ordinary course of business, Orbital Energy Group and its subsidiaries are required by certain customers to provide performance and payment bonds for contractual commitments related to its projects. These bonds provide a guarantee to the customer that the Company will perform under the terms of a contract and that the Company will pay its subcontractors and vendors. If the Company fails to perform under a contract or to pay its subcontractors and vendors, the customer

may

demand that the surety make payments or provide services under the bond. The Company must reimburse the surety for expenses or outlays it incurs. Certain bonds are for open-ended contracts with multiple work orders so the value

may

increase as the work progresses and more work orders are started. The bonds will remain in place as the Company completes projects and resolves any disputed matters with the customers, vendors and subcontractors related to the bonded projects. As of

March 31, 2021

 the total amount of the outstanding performance and payment bonds was approximately

$1.9

 million. The estimated cost to complete bonded projects was approximately

$0.9

million as of

March 31, 2021

.  

Additionally, from time to time, we guarantee certain obligations and liabilities of our subsidiaries that

may

arise in connection with, among other things, contracts with customers, equipment lease obligations, and contractor licenses. These guarantees

may

cover all of the subsidiary's unperformed, undischarged and unreleased obligations and liabilities under or in connection with the relevant agreement. For example, with respect to customer contracts, a guarantee

may

cover a variety of obligations and liabilities arising during the ordinary course of the subsidiary's business or operations, including, among other things, warranty and breach of contract claims,

third

-party and environmental liabilities arising from the subsidiary's work and for which it is responsible, liquidated damages, or indemnity claims.

Contingent Liabilities

Orbital Energy Group, Inc. is occasionally party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, negligence or gross negligence and/or property damages, wage and hour and other employment-related damages, punitive damages, civil penalties or other losses, or injunctive or declaratory relief.

Regarding all lawsuits, claims and proceedings, Orbital Energy Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Other than the reserve on the item described below, the Company currently has

no

such reserves. In addition, Orbital Energy Group, Inc. discloses matters for which management believes a material loss is at least reasonably possible. Except as otherwise stated below,

none

of these proceedings are expected to have a material adverse effect on Orbital Energy Group, Inc.'s consolidated financial position, results of operations or cash flows. In all instances, management has assessed the matter based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought and the probability of success. Management's judgment

may

prove materially inaccurate, and such judgment is made subject to the known uncertainties of litigation.

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Note 21 - Subsequent Events

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Subsequent Events [Text Block]

21. SUBSEQUENT EVENTS

Acquisition

Orbital Energy Group, Inc. (NASDAQ: OEG) (“OEG” or “Company”) entered into and closed upon a Share Purchase Agreement dated

April 13, 2021 (

“SPA”) by and among the Company and the owners of the capital stock of Gibson Technical Services, Inc. (“GTS”).  GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since

1990

and will become a wholly owned subsidiary of the Company.

Subject to the terms and conditions set forth in the SPA, the base purchase price for

100%

of the equity ownership of GTS is

$48,000,000,

with the consideration structured as follows:

● $22,000,000 in cash paid at closing; and

● 4,651,162 shares of restricted common stock issued to the GTS shareholders with an aggregate value of $26,000,000 based upon a per share value of $5.59. Of the newly issued shares, 2,232,569 of the shares are subject to a one ( 1 ) year restricted period and 2,418,593 are subject to a two ( 2 ) year restricted period.

● The SPA provides for the issuance of additional shares of OEG restricted common stock to the GTS shareholders valued at $5.59 as a post-closing adjustment for the excess net working capital above a 2 - 1 ratio within 45 days after the closing date of April 13, 2021.

The SPA contains various customary representations, warranties and covenants. In connection with the SPA, the Company entered into employment agreements with

three

(

3

) key employees of GTS with base compensation agreements ranging from

$165,000

to

$300,000,

plus incentive compensation arrangements tied to the performance of GTS.

Debt Agreement

On

May 11, 2021,

Orbital Energy Group, Inc. (the “Company”) completed a Note Purchase Agreement (the “Purchase Agreement”), by and between the Company and an institutional investor (the “Investor”), pursuant to which the Company agreed to issue to the Investor an unsecured instrument in the principal amount of

$10,715,000

(the “Note”). Upon the closing on

May 

11,

2021,

the Company received gross proceeds of

$10,715,000,

before fees and other expenses associated with the transaction, including but

not

limited to, a

$700,000

original issue discount payable to the Investor. The net proceeds received by the Company will be used primarily for working capital, future acquisitions, and general corporate purposes.

The Note is payable in full within

eighteen

(

18

) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of

nine

 percent (

9%

) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. The Company has the right to prepay all or any portion of the outstanding balance in an amount equal to

115%

multiplied by the portion of the outstanding balance to be prepaid.

Beginning

six

(

6

) months from the purchase price date, Investor has the right, in its sole and absolute discretion, to redeem all or any portion of the Note (such amount, the “Redemption Amount”) subject to the maximum monthly redemption amount of

$1,000,000

per calendar month, by providing Company with a “Redemption Notice."

The Note Purchase Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties thereto, and termination provisions.

The foregoing does

not

purport to be a complete description of the Note Purchase Agreement and is qualified in its entirety by reference to the full text of such documents and attachments which are attached as Exhibits to this Report and are incorporated by reference herein.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of new accounting standards

On

January 1, 2021,

the Company adopted ASU 

No.

2020

-

04,

"

Reference Rate Reform (Topic

848

) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

" ASU

2020

-

04

provides optional expedients and exceptions related to contract modifications and hedge accounting to address the transitions from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. The guidance permits an entity to consider contract modification due to reference rate reform to be an event that does

not

require contract remeasurement at the modification date or reassessment of a previous accounting determination. ASU

2020

-

04

also temporarily allows hedge relationships to continue without de-designation upon changes due to reference rate reform. The standard is effective upon issuance and can be applied as of

March 12, 2020

through

December 31, 2022.

There is

not

a material effect on the Company's financial statements due to the Company

not

having any current financial instruments that are affected by this new guidance.

On

January 1, 2021,

the Company adopted ASU 

2020

-

01,

 

Investments - Equity Securities (Topic

321

), Investments - Equity Method and Joint Ventures (Topic

323

), and Derivatives and Hedging (Topic

815

): Clarifying the Interactions between Topic

321,

Topic

323,

and Topic

815.

 ASU

2020

-

01

clarifies the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives, and is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. The amendments in ASU

2020

-

01

are effective for the Company's

2021

fiscal year, including interim periods. The new guidance does

not

currently have a material impact on the Company's consolidated financial statements due to the Company currently

not

having any equity-method investments or any derivative instruments.

On

January 1, 2021,

the Company adopted ASU

2019

-

12,

 

Simplifying the Accounting for Income Taxes

, which is guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC

740

and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for the Company's

2021

fiscal year, including interim periods. The ASU does

not

have a material impact on the Company's consolidated financial statements.

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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Reconciliation of Cash and Cash Equivalents from Balance Sheet to Cash Flow Statement [Table Text Block]

	For the Three Months
(in thousands)	Ended March 31,
	2021		2020
Cash and cash equivalents at beginning of period	$	3,046	$	23,351
Restricted cash at beginning of period (1)		1,478		—
Cash, cash equivalents and restricted cash at beginning of period	$	4,524	$	23,351
Cash and cash equivalents at end of period	$	34,733	$	6,740
Restricted cash at end of period (1)		1,179		1,027
Cash, cash equivalents and restricted cash at end of period	$	35,912	$	7,767

Restructuring and Related Costs [Table Text Block]

CUI-Canada termination benefits (in thousands)
December 31, 2020	$	371
Severance payouts		(190	)
Translation		3
March 31, 2021	$	184
Estimated total termination benefits paid and to be paid	$	2,822

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Note 3 - Discontinued Operations and Sale of a Business (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Disposal Groups, Including Discontinued Operations [Table Text Block]

(in thousands)		For the Three Months
	Ended March 31,
Major classes of line items constituting pretax profit (loss) of discontinued operations:	2021		2020
Revenues	$	—	$	2,033
Cost of revenues		—		(1,986	)
Selling, general and administrative expense		—		(385	)
Other expense		—		(148	)
Pretax loss of discontinued operations related to major classes of pretax loss		—		(486	)
Income tax benefit		—		(57	)
Total loss from discontinued operations that is presented in the statement of operations	$	—	$	(429	)

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Note 4 - Revenue From Contracts With Customers (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

	For the Three Months
	Ended March 31,
(in thousands)		2021			2020
Total contract liabilities - beginning of period (1)	$	6,996		$	1,860
Contract additions, net		1,924			696
Revenue recognized		(1,616	)		(431	)
Orbital Solar contract settlements		(3,129	)		—
Translation		13			(88	)
Total contract liabilities - end of period	$	4,188		$	2,037

	As of March 31,
(in thousands)		2021		2020
Current contract liabilities	$	4,024	$	1,849
Long-term contract liabilities (2)		164		188
Total contract liabilities	$	4,188	$	2,037

Disaggregation of Revenue [Table Text Block]

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
Revenues recognized at point in time	$	—	$	1,868	$	1,868	$	—	$	1,979	$	1,979
Revenues recognized over time		5,561		2,062		7,623		399		3,310		3,709
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

	For the Three Months						For the Three Months
	Ended March 31, 2021						Ended March 31, 2020
(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total		Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Total
North America	$	5,561	$	1,452	$	7,013	$	399	$	2,843	$	3,242
Europe		—		2,451		2,451		—		2,326		2,326
Other		—		27		27		—		120		120
Total revenues	$	5,561	$	3,930	$	9,491	$	399	$	5,289	$	5,688

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Note 6 - Inventories (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	As of March 31,		As of December 31,
(in thousands)	2021		2020
Finished goods	$	258	$	255
Raw materials		186		217
Work-in-process		530		651
Total inventories	$	974	$	1,123

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Note 8 - Leases (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

(in thousands)
2021	$	2,176
2022		2,666
2023		1,585
2024		1,056
2025		1,023
Thereafter		2,075
Interest portion		(1,597	)
Total operating lease obligations	$	8,984

Lease, Cost and Other Lease Information [Table Text Block]

	For the Three Months Ended March 31,
(in thousands)	2021			2020
Operating lease cost	$	706		$	320
Short-term lease cost		19			46
Variable lease cost		148			46
Sublease income		(113	)		(98	)
Total lease cost	$	760		$	314

Other information (in thousands)	Three Months Ended March 31,
	2021			2020
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows from operating leases (includes discontinued operations in 2020)	$	(982	)	$	(378	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	2,783		$	1,073
Weighted-average remaining lease term - operating leases (in years)		5.0			6.6
Weighted-average discount rate - operating leases		6.5	%		6.4	%

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Note 9 - Stock-based Payments for Compensation, Services and Royalties (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Disclosure of Shares Issued as Share-based Compensation and Royalty Payments [Table Text Block]

(dollars in thousands)
Date of issuance	Type of issuance	Stock issuance recipient	Reason for issuance	Total no. of shares issued		Fair value expense recorded in the three months ended March 31, 2021
January 2021	Common stock	Four directors	Director compensation		23,148	$	50
January 2021	Common stock	Employee	Employee bonus		11,415		25
February 2021	Common stock	Consultant	Services		5,625		22
February 2021	Common stock	Employee	Stock option exercise		214,596		—	(1)
March 2021	Restricted stock	Employee	Employee compensation		—		2,015	(2)
March 2021	Common stock	Four directors	Director compensation		—		437	(3)
March 2021	Common stock	Royalty recipient	Royalties		—		10	(4)
Total stock-based payments for compensation, services and royalties					254,784	$	2,559

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Note 10 - Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	5,561		$	3,930		$	—		$	9,491
Depreciation and amortization (1)		1,305			432			10			1,747
Interest expense		16			2			718			736
Loss from operations		(9,589	)		(1,756	)		(5,918	)		(17,263	)
Expenditures for long-lived assets (2)		2,920			705			13			3,638

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	33,888	$	18,072	$	42,986	$	94,946
Goodwill		7,006		—		—		7,006
Other intangible assets, net		9,487		4,731		3		14,221

(in thousands)	Electric Power and Solar Infrastructure Services			Integrated Energy Infrastructure Solutions and Services			Other			Total
Revenues from external customers	$	399		$	5,289		$	—		$	5,688
Depreciation and amortization (1)		79			399			8			486
Interest expense		7			—			4			11
Loss from operations		(2,058	)		(1,843	)		(3,162	)		(7,063	)
Expenditures for long-lived assets (2)		1,221			6			55			1,282

(in thousands)	Electric Power and Solar Infrastructure Services		Integrated Energy Infrastructure Solutions and Services		Other		Total
Segment assets	$	35,825	$	17,094	$	13,126	$	66,045
Goodwill		7,006		—		—		7,006
Other intangibles assets, net		10,550		3,144		3		13,697

Revenue from External Customers by Geographic Areas [Table Text Block]

(dollars in thousands)	For the Three Months Ended March 31,
	2021					2020
	Amount		%			Amount		%
USA	$	7,013		74	%	$	3,241		57	%
United Kingdom		1,988		21	%		2,221		39	%
All Others		490		5	%		226		4	%
Total	$	9,491		100	%	$	5,688		100	%

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Note 12 - Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

(in thousands)
March 31, 2021	Level 1		Level 2		Level 3		Total
Contingent consideration	$	—	$	—	$	720	$	720
Total liabilities	$	—	$	—	$	720	$	720

December 31, 2020	Level 1		Level 2		Level 3		Total
Convertible note payable	$	—	$	—	$	1,955	$	1,955
Contingent consideration		—		—		720		720
Total liabilities	$	—	$	—	$	2,675	$	2,675

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

(in thousands)	Convertible note payable
Balance at December 31, 2020	$	1,955
Loss on extinguishment on amendment to remove convertible feature		250
Amortization of original issue discount		40
Accrued interest		57
Extinguishment of note		(2,302	)
Balance at March 31, 2021	$	—

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Note 13 - Loss Per Common Share (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Three Months
(in thousands, except share and per share amounts)	Ended March 31,
	2021			2020
Loss from continuing operations, net of income taxes	$	(17,952	)	$	(6,952	)
Income from discontinued operations, net of income taxes		—			(429	)
Net loss	$	(17,952	)	$	(7,381	)
Basic and diluted weighted average number of shares outstanding		44,564,868			28,420,730
Loss from continuing operations per common share - basic and diluted	$	(0.40	)	$	(0.24	)
Loss from discontinued operations - basic and diluted		0.00			(0.02	)
Loss per common share - basic and diluted	$	(0.40	)	$	(0.26	)

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Note 15 - Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

(in thousands)	As of March 31, 2021			As of December 31, 2020
Foreign currency translation adjustment	$	(4,428	)	$	(4,406	)
Accumulated other comprehensive loss	$	(4,428	)	$	(4,406	)

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Note 16 - Notes Payable (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Debt [Table Text Block]

(in thousands)	As of March 31, 2021			As of December 31, 2020
Notes Payable - Insurance Financing notes (1)	$	383		$	1,163
Pay-check protection loans (2)		1,924			1,924
Seller Financed notes payable - Reach Construction Group, LLC acquisition (3)		5,480			6,480
Vehicle and equipment loans (4)		173			195
Non-recourse payable agreements (5)		1,187			2,699
Notes payable - Financing notes (6)		13,038			2,245
Conditional settlement notes payable agreement (7)		4,500			3,500
Unamortized discount and deferred debt issuance costs		(1,131	)		(904	)
Less short-term notes and current maturities of long term notes payable		(16,798	)		(12,246	)
Notes payable, less current portion	$	8,756		$	5,056

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Note 17 - Concentrations (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

For the Three Months Ended March 31,
Customer	2021			2020
Customer 1		23	%	<10%
Customer 2		16	%	<10%
Customer 3	<10%				18	%
Total concentrations		39	%		18	%

For the Three Months Ended March 31,
Country	2021			2020
United Kingdom		21	%		39	%
Total concentrations		21	%		39	%

	As of March 31,			As of December 31,
Customer	2021			2020
Customer 4		23	%	19		%
Customer 5		14	%	12		%
Customer 2	<10%				11	%
Total concentrations		37	%		42	%

	As of March 31,			As of December 31,
Country	2021			2020
United Kingdom		32	%		21	%
Total concentrations		32	%		21	%

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Note 19 - Acquisition of Reach Construction Group, LLC (Tables)

3 Months Ended

Mar. 31, 2021

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Purchase Consideration
Orbital Energy Stock issued - 2 million shares	$	1,224
18-Month Seller Note		5,000
3-year Seller Note		1,480
Contingent consideration		720
Cash payment		3,000
Total	$	11,424

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Purchase price	$	11,424
Cash and cash equivalents	$	19
Trade accounts receivable, net of allowance		6,972
Contract assets		3,299
Prepaid expenses and other current assets		427
Property and equipment		382
Right of use assets - Operating leases		890
Goodwill		7,006
Intangible, customer relationships & backlog		8,647
Intangible, trade name		1,878
Intangible, non-compete agreements		3,212
Deferred tax liability		(1,570	)
Liabilities assumed		(19,738	)
Purchase price allocation	$	11,424

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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions (Details Textual) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2021 USD ($)	Apr. 01, 2020 USD ($)
Number of Reportable Segments	3		3
Goodwill, Ending Balance	$ 7,006		$ 7,006		$ 7,000
Finite-Lived Intangible Assets, Gross, Total	13,700
Net Income (Loss) Attributable to Parent, Total	(17,952)	$ (7,381)
Gross Profit, Total	(1,306)	559
Net Cash Provided by (Used in) Operating Activities, Total	(13,482)	$ (7,724)
Retained Earnings (Accumulated Deficit), Ending Balance	(167,633)		$ (149,681)
Working Capital	18,400
Sale of Equity, Registration, Maximum Value	150,000
Restructuring Reserve, Ending Balance	400
Contract Termination [Member]
Payments for Restructuring	$ 200
Contract Termination [Member] | Forecast [Member]
Restructuring and Related Cost, Expected Cost Remaining				$ 200

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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands		Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
Cash and cash equivalents at beginning of period		$ 3,046	$ 6,740	$ 23,351
Restricted cash at beginning of period (1)	[1]	1,478	1,027
Cash, cash equivalents and restricted cash at beginning of period		4,524	7,767	23,351
Cash and cash equivalents at end of period		34,733	3,046	6,740
Restricted cash at end of period (1)	[1]	1,179	1,478	1,027
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD		$ 35,912	$ 4,524	$ 7,767

[1] Restrictions on cash at March 31, 2021 and March 31, 2020 relate to collateral for several bank-issued letters of credit for contract guaranties.

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Note 1 - Nature of Operations, Basis of Presentation and Company Conditions - Termination Benefit Liability (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Balance	$ 400
Employee Severance [Member]
Balance	371
Severance payouts	(190)
Translation	3
Balance	184
Estimated total termination benefits paid and to be paid	$ 2,822

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Note 3 - Discontinued Operations and Sale of a Business (Details Textual) - Discontinued Operations, Disposed of by Sale [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
CUI Japan Operations [Member]
Disposal Group, Including Discontinued Operation, Consideration			$ 163
Cash Provided by (Used in) Operating Activities, Discontinued Operations		$ 1,100
Power and Electromechanical Business [Member]
Cash Provided by (Used in) Investing Activities, Discontinued Operations	$ 0

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Note 3 - Discontinued Operations and Sale of a Business - Schedule of Discontinued Operations for Income Statement and Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Other expense		$ (148)
Pretax loss of discontinued operations related to major classes of pretax loss		(486)
Income tax benefit		(57)
Income from discontinued operations, net of income taxes		(429)
Power and Electromechanical Business [Member]
Revenues		2,033
Cost of revenues		(1,986)
Selling, general and administrative expense		$ (385)

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Note 4 - Revenue From Contracts With Customers (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021		Mar. 31, 2020		Jan. 01, 2021	Jan. 01, 2020
Contract with Customer, Liability, Noncurrent	$ 164	[1]	$ 188	[1]	$ 186	$ 192
Transferred at Point in Time [Member]
Percentage of Revenue From Goods and Services	20.00%		35.00%

[1] Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

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Note 4 - Revenue From Contracts With Customers - Contract Liabilities (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021		Mar. 31, 2020		Jan. 01, 2021	Dec. 31, 2020	Jan. 01, 2020
Total contract liabilities - beginning of period	[1]	$ 6,996		$ 1,860
Contract additions, net		1,924		696
Revenue recognized		(1,616)		(431)
Orbital Solar contract settlements		(3,129)
Translation		13		(88)
Total contract liabilities - end of period		4,188		2,037
Current contract liabilities		4,024		1,849			$ 6,810
Contract with Customer, Liability, Noncurrent		$ 164	[2]	$ 188	[2]	$ 186		$ 192

[1] For the beginning balance in 2021 and 2020, total contract liabilities included $186 thousand and $192 thousand, respectively that were classified as long term.

[2] Long-term contract liabilities are included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

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Note 4 - Revenue From Contracts With Customers - Revenues Disaggregated (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues from external customers	$ 9,491	$ 5,688
North America [Member]
Revenues from external customers	7,013	3,242
Europe [Member]
Revenues from external customers	2,451	2,326
Other Regions [Member]
Revenues from external customers	27	120
Electric Power and Solar Infrastructure Services Segment [Member]
Revenues from external customers	5,561	399
Electric Power and Solar Infrastructure Services Segment [Member] | North America [Member]
Revenues from external customers	5,561	399
Electric Power and Solar Infrastructure Services Segment [Member] | Europe [Member]
Revenues from external customers
Electric Power and Solar Infrastructure Services Segment [Member] | Other Regions [Member]
Revenues from external customers
Integrated Energy Infrastructure Solutions and Services Segment [Member]
Revenues from external customers	3,930	5,289
Integrated Energy Infrastructure Solutions and Services Segment [Member] | North America [Member]
Revenues from external customers	1,452	2,843
Integrated Energy Infrastructure Solutions and Services Segment [Member] | Europe [Member]
Revenues from external customers	2,451	2,326
Integrated Energy Infrastructure Solutions and Services Segment [Member] | Other Regions [Member]
Revenues from external customers	27	120
Transferred at Point in Time [Member]
Revenues from external customers	1,868	1,979
Transferred at Point in Time [Member] | Electric Power and Solar Infrastructure Services Segment [Member]
Revenues from external customers
Transferred at Point in Time [Member] | Integrated Energy Infrastructure Solutions and Services Segment [Member]
Revenues from external customers	1,868	1,979
Transferred over Time [Member]
Revenues from external customers	7,623	3,709
Transferred over Time [Member] | Electric Power and Solar Infrastructure Services Segment [Member]
Revenues from external customers	5,561	399
Transferred over Time [Member] | Integrated Energy Infrastructure Solutions and Services Segment [Member]
Revenues from external customers	$ 2,062	$ 3,310

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Note 5 - Other Intangible Assets (Details Textual)	1 Months Ended			3 Months Ended
	Jan. 31, 2021 USD ($)	Jan. 31, 2021 GBP (£)	Jun. 30, 2020 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2020 GBP (£)
Payments to Acquire Intangible Assets				$ 692,000	$ 4,000
VE Technology [Member]
Acquisition Agreement, Intangible Assets, Total Consideration					$ 1,800,000	£ 1,500,000
Acquisition Agreement, Additional Fee for Payments Extension			$ 100,000
Payments to Acquire Intangible Assets | £		£ 500,000
VE Technology [Member] | Intellectual Property [Member]
Payments to Acquire Intangible Assets	$ 700,000			$ 1,200,000
Finite-Lived Intangible Assets, Net, Ending Balance	$ 1,900,000

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Note 6 - Inventories (Details Textual) - USD ($) $ in Millions	Mar. 31, 2021	Mar. 31, 2020
Accrued Inventory Payable	$ 0.2	$ 0.1

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Note 6 - Inventories - Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Finished goods			$ 258	$ 255
Raw materials			186	217
Work-in-process			530	651
Total inventories	$ 974	$ 1,123	$ 974	$ 1,123

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Note 7 - Investments (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Income (Loss) from Equity Method Investments, Total		$ (446)
Equity Method Investments	1,063		$ 1,063
Payments to Acquire Notes Receivable		200
Virtual Power Systems [Member]
Income (Loss) from Equity Method Investments, Total		400
Equity Method Investments	$ 1,100		$ 1,100
Payments to Acquire Notes Receivable		$ 200

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Note 8 - Leases (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Selling, General and Administrative Expenses [Member]
Operating Lease, Expense	$ 0.8

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Note 8 - Leases - Future Minimum Operating Lease Obligations (Details) $ in Thousands	Mar. 31, 2021 USD ($)
2021	$ 2,176
2022	2,666
2023	1,585
2024	1,056
2025	1,023
Thereafter	2,075
Interest portion	(1,597)
Operating Lease Obligations [Member]
Total operating lease obligations	$ 8,984

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Note 8 - Leases - Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating lease cost	$ 706	$ 320
Short-term lease cost	19	46
Variable lease cost	148	46
Sublease income	(113)	(98)
Total lease cost	760	314
Operating cash flows from operating leases (includes discontinued operations in 2020)	(982)	(378)
Right-of-use assets obtained in exchange for new operating lease obligations	$ 2,783	$ 1,073
Weighted-average remaining lease term - operating leases (in years) (Year)	5 years	6 years 219 days
Weighted-average discount rate - operating leases	6.50%	6.40%

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Note 9 - Stock-based Payments for Compensation, Services and Royalties (Details Textual) - USD ($) $ in Thousands	1 Months Ended			3 Months Ended
	May 17, 2021	Apr. 30, 2021	Mar. 31, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)				0	0
Share-based Payment Arrangement, Expense				$ 2,600	$ 3
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)				552,663
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Shares Returned (in shares)				338,067
Stock Issued During Period, Shares, Cashless Stock Options Exercised (in shares)				214,596
Subsequent Event [Member]
Stock Issued During Period, Shares, Royalties (in shares)	2,292
Director [Member] | Subsequent Event [Member]
Stock Issued During Period, Shares, New Issues (in shares)		80,000
Restricted Stock [Member]
Share-based Payment Arrangement, Expense				$ 2,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Granted			$ 16,400
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total			$ 14,400	14,400
Restricted Stock [Member] | Vesting April 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			33.33%
Restricted Stock [Member] | Vesting April 2022 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			33.33%
Restricted Stock [Member] | Vesting April 2023 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage			33.33%
Stock Appreciation Rights (SARs) [Member] | Selling, General and Administrative Expenses [Member]
Cash Settled Stock Based Payments, Vesting Expense				1,900
Stock Appreciation Rights (SARs) [Member] | Accrued Expenses [Member]
Accrued Cash Settled Stock Based Payments			$ 2,600	$ 2,600		$ 600

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Note 9 - Stock-based Payments for Compensation, Services and Royalties - Common Stock Issuances (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Total no. of shares, exercise (in shares)		552,663
Total no. of shares (in shares)		254,784
Total stock-based payments for compensation, services and royalties		$ 2,559	$ 3
Four Directors [Member] | January 2021 [Member]
Total no. of shares, compensation (in shares)		23,148
Grant date fair value recorded at issuance, compensation		$ 50
Four Directors [Member] | March 2021 [Member]
Total no. of shares, compensation (in shares)
Grant date fair value recorded at issuance, compensation	[1]	$ 437
Employee [Member] | January 2021 [Member]
Total no. of shares, approved bonuses (in shares)		11,415
Grant date fair value recorded at issuance, approved bonuses		$ 25
Employee [Member] | February 2021 [Member]
Total no. of shares, exercise (in shares)	[2]	214,596
Employee [Member] | March 2021 [Member]
Total no. of shares, compensation (in shares)
Grant date fair value recorded at issuance, compensation	[3]	$ 2,015
Consultants [Member] | February 2021 [Member]
Total no. of shares, services (in shares)		5,625
Grant date fair value recorded at issuance, royalty agreement		$ 22
Grant date fair value recorded at issuance, royalty agreement		22
Royalty Receipient [Member] | March 2021 [Member]
Grant date fair value recorded at issuance, royalty agreement	[4]	$ 10
Total no. of shares, royalty agreement (in shares)
Grant date fair value recorded at issuance, royalty agreement	[4]	$ 10

[1] The Company granted 80,000 fully vested shares to four directors in March. These shares were issued in April 2021.

[2] The cashless exercise consisted of an exercise of 552,663 shares for which 338,067 of those share options were returned to the Company in return for the 214,596 shares issued. Expense related to these stock options were recorded in prior periods as they were fully vested.

[3] In March 2021, the Company granted 3 million restricted shares for employee compensation with an aggregate fair value of $16.4 million with a graded vesting schedule. One-third of which were vested and issued in April 2021, one third of which will vest in April 2022, and one-third of which will vest in April 2023. The Company recorded $2.0 million in compensation expense related to the partial vesting of these grants in the three months ended March 31, 2021, and will record the remaining $14.4 million of stock-based compensation related to these shares over the remaining vesting period. In addition, the Company issued

[4] The Company granted 2,292 fully vested shares for the payment of accrued royalties. These shares will be issued in May 2021.

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Note 10 - Segment Reporting (Details Textual) $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2021 USD ($)		Mar. 31, 2020 USD ($)		Dec. 31, 2020
Number of Reportable Segments	3				3
Depreciation, Depletion and Amortization, Total	$ 1,747	[1]	$ 486	[2]
Energy Segment [Member] | Cost of Sales [Member]
Depreciation, Depletion and Amortization, Total	$ 200		$ 79

[1] For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $0.2 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

[2] For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $79 thousand, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

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Note 10 - Segment Reporting - Segment Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021		Mar. 31, 2020		Dec. 31, 2020	Apr. 01, 2020
Revenues from external customers	$ 9,491		$ 5,688
Depreciation, Depletion and Amortization, Total	1,747	[1]	486	[2]
Interest expense	736		11
Loss from operations	(17,263)		(7,063)
Expenditures for long-lived assets	3,638	[3]	1,282	[4]
Segment assets	94,946				$ 66,045
Goodwill	7,006				7,006	$ 7,000
Other intangible assets, net	14,221				13,697
Electric Power and Solar Infrastructure Services Segment [Member]
Revenues from external customers	5,561		399
Depreciation, Depletion and Amortization, Total	1,305	[1]	79	[2]
Interest expense	16		7
Loss from operations	(9,589)		(2,058)
Expenditures for long-lived assets	2,920	[3]	1,221	[4]
Segment assets	33,888				35,825
Goodwill	7,006				7,006
Other intangible assets, net	9,487				10,550
Integrated Energy Infrastructure Solutions and Services Segment [Member]
Revenues from external customers	3,930		5,289
Depreciation, Depletion and Amortization, Total	432	[1]	399	[2]
Interest expense	2
Loss from operations	(1,756)		(1,843)
Expenditures for long-lived assets	705	[3]	6	[4]
Segment assets	18,072				17,094
Goodwill
Other intangible assets, net	4,731				3,144
Other Segments [Member]
Revenues from external customers
Depreciation, Depletion and Amortization, Total	10	[1]	8	[2]
Interest expense	718		4
Loss from operations	(5,918)		(3,162)
Expenditures for long-lived assets	13	[3]	$ 55	[4]
Segment assets	42,986				13,126
Goodwill
Other intangible assets, net	$ 3				$ 3

[1] For the Electric Power and Solar Infrastructure segment, depreciation and amortization includes $0.2 million, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

[2] For the Electric Power and Solar Infrastructure Services segment, depreciation and amortization includes $79 thousand, which was included in cost of revenues in the Condensed Consolidated Statements of Operations.

[3] Includes purchases of property, plant and equipment and other intangible assets.

[4] Includes purchases of property, plant and equipment and other intangible assets. The Other category includes expenditures for discontinued operations.

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Note 10 - Segment Reporting - Revenue by Country (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenues from external customers	$ 9,491	$ 5,688
Revenues, percent	100.00%	100.00%
UNITED STATES
Revenues from external customers	$ 7,013	$ 3,241
Revenues, percent	74.00%	57.00%
UNITED KINGDOM
Revenues from external customers	$ 1,988	$ 2,221
Revenues, percent	21.00%	39.00%
All Others [Member]
Revenues from external customers	$ 490	$ 226
Revenues, percent	5.00%	4.00%

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Note 12 - Fair Value Measurements (Details Textual) - Convertible Note Receivable with VPS [Member] - Fair Value, Inputs, Level 3 [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Payments to Acquire Investments, Total	$ 200
Increase (Decrease) in Notes Receivable, Current	60
Convertible Note Receivable	$ 260

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Note 12 - Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Contingent consideration	$ 720	$ 720
Total liabilities	720	2,675
Convertible Notes Payable [Member]
Convertible note payable		1,955
Fair Value, Inputs, Level 1 [Member]
Contingent consideration
Total liabilities
Fair Value, Inputs, Level 1 [Member] | Convertible Notes Payable [Member]
Convertible note payable
Fair Value, Inputs, Level 2 [Member]
Contingent consideration
Total liabilities
Fair Value, Inputs, Level 2 [Member] | Convertible Notes Payable [Member]
Convertible note payable
Fair Value, Inputs, Level 3 [Member]
Contingent consideration	720	720
Total liabilities	$ 720	2,675
Fair Value, Inputs, Level 3 [Member] | Convertible Notes Payable [Member]
Convertible note payable		$ 1,955

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Note 12 - Fair Value Measurements - Reconciliation of Changes in Fair Value (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($)
Loss on extinguishment on amendment to remove convertible feature	$ 250
Amortization of original issue discount	40
Extinguishment of note	(2,302)
Fair Value, Inputs, Level 3 [Member] | Investment in Convertible Note Receivable [Member]
Balance	1,955
Accrued interest	57
Balance

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Note 13 - Loss Per Common Share (Details Textual) - shares shares in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	0.2	0.8
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	3.0

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Note 13 - Loss Per Common Share - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Loss from continuing operations, net of income taxes	$ (17,952)	$ (6,952)
Income from discontinued operations, net of income taxes		(429)
Net loss	$ (17,952)	$ (7,381)
Basic and diluted weighted average number of shares outstanding (in shares)	44,564,868	28,420,730
Loss from continuing operations per common share - basic and diluted (in dollars per share)	$ (0.40)	$ (0.24)
Loss from discontinued operations - basic and diluted (in dollars per share)	0	(0.02)
Loss per common share - basic and diluted (in dollars per share)	$ (0.40)	$ (0.26)

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Note 14 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Expense (Benefit), Total	$ 16	$ (1,600)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	0.10%	18.70%
Income Tax Expense (Benefit), Continuing and Discontinued Operations		$ (1,700)
Discontinued Operation, Tax Effect of Discontinued Operation, Total		$ (57)

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Note 15 - Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Foreign currency translation adjustment	$ (4,428)	$ (4,406)
Accumulated other comprehensive loss	$ (4,428)	$ (4,406)

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Note 16 - Notes Payable (Details Textual) - USD ($) $ / shares in Units, $ in Thousands									1 Months Ended			3 Months Ended		6 Months Ended
		Mar. 31, 2022	Oct. 31, 2021	Mar. 23, 2021	Mar. 03, 2021	Nov. 13, 2020	Oct. 30, 2020	May 02, 2020	Feb. 28, 2021	Jan. 31, 2021	Jul. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2021	Dec. 31, 2020
Common Stock, Par or Stated Value Per Share (in dollars per share)												$ 0.001			$ 0.001
Gain (Loss) on Extinguishment of Debt, Total												$ (250)
Seller Financed Notes Payable, Two [Member]
Long-term Debt, Total												1,500
Unsecured Debt [Member] | Streeterville Capital, LLC [Member]
Debt Instrument, Face Amount				$ 10,700
Debt Instrument, Interest Rate, Stated Percentage				9.00%
Debt Instrument, Term (Month)				1 year 180 days
Debt Instrument, Periodic Payment, Total				$ 1,000
Long-term Debt, Total												9,700
Debt Instrument, Unamortized Discount, Total				$ 1,000
Debt Instrument, Interest Rate, Effective Percentage				19.60%
Financing Note [Member]
Long-term Debt, Total	[1]											383			$ 1,163
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-term Debt, Total								$ 1,900
Long-term Debt, Total	[2]											$ 1,924			1,924
Seller Financed Notes Payable, One [Member]
Debt Instrument, Interest Rate, Stated Percentage												6.00%
Debt Instrument, Term (Month)												1 year 180 days
Long-term Debt, Total												$ 5,000
Repayments of Debt					$ 1,000
Seller Financed Notes Payable, One [Member] | Forecast [Member]
Repayments of Debt		$ 3,000	$ 1,000
Seller Financed Notes Payable, Two [Member]
Debt Instrument, Term (Month)												3 years
Vehicle and Equipment loans [Member]
Long-term Debt, Total	[3]											$ 173			195
Vehicle and Equipment loans [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage												6.79%
Vehicle and Equipment loans [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage												8.99%
Non-Recourse Payable Agreement [Member]
Long-term Debt, Total	[4]											$ 1,187			2,699
The Convertible Notes Payable [Member]
Debt Instrument, Face Amount						$ 2,200
Debt Instrument, Interest Rate, Stated Percentage						10.00%
Debt Instrument, Term (Month)						1 year 180 days
Debt Instrument, Periodic Payment, Total						$ 250
Long-term Debt, Total												2,300
Common Stock, Par or Stated Value Per Share (in dollars per share)						$ 0.001
Proceeds from Convertible Debt						$ 2,200
Debt Instrument, Unamortized Discount, Total						$ 200
Debt Instrument, Redemption Price, Percentage						115.00%
Debt Instrument, Interest Rate, Effective Percentage						29.00%
Gain (Loss) on Extinguishment of Debt, Total									$ (250)
Conditional Settlement Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage							0.00%
Debt Instrument, Term (Month)							3 years
Long-term Debt, Total							$ 3,500
Second Conditional Settlement Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage										12.00%
Debt Instrument, Term (Month)										150 days
Debt Instrument, Periodic Payment, Total										$ 1,400
Long-term Debt, Total										$ 1,000
First Insurance Funding [Member] | Financing Note [Member]
Debt Instrument, Face Amount											$ 1,400				$ 100
Debt Instrument, Interest Rate, Stated Percentage											3.35%				3.35%
Debt Instrument, Term (Month)											270 days
Debt Instrument, Periodic Payment, Total											$ 159
First Insurance Funding [Member] | Second Financing Note [Member]
Debt Instrument, Face Amount															$ 400
Debt Instrument, Interest Rate, Stated Percentage															4.35%
Amended C6 Capital Agreement [Member] | Non-Recourse Payable Agreement [Member]
Debt Instrument, Face Amount												$ 3,500
Debt Instrument, Interest Rate, Stated Percentage												0.00%
Debt Instrument, Periodic Payment, Total												$ 54
Long-term Debt, Total												1,100
Long-term Debt, Gross												$ 1,200
Amended C6 Capital Agreement [Member] | Non-Recourse Payable Agreement [Member] | Forecast [Member]
Debt Instrument, Periodic Payment, Total														$ 116
Amended C6 Capital Agreement [Member] | Future Revenue Payable [Member]
Debt Instrument, Effective Interest Rate for Discount Amortization												117.00%

[1] Note payable with an original balance for $1.4 million to First Insurance Funding was executed in July 2020 by the Company for the purposes of financing a portion of the Company's insurance coverage. The Note has an annual percentage rate of 3.35% with nine monthly payments of approximately $159 thousand and will be paid off by April 1, 2021. The Company financed two additional insurance policies in the fourth quarter of 2020 for $0.1 million and $0.4 million, respectively. The smaller of which will mature in April 2021 and the other of which will mature in September 2021, and for which had annual interest rates of 3.35% and 4.35%, respectively.

[2] On April 30, 2020 and May 2, 2020, the Company entered into unsecured loans in the aggregate principal amount of approximately $1.9 million (the "Loans") pursuant to the Paycheck Protection Program (the "PPP"), sponsored by the Small Business Administration (the "SBA") as guarantor of loans under the PPP. The Loans, and interest accrued thereon, is forgivable, partially or in full, if certain conditions are met. The Loans are evidenced by four promissory notes, three with Bank of America, NA which are dated as of April 30, 2020 and one with Dogwood State Bank dated May 2, 2020. The Bank of America notes mature two years from funding date of the notes and the Dogwood State Bank note matures two years from the note date. Each of the notes bear interest at a fixed rate of 1.0% per annum with payments deferred. The Loans may be prepaid at any time prior to maturity with no prepayment penalties.

[3] Includes vehicle and equipment loans with interest rates ranging from 6.79% to 8.99%.

[4] To refinance an earlier non-recourse note and to provide the Company with additional capital, the Company took out two non-recourse agreements with C6 Capital for the sale of future revenues in the total amount of $3.5 million. These agreements had no stated interest rate and the original issue discount including upfront fees are being amortized using an effective interest rate of approximately 117%. After combined weekly payments of approximately $54 thousand for the first four weeks, the combined payments increased to approximately $116 thousand until June 2021. As of March 31, 2021, the future payments for these financing agreements was approximately $1.2 million ($1.1 million net of discount).

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Note 16 - Notes Payable - Summary of Debt (Details) - USD ($) $ in Thousands		Mar. 31, 2021		Dec. 31, 2020		Apr. 01, 2020
Unamortized discount and deferred debt issuance costs		$ (1,131)		$ (904)
Less short-term notes and current maturities of long term notes payable		(16,798)		(12,246)
Notes payable, less current portion		8,756		5,056
Financing Note [Member]
Long-term Debt	[1]	383		1,163
Paycheck Protection Program CARES Act [Member]
Long-term Debt	[2]	1,924		1,924
Seller Financed Notes Payable [Member]
Long-term Debt		5,480	[3]	6,480	[3]	$ 6,500
Vehicle and Equipment loans [Member]
Long-term Debt	[4]	173		195
Non-Recourse Payable Agreement [Member]
Long-term Debt	[5]	1,187		2,699
Notes Payable, Financing Notes [Member]
Long-term Debt	[6]	13,038		2,245
Conditional Settlement Note Payable [Member]
Long-term Debt	[7]	$ 4,500		$ 3,500

[1] Note payable with an original balance for $1.4 million to First Insurance Funding was executed in July 2020 by the Company for the purposes of financing a portion of the Company's insurance coverage. The Note has an annual percentage rate of 3.35% with nine monthly payments of approximately $159 thousand and will be paid off by April 1, 2021. The Company financed two additional insurance policies in the fourth quarter of 2020 for $0.1 million and $0.4 million, respectively. The smaller of which will mature in April 2021 and the other of which will mature in September 2021, and for which had annual interest rates of 3.35% and 4.35%, respectively.

[2] On April 30, 2020 and May 2, 2020, the Company entered into unsecured loans in the aggregate principal amount of approximately $1.9 million (the "Loans") pursuant to the Paycheck Protection Program (the "PPP"), sponsored by the Small Business Administration (the "SBA") as guarantor of loans under the PPP. The Loans, and interest accrued thereon, is forgivable, partially or in full, if certain conditions are met. The Loans are evidenced by four promissory notes, three with Bank of America, NA which are dated as of April 30, 2020 and one with Dogwood State Bank dated May 2, 2020. The Bank of America notes mature two years from funding date of the notes and the Dogwood State Bank note matures two years from the note date. Each of the notes bear interest at a fixed rate of 1.0% per annum with payments deferred. The Loans may be prepaid at any time prior to maturity with no prepayment penalties.

[3] Includes two seller financed notes payable, one for $5 million and the second for $1.5 million. The $5 million note was amended from its original 18-month term to provide for installments of $1 million paid on March 3, 2021, a second $1 million payment to be made on October 31, 2021 and a final principal payment of $3 million on March 31, 2022. The original payment terms called for the full $5 million principal to be paid no later than November 1, 2021 without separate installments. The second seller financed note payable is due 36-months from the April 1, 2020 acquisition date. Both notes have an interest rate of 6% per annum.

[4] Includes vehicle and equipment loans with interest rates ranging from 6.79% to 8.99%.

[5] To refinance an earlier non-recourse note and to provide the Company with additional capital, the Company took out two non-recourse agreements with C6 Capital for the sale of future revenues in the total amount of $3.5 million. These agreements had no stated interest rate and the original issue discount including upfront fees are being amortized using an effective interest rate of approximately 117%. After combined weekly payments of approximately $54 thousand for the first four weeks, the combined payments increased to approximately $116 thousand until June 2021. As of March 31, 2021, the future payments for these financing agreements was approximately $1.2 million ($1.1 million net of discount).

[6] On November 13, 2020, the Company completed a Securities Purchase Agreement with an institutional investor, pursuant to which the Company agreed to issue to the Investor an unsecured convertible instrument in the principal amount of $2.2 million (the "Convertible Security" or "Note") to purchase shares of the Company's common stock, $0.001 par value per share (the "Common Stock") against the payment of the applicable consideration therefore. Upon the closing on November 13, 2020, the Company received gross proceeds of $2.2 million before fees and other expenses associated with the transaction, including but not limited to, a $0.2 million original issue discount payable to the Investor. The net proceeds received by the Company was used primarily for working capital, debt repayment and general corporate purposes. The Note is payable in full within eighteen (18) months after the purchase price date in accordance with the terms set forth in the Note and accrues interest on the outstanding balance at the rate of ten percent (10%) per annum from the Purchase Price Date until the Note is paid in full. All interest shall compound daily and shall be payable in accordance with the terms of the Note. Company has the right to prepay all or any portion of the outstanding balance in an amount equal to 115% multiplied by the portion of the outstanding balance to be prepaid. The creditor may request payment of up to $250 thousand per month beginning 6 months after initial issuance. Original issue discount is amortized over the expected life of the investment at an effective interest rate of approximately 29%. The Company elected the fair value option for this note and as a result did not bifurcate any potential embedded derivatives. In February 2021, the Company negotiated modified terms which effectively removed the convertible option from the note and the Company recorded a $250 thousand loss on extinguishment and its carrying value was $2.3 million at March 31, 2021. See Note 12 for more information on the fair value of this note payable. On March 23, 2021, the Company completed a second note payable with the same institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 19.6% an original issue discount of $1.0 million and a carrying value of $9.7 million at March 31, 2021. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1 million per month beginning 6 months after initial issuance.

[7] In October 2020, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $3.5 million at zero interest over three years. In January 2021, the Company entered into a conditional settlement agreement with a subcontractor to make payments of $1.4 million over approximately 5 months at 12% annual interest rate with the final payment on or before June 30, 2021. There is $1.0 million outstanding on this note at March 31, 2021.

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Note 17 - Concentrations - Concentration Risk (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration risk, percentage	39.00%	18.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer One [Member]
Concentration risk, percentage	23.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Two [Member]
Concentration risk, percentage	16.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer Three [Member]
Concentration risk, percentage		18.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration risk, percentage	37.00%		42.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member]
Concentration risk, percentage			11.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Four [Member]
Concentration risk, percentage	23.00%		19.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Five [Member]
Concentration risk, percentage	14.00%		12.00%
Geographic Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration risk, percentage	21.00%	39.00%
Geographic Concentration Risk [Member] | Revenue Benchmark [Member] | UNITED KINGDOM
Concentration risk, percentage	21.00%	39.00%
Geographic Concentration Risk [Member] | Accounts Receivable [Member]
Concentration risk, percentage	32.00%		21.00%
Geographic Concentration Risk [Member] | Accounts Receivable [Member] | UNITED KINGDOM
Concentration risk, percentage	32.00%		21.00%

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Note 18 - Other Equity Transactions (Details Textual) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2021	Mar. 31, 2021	Apr. 30, 2021
Stock Issued During Period, Value, New Issues	$ 45,000	$ 42,376
Payments of Stock Issuance Costs	2,600
Proceeds from Issuance of Common Stock	$ 42,400
Sale of Equity, Registration, Maximum Value		$ 150,000
Subsequent Event [Member]
Sale of Equity, Registration, Maximum Value			$ 150,000

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Note 19 - Acquisition of Reach Construction Group, LLC (Details Textual) - USD ($) $ in Thousands	Apr. 01, 2020	Mar. 31, 2021		Dec. 31, 2020
Business Combination, Contingent Consideration, Liability, Total		$ 720		$ 720
Seller Financed Notes Payable [Member]
Long-term Debt Issued for Business Acquisition, Subject to Preliminary Working Capital Adjustment	$ 35,000
Long-term Debt, Total	$ 6,500	$ 5,480	[1]	$ 6,480	[1]
Reach Construction Group, LLC [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)	2,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 1,224
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	30,000
Business Combination, Contingent Consideration, Liability, Total	700
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred	28,500
Reach Construction Group [Member]
Off-balance Sheet Asset, Contractual Backlog	$ 100,000

[1] Includes two seller financed notes payable, one for $5 million and the second for $1.5 million. The $5 million note was amended from its original 18-month term to provide for installments of $1 million paid on March 3, 2021, a second $1 million payment to be made on October 31, 2021 and a final principal payment of $3 million on March 31, 2022. The original payment terms called for the full $5 million principal to be paid no later than November 1, 2021 without separate installments. The second seller financed note payable is due 36-months from the April 1, 2020 acquisition date. Both notes have an interest rate of 6% per annum.

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Note 19 - Acquisition of Reach Construction Group, LLC - Purchase Consideration (Details) - Reach Construction Group, LLC [Member] $ in Thousands	Apr. 01, 2020 USD ($)
Orbital Energy Stock issued - 2 million shares	$ 1,224
Payments to Acquire Businesses, Gross	3,000
Business Combination, Consideration Transferred, Total	11,424
Contingent Consideration [Member]
Liabilities incurred	720
The 18 Month Seller Note [Member]
Liabilities incurred	5,000
The 3 Year Seller Note [Member]
Liabilities incurred	$ 1,480

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Note 19 - Acquisition of Reach Construction Group, LLC - Purchase Consideration (Details) (Parentheticals)	Apr. 01, 2020 shares
Reach Construction Group, LLC [Member]
Stock issued for acquisition (in shares)	2,000,000

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Note 19 - Acquisition of Reach Construction Group, LLC - Purchase Price Allocation (Details) - USD ($) $ in Thousands		Apr. 01, 2020	Mar. 31, 2021	Dec. 31, 2020
Goodwill, Ending Balance		$ 7,000	$ 7,006	$ 7,006
Reach Construction Group, LLC [Member]
Business Combination, Consideration Transferred, Total		11,424
Cash and cash equivalents		19
Trade accounts receivable, net of allowance		6,972
Contract assets		3,299
Prepaid expenses and other current assets		427
Property and equipment		382
Right of use assets - Operating leases		890
Goodwill, Ending Balance		7,006
Deferred tax liability	[1]	(1,570)
Liabilities assumed		(19,738)
Purchase price allocation		11,424
Reach Construction Group, LLC [Member] | Customer Relationships [Member]
Intangible		8,647
Reach Construction Group, LLC [Member] | Trade Names [Member]
Intangible		1,878
Reach Construction Group, LLC [Member] | Noncompete Agreements [Member]
Intangible		$ 3,212

[1] The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in 2020.

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Note 20 - Commitments and Contingencies (Details Textual) $ in Millions	Mar. 31, 2021 USD ($)
Performance and Payment Bonds Outstanding Amount	$ 1.9
Estimated Cost to Complete Bonded Projects	$ 0.9

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Note 21 - Subsequent Events (Details Textual) - Subsequent Event [Member] - USD ($)	May 11, 2021	Apr. 13, 2021
The Investor Note [Member]
Debt Instrument, Face Amount	$ 10,715,000
Proceeds from Issuance of Debt, Gross	10,715,000
Debt Instrument, Unamortized Discount, Total	$ 700,000
Debt Instrument, Term (Month)	1 year 180 days
Debt Instrument, Interest Rate, Stated Percentage	9.00%
Debt Instrument, Redemption Price, Percentage	115.00%
Debt Instrument, Periodic Payment, Total	$ 1,000,000
Minimum [Member] | Three Employees [Member]
Base Annual Compensation		$ 165,000
Maximum [Member] | Three Employees [Member]
Base Annual Compensation		$ 300,000
Gibson Technical Services, Inc. [Member]
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Business Combination, Consideration Transferred, Total		$ 48,000,000
Payments to Acquire Businesses, Gross		$ 22,000,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)		4,651,162
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		$ 26,000,000
Business Acquisition, Share Price (in dollars per share)		$ 5.59
Gibson Technical Services, Inc. [Member] | One Year Restricted Share Period [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)		2,232,569
Business Acquisition, Equity Interest Issued or Issuable, Restriction Period (Year)		1 year
Gibson Technical Services, Inc. [Member] | Two Year Restricted Share Period [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)		2,418,593
Business Acquisition, Equity Interest Issued or Issuable, Restriction Period (Year)		2 years