10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022

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 Infrastructure Group, Inc.

(Exact name of registrant as specified in its charter)

Texas	(1731)	84-1463284
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification No.)

5444 Westheimer Road

Suite 1650

Houston, Texas 77056

(832) 467-1420

(Address and Telephone Number of Principal Executive Offices and Principal Place of Business)

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

Title of each class	Trading Symbol(s)	Name of each exchange where registered
Common Stock, $0.001 par value.	OIG	Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes   ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes   ☒ No

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

1

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   ☐ Yes   ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates, based on the closing price of our common stock on the last business day of the registrant’s most recently completed fiscal second quarter (June 30, 2022), was approximately $68,232,566. Shares of common stock beneficially held by each executive officer and director as well as 10% holders as of June 30, 2022 have been excluded from this computation because these persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.

As of  March 31, 2023, the registrant had 185,464,173 shares of common stock outstanding and no shares of preferred stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

Part I
Item 1.	Business	4
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	23
Item 2.	Properties	23
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosure	23
Part II
Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
	Market Value	24
	Description of Securities	24
Item 6.	Reserved	24
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
	Critical Accounting Policies	28
	Liquidity and Capital Resources	32
	Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 8.	Financial Statements and Supplementary Data	45
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	90
Item 9A.	Controls and Procedures	90
Item 9B.	Other Information	91
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	92
	Our Corporate Governance Practices	96
	Audit Committee	97
	Audit Committee Report	98
	Nominating Committee	98
Item 11.	Executive Compensation	102
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	107
Item 13.	Certain Relationships, Related Transactions and Director Independence	109
Item 14.	Principal Accounting Fees and Services	110
Part IV
Item 15.	Exhibits, Financial Statement Schedules	111
	Exhibits	112
Item 16.	Form 10-K Summary	113
	Signatures	113
	Certifications

3

PART I

Item 1.  Business

Corporate Overview

Orbital Infrastructure Group, Inc. and subsidiaries (Nasdaq: OIG), formerly known as Orbital Energy Group, Inc. and CUI Global Inc., are collectively referred to as ‘‘Orbital Infrastructure Group,’’ the “Company,” or “OIG.” Orbital Infrastructure Group is a Texas corporation organized on April 21, 1998 with its principal place of business located at 5444 Westheimer Road, Suite 1650, Houston, Texas 77056. The Company is a diversified infrastructure services company serving customers in the electric power, telecommunications, and renewable markets.

In the fourth quarter of 2021, the Company's continuing operations were reclassified into three reportable segments, which include the Electric Power segment, the Telecommunications segment, and the Renewables segment. The Company’s corporate overhead activities are included in Other. Orbital Infrastructure Group has continuing operations in four countries, including the United States, Australia, Belgium and India.

In December 2021, the Company announced plans to exit its Integrated Energy Infrastructure Solutions and Services segment. Both the domestic portion of the segment, Orbital Gas Systems, North America, and the foreign segment, Orbital Gas Systems, Ltd. (Orbital-UK) were held for sale as of December 31, 2021, and considered discontinued operations.

Electric Power Segment

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas and Orbital Power, Inc. based in Dallas, Texas. The segment provides comprehensive infrastructure solutions to customers in the electric power industry. Services performed by Front Line Power and Orbital Power, Inc. generally include but are not limited to the engineering, design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services. 

Telecommunications Segment

The Telecommunications segment consists of Gibson Technical Services (GTS) along with its subsidiaries IMMCO, Inc. based in Atlanta, Georgia and Full Moon Telecom, LLC based in Florida and Coax Fiber Solutions, LLC, based in Georgia. GTS provides engineering, design, construction, and maintenance services to the broadband and wireless telecommunication industries and was acquired by the Company effective April 13, 2021. IMMCO, Inc. provides enterprise solutions to the cable and telecommunication industries and was acquired by the Company effective July 28, 2021. Full Moon Telecom, LLC provides telecommunication services including an extensive array of wireless service capabilities and was acquired by the Company effective October 22, 2021. Coax Fiber Solutions, LLC (acquired March 7, 2022), is based in Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.

Renewables Segment

Orbital Solar Services, LLC (OSS), based in Raleigh, North Carolina, makes up the Renewables segment. OSS provides engineering, procurement and construction (“EPC”) services that support the development of renewable energy generation focused on utility-scale solar construction. 

4

Discontinued Operations - Integrated Energy Infrastructure Solutions and Services

On December 28, 2021, the Board of Directors of Orbital Infrastructure Group, Inc. approved management’s recommendation for certain restructuring and cost reduction actions to strategically reposition the Company’s business. This strategy focused on building an infrastructure services company serving the electric power, telecommunications and renewable markets by disposing of two (2) of its subsidiaries.  The two subsidiaries were:

● Orbital Gas Systems, North America, Inc. (“OGSNA”);

● Orbital Gas Systems, Ltd. (“Orbital UK”).

OGSNA and Orbital UK are collectively referred to as the “Orbital Gas Subsidiaries."

The Orbital Gas Subsidiaries provide proprietary gas measurement and sampling technologies and the integration of process control and measuring/sampling systems. These legacy businesses did not fit within the Company's future strategy to build an infrastructure services company serving the electric power, telecommunications, and renewable markets. The disposition of the Orbital Gas Subsidiaries facilitated the Company’s restructuring and cost savings initiatives and were intended to realign and simplify its business structure and better position the Company for future growth and improved profitability.

Following is a description of the businesses included in discontinued operations.

Orbital Gas Systems, Ltd. (Orbital-UK) was based in Stone, Staffordshire in the United Kingdom and Orbital Gas Systems, North America, Inc. (Orbital North America), was based in Houston, Texas. The Integrated Energy Infrastructure Solutions and Services segment subsidiaries are providers of gas solutions, with more than 30 years of experience in design, installation and the commissioning of industrial gas sampling, measurement and delivery systems. Included in the U.K. is a 46,000 square foot manufacturing/administration/research and development facility. Orbital Gas Systems manufactures and delivers integrated engineering solutions and technologies including environmental monitoring, gas metering, process control, telemetry, gas sampling and BioMethane to grid solutions. 

Under the United States Trademark Act of 1946, as amended, and the system of international registration of trademarks governed by international treaties, the Madrid Agreement, which maintains the international register and, in several instances, direct trademark registration in foreign countries, our discontinued operations maintain up to date the following trademarks: GasPT, IRIS, Orbital Gas Systems, and VE Technology.

As of December 31, 2021, Orbital UK was considered held for sale and its assets were written down to their expected sale price, resulting in a $9.2 million impairment in 2021. The sale of the U.K. operations closed in May of 2022. The Company could receive additional consideration if certain events transpire during the 12-month restricted period following the settlement date.  

The Company sold a portion of the North America business in the third quarter of 2022 at approximately book value of the assets sold. Certain assets and liabilities not sold with the business were reclassified from held for sale to held and used. Remaining assets held for sale at December 31, 2022 include the VE Technology asset of the Company's North America Orbital Gas subsidiary. VE Technology is a gas sampling intellectual property, which provides a method of penetrating the gas flow without the associated vortex vibration, thereby making it a ‘‘stand-alone’’ product for thermal sensing (thermowells) and trace-element sampling.

In addition to the discontinued operations held for sale, the Company's assets held for sale also included $1.4 million of assets from Eclipse Foundation Group, which was integrated into the Front Line Power Construction, LLC in the third quarter of 2022.

5

Anticipated Growth Strategy

Our strategy includes:

• Profitably grow organically and through acquisitions into infrastructure services within the electric power, telecommunications and renewables markets.

• We are committed to fostering greater diversity within the industries we serve, ensuring that people of color and minority-owned and/or operated businesses have ample opportunities to join in and benefit from our growth.

• Continuing to enhance our service capabilities, expand existing and new customer relationships and broaden our geographic footprint.

Acquisition Strategy

Our acquisition strategy is focused on pursuing targets with profitability that is equal to or greater than that of industry peers, revenue visibility, good outlook for growth, long-standing customer relationships and entrepreneurial leaders with a proven track record in operations management. Due diligence is performed on each potential acquisition target to identify relevant synergies with our current business, along with the potential for increasing revenue, earnings and shareholder value. Our strategy is contingent on those equity and/or capital issues identified in Item 1A. Risk  Factors below.

6

Employees

As of December 31, 2022, Orbital Infrastructure Group, Inc., with its consolidated subsidiaries, had 1,490 employees in continuing operations and 3 employees in discontinued operations. This is an increase in total employees from the 1329 total employees reported as of December 31, 2021 in continuing operations and 111 employees in discontinued operations. As of December 31, 2022, 190 of its employees are members of the International Brotherhood of Electrical Workers or IBEW, which is a slight decrease from 203 IBEW members as of December 31, 2021. The increase in employees relates to the growth at IMMCO and GTS and the addition of Coax Fiber Solutions in 2022 partially offset by a decrease in headcount at the other entities. The Company values all of its employees and fosters a good working relationship. As the company continues to increase revenues, additional staff may be added to adequately support the business.

Intellectual Property Protection

The Company relies on various intellectual property laws and contractual restrictions to protect its proprietary rights in products, logos and services. These include confidentiality, invention assignment and nondisclosure agreements with employees, contractors, suppliers and strategic partners. The confidentiality and nondisclosure agreements with employees, contractors and suppliers are in perpetuity or for a sufficient length of time so as to not threaten exposure of proprietary information.

Trademark Act of 1946, as amended, and the system of international registration of trademarks governed by international treaties, the Madrid Agreement, which maintains the international register and, in several instances, direct trademark registration in foreign countries, we and our subsidiaries actively maintain up to date the following trademarks for continuing operations: Orbital Power, Inc. and IMMCO, Inc.

The Company continuously reviews and updates the existing intellectual property filings and files new documentation both nationally and internationally (Patent Cooperation Treaty) in a continuing effort to maintain up-to-date protection of its intellectual property.

For those intellectual property applications pending, there is no assurance that the registrations will be granted. Furthermore, the Company is exposed to the risk that other parties may claim the Company infringes their existing patent and trademark rights, which could cause the Company’s inability to develop and market its products unless the Company enters into licensing agreements with the technology owner or could force the Company to engage in costly and potentially protracted litigation.

Competitive Business Conditions

The markets in which we operate are highly fragmented and highly competitive wherein Orbital Infrastructure Group competes with other contractors, from small local independent companies to large national firms, in most of the geographic markets in which we operate. Several competitors are large companies that have significant financial, technical and marketing resources. Certain barriers to entry exist in the markets in which we operate such as technical expertise, high safety rating requirements, operational experience and quality, and financial resources. From time to time, new competitors that have adequate financial resources and access to technical expertise may become a competitor in our markets. A significant portion of our revenues is currently derived from unit price or fixed price agreements with price often a primary factor in customer project awards; therefore, we could be underbid by our competitors. We believe that as demand for our services increases, customers often consider other factors in choosing a service provider, including technical expertise and experience, safety ratings, financial and operational resources, geographic presence, industry reputation and dependability, which we expect to benefit larger contractors such as us. There can be no assurance, however, that our competitors will not develop the expertise, experience and resources to provide services that are superior in both price and quality to our services, or that we will be able to maintain or enhance our competitive position. Many of our customers are able to perform their own infrastructure services similar to the work we provide. Although these companies currently outsource a significant portion of these services, there can be no assurance that they will continue to do so in the future or that they will not acquire additional in-house capabilities.

Item 1A. Risk Factors

RISK FACTORS

Our business is subject to various risks and uncertainties. Investors should read carefully the following factors as well as the cautionary statements referred to in ‘‘Forward-Looking Statements’’ together with all of the other information in this Form 10-K. If any of the risks and uncertainties described below or elsewhere in this annual report on Form 10-K actually occur, the Company's business, financial condition or results of operations could be materially adversely affected and/or the trading price of our common stock could decline. We also may not be able to achieve our goals or expectations. 

Risks Related to Our Business and Operations, Services, Products and Industries We Serve

There is substantial doubt about the Company’s ability to continue as a going concern and this could, among other things, materially and adversely impact our ability to obtain additional financing and the value of our common stock.
Due to the decreases in the Company’s market capitalization, the significant loss in the Renewables segment in 2022, interest rate increases and limitations on accessing capital, there is substantial doubt as to the ability of the Company to continue as a going concern. Furthermore, management may seek additional equity or debt financing, but there can be no assurance that the Company would be able to obtain additional equity or debt financing in amounts sufficient to alleviate the substantial doubt regarding the Company’s ability to continue as a going concern.

If we cannot continue as a going concern, our stockholders would likely lose most or all of their investment in us and holders of our indebtedness may also suffer material losses on their investments. Reports raising substantial doubt as to a company’s ability to continue as a going concern are generally viewed unfavorably by analysts and investors and could have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.

Our cash, cash equivalents and investments could be adversely affected if the financial institutions in which we hold our cash, cash equivalents and investments fail.

We hold our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts at multiple financial institutions. The balance held in these accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”), standard deposit insurance limit or similar government guarantee schemes. If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds. Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations.

Historically, we have generated annual losses from operations, and we may need additional funding in the future.

Historically, on an annual basis, we have not generated sufficient revenues from operations to self-fund our capital and operating requirements. For the year ended 2022, we had a net loss of  $280.3 million, an accumulated deficit as of December 31, 2022 of  $487.1 million, and negative working capital of $190.5 million, which includes current maturities of long-term debt. If we are not able to generate sufficient income and cash flows from operations to fund our operations and growth plans, we may seek additional capital from equity and debt placements or corporate arrangements. Additional capital may not be available on terms favorable to us, or at all. If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Debt financing, if available, may involve restrictive covenants or security interests in our assets. If we raise additional funds through collaboration arrangements with third parties, it may be necessary to relinquish some rights to technologies or products. If we are unable to raise adequate funds or generate them from operations, we may have to delay, reduce the scope of, or eliminate some or all of our growth plans or liquidate some or all of our assets.

There is no assurance we will achieve or sustain profitability.

For the year ended December 31, 2022, we had a net loss of $280.3 million. There is no assurance that we will achieve or sustain profitability. If we fail to achieve or sustain profitability, the price of our common stock could fall and our ability to raise additional capital could be adversely affected.

7

Acquisitions and strategic investments related to business expansion activities may not be successful and may divert our resources from our existing business activities, negatively affecting our operating results, cash flows and liquidity and may not enhance shareholder value.

Orbital Infrastructure Group has focused our business on the acquisition and development of energy infrastructure services companies including Front Line Power Construction, LLC, Gibson Technical Services, IMMCO, Inc, Full Moon Telecom, LLC., Coax Fiber Solutions, LLC. and Orbital Solar Services (formerly Reach Construction Group, LLC), and the greenfield development of Orbital Power, Inc. We may not be successful in acquiring energy infrastructure services companies that are commercially viable. We may fail to successfully develop or commercialize such services, solutions and products that we acquire. Research, development and commercialization of such acquired services, solutions and products may disproportionately divert our resources from our other business activities. Acquisitions expose us to operational challenges and risks, including the ability to profitably manage and integrate acquired operations, implement internal controls, procedures, financial reporting and accounting systems into our business. In addition, increased indebtedness, earn-out obligations and cash flow requirements may result in cash flow shortages if anticipated revenue and earnings are not realized or are delayed. Other risks for acquisitions include, among other things, the ability to retain and hire qualified personnel, costs to integrate the business and fund capital needs. 

We may not be able to identify suitable acquisitions or investments or may have difficulty obtaining the necessary financing required to complete such acquisitions and investments. We may utilize our common stock, debt instruments, including convertible debt securities, which could dilute the ownership interests of our shareholders. In addition, we may pursue acquisitions our existing shareholders may not agree with. 

We cannot assure you that the indemnifications granted to Orbital Infrastructure Group, Inc. by sellers of acquired companies will be sufficient in amount, scope or duration to fully offset potential liabilities from acquired businesses which may have liabilities that we failed, or were unable, to discover during due diligence processes. Any such liabilities could have a material adverse effect on our business.

Acquisitions could result in operating difficulties, dilution and other harmful consequences.

We expect to continue to pursue acquisitions which require integration into our own business model. We expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions focused on energy infrastructure services. These transactions could be material to our financial condition and results of operations. The process of integrating an acquired company, business or technologies may create unforeseen operating difficulties and expenditures. The areas where we face risks include:

• implementation or remediation of controls, procedures and policies of the acquired company;

• diversion of management time and focus from operating our business to acquisition integration challenges;

• coordination of product, engineering and sales and marketing functions;

• transition of operations, users and customers into our existing customs;

• cultural challenges associated with integrating employees from the acquired company into our organization;

• retention of employees from the businesses we acquire;

• integration of the acquired company’s accounting, management information, human resource and other administrative systems;

• liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

• litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former shareholders, or other third parties;

• in the case of foreign acquisitions, the need to integrate operations across different cultures, time zones, and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;

• failure to successfully further develop the acquired technologies; and

• other as yet unknown risks that may impact our business.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions could cause us to fail to realize the anticipated benefits of such acquisitions, incur unanticipated liabilities and harm our business generally. 

Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill, or reductions to our tangible net worth any of which could harm our business, financial condition, results of operations and prospects. Also, the anticipated benefit of many of our acquisitions may not materialize.

We could incur goodwill and intangible asset impairment expenses, which could negatively impact our profitability.

We have goodwill and intangible assets and will continue to as we acquire new businesses. We periodically review the carrying values of goodwill and intangible assets to determine whether such carrying values exceed their fair market values. Adverse changes in financial, competitive and other conditions such as declines in operating performance or other adverse changes in valuation assumptions could adversely affect the estimated fair values of the related assets and impairment to goodwill or intangible assets. See Note 5 in the notes to the audited consolidated financial statements for further details.

We utilize debt to fund our operations and acquisitions strategy, which could adversely affect our business, financial condition and results of operations or could affect our ability to access capital markets in the future. Our debt may contain restrictive covenants that may prevent Orbital Infrastructure Group from engaging in transactions that might benefit us.

Outstanding debt and related debt service requirements could have significant consequences on our future operations including making it difficult to meet payment and other obligations. Events of default may occur if we fail to comply with the financial and other restrictive covenants included with our debt agreements which could result in an acceleration of our debts becoming due and payable which would negatively impact our ability to fund working capital, capital expenditures, acquisitions and investments and could impact our ability to obtain additional financing or limiting access to financing with reasonable terms. 

We cannot assure that our business will generate future cash flows from operations, or that future borrowings will be available to us in an amount sufficient to enable us to meet our payment obligations and to fund other operational and liquidity needs.

In addition, regulatory changes and/or reforms, such as the phase-out of the London Inter-bank Offered Rate (“LIBOR”), which is expected to occur by June 30, 2023, could lead to additional volatility in interest rates and other unpredictable effects. 

8

We have a significant amount of debt, and our significant indebtedness could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under our other debt.

We have a significant amount of debt and debt service requirements. As of December 31, 2022, the Company had approximately $100.5 million of outstanding long-term debt, excluding current maturities and $148.9 million of current maturities including its line of credit. A large amount of the debt includes amounts borrowed during 2021 to finance a portion of the closing consideration paid in connection with our acquisition of Front Line Power Construction, LLC. This level of debt could have significant consequences on our future operations, including:

• making it more difficult for us to meet our payment and other obligations under our outstanding debt;

• an event of default if we fail to comply with the financial and other restrictive covenants contained in our debt agreements, which event of default could result in an acceleration of our debt maturity and higher default-level interest rates;

• reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions or strategic investments, and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes;

• subjecting us to the risk of increasing interest expense on variable rate indebtedness;

• limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to changes in our business, the industries in which we operate and the general economy;

• limiting our ability to pursue business opportunities that become available to us; and

• placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged.

Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations on our existing indebtedness.

Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our operations to pay our indebtedness.

Our ability to generate cash in order to make scheduled payments on the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive, legislative, regulatory and other factors beyond our control. In addition, our ability to borrow funds in the future to make payments on our debt will depend on the satisfaction of the covenants in our current credit agreements and those we may enter into in the future. Specifically, we will need to maintain certain financial ratios. Our business may not continue to generate sufficient cash flow from operations in the future and future borrowings may not be available to us under our senior credit facility or from other sources in an amount sufficient to service our indebtedness, to make necessary capital expenditures or to fund our other liquidity needs. If we are unable to generate cash from our operations or through borrowings, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to make payments on our indebtedness or refinance our indebtedness will depend on factors including the state of the capital markets and our financial condition at such time, as well as the terms of our financing agreements. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

We may be unable to obtain sufficient bonding capacity to support certain service offerings, and the need for performance and surety bonds could reduce availability of our available working capital resources.

Some of our contracts require performance and payment bonds. If Orbital Infrastructure Group, Inc. is unable to obtain or renew the necessary bonding capacity, we may be precluded from participation in bidding for certain contracts and from certain customers. Such bonding may require Orbital Infrastructure Group to post letters of credit or other collateral in connection with the bonds, which could reduce our available capacity to support other needs. Standard terms in the surety market allow for sureties to issue bonds on a project-by-project basis. Sureties may decline to issue bonds at any time and can require additional collateral as a condition to issuing or renewing any bonds. 

Changes to laws, governmental regulations and policies, including among other things, permitting processes and tax incentives, could affect demand for our services. Demand for construction services depends on industry activity and expenditure levels which can be affected by numerous factors. An inability to adjust to such changes could result in decreased demand for our services and adversely affect our operating results, cash flows and liquidity.

Government regulations, climate change initiatives, political and social activism each effect the industries Orbital Infrastructure Group, Inc. serves. Changes in such could result in reduced demand for our services, delays in the timing of construction projects and possible cancellation of current or planned projects. Many of our customers must comply with strict regulatory and environmental requirements along with complex permitting processes. Our energy customers are regulated by the Federal Energy Regulatory Commission (“FERC”), among others. Our utility customers are regulated by state public utility commissions. Changes to existing, or implementation of new regulations and policies could have an adverse effect on our customers resulting in reduced demand for our services. We build renewable energy infrastructure including solar and other renewable energy projects for which the development is often dependent upon federal tax credits, existing renewable portfolio standards and other incentives. Changes to those may delay or otherwise negatively affect the demand for our services and solutions.

Our business and operating results are subject to physical risks associated with climate change.

Changes in climate have caused, and are expected to continue to cause, among other things, increasing temperatures, rising sea levels and changes to patterns and intensity of wildfires, hurricanes, floods, other storms and severe weather-related events and natural disasters. These changes have and could continue to significantly impact our future operating results and may have a long-term impact on our business, results of operation, financial condition and cash flows. While we seek to mitigate our risks associated with climate change, we recognize that there are inherent climate-related risks regardless of how and where we conduct our operations. For example, a catastrophic natural disaster could negatively impact any of our projects or office locations and the locations and service regions of our customers. Accordingly, a natural disaster has the potential to disrupt our business as well as the businesses that we serve and may cause us to experience work stoppages, project delays, financial losses and additional costs to resume operations, including increased insurance costs or loss of coverage, legal liability and reputational losses.

9

A lack of availability or an increase in the price of fuel, materials or equipment necessary for our business or our customers’ projects could adversely affect our business.

Pursuant to certain contracts, including fixed price and EPC contracts where we have assumed responsibility for procuring materials for a project, we are exposed to availability issues and price increases for materials that are utilized in connection with our operations, including, among other things, copper, steel and aluminum. In addition, the timing of our customers’ ongoing projects, as well as their capital budgets and decision-making with respect to the timing of the future projects, can be negatively impacted by a lack of availability or an increase in prices of certain materials. Prices and availability could be materially impacted by, among other things, supply chain and other logistical challenges, global trade relationships (e.g., tariffs, sourcing restrictions) and other general market and geopolitical conditions (e.g., inflation). For example, recent logistical challenges in connection with the COVID-19 pandemic and sourcing restrictions have resulted in uncertainty concerning availability and pricing of certain commodities and goods important to our and our customers’ businesses, including renewable energy project components (e.g., solar panels). The lack of availability of necessary materials could result in project delays, some of which could be attributable to us, and an increase in prices of materials could reduce our profitability on projects or negatively impact our customers, which could have an adverse effect on demand for our services or our business, financial condition, results of operations and cash flows.

Additionally, supply chain and other logistical challenges have negatively impacted suppliers of certain equipment necessary for the performance of our business, including, among other things, new vehicles for our fleet (both on-road and specialty vehicles) and vehicle parts (e.g., tires). Based on the significant worldwide shortage of semiconductors, as well as other factors, vehicle manufacturers are experiencing production delays with respect to vehicles we utilize in our operations. To the extent these production issues worsen or become longer-term in nature, our operations could be negatively impacted.

We are also exposed to increases in energy prices, particularly fuel prices for our fleet of vehicles, which have increased during the COVID-19 pandemic, and could increase further due to future regulatory, legislative and policy changes that result from, among other things, war in Ukraine and climate change initiatives. Furthermore, some of our fixed price contracts do not allow us to adjust our prices and, as a result, increases in fuel costs could reduce our profitability with respect to such projects. Our ability to utilize certain existing vehicles within our fleet may also be limited by new emissions or other regulations, and, due to lack of production or availability, we may not be able to procure a sufficient number of vehicles meeting any such regulations. To the extent we are unable to utilize a significant portion of our existing fleet, we may be unable to perform services, which could have an adverse effect on our future financial condition, results of operations and cash flows. The broader and longer-term implications of these challenges, as a result of the COVID-19 pandemic, the transition to a carbon-neutral economy and otherwise, remains highly uncertain and variable and could negatively impact our overall business, financial condition, results of operations and cash flows.

If our manufacturers, suppliers or our service providers are unable to provide an adequate supply of products and services, our growth could be limited, and our business could be harmed.  

We rely on third parties to supply services and materials for our integrated solutions and construction offerings. In order to grow our business to achieve profitability, we may need such business partners to increase, or scale up, production and supply by a significant factor over current levels. There are technical challenges to scaling up capacity that may require the investment of substantial additional funds by our manufacturers or suppliers and hiring and retaining additional management and technical personnel who have the necessary experience. If our manufacturers and suppliers are unable to do so, we may not be able to meet the requirements to grow our business to anticipated levels. We also may represent only a small portion of our supplier’s or manufacturer’s business, and if they become capacity constrained, they may choose to allocate their available resources to other customers that represent a larger portion of their business.

Our global operations are subject to increased risks, which could harm our business, operating results and financial condition.

Our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to a number of risks, including the following:

• challenges caused by distance, and cultural differences and by doing business with foreign agencies and governments;

• longer payment cycles in some countries;

• uncertainty regarding liability for services and content;

• credit risk and higher levels of payment fraud;

• currency exchange rate fluctuations and our ability to manage these fluctuations;

• foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.;

• import and export requirements that may prevent us from shipping products or providing services to a particular market and may increase our operating costs;

• potentially adverse tax consequences;

• higher costs associated with doing business internationally;

• political, social and economic instability abroad, terrorist attacks and security concerns in general;

• natural disasters, public health issues including impacts from global or national health epidemics and concerns such as the recent coronavirus, and other catastrophic events;

• reduced or varied protection for intellectual property rights in some countries; and

• different employee/employer relationships and the existence of workers’ councils and labor unions.

In addition, compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business in international venues and could expose us or our employees to fines and penalties. These numerous and sometimes conflicting laws and regulations include import and export requirements, content requirements, trade restrictions, tax laws, sanctions, internal and disclosure control rules, data privacy requirements, labor relations laws, U.S. laws such as the Foreign Corrupt Practices Act and local laws prohibiting corrupt payments to governmental officials. Violations of these laws and regulations could result in fines, civil and criminal penalties against us, our officers or our employees, prohibitions on the conduct of our business and damage to our reputation. Any such violations could include prohibitions on our ability to offer our products and services in one or more countries and could also materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business and our operating results.

Our revenues depend on key customers and suppliers.

The Company’s major product and service lines in 2022 and 2021 were electric power, telecommunications, and renewables. Revenues could be negatively impacted by customer budgetary spending patterns or changes to their strategic plans.

During 2022, 75% of revenues were derived from four customers, one with 27%, a second with 23%, a third with 15% and a fourth with 10% of total revenues. During  2021, 26% of revenues were derived from two customers, one with 15% and a second with 11%.  

10

At December 31, 2022, of the gross trade accounts receivable totaling approximately $53.4 million, there were four individual customers that made up approximately 72% of the Company's total trade accounts receivable: one customer with 26%, one customer with 21%, one customer with 14% and one customer with 11%. At December 31, 2021, of the gross trade accounts receivable totaling approximately $50.2 million, there were two individual customers that made up approximately 46% of the Company's total trade accounts receivable: one customer with 30%, and one customer with 16%.

During 2022 the Company had no supplier that made up a concentration of more than 10% of purchases included in cost of revenues and in 2021, the Company had one supplier that made up 12% of purchases included in cost of revenues.

There is no assurance that we will continue to maintain all of our existing key customers or vendors in the future. Should we, for any reason, discontinue our business relationship with any one of these key customers, the impact to our revenue stream would be substantial. For additional information on our concentrations, see Note 15 – Concentrations.

A public health crisis like the novel coronavirus outbreak, or other similar pandemic, epidemic or outbreak of infectious disease, could adversely impact our business, financial condition and results of operations and acquisitions.

Certain of our suppliers and the manufacturers of certain of our products may be adversely impacted by a public health crisis. As a result, we may face delays or difficulty sourcing products and services, which could negatively affect our business and financial results. Even if we are able to find alternate sources for such products and services, they may cost more, which could adversely impact our results of operations and financial condition. If we temporarily close our locations for periods of time or if our partners temporarily close, demand for our products and services may be reduced, and our revenues, results of operations and financial condition could be materially adversely affected.

11

Unfavorable market conditions, market uncertainty, and/or economic downturns could reduce capital expenditures in the industries we serve.

Demand for our products, solutions and services has been, and will likely continue to be cyclical in nature. We are vulnerable to general downturns in the U.S. economy and those of the countries in which we operate. Unfavorable market conditions, market uncertainty, and/or economic downturns could have a negative effect on demand from our customers and our customers' health. During such times, our customers may not have the ability to fund capital expenditures for infrastructure due to difficulty obtaining financing when there may be limited availability of debt or equity financing. This could result in project cancellations or deferral which could materially adversely affect our results of operations, cash flows and liquidity. 

Demand for alternative energy sources and legislative and regulatory changes, the volatility of oil and gas markets, among others, are beyond our control. Such economic factors can negatively affect our results of operations, cash flows and liquidity.

Our failure to properly manage projects, or project delays, could result in additional costs or claims, which could have a material adverse effect on our operating results, cash flows and liquidity.

Certain of our engagements occur over extended time periods and involve large-scale, complex projects. Our ability to manage our client relationship and the project itself, such as the timely deployment of appropriate resources, including third-party contractors and our own personnel will impact the quality of our project performance. Our results of operations, cash flows and liquidity could be adversely affected if we miscalculate the resources or time needed to complete a project with capped or fixed fees, or the resources or time needed to meet contractual milestones.

We perform work under a variety of conditions, including, but not limited to, challenging and hard to reach terrain and difficult site conditions. Performing work under such conditions can result in project delays or cancellations, potentially causing us to incur unanticipated costs, reductions in revenue or the payment of liquidated damages. In addition, some of our contracts require that we assume the risk should actual site conditions vary from those expected. Some of our projects involve challenging engineering, procurement and construction phases, which may occur over extended time periods. We may encounter difficulties in engineering, delays in designs or materials provided by the customer or our vendors and subcontractors, equipment and material delivery delays, permitting delays, weather-related delays, schedule changes, delays from customer failure to timely obtain rights-of-way, delays by subcontractors in completing their portion of projects and governmental, market and political or other factors, some of which are beyond our control and could affect our ability to complete a project as originally scheduled. In some cases, delays and additional costs may be substantial, and/or we may be required to cancel or defer a project and/or compensate the customer for the delay. We may not be able to recover any of such costs. Any such delays, cancellations, errors or other failures to meet customer expectations could result in damage claims substantially in excess of the revenue associated with a project. Delays or cancellations could also negatively affect our reputation or relationships with our customers, which could adversely affect our ability to secure new contracts.

We could also encounter project delays due to opposition, including political and social activism, and such delays could adversely affect our project margins. In addition, some of our agreements require that we share in cost overages or pay liquidated damages if we do not meet project deadlines; therefore, any failure to properly estimate or manage cost, or delays in the completion of projects, could subject us to penalties, which could adversely affect our results of operations, cash flows and liquidity. Further, any defects or errors, or failures to meet our customers’ expectations, could result in large damage claims against us. Due to the substantial cost of, and potentially long lead-times necessary to acquire certain of the materials and equipment used in our complex projects, damage claims could substantially exceed the amount we can charge for our associated services.

Fixed price contracts include risk that estimated costs are not accurate. We recognize revenue for certain projects using the cost-to-cost method of accounting and variations to assumptions could reduce profitability.

Some of our contracts include fixed price master service and other service arrangements in which the price of our services may be set on a per unit or aggregate basis. Our ability to accurately estimate the costs associated with our products, solutions and services and our ability to execute within those estimates is necessary for the success of those efforts. 

For certain projects we recognize revenue over time utilizing the cost-to-cost method of accounting whereby the percentage of revenue to be recognized in a period is measured by the percentage of the costs incurred to date relative to the total estimated costs for the contract. This method relies upon estimates of total estimated costs. Contract revenue and cost estimates are reviewed and revised on an ongoing basis as work progresses with adjustments recognized in the fiscal period in which the changes are made. 

Estimates are based upon management’s reasonable assumptions, judgment and experience. There are inherent risks in estimates, including unanticipated delays, technical complications, job conditions, and other factors including management’s assessment of expected variables. Any such adjustments could negatively affect the results of operations, cash flows, and liquidity.

We may fail to adequately recover on claims against project owners, subcontractors or suppliers for payment or performance.

From time to time, we may bring claims against project owners for additional costs that exceed the contract price or for amounts not included in the original contract. We may also present change orders and claims to our subcontractors and suppliers. Failure to properly document the nature of change orders or claims or other reasons that may result in unsuccessful negotiations for settlement could result in reduced profits, cost overruns or project losses. 

Our subcontractors and suppliers may fail or be unable to satisfy their obligations to us or other parties, or we may be unable to maintain these relationships, either of which could have a material adverse effect on our results of operations, cash flows and liquidity.

We depend on subcontractors to perform work for some of our projects. There is a risk that we could have disputes with subcontractors arising from, among other things, the quality and timeliness of the work they perform, customer concerns, or our failure to extend existing work orders or issue new work orders under a subcontracting arrangement. Our ability to fulfill our obligations as a prime contractor could be jeopardized if any of our subcontractors fail to perform the agreed-upon services on a timely basis and/or deliver the agreed-upon supplies. In addition, the absence of qualified subcontractors with whom we have satisfactory relationships could adversely affect our ability to perform under some of our contracts, or the quality of the services we provide. Additionally, in some cases, we pay our subcontractors before our customers pay us for the related services. We could experience a material decrease in profitability and liquidity if we pay our subcontractors for work performed for customers that fail to or delay paying us for the related work. Any of these factors could have a material adverse effect on our results of operations, cash flows and liquidity.

We also rely on suppliers, equipment manufacturers and lessors to obtain or provide the materials and equipment we require to conduct our operations. Any substantial limitation on the availability of suppliers or equipment, including from economic, regulatory or market conditions, could negatively affect our operations. Our results of operations, cash flows and liquidity could be adversely affected if we were unable to acquire sufficient materials or equipment to conduct our operations.

12

We include amounts in backlog that may not result in actual revenue or translate into profits. 

Our backlog may be subject to cancellation and unexpected adjustments. As such, it is an uncertain indicator of future operating results. OIG’s backlog includes estimated amounts of revenue we expect to realize from future work on uncompleted contracts, revenue from change orders and renewal options, and master service agreements. Some of these may be cancellable on short or no advance notice. Backlog amounts are determined based on contract price, estimates of work to be completed under contracts taking into account historical trends, experience on similar projects and estimates of customer demand based upon communications with our customers. In the past, we have experienced postponements, cancellations and reduction in expected future work due to customers’ changing plans, market volatility, regulatory and other factors. There can be no assurance that actual results will be consistent with the estimates included in our forecasts and as such backlog as of any particular date is an uncertain indicator of future revenue and earnings. 

We are a relatively small energy infrastructure services business and face formidable competition.

We are a relatively small company with limited capitalization in comparison to many of our competitors. Because of our size and capitalization, we believe that we have not yet established sufficient market awareness that is essential to our continued growth and success in all of our markets. We face formidable competition in every aspect of our business from other companies, many of whom have greater name recognition, more resources and broader service offerings than ours.

We also expect competition to intensify in the future. Our future success in keeping pace with technological developments and achieving product acceptance depends upon our ability to enhance our current products, solutions, and services and to continue to develop and introduce new product, solutions and service offerings and enhanced performance features and functionality on a timely basis at competitive prices. Our inability, for technological or other reasons, to enhance, develop, introduce or deliver compelling products, solutions, and services in a timely manner, or at all, in response to changing market conditions, technologies or customer expectations, could have a material adverse effect on our operating results and growth prospects. Our ability to compete successfully will depend in large measure on our ability to maintain a technically skilled development and engineering staff and to adapt to technological changes and advances in the industry, including providing for the continued compatibility of our products solutions, and services with evolving industry standards and protocols in a competitive environment.

The industries we serve are highly competitive and subject to rapid technological and regulatory change as well as customer consolidation. Any of these could result in decreased demand for our services, solutions and products which could adversely affect our results of operations, cash flows and liquidity.

We compete with other companies in most of the markets in which we operate that range from small independent firms serving local markets to larger regional, national and international firms. Some of our customers employ in-house personnel to perform some of the services we provide. Most of our customers’ work is awarded through bid processes, and our project bids may not be successful, which could materially adversely affect our results of operations, cash flows and liquidity. 

Technological advances in the markets we serve could change our customers’ operating models and project requirements. Governmental regulations may also change our customers’ project requirements and our ability to adapt to those changing requirements could reduce the demand for our solutions, services and products. 

Our business is subject to operational risk, including from operational and physical hazards that could result in substantial liabilities and negatively affect our financial condition.

Due to the nature of the services we provide and the conditions in which we operate, our business is subject to operational hazards. Though we invest in substantial resources to provide for safety including occupational health and safety programs and by carrying appropriate amounts of insurance coverage, there can be no assurance that we will be able to mitigate all hazards, including electricity, fires, explosions, mechanical failures and weather-related incidents. This could result in significant liability. The risks faced by our personnel can cause personal injuries and loss of life, severe damage to or destruction of property and equipment and other consequential damages which could lead to large damage claims, suspension of operations, government enforcement actions, regulatory penalties, civil litigation or criminal prosecution. These costs could exceed the amount we charge for the associated products, solutions and services.

If serious accidents or fatalities occur, or if our safety records deteriorate, we could be restricted from bidding on certain projects, obtaining new customers or contracts, and contracts could be terminated. Accidents in the course of our business could result in significant liabilities, employee turnover and/or an increase to the costs of our projects. 

13

We will need to grow our organization and we may encounter difficulties in managing this growth.

As of December 31, 2022, Orbital Infrastructure Group, Inc., together with its consolidated subsidiaries, had 1,490 full-time employees excluding 3 employees at our discontinued operations. We expect to experience growth in the number of our employees and the scope of our operations as we follow our growth strategy. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Also, management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. Due to our limited resources, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. The physical expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of new products, solutions and services. If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate or increase our revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize new products, solutions and services and compete effectively will depend, in part, on our ability to effectively manage any future growth.

Our operating results may vary over time and such fluctuations could cause the market price of our common stock to decline.

Our operating results may fluctuate significantly due to a variety of factors, many of which are outside of our control. Because revenues for any future period are not predictable with any significant degree of certainty, you should not rely on our past results as an indication of our future performance. If our revenues or operating results fall below the expectations of investors or securities analysts or below any estimates we may provide to the market, the price of our common shares would likely decline substantially. Factors that could cause our operating results and stock price to fluctuate include, among other things:

• varying demand for our products, solutions and services due to the financial and operating condition of our customers, and general economic conditions;

• inability of our suppliers and subcontractors to meet our demand;

• success and timing of new product, solutions and services introductions by us and the performance of those generally;

• announcements by us or our competitors regarding products, solutions, services, promotions or other transactions;

• costs related to responding to government inquiries related to regulatory compliance;

• our ability to control and reduce product, solutions and services costs;

• changes in the manner in which we sell products, solutions and services;

• volatility in foreign exchange rates, changes in interest rates and/or the availability and cost of financing or other working capital to our customers.

Our operating expenses may increase as we make further expenditures to enhance and expand our operations in order to support additional growth in our business and national stock market reporting and compliance obligations.

In the future, we expect our operations and marketing investments to increase to support our anticipated growth and as a result of our listing on the Nasdaq Stock Market. We have made significant investments in using professional services and expanding our operations. We may make additional investments in personnel and continue to expand our operations to support anticipated growth in our business. In addition, we may determine the need in the future to increase our direct sales force, add distributors and sales representatives to market and sell our products, solutions and services. Such changes to our existing sales model would likely result in higher selling, general and administrative expenses as a percentage of our revenues. We expect such increased investments could adversely affect operating income in the short term while providing long-term benefit.

Our business depends on a strong brand and failing to maintain and enhance our brand would hurt our ability to expand our base of customers.

We believe that we have not yet established sufficient market awareness in our various markets. Market awareness of our capabilities and products, solutions and services is essential to our continued growth and our success in all of our markets. We expect the brand identity that we acquired with platform companies, Front Line Power Construction, LLC, and Gibson Telecom Services along with developing brand identity with Orbital Solar Services and Orbital Power, Inc. will significantly contribute to the success of our business. Maintaining and enhancing these brands is critical to expanding our base of customers. If we fail to maintain and enhance our brands, or if we incur excessive expenses in this effort, our business, operating results and financial condition could be materially and adversely affected. Maintaining and enhancing our brands will depend largely on our ability to be a technology leader and continue to provide high-quality services, solutions, and products, which we may not do successfully.

14

New entrants in our markets may harm our competitive position.

New entrants seeking to gain market share by introducing new technology, services, solutions and products may make it more difficult for us to sell our services, solutions and products and could create increased pricing pressure, reduced profit margins, increased sales and marketing expenses or the loss of market share or expected market share, any of which may significantly harm our business, operating results and financial condition.

Adverse conditions in the global economy and disruption of financial markets may significantly restrict our ability to generate revenues or obtain debt or equity financing.

The global economy continues to experience volatility and uncertainty and governments in many countries continue to evaluate and implement spending cuts designed to reduce budget deficits. These conditions and deficit reduction measures could reduce demand for our products and services, including through reduced government infrastructure projects, which would significantly jeopardize our ability to achieve our sales targets. These conditions could also affect our potential strategic partners, which in turn, could make it more difficult to execute a strategic collaboration. Moreover, volatility and disruption of financial markets could limit our customers’ ability to obtain adequate financing or credit to purchase and pay for our products, solutions and services in a timely manner, or to maintain operations and result in a decrease in sales volume. General concerns about the fundamental soundness of domestic and international economies may also cause customers to reduce purchases. Changes in governmental banking, monetary and fiscal policies to restore liquidity and increase credit availability may not be effective. Economic conditions and market turbulence may also impact our suppliers’ and subcontractors’ ability to supply sufficient resources in a timely manner, which could impair our ability to fulfill sales orders. It is difficult to determine the extent of the economic and financial market problems and the many ways in which they may affect our suppliers, customers, investors and business in general. Continuation or further deterioration of these financial and macroeconomic conditions could significantly harm sales, profitability and results of operations.

Some of our operations and certain suppliers and customers are located in areas subject to natural disasters or other events that could stop us from having our products made or shipped or could result in a substantial delay in our production or development activities.

Many of our operating units and customers are located in and around Houston, Texas and Full Moon Telecom is located in Florida. The risk of hurricanes and other natural disasters in these geographic areas are significant due to the proximity to the coast and their propensity to flood. Despite precautions taken by us and our third-party providers, a natural disaster or other unanticipated problems, at our locations or at third-party providers could cause interruptions to our operations. Any disruption resulting from these events could cause significant delays in our ability to deliver our solutions, services and products until we are able to shift our manufacturing, assembly or testing from the affected contractor(s) to another third-party vendor. We cannot assure you that alternative capacity could be obtained on favorable terms, if at all.

Defects in our solutions could harm our reputation and business.

Our services and solutions are complex and have contained and may contain undetected defects or errors. Defects in our services and solutions may require us to implement design changes or updates.

Any defects or errors in our products, or the perception of such defects or errors, could result in:

• expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors or defects;

• loss of existing or potential customers;

• delayed or lost revenue;

• delay or failure to attain market acceptance;

• negative publicity, which would harm our reputation;

• warranty claims against us;

• an increase in collection cycles for accounts receivable, which could result in an increase in our provision for doubtful accounts and the risk of costly litigation; and

• harm to our results of operations.

15

Our contract manufacturers purchase some components, subassemblies and products from a limited number of suppliers. The loss of any of these suppliers may substantially disrupt our ability to obtain orders and fulfill sales. 

We rely on third-party components and technology to build and operate our solutions and we rely on our contract manufacturers to obtain the components, subassemblies and products necessary for our services and solutions. Shortages in components that we use in our solutions are possible and our ability to predict the availability of such components is limited. If shortages occur in the future, as they have in the past, our business, operating results and financial condition would be materially adversely affected. Unpredictable price increases of such components due to market demand may occur. 

We depend on key personnel and will need to recruit new personnel as our business grows.

As a small company, our future success depends in a large part upon the continued service of key members of our senior management team who are critical to the overall management of Orbital Infrastructure Group, Inc. and our subsidiary companies, as well as the development of our technologies, products, solutions and service offerings, our business culture and our strategic direction. The loss of any of our management or key personnel could seriously harm our business and we do not maintain any key-person life insurance policies on the lives of these critical individuals.

If we are successful in expanding our product and customer base, we will need to add additional key personnel as our business continues to grow. If we cannot attract and retain enough qualified and skilled staff, the growth of the business may be limited. Our ability to provide services to customers and expand our business depends, in part, on our ability to attract and retain staff with professional experiences that are relevant to technology development and other functions the Company performs. Competition for personnel with these skills is intense. We may not be able to recruit or retain the caliber of staff required to carry out essential functions at the pace necessary to sustain or expand our business. Skilled resources in the industries we serve are in high demand, and labor rates may increase in the future, potentially negatively impacting the profitability of our services.

We believe our future success will depend in part on the following:

• the continued employment and performance of our senior management;

• our ability to retain and motivate our officers and key employees; and

• our ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial, marketing, sales and customer service personnel.

Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact our business.

Our business is subject to operating hazards and risks relating to handling, storing, transporting and use of the products, solutions and services we sell. We maintain insurance policies in amounts and with coverage and deductibles that we believe are reasonable and prudent. Nevertheless, our insurance coverage may not be adequate to protect us from all liabilities and expenses that may arise from claims for personal injury or death or property damage arising in the ordinary course of business, and our current levels of insurance may not be maintained or available in the future at economical prices. If a significant liability claim is brought against us that is not adequately covered by insurance, we may have to pay the claim with our own funds, which could have a material adverse effect on our business, consolidated financial condition, results of operations, or cash flows.

16

We may become subject to lawsuits, indemnity or other claims, in the ordinary course of our business, which could materially and adversely affect our business, results of operations and cash flows.

From time to time, we are subject to various claims, lawsuits and other legal proceedings brought or threatened against us in the ordinary course of our business. These actions and proceedings may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination and other employment-related damages, breach of contract, property damage, environmental liabilities, liquidated damages, consequential damages, punitive damages and civil penalties or other losses, or injunctive or declaratory relief. We may also be subject to litigation in the normal course of business involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, and, in some instances, we may be allocated risk through our contract terms for actions by our joint venture partners, customers or other third parties.

Claimants may seek large damage awards and defending claims can involve significant costs. When appropriate, we establish accruals for litigation and contingencies that we believe to be adequate in light of current information, legal advice and our indemnity insurance coverages. We reassess our potential liability for litigation and contingencies as additional information becomes available and adjust our accruals as necessary. We could experience a reduction in our profitability and liquidity if we do not properly estimate the number of required accruals for litigation or contingencies, or if our insurance coverage proves to be inadequate or becomes unavailable, or if our self-insurance liabilities are higher than expected. The outcome of litigation is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts and the magnitude of the potential loss may remain unknown for substantial periods of time. Furthermore, because litigation is inherently uncertain, the ultimate resolution of any such claim, lawsuit or proceeding through settlement, mediation, or court judgment could have a material adverse effect on our business, financial condition or results of operations. In addition, claims, lawsuits and proceedings may harm our reputation or divert management’s attention from our business or divert resources away from operating our business and cause us to incur significant expenses, any of which could have a material adverse effect on our business, results of operations or financial condition.

Expanding and evolving data privacy laws and regulations could impact our business and expose us to increased liability.

The California Consumer Privacy Act (“CCPA”) created new consumer rights relating to the access to, deletion of, and sharing of personal information that is collected by businesses. Costs to comply with and implement these privacy-related and data protection measures could be significant. In addition, even our inadvertent failure to comply with federal, state, or international privacy-related or data protection laws and regulations could result in proceedings against us by governmental entities or others. Any inability to adequately address privacy concerns, even if unfounded, or to comply with the more complex privacy or data protection laws, regulations and privacy standards, could lead to significant financial penalties, which may result in a material and adverse effect on our results of operations.

We are subject to taxation in multiple jurisdictions. As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, consolidated financial condition or results of operations. In addition, our annual effective income tax rate can change materially as a result of changes in our mix of U.S. and foreign earnings and other factors, including changes in tax laws and changes made by regulatory authorities.

We are subject to taxation in, and to the tax laws and regulations of, multiple jurisdictions as a result of the global scope of our operations and our corporate and financing structure. We are also subject to transfer pricing laws with respect to our intercompany transactions. Adverse developments in these laws or regulations, or any change in position regarding the application, administration or interpretation thereof, in any applicable jurisdiction, could have a material adverse effect on our business, consolidated financial condition or results of our operations. In addition, the tax authorities in any applicable jurisdiction, including the United States, may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. If any applicable tax authorities, including U.S. tax authorities, were to successfully challenge the tax treatment or characterization of any of our transactions, it could have a material adverse effect on our business, consolidated financial condition or consolidated results of our operations.

Our overall effective income tax rate is equal to our total tax expense as a percentage of total earnings before tax. However, income tax expense and benefits are not recognized on a global basis but rather on a jurisdictional or legal entity basis. Losses in one jurisdiction may not be used to offset profits in other jurisdictions and may cause an increase in our tax rate. Changes in statutory tax rates and laws, as well as ongoing audits by domestic and international authorities, could affect the amount of income taxes and other taxes paid by us. Also, changes in the mix of earnings (or losses) between jurisdictions and assumptions used in the calculation of income taxes, among other factors, could have a significant effect on our overall effective income tax rate.

17

A failure of our internal control over financial reporting could materially affect our business.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. An internal control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Internal control over financial reporting may not prevent or detect misstatements due to inherent limitations in internal control systems. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to prevent and detect fraud, and could expose us to litigation, harm our reputation, and/or adversely affect the market price of our common stock.

Risks Related to Our Intellectual Property and Technology

Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information.

We have devoted substantial resources to the development of our proprietary technology and trade secrets. In order to protect our proprietary technology and trade secrets, we rely in part on confidentiality agreements with our key employees, licensees, independent contractors and other advisors. These agreements may not effectively prevent disclosure of our trade secrets and may not provide an adequate remedy in the event of unauthorized disclosure of our trade secrets. We may have difficulty enforcing our rights to our proprietary technology and trade secrets, which could have a material adverse effect on our business, operating results and financial condition. In addition, others may independently discover trade secrets and proprietary information and in such cases we could not assert any trade secret rights against such parties. Costly and time-consuming litigation could be necessary to determine and enforce the scope of our proprietary rights and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business, could have a material adverse effect on our business, consolidated financial condition and results of operations.

We are subject to an increasing number of various types of information technology vulnerabilities, threats and targeted computer crimes which pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. Disruptions or failures in the physical infrastructure or operating systems that support our businesses and customers, or cyber-attacks or security breaches of our networks or systems, could result in the loss of customers and business opportunities, legal liability, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, any of which could materially adversely affect our business, financial condition and results of operations. While we attempt to mitigate these risks, our systems, networks, products, solutions and services remain potentially vulnerable to advanced and persistent threats. Despite our efforts, our facilities and systems and those of our customers and third-party service providers may be vulnerable to security breaches, theft, misplaced or lost data, programming and/or human errors that could lead to the compromising of sensitive, confidential or personal data or information, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information, defective products, production downtimes and operational disruptions, which in turn could adversely affect our consolidated financial condition and results of operations.

18

Risks Related to Regulation and Compliance

Our failure to comply with the regulations of federal, state and local agencies that oversee transportation and safety compliance could reduce our revenue, profitability and liquidity.

OSHA establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by OSHA and various recordkeeping, disclosure and procedural requirements. Various standards, including standards for notices of hazards and safety in excavation and demolition work, may apply to our operations. We incur capital and operating expenditures and other costs in the ordinary course of business in complying with OSHA and other state and local laws and regulations, and could incur penalties and fines in the future from violations of health and safety regulations, including, in extreme cases, criminal sanctions. Our customers could cancel existing contracts and not award future business to us if we were in violation of these regulations.

From time to time, we may receive notice from the Department of Transportation (“DOT”) that our motor carrier operations will be monitored. The failure to monitor and maintain our safety performance could result in suspension or revocation of vehicle registration privileges. Our ability to service our customers could be damaged if we were not able to successfully resolve such issues, which could lead to a material adverse effect on our results of operations, cash flows and liquidity.

Our operations could affect the environment or cause exposure to hazardous substances. In addition, our properties could have environmental contamination, which could result in material liabilities.

Our operations are subject to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, polychlorinated biphenyls, fuel storage, air quality and the protection of endangered species. Certain of our current and historical construction operations have used hazardous materials and, to the extent that such materials are not properly stored, contained or recycled, they could become hazardous waste. Additionally, some of our contracts require that we assume the environmental risk of site conditions and require that we indemnify our customers for any damages, including environmental damages, incurred in connection with our projects. We may be subject to claims under various environmental laws and regulations, federal and state statutes and/or common law doctrines for toxic torts and other damages, as well as for natural resource damages and the investigation and clean-up of soil, surface water, groundwater, and other media under laws such as the Comprehensive Environmental Response, Compensation and Liability Act. Such claims may arise, for example, out of current or former conditions at project sites, current or former properties owned or leased by us, or contaminated sites that have always been owned or operated by third parties. For example, we own and lease facilities at which we store our equipment. Some of these facilities may contain fuel storage tanks. If these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines. Liability may be imposed without regard to fault and may be strict and joint and several, such that we may be held responsible for more than our share of any contamination or other damages, or even for the entire share, and we may be unable to obtain reimbursement from the parties that caused the contamination. The obligations, liabilities, fines and costs or reputational harm associated with these and other events could be material and could have a material adverse impact on our business, financial condition, results of operations and cash flows.

We perform work in underground environments, which could affect the environment. A failure to comply with environmental laws could result in significant liabilities or harm our reputation, and new environmental laws or regulations could adversely affect our business.

Some of the work we perform is in underground environments. If the field location maps supplied to us are not accurate, or if objects are present in the soil that are not indicated on the field location maps, our underground work could strike objects in the soil containing pollutants and result in a rupture and discharge of pollutants. In such a case, we could incur significant costs, including clean-up costs, and we may be liable for significant fines and damages and could suffer reputational harm. Additionally, we sometimes perform directional drilling operations below certain environmentally sensitive terrains and water bodies. Due to the inconsistent nature of terrain and water bodies, it is possible that such directional drilling could cause a surface fracture releasing subsurface materials or drilling fluid. These releases alone or, in combination with releases that may contain contaminants in excess of amounts permitted by law, could potentially expose us to significant clean up and remediation costs, damages, fines and reputational harm, which could have a material adverse effect on our results of operations, cash flows and liquidity.

New environmental laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, or the imposition of new clean-up requirements could require us to incur significant costs or result in new or increased liabilities that could have a material adverse effect on our results of operations, cash flows and liquidity. We may incur work stoppages to avoid violating these laws and regulations, or we may risk fines or other sanctions if we inadvertently violate these laws and regulations, which could adversely affect our business.

19

Compliance with and changes in tax laws could adversely affect our financial results.

We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes (excise/duty, sales/use, gross receipts, and value-added taxes), payroll taxes, franchise taxes, withholding taxes, and ad valorem taxes. New tax laws, treaties and regulations and changes in existing tax laws, treaties and regulations are continuously being enacted or proposed, and significant changes could result from the change in control of the U.S. Congress in 2023, all of which can result in significant changes to the tax rate on our earnings and have a material impact on our earnings and cash flows from operations. Since future changes to federal and state tax legislation and regulations are unknown, we cannot predict the ultimate impact such changes may have on our business.

In addition, significant judgment is required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. We may be audited by tax authorities, and our tax estimates and tax positions could be materially affected by many factors, including the final outcome of tax audits and related litigation, the introduction of new tax accounting standards, legislation, regulations and related interpretations, our global mix of earnings, our ability to realize deferred tax assets and changes in uncertain tax positions. A significant increase in our tax rate can have a material adverse effect on our profitability and liquidity.

Risks Related to Our Common Stock

The trading price of our common stock may continue to be volatile, which could result in substantial losses for individual shareholders.

Our common stock trades on the Nasdaq Stock Market. There can be no assurance, however, that the trading market for our common stock will be robust. A limited trading market for our common stock may cause fluctuations in the market value of our common stock to be exaggerated, leading to price volatility in excess of that which would occur in a more active trading market for our common stock. The trading price of our common stock has been volatile and could continue to be subject to wide fluctuations in response to various factors, some of which are beyond our control. During calendar year 2022, our common stock traded at a low of $0.16 and a high of $2.36.

The stock market in general, and the market for energy companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Public perception and other factors outside of our control may additionally impact the stock price of companies like us that garner a disproportionate degree of public attention, regardless of actual operating performance.

As a result of this volatility, our securities could experience rapid and substantial decreases in price.

Some, but not all, of the factors that may cause the market price of our common stock to fluctuate include:

● fluctuations in our quarterly or annual financial results or the quarterly or annual financial results of companies perceived to be similar to us or relevant for our business;

● changes in estimates of our financial results or recommendations by securities analysts;

● failure of our services, products, and technologies to achieve or maintain market acceptance;

● changes in market valuations of similar or relevant companies;

● success of competitive service offerings or technologies;

● changes in our capital structure, such as the issuance of securities or the incurrence of debt;

● announcements by us or by our competitors of significant services, contracts, acquisitions or strategic alliances;

● regulatory developments in the United States, foreign countries, or both;

● litigation;

● additions or departures of key personnel;

● investors’ general perceptions; and

● changes in general economic, industry or market conditions.

20

These factors may materially and adversely affect the market price of our common stock, regardless of our performance. In addition, the stock market in general and the market for energy infrastructure services companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actual operating performance. Additionally, because the trading volume of our stock is not large, there can be a disparity between the bid and the asked price that may not be indicative of the stock’s true value.

In addition, if the market for energy stocks, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition, or results of operations. Further, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to additional price volatility.

In the future investors may purchase shares of our common stock to hedge existing exposure or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent an aggregate short exposure in our common stock becomes significant, investors with short exposure may have to pay a premium to purchase shares for delivery to share lenders at times if and when the price of our common stock increases significantly, particularly over a short period of time. Those purchases may in turn, dramatically increase the price of our common stock. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in our common stock that are not directly correlated to our business prospects, financial performance or other traditional measures of value for the Company or its common stock.

Additional stock offerings in the future may dilute then-existing shareholders’ percentage ownership of the Company.

Given our plans and expectations that we will need additional capital in the future, we anticipate that we may need to issue additional shares of common stock or securities convertible or exercisable for shares of common stock, including convertible preferred stock, convertible notes, stock options or warrants. The issuance of additional securities in the future will dilute the percentage ownership and potentially voting power of then current stockholders and could negatively impact the price of our common stock and other securities.

Offers or availability for sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock and make it more difficult for us to raise funds through future offerings of common stock.

We have never paid dividends on our common stock and do not expect to pay any in the foreseeable future.

Potential purchasers should not expect to receive a return on their investment in the form of dividends on our common stock. The Company has never paid cash dividends on its common stock and the Company does not expect to pay dividends in the foreseeable future.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Our ability to pay dividends may be further restricted by the terms of any of our future debt or preferred securities. Accordingly, investors must rely on sales of their own common stock after price appreciation, which may never occur, as the only way to realize their investment. Investors seeking cash dividends should not purchase shares of our stock.

There is a limited public trading market for our common stock so you may not be able to resell your stock and may not be able to turn your investment into cash.

Our common stock is currently traded on the Nasdaq Stock Market under the trading symbol ‘‘OIG.’’ Our shares of common stock are thinly traded. Due to the illiquidity, the market price may not accurately reflect our relative value. There can be no assurance that there will be an active market for our shares of common stock either now or in the future. Because our common stock is thinly traded, a large block of shares traded can lead to a dramatic fluctuation in the share price and investors may not be able to liquidate their investment in us at all or at a price that reflects the value of the business.

21

Nasdaq may delist our common stock from its exchange which could limit your ability to make transactions in our securities and subject us to additional trading restrictions.

On July 19, 2022, Nasdaq notified the Company that the bid price of our common stock had closed at less than $1 per share over the previous 30 consecutive business days, and, as a result, did not comply with Listing Rule 5550(a)(2) (the “Rule”). In accordance with Listing Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until January 16, 2023, to regain compliance with the Rule.

On January 18, 2023, Nasdaq staff notified the Company it has not regained compliance with the Rule and is not eligible for a second 180-day extension and therefore subject to delisting unless the Company requests an appeal of this determination.

The Company has appealed the staff’s determination to a Nasdaq Panel, which will stay the suspension of the Company’s common stock. The appeal hearing was held on March 9, 2023. On March 22, 2023, the Company received a written decision from the Panel granting its request for continued listing on Nasdaq, subject to the condition that, on May 5, 2023, the Company will have demonstrated compliance with the Bid Price Requirement, as set forth in Listing Rule 5550(a)(2), by evidencing a closing price of $1.00 or more per share for a minimum of 10 consecutive trading days. The Panel noted that the Company should be afforded time to implement its compliance plan in light of the fact that the Company has already initiated the process to complete the reverse split, subject to shareholder approval via a proxy vote, and given the short duration of the exception period requested. The Notice does not have an immediate effect on the listing of our common stock, and our common stock will continue to trade on the Nasdaq Stock Market under the symbol “OIG.” Under Nasdaq Listing Rule 5810(c)(3)(A), if during the 180 calendar day period following the date of the Notice (the “Compliance Period”), the closing bid price of our common stock has a closing stock price at or above $1.00 for a minimum of 10 consecutive business days, we would regain compliance with the Minimum Bid Price Requirement and our common stock would continue to be eligible for listing on the Nasdaq Stock Market, absent noncompliance with any other requirement for continued listing. If we do not regain compliance with the Minimum Bid Price Requirement by the end of the Compliance Period as extended, the Company’s common stock would be subject to delisting. If this were to happen, we would monitor the closing bid price of our common stock and may, if appropriate, consider implementing available options to regain compliance with the Minimum Bid Price Requirement under the Nasdaq Listing Rules.

On December 28, 2022, the Company received a second notification letter (the “Notice”) from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with the minimum market value of listed securities (“MVLS”) requirement for continued listing set forth in Nasdaq Listing Rule 5550(b)(2). Nasdaq Listing Rule 5550(b)(2) requires listed securities to maintain a minimum MVLS of $35 million and Listing Rule 5810(c)(3)(C) provides that a failure to meet the minimum MVLS requirement exists if the deficiency continues for a period of 30 consecutive business days.

In accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has 180 calendar days, or until June 26, 2023, to regain compliance. If at any time before June 26, 2023, the Company’s MVLS closes at or above $35 million for a minimum of 10 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the minimum MVLS requirement, and the matter will be resolved.

If the Company does not regain compliance or meet the alternative standards during the compliance period ending June 26, 2023, Nasdaq will provide written notification that the Common Stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the minimum MVLS requirement during the 180-day compliance period. 

If our common stock is delisted, our common stock would likely then trade only in the over-the-counter market. If our common stock were to trade on the over-the-counter market, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and we could face significant material adverse consequences, including: a limited availability of market quotations for our securities; reduced liquidity with respect to our securities; a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; a reduced amount of news and analyst coverage for our Company; and a decreased ability to issue additional securities or obtain additional financing in the future. These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock and would substantially impair our ability to raise additional funds and could result in a loss of institutional investor interest and fewer development opportunities for us.

In addition to the foregoing, if our common stock is delisted from Nasdaq and it trades on the over-the-counter market, the application of the “penny stock” rules could adversely affect the market price of our common stock and increase the transaction costs to sell those shares. The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. If our common stock is delisted from Nasdaq and it trades on the over-the-counter market at a price of less than $5.00 per share, our common stock would be considered a penny stock. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a penny stock.

Risks Relating to Stockholder Rights

Our board of directors has the authority, without stockholder approval, to issue preferred stock with terms that may not be beneficial to existing common stockholders and with the ability to adversely affect stockholder voting power and perpetuate their control.

Although we do not have any preferred stock outstanding presently, our Articles of Incorporation allow us to issue shares of preferred stock without any vote or further action by our stockholders. Our board of directors has the authority to issue preferred stock without further stockholder approval, as well as the authority to fix and determine the relative rights and preferences of preferred stock. As a result, our board of directors could authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common stock or other preferred stockholders and the right to the redemption of the shares, together with a premium, prior to the redemption of our common stock.

Preferred stock could be used to dilute a potential hostile acquirer. Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock and preferred stock.

Our Articles of Incorporation limit director liability, thereby making it difficult to bring any action against them for breach of fiduciary duty.

Orbital Infrastructure Group, Inc. is a Texas corporation. As permitted by Texas law, the Company’s Articles of Incorporation limits the liability of directors to Orbital Infrastructure Group, Inc. or its stockholders for monetary damages for breach of a director’s fiduciary duty, with certain exceptions. These provisions may discourage stockholders from bringing suit against a director for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on behalf of the Company against a director.

Our charter documents may inhibit a takeover that stockholders consider favorable.

Provisions of our Articles of Incorporation and Bylaws may delay or discourage transactions involving an actual or potential change in control of the Company, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. These provisions:

• provide that the authorized number of directors may be changed by resolution of the board of directors;

• provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; and

• do not provide for cumulative voting rights.

22

Item 1B. Unresolved Staff Comments

None.

Item 2.  Properties

In 2022, the Company signed a new office lease in Houston Texas which is considered the headquarters of OIG. This space totals approximately 4,918 square feet. Its lease expires in 2026.

In April 2021, the Company acquired Gibson Technical Services, LLC ("GTS"), which leases approximately 10,000 square feet of office and 5,000 square feet of warehouse space in Atlanta, GA. In addition, this space includes a fenced equipment yard of approximately 30,000 square feet. The lease ends in July 2028. GTS also leases warehouse space ranging from 250 square feet to 8,700 square feet in Alabama, Georgia, North Carolina, Nevada, Mississippi, Louisiana, New York, Virginia, and Oklahoma. 

In July 2021, the Company acquired IMMCO, Inc, which is a subsidiary of Gibson Technical Services, LLC and which shares office space with GTS in Atlanta, GA. IMMCO also has 20,648 square feet of office space in Kochi India that expire in 2023, 2026 and 2036. 

In October 2021, the Company acquired Full Moon, Telecom, LLC, which runs remotely and thus has no properties associated with it.

In November 2021, the Company acquired Front Line Power Construction, LLC, which leases two industrial/office type buildings that total approximately 55 thousand square feet along with the surrounding six acres in the greater Houston area of Rosharon, Texas. These leases expire in 2024 and 2025.

In April 2020, the Company sublets 3,358 square feet of office space in Irving, Texas for corporate support services and Orbital Power, Inc. office personnel; the lease runs through 2023. Orbital Power, Inc. also maintains an equipment yard in Sherman, Texas that houses equipment primarily for Orbital Power, Inc. for which the lease runs until 2023.

With the acquisition of Orbital Solar (formerly Reach Construction Group, LLC), the Company leases office space in Raleigh, North Carolina which includes approximately 460 feet of office space and runs through 2024. Orbital Solar also leases 230 feet of office space in Phoenix, Arizona, also expiring in 2024.

The Company leases office and warehouse space in Tualatin, Oregon, which was its former headquarters and now sublets to outside parties. In addition, the Company leases office space in Lake Oswego, Oregon that is comprised of 1,763 feet and expires in 2027.

In the future, the Company may obtain additional leased properties to support its growth strategy and expansion of operations within the energy infrastructure services industry.

Item 3.  Legal Proceedings

Orbital Infrastructure 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 Infrastructure 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 Infrastructure 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 Infrastructure 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.

In the first quarter of 2022, the Company filed and served a federal civil complaint in the United States District Court for the Northern District of Texas – Dallas Division against the former owner of Reach Construction Group LLC (“Reach”).  The complaint alleges, among other things, misrepresentations and misconduct committed by the former owner in conjunction with the purchase and sale of Reach to Orbital Infrastructure Group, Inc. Based on the information and evidence contained in the complaint, the Company reasonably believes that it owes no more compensation to the former owner and is seeking return of certain funds already paid and relief of certain debt and accruals currently on the balance sheet.

The Company and its subsidiary, OSS, are also involved in a contract dispute with Jingoli Power (“Jingoli”) regarding the Joint Venture between Jingoli and OSS for construction of the Black Bear and Happy - Lightsource BP Projects.  The Company contends that Jingoli unjustifiably and without proper authority took over management and control of the two projects and that, as a direct result of Jingoli’s mismanagement, the projects have suffered significant losses. The Company has disclosed and accrued losses including liquidated damages for both projects and is currently pursuing its contractual remedies to collect on losses from Jingoli.   

Item 4.  Mine Safety Disclosure

Not applicable.

23

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Description of Securities

The Company’s common stock is traded on The Nasdaq Stock Market under the trading symbol ‘‘OIG.’’ The Company currently has authorized 325,000,000 common shares, par value $0.001 per share, and as of December 31, 2022, the Company’s issued and outstanding shares consisted of 157,884,024 shares of common stock issued and 157,530,961 shares outstanding of which 145,347,136 shares are freely tradable without restriction or limitation under the Securities Act. As of December 31, 2022, the Company had in excess of 3,000 beneficial holders of our common stock and in excess of 2,300 stockholders of record. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

The holders of Common Stock are entitled to one vote per share and do not have cumulative voting rights. Holders of the Company’s Common Stock do not have any pre-emptive or other rights to subscribe for or purchase additional shares of capital stock and no conversion rights, redemption or sinking-fund provisions.

Market Value

The Company’s common stock is traded on the Nasdaq Stock Market under the trading symbol ‘‘OIG.’’ The following table sets forth the high and low sales prices of our Common Stock on the Nasdaq during each quarter of the two most recent years.

	High		Low
2022
First Quarter	$	2.36	$	1.23
Second Quarter		1.77		0.63
Third Quarter		1.15		0.47
Fourth Quarter		0.50		0.16
2021
First Quarter	$	9.86	$	2.08
Second Quarter		7.64		2.91
Third Quarter		4.66		2.92
Fourth Quarter		3.07		2.15

24

Dividend Policy

The Company has never paid cash dividends on its common stock and the Company does not expect to pay dividends in the foreseeable future.

We currently expect to retain future earnings to finance the growth and development of our business. The timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flows; our general financial condition and future prospects; our capital requirements and surplus; contractual restrictions; the amount of distributions, if any, received by us from our subsidiaries; and other factors deemed relevant by our board of directors. Any future dividends on our common shares would be declared by and subject to the discretion of our board of directors.

Common Stock Reserved for Future Issuances

Set forth below is a summary of the outstanding securities, transactions and agreements, which relate to 197,887 shares of common stock the Company is required to reserve for potential future issuances.

• 197,887 common shares reserved for outstanding options issued under our Equity Compensation Plans. As of December 31, 2022, there were reserved for issuance an aggregate of 197,887 shares of common stock for options outstanding under the Company’s 2008 Equity Incentive Plan and the Company’s 2009 Equity Incentive Plan (Executive).

At the 2020 Annual Meeting of Shareholders, the Company’s shareholders approved the Orbital Infrastructure Group 2020 Incentive Award Plan and authorized a share limit of 2,000,000 shares. This limit was increased to a total of 5,000,000 shares at the 2021 Annual Meeting of Shareholders. The authorization was increased by an additional 5,000,000 shares in 2022. This Plan replaced the 2008 and 2009 Equity Incentive Plan, which had expired. As of December 31, 2022 there are 3,039,900 remaining shares available to grant under the 2020 Incentive Award Plan. See Note 10 Stockholders' Equity for more information on the Company's 2020 Incentive Award Plan.

Other than as described herein, as of the date of this report, there are currently no plans, arrangements, commitments or understandings for the issuance of additional shares of Common Stock.

25

RECENT SALES OF UNREGISTERED SECURITIES

Following is a list of all securities we sold within the past two years, 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.

 2022 Sales of Unregistered Securities

Common Stock Issued During 2022

(Dollars in thousands)
Dates of issuance	Type of issuance	Stock issuance recipient	Reason for issuance	Total no. of shares		Fair value recorded at issuance
January, April 2022	Common stock	Consult	Services		117,320	$	212
January, February, March, April, May, June, July, August, September, October, November, December 2022	Common stock	Institutional investor	Debt payment		20,297,993		15,936
February 2022	Common stock	1 Syndicated debt lender	Portion of original issue discount on $105 million credit facility*		54,026		—
June, September, November and December 2022	Common stock	Syndicated debt lenders	Shares issued to lenders as part of amended and restated subscription agreement		24,909,425		7,667
Total 2022 other equity transactions					45,378,764	$	23,815

*These shares were issuable as of November 17th, 2021, and were recorded as part of additional paid in capital prior to issuance. 

 2021 Sales of Unregistered Securities

Common Stock Issued During 2021

(Dollars in thousands)
Dates of issuance	Type of issuance	Stock issuance recipient	Reason for issuance	Total no. of shares		Fair value recorded at issuance
February, June, July, August, and October 2021	Common stock	Four consultants	Services		251,537	$	1,161
April and June 2021	Common stock	Various GTS sellers	GTS acquisition		5,929,267		16,932
July 2021	Common stock	Various IMMCO sellers	IMMCO acquisition		874,317		2,024
July, August, September, October, November and December 2021	Common stock	Various	Debt payment		3,082,299		8,971
October 2021	Common stock	2 sellers	Full Moon Telecom acquisition		227,974		368
November 2021	Common stock	2 sellers	Front Line Power acquisition		11,622,018		17,612
November 2021	Common stock	4 lenders	Portion of original issue discount on $105 million credit facility		1,636,651		3,813
Total 2021 other equity transactions					23,624,063	$	50,881

26

 Shares Eligible for Future Sale

As of December 31, 2022, we had outstanding 157,530,961 shares of common stock. Of these shares, 145,347,136 shares are freely tradable without restriction or limitation under the Securities Act.

The 12,183,825 shares of common stock held by existing stockholders as of December 31, 2022 that are ‘‘restricted’’ within the meaning of Rule 144 adopted under the Securities Act (the ‘‘Restricted Shares’’), may not be sold unless they are registered under the Securities Act or sold pursuant to an exemption from registration, such as the exemption provided by Rule 144 promulgated under the Securities Act. The Restricted Shares were issued and sold by us in private transactions in reliance upon exemptions from registration under the Securities Act.

27

 Item 6. Reserved

Item 7.  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 our audited consolidated financial statements as of December 31, 2022 and notes thereto included in this document and our unaudited 10-Q filings for the first three quarters of 2022 and the notes thereto. In addition to historical information, the following discussion and other parts of this Form 10-K contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to factors discussed elsewhere in this Form 10-K.

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, expressed or implied by such forward-looking statements. These forward-looking statements are identified by the 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; 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-K 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.

Overview

Orbital Infrastructure Group, Inc. is a Texas corporation organized on April 21, 1998. The Company’s principal place of business is located at 5444 Westheimer Road Suite 1650 Houston, Texas 77056. Orbital Infrastructure Group is a holding company dedicated to maximizing stockholder value through the acquisition and development of infrastructure services contractors. Through its subsidiaries, Orbital Infrastructure Group has built a diversified portfolio of industry leading infrastructure service providers that touch many markets. The Company's reportable segments are the Electric Power segment, the Telecommunications segment, and the Renewables segment. 

Critical Accounting Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (‘‘GAAP’’). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

28

While all of our significant accounting policies impact the Company’s financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would have caused a material change in our results of operations, financial position or liquidity for the periods presented in this report.

Finite-Lived Asset Impairment

The Company reviews its long-lived assets including finite-lived intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In performing the review for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized as the excess of the carrying amount over the fair value. Otherwise, an impairment loss is not recognized. Management estimates the fair value and the estimated future cash flows expected. Any changes in these estimates could impact whether there was impairment and the amount of the impairment.

Fair Value of Estimates in Business Combination Accounting and Goodwill and Indefinite Lived Assets

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, ‘‘Business Combinations,’’ where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates if they were known or knowable at the acquisition date. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. At December 31, 2022, the Company has four operating segments (Front Line Power, Orbital Power Inc., Gibson Technical Services, and Orbital Solar Services) comprised of eight reporting units with Gibson Technical Services, IMMCO, Inc, Full Moon Telecom, LLC and Coax Fiber Solutions consolidating into one operating segment called Gibson Technical Services, and Eclipse Foundation is combined with Front Line Power. Goodwill is recognized at the operating segment level. At December 31, 2022, all remaining goodwill is at the Orbital Solar Services operating segment as goodwill at Front Line Power Construction, LLC and Gibson Technical Service was fully impaired in Q3 2022. 

Upon acquisition of Coax Fiber Solutions (CFS), the Company recorded $1.5 million of goodwill. Factors that contributed to the Company’s goodwill in CFS include the company's specialized knowledge and experience in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation which will add synergies with customers in the telecommunication market. 

Upon acquisition of Front Line Power Construction, LLC, the Company recorded $70.2 million of goodwill. Goodwill was valued as of November 17, 2021 by a third-party valuation expert and was recorded following the recognition of Front Line Power Construction’s tangible assets and liabilities and $108.2 million of finite- and indefinite-lived identifiable intangible assets. Factors that contributed to the Company’s goodwill at Front Line Power Construction included the strong leadership of Kurt Johnson, Front Line Power Construction’s Founder and CEO, along with the skills and expertise brought by his team. Front Line Power Construction’s team provides synergies with Orbital Power Inc. that have added momentum to the comprehensive range of solutions by OIG’s Electric Power Segment. 

Upon acquisition of Full Moon Telecom, LLC, the Company recorded $0.8 million of goodwill. Goodwill was valued as of October 22, 2021, by a third-party valuation expert and was recorded following the recognition of Full Moon Telecom’s tangible assets and liabilities and $0.4 million of finite- and indefinite-lived identifiable intangible assets. Factors that contributed to the Company’s goodwill in Full Moon Telecom, LLC, included the highly skilled and technically competent workforce at Full Moon. This workforce when combined with Gibson Technical Services and IMMCO provides synergies that increase the unique portfolio of services provided to their customers and further penetrates the telecommunications market.

Upon acquisition of IMMCO, Inc., and after recording a working capital adjustment, the Company recorded $11.1 million of goodwill. Goodwill was valued as of July 28, 2021 by a third-party valuation expert and was recorded following the recognition of IMMCO Inc.’s tangible assets and liabilities and $6.4 million of finite- and -indefinite-lived identifiable intangible assets. Factors that contributed to the Company’s goodwill at IMMCO include the significant synergies added to the Company’s telecommunications segment by expanding the depth and breadth of the customer solutions provided.

Upon acquisition of Gibson Technical Services, the Company recorded $12.3 million of goodwill. Goodwill was valued as of April 13, 2021 by a third-party valuation expert and was recorded following the recognition of Gibson Technical Services’ tangible assets and liabilities and $22.8 million of finite- and indefinite-lived identifiable intangible assets. Factors that contributed to the Company’s goodwill in Gibson Technical Services (GTS) include GTS’s sterling reputation within the telecommunications industry, which when combined with the Company’s resources, provides the Company the solid platform that has helped OIG penetrate the telecommunications market and build upon to create synergies with current and future acquisitions.

During the three months ended June 30, 2022, the Company performed its annual impairment testing as of May 31, 2022, which included a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. Fair values of the reporting units were determined based on applying a combination of the discounted cash flow method (i.e., income approach) as well as a market approach. Significant assumptions included estimates of future cash flows, discount rates, and market information for comparable companies. The review of goodwill determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended June 30, 2022. 

The Company performed a second goodwill impairment analysis as of June 30, 2022 due to a 42-percent drop in the Company's stock price between May 31, 2022 and June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill and intangibles impairment testing of our reporting units as of September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach.

The impairment assessment resulted in a conclusion that goodwill in the Electric Power and Telecommunications reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. At December 31, 2022, all remaining goodwill is at the Orbital Solar Services operating segment as goodwill at Front Line Power Construction, LLC and Gibson Technical Service was fully impaired in Q3 2022.  

During the three months ended June 30, 2022, the Company also performed an annual impairment analysis for Indefinite-lived intangible assets, which included a quantitative analysis to determine if carrying value exceeded the fair value for each asset. Fair values of the Indefinite-lived intangible assets were determined using the relief from royalty method, which included assumptions related to revenue growth rates, royalty rates, and discount rates. As a result of the annual impairment test, no impairment was identified as of June 30, 2022.

During the third quarter of 2022, an additional impairment analysis was performed over the Indefinite-lived intangible assets due to the triggering events mentioned above. As a result of the interim impairment testing, no impairment was identified as of September 30, 2022. In the fourth quarter of 2022, triggering events were identified which led to performing an additional Indefinite-lived intangibles impairment test.  These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company's ability to continue as a going concern.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. For the year ended December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

29

Revenue Recognition

The Electric Power segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, and emergency response sectors of North America through Front Line Power, and Orbital Power Services. The Telecommunications segment composed of Gibson Technical Services and subsidiaries provides technical implementation, design, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.  The Renewables segment, 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.

For our construction contracts, revenue is generally recognized over time. Our fixed price and unit-price construction projects generally use a cost-to-cost input method or an output 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. Under the output method, progress towards completion is measured based on units of work completed based on the contractual pricing amounts.  We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. 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 certain types of over time revenue jobs, the Company utilizes the right-to-invoice practical expedient. In these instances, we have a right to invoice the customer for an amount that corresponds directly with the value transferred to the customer for our performance completed to date. When this practical expedient is used, we recognize revenue based on billing and calculate any additional revenue earned that is unbilled at the period end. We have contracts which have payment terms dictated by daily or hourly rates where some contracts may have mixed pricing terms which include a fixed fee portion. For contracts in which we charge the customer a fixed rate based on the time or materials spent during the project, we recognize revenue in the amount to which we have the right to invoice, which corresponds to the value transferred to the customer. 

For any job where the customer does not simultaneously receive and consume the benefits of our performance as we perform the service, the timing of revenue recognition also depends on the payment terms of the contract. For those contracts 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 or output 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. 

30

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.

For certain of our revenue streams, such as call-out repair and service work, and outage services, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an input method as the customer receives and consumes the benefits of our performance completed to date.

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. 

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 integration systems 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.

31

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 event the Company misses a timing target, or fails to meet any other contract benchmarks, the Company accounts 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 the Company estimates that they will be a factor in the performance of the contract.

Two large solar projects have liquidated damages included within their customer contract which reduce their total contract values. In the event of a delay in the achievement of project milestones, the contracts specify the dollar amount of delay damages owed each day past the agreed upon milestone date. These delay liquidated damages are capped at 15% of the project contract price. During Q4 2022, the estimated completion dates on these two large solar projects were pushed passed milestone due dates in which the Company is contractually obligated to meet. As a result of these delays, the Company recorded liquidated damages as variable consideration, reducing the contract price on these two projects by a total of $17.1 million in 2022. This reduction in contract price along with additional estimated costs to complete the project resulted in a catch-up adjustment to reduce revenue recorded year-to-date by $21.4 million dollars. The customer on these two solar projects has the right to invoice for any liquidated damages on one of these projects, but as of March 31, 2023, has not yet sent an invoice for liquidated damages. Although the Company accrued for these liquidated damages in 2022, there is a possibility that some or all of the $17.1 million in liquidated damages could be reversed in future years if the customer does not invoice for these damages or if a legal settlement is reached.

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.

Liquidity and Capital Resources

Company Conditions and Sources of Liquidity

The Company has experienced net losses, cash outflows from cash used in operating activities and a decline in share value over the past years. As of and for the year ended December 31, 2022, the Company had an accumulated deficit of $487.1 million, loss from continuing operations of $277.9 million, and net cash used in operating activities of $19.6 million. Further, as of December 31, 2022, the Company had a working capital deficit of $190.5 million, including current maturities of debt, and cash and cash equivalents of $21.5 million available for working capital needs and planned capital asset expenditures.  As a result of the foregoing, the Company does not have sufficient liquidity and capital resources to meet its obligations and fund its operations for the twelve months following the issuance of these financial statements. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company has plans to access additional capital to meet its obligations for the twelve months from the date these financial statements are available to be issued. Historically, the Company has raised additional equity and debt financing to fund its expansion; refer to Note 7 — Notes Payable and Note 8 — Line of Credit. The Company has also funded some of its capital expenditures through long-term financing with lenders and other investors as also described in further detail in Note 7 — Notes Payable and Note 8 — Line of Credit. Our ability to raise the additional capital is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of business risks and uncertainties, our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price that is favorable to us. As of December 31, 2022, the Company has an effective S-3 shelf registration statement for the issuance of various types of securities, including common stock, preferred stock, debt securities and/or warrants in the aggregate of up to $65.9 million. In addition, although no formal agreements exist, the company has solicited interest from various lenders to potentially raise additional term debt to restructure or refinance its existing notes.

There can be no assurance that the Company will succeed in executing these plans. If unsuccessful, the Company will not have sufficient liquidity and capital resources to repay its indebtedness when it matures, or otherwise meet its cash requirements over the next twelve months, as noted above.

32

Cash used in Operations

Cash used in operations was approximately $19.6 million during the year ended December 31, 2022 compared to a $45.7 million use of cash in 2021. This was a decrease in the use of cash from operations of approximately $26.1 million from the year ended December 31, 2021. Overall, the change in cash used in operations is primarily the result of the loss from continuing operations, net of income taxes in 2022 and changes in assets and liabilities.

Decreased uses of cash in 2022 relate to improved cash flows in the Electric Power segment provided in large part by a full year of operations from Front Line Power. The Company believes that revenue generated by recent Telecommunications and Electric Power acquisitions will continue to improve cash flow from operating activities. The Company believes overall cash used in operations will improve through revenue growth associated with new customers and larger projects. 

During 2022, in addition to the Company's net loss after non-cash items, significant factors affecting cash used in operating activities included the change in retainage receivables, trade accounts payable, accrued liabilities, and changes in contract liabilities. and contract assets. The change in retainage receivables accounted for a $7.0 million use of cash in operating activities and was due to increased retainage receivables balances from the Renewables segment. Trade accounts payable increased $30.3 million primarily related to increased costs for subcontractor labor and materials on two large Renewable projects in 2022. Accrued liabilities also increased by $19.9 million, largely due to increased labor and vendor costs in the Renewables segment. Changes in contract liabilities and contract assets were due to a $1.9 million increase in costs in excess of billings and an increase in provision for loss on contracts of $4.2 million, primarily related to the Renewables segment.

During 2021, in addition to the Company's net loss after non-cash items, significant factors affecting cash used in operating activities included the change in trade accounts receivable, accrued liabilities, and changes in contract liabilities. The change in trade accounts receivable accounted for a $19.2 million use of cash in operating activities and was due to increased trade account receivable balances from the Electric Power and Renewables segments. Accrued expenses and Accrued Compensation increased by $4.5 million primarily related to increased accrued compensation expense in 2021 related to the timing of payroll expense along with increased accrued expenses at the corporate level for interest payable on outstanding debt. Changes in contract liabilities was a source of cash due to increased billings in excess of cash at the Renewables segment.

33

During 2022 and 2021, the Company issued common stock as a form of payment to certain vendors, consultants, directors and employees. For the years ended December 31, 2022 and 2021, the Company recorded a total of $1.1 million greater forfeitures than stock compensations compared to $12.2 of net stock compensation in 2021. These amounts are comprised of compensation related to equity given, or to be given, to employees, directors and consultants for services provided and as payment for royalties earned net of forfeitures. The decrease in 2022 compared to 2021 was due to greater stock-based compensation in 2021 than in 2022, and a $5.2 million dollar employee restricted stock forfeiture in 2022. In addition, there was a fair value adjustment to stock appreciation rights of negative $0.3 million in 2022 compared to a fair value adjustment of $2.1 million in 2021. Stock appreciation rights were exchanged for restricted stock units in the first quarter of 2022. 

Capital Expenditures and Investments

In 2022 and 2021, the Company paid $0.8 million and $132.5 million cash for acquisitions, net of cash received. 

During the years ended 2022 and 2021, Orbital Infrastructure Group invested $4.5 million and $7.8 million, respectively, in fixed assets. These investments typically include additions to equipment including vehicles and equipment for powerline service and maintenance, telecommunications service and maintenance, engineering and research and development, tooling for manufacturing, furniture, computer equipment for office personnel, facilities improvements and other fixed assets as needed for operations. The decrease in 2022 was due to larger costs in 2021 compared to 2022 related to start-up costs associated with the Company's Electric Power segment along with increased equipment at the Telecommunications segment. The Company anticipates further investment in fixed assets during 2023 in support of its on-going business and continued development of product lines, technologies and services.

Orbital Infrastructure Group invested $0.1 million and $0.7 million in other intangible assets during 2022 and 2021, respectively. These investments typically include capitalized website development, software for engineering and research and development and software upgrades for office personnel. The decrease in cash paid for investments in the current year primarily relates to an investment in VE Technology in 2021 compared to an investment in software developed by IMMCO and subsidiaries in 2022. 

The Company paid a working capital adjustment related to the Front Line Power Acquisition of $9.5 million in 2022. In 2022 the Company recognized proceeds from notes receivable of $3.5 million compared to $0.6 million in 2021. Cash used in purchase of short-term investments was $0.5 million in 2022 compared to $1.0 million in 2021. During 2022 the Company was refunded $0.2 million on finance lease deposits compared to lease deposits paid of $0.8 million in 2021.

34

Financing Activities

During the years ended December 31, 2022 and 2021, the Company issued payments of $5.1 million and $2.0 million, against finance leases of equipment. The Company had proceeds from notes payable in 2022 of $90.5 million, compared to $143.0 million in 2021. See Note 7, Notes payable for more information on the Company's notes payable. The Company made payments on notes payable of $83.2 million in 2022 and $9.9 million in 2021. 

On August 19, 2021, the Company's Telecommunications segment entered into a $4.0 million variable rate line of credit agreement that was extended in November 2022 until November 2023. Interest accrues at a rate of 2.05% over the Daily Simple Secured Overnight Financing Rate ("SOFR") index rate. At December 31, 2022 the Company had an outstanding balance on the line of credit of $4.0 million and zero dollars were available for borrowing. At December 31, 2021 the Company had an outstanding balance on the line of credit of $2.5 million and $1.5 million was available for borrowing.

S-3 registration and share issuances

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 Infrastructure 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. The Company utilized this S-3 registration to issue additional common stock in July 2021 for $38 million before costs of approximately $2.3 million for net proceeds of approximately $35.7 million. In May 2022, the Company utilized the S-3 to issue shares and prefunded warrants for $21.0 million and additional warrants with a cumulative exercise value of $21.2 million. The Company has approximately $65.9 million remaining available to issue additional securities from its shelf registration.

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.

Orbital Infrastructure Group may raise additional capital needed to fund operations as well as make payment on debt obligations.

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

35

Recap of Liquidity and Capital Resources

The Company had a net loss of $280.3 million and cash used in operating activities of $19.6 million during 2022. As of December 31, 2022, the Company's accumulated deficit is $487.1 million. The Company has supplemented its liquidity by issuing $45 million of common stock in January 2021 and $38 million of common stock in July 2021. In November 2021, the Company entered into a Credit Agreement with Alter Domus (US), LLC, as administrative agent and collateral agent and various lenders (the “Lenders”) in order to enable the Company to finance the acquisition of Front Line Power Construction, LLC (“Front Line”) (the “Acquisition”). Pursuant to the Credit Agreement, the Lenders made a Term Loan to Front Line in the initial principal amount of $105 million for the purposes of financing the Acquisition and the associated expenses. The Term Loan initially bears interest at the three-month Adjusted LIBOR Rate, plus the Applicable Margin, of which 2.5% may be paid in-kind. The Term Loan is being repaid in consecutive quarterly installments of $262,500, and commenced with payments on June 30, 2022. The Credit Agreement provides for mandatory prepayments on the occurrence of events such as sales of assets, Consolidated Excess Cash Flow and Excess Receipts during the term. The Credit Agreement provides for prepayment premiums (initially 5% on prepayments made in the first 30 months of the term, declining to 1% in the final year of the term). The Term Loan matures on November 17, 2026, subject to acceleration on Events of Default. Additionally, the Company issued two, unsecured promissory notes to the sellers of Front Line in the aggregate principle amount outstanding of $86.7 million with an original maturity date of May 17, 2022 and an interest rate of 6% per annum. The seller notes were amended in the first quarter of 2022 so that $35 million will be due in 2022 and the remaining portion of the seller notes will be due May 31, 2023. As modified on April 29, 2022 and December 30, 2022, $20 million was paid on May 6, 2022, $15 million is due on or before April 1, 2023 and the remaining balance is due on May 31, 2023. 

At December 31, 2022, and 2021 the Company had cash and cash equivalents balances of $21.5 million and $26.9 million. At December 31, 2022 and 2021, the Company had $3.0 million and $2.3 million, respectively, of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposit programs and $0.3 million and $0.4 million, respectively, of cash and cash equivalents covered at foreign financial institutions. At December 31, 2022 and 2021, the Company held $1.6 million and $2.1 million, respectively, in foreign bank accounts.

The following tables present our contractual obligations as of December 31, 2022:

	Payments due by period
	Less than
(In thousands)	1 year		1 to 3 years		3 to 5 years		After 5 years		Total
Financing lease obligations:
Minimum lease payments	$	5,977	$	7,177	$	944	$	—	$	14,098
Operating lease obligations:
Operating lease - minimum payments		5,565		7,779		4,936		1,512		19,792
Notes payable obligations:
Notes payable maturities plus interest		176,383		46,153		131,818		—		354,354
Total Obligations	$	187,925	$	61,109	$	137,698	$	1,512	$	388,244

As of December 31, 2022, the Company had an accumulated deficit of $487.1 million. 

The Company expects the revenues from its continuing operations to cover operating expenses for the next twelve months of operations. However, in the short-term, the Company is working to restructure its debt in order to extend payment of its current debt obligations over a longer duration.

Off-Balance Sheet Arrangements - Obligations under Certain Guarantee Contracts

The Company may enter into guarantee arrangements in the normal course of business to facilitate commercial transactions with third parties. As of December 31, 2022, the Company is an indemnitor on nine surety bonds and had three letters of credit off-balance sheet for a total dollar value of approximately $16.8 million. Two bonds were with the Renewables segment for a total of $14.9 million dollars for two construction projects. At the Electric Power segment there were three bonds totaling $0.4 million for various unit-based construction jobs. The Company held three off-balance sheet letters of credit as of December 31, 2022. The Telecommunications segment had a letter of credit for $0.4 million, the Renewables segment for $0.6 million and the Other segment for $0.4 million. The Company does not expect any liability associated with these off-balance sheet arrangements.

36

Results of Operations

The following tables set forth, for the periods indicated, Revenue and income (loss) from operations by segment:

(Dollars in thousands)	For the Year Ended December 31, 2022
	Electric Power			Telecommunications			Renewables			Other			Total
Total Revenues	$	152,635		$	83,816		$	85,766		$	—		$	322,217
Loss from operations	$	(88,045	)	$	(22,112	)	$	(68,137	)	$	(9,283	)	$	(187,577	)

(Dollars in thousands)	For the Year Ended December 31, 2021
	Electric Power			Telecommunications		Renewables			Other			Total
Total Revenues	$	43,599		$	27,799	$	11,550		$	—		$	82,948
Income (loss) from operations	$	(13,215	)	$	43	$	(19,043	)	$	(20,576	)	$	(52,791	)

37

Revenue

2022 compared to 2021

Revenues in 2022 are primarily attributable to newly acquired entities and increased revenues in the Renewables segment. Net revenues for the year ended December 31, 2022 were greater than in 2021 due to continued growth in the Telecommunications and Electric Power segments along with progress made in two large solar projects. Revenues will fluctuate generally around the timing of customer project delivery schedules. 

The Electric Power segment held unaudited backlogs of customer orders of approximately $229.4 million as of December 31, 2022 and $207.7 million at December 31, 2021. The Renewables segment held unaudited backlogs of customer orders of approximately $34.1 million as of December 31, 2022 compared to $121.4 million as of December 31, 2021. Telecommunications, had unaudited backlogs of customer orders of approximately $199.0 million compared to $194.5 million as of December 31, 2021. The difference between the total Non-GAAP backlog and remaining performance obligations relates to certain Master Service Agreement Backlog that does not meet the GAAP definition of performance obligations.

Cost of Revenues

2022 compared to 2021

For the year ended December 31, 2022, the cost of revenues as a percentage of revenue increased to 100.2% from 94.8% during 2021. Although the Company experienced improved margins in the electric power and telecommunications segments, margins in the renewables segment were negatively impacted by poor performance and higher than expected cost of sales related to two large solar projects which included recording delay liquidated damages that reduced the contract prices on these jobs. When combined, this resulted in an increase in cost of revenues as a percentage of revenue year over year. Margins will vary based upon the mix of work provided, proprietary technology included in projects, contract labor necessary to complete projects, and the competitive markets in which the Company competes. 

The Company expects improvement in 2023 with the continued growth of the Telecommunications group of companies and Front Line Power Construction, LLC in the Electric Power segment. With the addition of these entities, the Company expects synergies that will promote efficiencies and increase revenue in the years to come. The Company also expects improved margins in the Renewables segment with a movement away from fixed price contracts and into subcontractor projects. 

38

Selling, General and Administrative Expense

Selling, General and Administrative (SG&A) expenses includes such items as wages, consulting, general office expenses, and costs of being a public company including legal and accounting fees, insurance and investor relations. 

2022 compared to 2021

During the year ended December 31, 2022, SG&A decreased $2.6 million compared to the year ended December 31, 2021.  The decrease in SG&A for the twelve month period was primarily due to decreased SG&A costs in the Renewables segment due to the $5.2 million restricted stock forfeiture related to a Renewables' Executive termination in Q1 2022 and higher stock-based compensation in the year ended December 31, 2021 as compared to the year ended December 31, 2022 due to the restricted stock vesting expense recorded in 2021 on the restricted stock that was subsequently forfeited in the first quarter of 2022. Additionally, in 2021 there were higher SG&A expenses around strategic initiatives which included increased professional fees and costs associated with due diligence activities related to acquisitions.

SG&A decreased to 14.7% of total revenue in 2022 compared to 60.3% of total revenue during the year ended December 31, 2021 due to economies of scale on 288.5% higher consolidated revenues, and the factors described above.

Depreciation and Amortization

	For the Years Ended December 31,
Depreciation and Amortization by Segment			Percent
(Dollars in thousands)	2022		Change			2021
Electric Power	$	26,911		350.8	%	$	5,969
Telecommunications		4,863		109.1	%		2,326
Renewables		2,001		(31.7	)%		2,931
Other		64		(96.2	)%		1,684
Total depreciation and amortization (1)	$	33,839		162.1	%	$	12,910

(1) For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the years ended December 31, 2022 and 2021, depreciation and amortization totals included $13.8 million and $4.5 million, respectively that were classified as cost of revenues in the Consolidated Statements of Operations.

The depreciation and amortization expenses are associated with depreciating buildings, furniture, vehicles, equipment, software and other intangible assets over the estimated useful lives of the related assets. 

39

2022 compared to 2021

Depreciation and amortization expense in the year ended December 31, 2022 was up compared to 2021 primarily due to the amortization of Telecommunications and Electric Power segment acquisition intangibles and depreciation of equipment used by Telecommunications and Electric Power segments.

Provision for Bad Debt

Provision for bad debt in 2022 represented less than 1% of total revenues and related to miscellaneous trade receivables, which the Company had either recorded an allowance for doubtful collections of the receivable or for which the Company had determined the balance to be uncollectible. The provision for bad debt decreased in 2022 compared to 2021 as the 2021 provision for bad debt primarily related to accounts receivable write-offs on the Renewables segment's customer balances that were deemed to be uncollectible.

40

Other Income (Expense)

	For the Years Ended December 31,
				Percent
(Dollars in thousands)	2022			Change			2021
Foreign exchange loss	$	1			(100.2	)%	$	(500	)
Interest income		138			(59.2	)%		338
Sublet rental income		517			3.2	%		501
Liquidated damages on debt		(7,969	)		100.0	%		—
Other, net		274			585.0	%		40
Total other income (expense)	$	(7,039	)		(1957.3	)%	$	379

Other income (expense) changes contributing to increased expenses were liquidated damages incurred on the Company's investor held debt in 2022. Losses were slightly offset by rental income in the year-to-date period. See Note 7 - Notes Payable for more information on the liquidated damages on debt.

Interest Expense

The Company incurred $37.8 million and $8.3 million of interest expense during 2022 and 2021, respectively. Interest expense is for interest on the short-term and long-term notes payable including syndicated debt agreement, seller-financed notes, non-recourse payable agreements, convertible note payable, insurance financing notes, secured promissory note, and lines of credit. The increased interest expense in 2022 is related to interest on debt acquired in the Front Line Power Construction acquisition in late November 2021. Also contributing to the increase in interest expense is the increase in the variable rate on the Company's $104.5 million Syndicated debt that increased from 13.50% at inception to 17.15% in 2022.

See Note 7 for more information on the Company's notes payable.

Loan modifications and gain (losses) on extinguishments

In 2022, the Company recorded total losses on extinguishments of $31.3 million. Of this amount, $28.5 million related to loan modifications and loans refinanced of which $26.2 million was related to the seller financed notes payable with the sellers of Front Line Power Construction, LLC. See Note 7  - Notes Payable for more information on the Company's seller financed notes payable.

The remaining portion of losses on extinguishment were due to the Company's payment of debt with its common stock. Any discounts the Company gives to the investor on its common stock is recorded as a loss on extinguishment. In 2022, the Company issued 20,297,993 shares to this investor for $15.9 million, which included a $2.8 million loss on extinguishment.

Gain (loss) on financial instruments and warrant liabilities

As part of the purchase of Front Line, the Company paid the sellers, Tidal Power and Kurt Johnson, a certain number of shares of restricted stock. To the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. In 2022, fair value adjustments to these financial instrument liabilities were $16.9 million of losses.

In conjunction with the Company issuing $105 million of debt to a syndicate of lenders, the Company committed to issuing 1,690,677 shares of stock to the lenders in the syndicate in a subscription agreement. Included in the subscription agreement is a provision that provides for additional shares to be issued to the lenders of the syndicate if the Company issues shares of common stock in an offering at a price lower than $2.36 per share amount ("the reference price"), for the shares initially issued to the lenders in the syndicate. This financial instrument was valued as a put option using the Black Scholes option pricing model. Unobservable inputs include volatility, exercise price, and time to expiration. The put expires at the maturity of the Company's seller notes. In 2022, there were five separate issuances via the financial instrument for a total of 25.0 million shares. The updated reference price as of December 31, 2022 was $0.15. In 2022, fair value adjustments to this financial instrument liability were $7.4 million of losses. 

We account for warrants for shares of the Company's common stock that are not indexed to our own stock as liabilities at fair value on the balance sheet. The warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized in our statement of operations. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Warrants issued in connection with Company's offering has been measured based on the Black Scholes Option Pricing Model. In 2022, fair value adjustments to warrant liabilities were $11.1 million.

41

Provision (benefit) for taxes

The Company is subject to taxation in the U.S., various state and foreign jurisdictions. We continue to record a full valuation allowance against the Company's U.S. 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."

2022 compared to 2021

In 2022, net tax expense of $0.8 million, was recorded to the income tax provision from continuing operations for the year ended December 31, 2022 resulting in an effective tax rate of (0.31%) compared to a $10.5 million tax benefit from continuing operations for the year ended December 31, 2021 and an effective tax rate of 17.4%. For the year ended December 31, 2022, the income tax expense primarily represents state minimum and foreign taxes. For the year ended December 31, 2021, the income tax benefit primarily represents a decrease in the U.S. valuation allowance as a result of the GTS acquisition. As of December 31, 2022, we have federal and state net operating loss carryforwards of approximately $192.9 million and $0.9 million respectively, and for which the federal and state net operating loss carry-forwards will expire between 2027 and 2038, with the exception of $34.1 million of federal net operating loss carryforwards that are not subject to expiration. 

Loss from Continuing Operations, net of income taxes

2022 compared to 2021

The Company had a loss from continuing operations, net of income taxes of $277.9 million for the year ended December 31, 2022 compared to a loss of $49.8 million in 2021. The increased loss from continuing operations, net of income taxes was attributable in part to an over $55.0 million loss on two utility scale solar projects which were nearing completion as of December 31, 2022. In addition, the Company recorded $109.6 million of impairments of goodwill and intangible assets in 2022. There was also a $29.5 million increase in interest expense compared to 2021, primarily related to debt financing of 2021 acquisitions. Loss on extinguishment of debt of $31.3 million was recognized, largely due to a loan modification in the first quarter of 2022 on the Front Line Seller Financed notes payable. Lastly, unfavorable changes in financial instruments resulted in a $13.4 million dollar loss in 2022. 

42

Income from Discontinued Operations, net of income taxes

2022 compared to 2021

The Company had loss from discontinued operations, net of income taxes of $2.3 million for the year ended December 31, 2022 compared to a loss of $11.4 million in 2021. The decrease in loss from discontinued operations is primarily due to an impairment recognized at Orbital UK in 2021 that wrote down Orbital UK to its expected sales price.  Orbital UK was sold in 2022 and the VE Technology asset of the Company's North America Orbital Gas subsidiary remains held for sale at December 31, 2022.

Consolidated Net Loss

2022 compared to 2021

The Company had a net loss of $280.3 million for the year ended December 31, 2022 compared to a net loss of $61.2 million for the year ended December 31, 2021. The increased consolidated net loss was attributable to $109.6 million dollars of impairment recognized in 2022 on goodwill and intangible assets driven in part by a large stock price decrease in 2022. In addition, two utility scale solar projects resulted in large losses in 2022 related to delays, additional subcontractor labor related to rework, and other costs beyond original estimates that eroded the margins on these jobs, resulting in an over $55 million dollar loss. Loss on extinguishment of debt and losses on financial instruments also contributed to the greater loss.

Recently Adopted and Recently Issued Accounting Standards

Information on recently adopted and recently issued accounting standards is included in Note 2 Summary of Significant Accounting Policies - Recent Accounting Pronouncements, to the Consolidated Financial Statements under Part II, Item 8, ‘‘Financial Statements and Supplementary Data.’’

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our 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.

Interest Rate Risk. We are exposed to interest rate risk with respect to our fixed-rate and variable-rate debt. Fluctuations in interest rates exposes us to the risk that we may need to refinance debt at higher rates at each instrument’s respective maturity date. Fluctuations in interest rates impact interest expense from our variable-rate debt. At December 31, 2022, 56% of our debt portfolio, on a gross basis, incurred interest at a fixed-rate and the remaining 44% of the portfolio incurred interest at a variable-rate.

As of December 31, 2022, the gross value of our fixed-rate debt was $152.2 million, which consisted primarily of our seller financed notes payable and notes payable with an institutional investor. 

As of December 31, 2022, the gross value of our variable-rate debt consisted of $114.7 million outstanding under our syndicated debt and $4.0 million line of credit. The stated interest rate on our syndicated debt as of December 31, 2022 was 17.15%, and the Interest rate on the line of credit was 2.05% over the Daily Simple Secured Overnight Financing Rate ("SOFR") index rate. Based on these borrowings outstanding as of December 31, 2022, we estimate that a 1% increase or decrease in interest rates would impact annual interest expense by approximately $1.2 million.

For additional information about our debt obligations, refer to Note 7 - Notes Payable.

Foreign Currency Exchange Rates

The Company conducts continuing operations in one principal currency: the U.S. dollar. This currency operates as the functional currency for the Company’s U.S. operations. Cash is managed centrally within the region with net earnings invested in the U.S. and working capital requirements met from existing U.S. intercompany liquid funds. 

The Company has limited exposure to foreign currencies. 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 our Statements of our foreign operations into U.S. dollars affects the comparability of revenues and operating expenses between years.

43

Revenues and operating expenses are primarily denominated in US dollars, the currency in which the majority of our continuing operations are located, which is in the U.S. We have limited operations in India, Australia and Europe. Our consolidated results of operations and cash flows are, therefore, subject to limited fluctuations due to changes in foreign currency exchange rates and is not expected to be adversely affected in the future by changes in foreign exchange rates.

To date, we have 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.

Investment Risk

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 revenue concentrations with large customers. See Note 15 of the Company's financial statements for more information on the Company's concentration risks.

44

Item 8.  Financial Statements and Supplementary Data

This item includes the following financial information:

	Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 238)	46
Consolidated Balance Sheets	48
Consolidated Statements of Operations	49
Consolidated Statements of Comprehensive Income and (Loss)	50
Consolidated Statements of Changes in Stockholders’ Equity	51
Consolidated Statements of Cash Flows	52
Notes to Consolidated Financial Statements	54 – 89

45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Orbital Infrastructure Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Orbital Infrastructure Group, Inc. and its subsidiaries (the “Company”) as of December 31, 2022, and the related consolidated statements of operations, of comprehensive income and (loss), of changes in stockholders’ equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has experienced net losses, cash outflows from cash used in operating activities and a decline in share value over the past years that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Estimated Costs to Determine Progress Towards Contract Completion of Fixed Price Contracts in the Renewables Segment

As described in Note 2 to the consolidated financial statements, $85.8 million of the Company’s total revenues for the year ended December 31, 2022 was generated from fixed price contracts in the Renewables segment. The Company’s fixed price construction projects are generally recognized over time and use a cost-to-cost input method to measure progress towards complete satisfaction of the performance obligation. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured by management based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Changes in management’s total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized by the Company on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When management’s 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. Management’s estimates of revenue recognition over time using cost-based input methods require significant judgment to evaluate assumptions, including the amount of total estimated costs to determine progress towards contract completion and to calculate the corresponding amount of revenue to recognize.

The principal considerations for our determination that performing procedures relating to revenue recognition - estimated costs to determine progress towards contract completion of fixed price contracts in the Renewables segment is a critical audit matter are (i) the significant judgment by management when developing the total estimated costs at completion and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the total estimated costs at completion. 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing management’s process for developing the total estimated costs at completion, (ii) obtaining executed agreements for a selection of contracts; (iii) evaluating the appropriateness of the cost-to-cost input method; (iv) testing the completeness and accuracy of the underlying data used in the cost-to-cost input method; and (v) evaluating the reasonableness of significant assumptions used by management related to the total estimated costs at completion. Evaluating management’s significant assumptions related to the total estimated costs at completion involved assessing management’s ability to reasonably estimate the total costs at completion by (i) as applicable for selected contracts that were still open as of December 31, 2022, performing a comparison of the total estimated costs at completion against incurred costs as of December 31, 2022; (ii) testing, on a sample basis, incurred costs to date as of December 31, 2022; (iii) performing a retrospective comparison of incurred costs to date subsequent to year-end to evaluate the reasonableness of the total estimated costs at completion; and (iv) evaluating the timely identification of circumstances which may warrant a modification to total estimated costs at completion.

Interim Impairment Assessments – Front Line and Gibson Technical Services (GTS) Trade Names

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s consolidated identifiable indefinite-lived other intangible assets balance was $13.4 million as of December 31, 2022, of which $7.7 million and $4.6 million related to the Front Line and GTS trade names, respectively. Indefinite-lived intangibles are tested for impairment in the second quarter of each year and when events or circumstances indicate that the carrying amount exceeds its fair value and may not be recoverable. During the fourth quarter of 2022, a triggering event was identified due to decreases in market capitalization and interest rate increases, which resulted in impairments of $7.4 million and $1.7 million to the Front Line and GTS trade names, respectively. Fair value is estimated by management using the relief from royalties method. Management’s impairment assessments included significant assumptions related to revenue growth rates, royalty rates, and discount rates. 

The principal considerations for our determination that performing procedures relating to the interim impairment assessments for the Front Line and GTS trade names is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the Front Line and GTS trade names; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, royalty rates, and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing management’s process for developing the fair value estimates of the Front Line and GTS trade names; (ii) evaluating the appropriateness of the relief-from-royalties method; (iii) testing the completeness and accuracy of the underlying data used in the relief-from-royalties method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, royalty rates, and discount rates. Evaluating management’s significant assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brands; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of (i) the appropriateness of the Company's relief-from-royalties method and (ii) the reasonableness of the royalty rates and discount rates assumptions.

/s/ PricewaterhouseCoopers LLP  

Houston, Texas

April 6, 2023

We have served as the Company’s auditor since 2022.

46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Orbital Infrastructure Group, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Orbital Infrastructure Group, Inc. (a Texas corporation formerly known as Orbital Energy Group, Inc.) and subsidiaries (the “Company”) as of December 31, 2021, the related consolidated statements of operations, comprehensive income and (loss), changes in stockholders’ equity, and cash flows for the year then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

   /s/ GRANT THORNTON LLP

We served as the Company’s auditor from 2019 to 2022.

Dallas, Texas

March 31, 2022

47

Orbital Infrastructure Group, Inc.

Consolidated Balance Sheets

As of December 31, 

(In thousands, except share and per share amounts)	2022			2021
Assets:
Current Assets:
Cash and cash equivalents	$	21,489		$	26,865
Restricted cash - current portion		123			150
Trade accounts receivable, net of allowance		52,652			48,752
Inventories		1,691			1,335
Contract assets		13,917			7,478
Notes receivable, current portion		1,442			3,536
Prepaid expenses and other current assets		7,840			6,919
Assets held for sale, current portion		3,198			6,679
Total current assets		102,352			101,714
Property and equipment, less accumulated depreciation		22,930			29,638
Investment		1,063			1,063
Right of use assets - Operating leases		16,588			18,247
Right of use assets - Financing leases		8,394			14,702
Goodwill		7,006			100,899
Other intangible assets, net		111,134			142,656
Restricted cash, noncurrent portion		486			1,026
Note receivable		—			836
Deposits and other assets		1,618			1,558
Total assets	$	271,571		$	412,339
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable	$	41,333		$	10,111
Notes payable, current		144,708			72,774
Line of credit		4,000			2,500
Operating lease obligations - current portion		4,540			4,674
Financing lease obligations - current portion		5,316			4,939
Accrued expenses		39,065			28,301
Contract liabilities		10,218			6,503
Financial instrument liability, current portion		43,693			825
Liabilities held for sale, current portion		—			4,367
Total current liabilities		292,873			134,994
Financial instrument liability, noncurrent portion		536			—
Warrant liabilities		1,777			—
Deferred tax liabilities		—			260
Notes payable, less current portion		100,528			156,605
Operating lease obligations, less current portion		12,350			13,555
Financing lease obligations, less current portion		7,673			9,939
Contingent consideration		570			720
Total liabilities		416,307			316,073
Commitments and contingencies
Stockholders' Equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized; no shares issued at December 31, 2022 or December 31, 2021		—			—
Common stock, par value $0.001; 325,000,000 shares authorized; 157,884,024 shares issued and 157,530,961 shares outstanding at December 31, 2022 and 82,259,739 shares issued and 81,906,676 shares outstanding at December 31, 2021		158			82
Additional paid-in capital		347,357			311,487
Treasury stock at cost; 353,063 shares held at December 31, 2022 and December 31, 2021		(413	)		(413	)
Accumulated deficit		(487,121	)		(210,934	)
Accumulated other comprehensive loss		(691	)		(3,995	)
Total Orbital Energy Group, Inc.'s stockholders' equity		(140,710	)		96,227
Noncontrolling interest		(4,026	)		39
Total stockholders' equity		(144,736	)		96,266
Total liabilities and stockholders' equity	$	271,571		$	412,339

See accompanying notes to consolidated financial statements

48

Orbital Infrastructure Group, Inc.

Consolidated Statements of Operations

For the Years Ended December 31,

(In thousands, except share and per share amounts)
	2022			2021
Revenues	$	322,217		$	82,948
Cost of revenues		328,318			78,630
Gross profit		(6,101	)		4,318
Operating expenses:
Selling, general and administrative expense		47,428			50,024
Depreciation and amortization		20,060			6,762
Impairment of goodwill and intangible assets		109,586			—
Impairment of financing leased assets		4,467			—
Provision for bad debt		(26	)		346
Other operating (income) expenses		(39	)		(23	)
Total operating expenses		181,476			57,109
Loss from operations		(187,577	)		(52,791	)
Gain (loss) on extinguishment of debt		(31,258	)		365
Gain (loss) on financial instruments		(24,487	)		33
Gain on warrant liabilities		11,085			—
Other income (expense)		(7,039	)		379
Interest expense		(37,813	)		(8,337	)
Loss from continuing operations before taxes		(277,089	)		(60,351	)
Income tax expense (benefit)		846			(10,508	)
Loss from continuing operations, net of income taxes		(277,935	)		(49,843	)
Discontinued operations (Note 2)
Loss from operations of discontinued businesses		(2,317	)		(12,705	)
Income tax benefit		—			(1,334	)
Loss from discontinued operations, net of income taxes		(2,317	)		(11,371	)
Net loss		(280,252	)		(61,214	)
Less: net income (loss) attributable to noncontrolling interest		(4,065	)		39
Net loss attributable to Orbital Infrastructure Group, Inc.	$	(276,187	)	$	(61,253	)
Basic and diluted weighted average number of shares outstanding		108,313,369			58,348,489
Loss from continuing operations per common share - basic and diluted	$	(2.53	)	$	(0.86	)
Loss from discontinued operations per common share - basic and diluted	$	(0.02	)	$	(0.19	)
Loss per common share - basic and diluted	$	(2.55	)	$	(1.05	)

See accompanying notes to consolidated financial statements

49

Orbital Infrastructure Group, Inc.

Consolidated Statements of Comprehensive Income and (Loss)

For the Years Ended December 31,

(In thousands)

	2022			2021
Net loss	$	(280,252	)	$	(61,214	)
Other comprehensive income (loss)
Foreign currency translation adjustment		(304	)		411
Reclassification adjustment upon sale of Orbital U.K.		3,608			—
Other comprehensive income (loss)		3,304			411
Comprehensive loss		(276,948	)		(60,803	)

See accompanying notes to consolidated financial statements

50

Orbital Infrastructure Group, Inc.

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 

(In thousands, except share amounts)

																						Accumulated
							Additional															Other				Total OIG								Total
	Common Stock						Paid-in			Treasury Stock								Accumulated				Comprehensive				Stockholders'				Non-controlling				Stockholders'
	Shares			Amount			Capital			Shares				Amount				Deficit				Income (Loss)				Equity				Interest				Equity
Balance, January 1, 2021		31,029,642		$	31		$	171,616			(353,063	)		$	(413	)		$	(149,681	)		$	(4,406	)		$	17,147			$	—			$	17,147
Issuance of common stock via equity raises		25,966,515			26			78,020			—				—				—				—				78,046				—				78,046
Common stock issued for acquisitions		18,653,576			18			36,917			—				—				—				—				36,935				—				36,935
Common stock issued and issuable for compensation, services and royalty payments		1,891,056			2			12,155			—				—				—				—				12,157				—				12,157
Common stock issued to lenders for OID for $105 million debt		1,636,651			2			3,811			—				—				—				—				3,813				—				3,813
Common stock issued for debt repayment		3,082,299			3			8,968			—				—				—				—				8,971				—				8,971
Net loss		—			—			—			—				—				(61,253	)			—				(61,253	)			39				(61,214	)
Other comprehensive loss		—			—			—			—				—				—				411				411				—				411
Balance, December 31, 2021		82,259,739		$	82			311,487			(353,063	)			(413	)			(210,934	)			(3,995	)			96,227				39				96,266
Common stock issued for acquisition		125,000			—			146			—				—				—				—				146				—				146
Issuance of common stock via equity raises		20,194,537			20			3,935			—				—				—				—				3,955				—				3,955
Issuance of common stock upon exercise of pre-funded warrants, net		7,153,847			7			6,932			—				—				—				—				6,939				—				6,939
Common stock issued for debt repayment		20,297,993			21			15,916			—				—				—				—				15,937				—				15,937
Common stock issued to lenders for OID and based on a new reference price on subscription agreement		24,963,451			25			7,642			—				—				—				—				7,667				—				7,667
Common stock issued and issuable for compensation, services and royalty payments		2,889,457			3			1,299			—				—				—				—				1,302				—				1,302
Net loss		—			—			—			—				—				(276,187	)			—				(276,187	)			(4,065	)			(280,252	)
Other comprehensive income (loss)		—			—			—			—				—				—				3,304				3,304				—				3,304
Balance, December 31, 2022		157,884,024	—	$	158	—	$	347,357	—		(353,063	)	—	$	(413	)	—	$	(487,121	)	—	$	(691	)	—	$	(140,710	)	—	$	(4,026	)	—	$	(144,736	)

See accompanying notes to consolidated financial statements

51

Orbital Infrastructure Group, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31,

(In thousands)

	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(280,252	)	$	(61,214	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		15,371			5,208
Amortization of intangibles		18,468			7,702
Amortization of debt discount		11,037			3,392
Loss (gain) on extinguishment of debt and loan modifications		31,258			(1,134	)
Gain on disposal of assets		(154	)		(26	)
Gain on sale of businesses		(299	)		—
Amortization of note receivable discount		(63	)		(319	)
Stock-based compensation and expense		(1,144	)		12,168
Fair value adjustment to liability for stock appreciation rights		(269	)		2,054
Fair value adjustment to financial instrument liabilities		24,487			(33	)
Fair value adjustment to warrant liabilities		(11,085	)		—
Provision for bad debt		(8	)		343
Deferred income taxes		(347	)		(10,878	)
Non-cash unrealized foreign currency (gain) loss		(7	)		492
Liquidated damages from debt		7,969			—
Impairment of goodwill and intangible assets		109,586			—
Impairment of financing leased assets		4,467			—
Impairment of assets held for sale		—			9,185
Inventory reserve		(9	)		(350	)
Change in operating assets and liabilities, net of acquisition:
Trade accounts receivable		(1,844	)		(19,173	)
Inventories		58			(425	)
Contract assets		(5,086	)		(296	)
Prepaid expenses and other current assets		3,540			41
Right of use assets/lease liabilities, net of acquisitions:		234			49
Deposits and other assets		(39	)		(24	)
Increase (decrease) in operating liabilities:
Accounts payable		30,269			(38	)
Accrued expenses		19,905			4,540
Contingent consideration		(150	)		—
Contract liabilities		4,482			3,060
NET CASH USED IN OPERATING ACTIVITIES		(19,625	)		(45,676	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions, net of cash received		(773	)		(132,518	)
Cash paid for working capital adjustment on Front Line Power acquisition		(9,500	)		—
Purchases of property and equipment		(4,511	)		(7,779	)
Deposits on financing lease property and equipment/ proceeds from deposits		158			(762	)
Proceeds from sale of businesses, net of cash included in business		1,027			—
Proceeds from sale of property and equipment		485			141
Purchase of other intangible assets		(99	)		(705	)
Purchase of investments		(469	)		(1,025	)
Proceeds from notes receivable		3,500			621
NET CASH USED IN INVESTING ACTIVITIES		(10,182	)		(142,027	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		4,250			3,250
Payments on line of credit		(2,750	)		(1,191	)
Payments on financing lease obligations		(5,090	)		(1,995	)
Proceeds from notes payable, net of debt discounts and issuances costs		90,522			143,045
Payments on notes payable		(83,162	)		(9,941	)
Proceeds from sales of common stock and warrants		20,395			78,046
NET CASH PROVIDED BY FINANCING ACTIVITIES		24,165			211,214
Effect of exchange rate changes on cash		(301	)		6
Net (decrease) increase in cash, cash equivalents and restricted cash		(5,943	)		23,517
Cash, cash equivalents and restricted cash at beginning of year		28,041			4,524
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	$	22,098		$	28,041

See accompanying notes to consolidated financial statements

52

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
For the Years Ended December 31, 2022 and 2021
	2022		2021
Income taxes paid (net refunded)	$	336	$	(316	)
Interest paid	$	26,584	$	2,257
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash investment in acquisitions including seller notes, equity issued and contingent consideration	$	146	$	123,457
Financing note payable issued for payment on certain insurance policies	$	4,761	$	2,854
Equipment purchased with debt	$	969	$	138
Accrued property and equipment purchases at December 31	$	9	$	404

See accompanying notes to consolidated financial statements

53

Orbital Infrastructure Group, Inc.

Notes to Consolidated Financial Statements 

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Orbital Infrastructure Group, Inc. f/k/a Orbital Energy Group, Inc. (Orbital Infrastructure Group, "OIG," "The Company") is a diversified infrastructure services company serving customers in the electric power, telecommunications, and renewable markets. The Company’s reportable segments are the Electric Power segment, the Telecommunications segment, and the Renewables segment. In December 2021, the Company announced the planned divestiture of its previous Integrated Energy Infrastructure Solutions and Services segment.

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas and Orbital Power, Inc. based in Dallas, Texas. The segment provides comprehensive infrastructure solutions to customers in the electric power industry. Services performed by Front Line Power and Orbital Power, Inc. generally include but are not limited to the engineering, design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services. Eclipse Foundation Group, which began operations in January 2021 and was integrated into Front Line Power in the third quarter of 2022, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, telecommunication and disaster restoration market sectors, with expertise performing services in water, marsh and rock terrains.

The Telecommunications segment is made up of Gibson Technical Services, Inc. (“GTS”) (acquired April 13, 2021). GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and is the parent of the following companies:

o IMMCO, Inc. (acquired July 28, 2021), which includes two Indian subsidiaries and is an Atlanta-based, full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.

o Full Moon Telecom, LLC (acquired October 22, 2021) a Florida-based telecommunications service provider that offers an extensive array of wireless service capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network (“RAN”) Integration, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna (“DAS”) systems.

o Coax Fiber Solutions, LLC (acquired  March 7, 2022), is based in Loganville, Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.  

The Renewables segment consists of Orbital Solar Services based in Raleigh, North Carolina. 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. Orbital Solar Services entered into an agreement in 2021 to form OSS-JPOW Solar Services, LLC (OSS-JPOW), a partnership with Jingoli Power, LLC. OSS-JPOW is considered a Variable Interest Entity (VIE) to Orbital Solar Services.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 record purchase price allocation for the Company's acquisitions, fair value measurements used in goodwill impairment tests, impairment estimations of long-lived assets, revenue recognition on cost-to-cost type contracts, allowances for uncollectible accounts, valuations of non-cash capital stock issuances, estimates of the incremental borrowing rate for long-term leases, fair value estimates and the valuation allowance on deferred tax 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 assumptions or conditions.

54

 

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Orbital Infrastructure Group, Inc. and its wholly owned subsidiaries Front Line Power Construction, LLC, Orbital Power, Inc., Eclipse Foundation Group, Orbital Solar Services, Gibson Technical Services, Inc., and GTS's wholly owned subsidiaries, IMMCO, Inc., Full Moon Telecom, LLC, and Coax Fiber Solutions, LLC, hereafter referred to as the ‘‘Company.’’ Additionally, the following wholly owned subsidiaries are included in these financial statements as discontinued operations: Orbital Gas Systems, Ltd. and Orbital Gas Systems, North America, Inc. Intercompany accounts and transactions have been eliminated in consolidation.

Variable Interest Entity

Orbital Solar Services entered into an agreement in 2021 to form OSS-JPOW Solar Services, LLC (OSS-JPOW), a partnership with Jingoli Power, LLC. Orbital Solar Services holds a controlling interest in OSS-JPOW and the portions of OSS-JPOW’s net earnings and equity not attributable to Orbital Solar Service’s controlling interest are shown separately as noncontrolling interests in the consolidated statements of operations and consolidated balance sheets. OSS-JPOW is considered a Variable Interest Entity ("VIE") to Orbital Solar Services. At 12/31/2022, OSS-JPOW had $10.6 million dollars of assets and $68.2 million dollars of liabilities on their balance sheet.  

Orbital Solar Services, through its controlling interest in OSS-JPOW, has the contractual power to direct the activities that significantly affect the economic performance of OSS-JPOW and the obligation to absorb losses or the right to receive benefits that could be significant to OSS-JPOW; therefore, Orbital Solar Services is considered the primary beneficiary and consolidates OSS-JPOW. The VIE has been jointly financed by the Company and JPOW. For the years ended December 31, 2022 and 2021, a $54.5 million loss and $0.1 million of income was attributable to OSS-JPOW with a $4.1 million dollar loss and $39 thousand of income allocated to non-controlling interest.

Company Conditions and Sources of Liquidity 

The Company has experienced net losses, cash outflows from cash used in operating activities and a decline in share value over the past years. As of and for the year ended December 31, 2022, the Company had an accumulated deficit of $487.1 million, loss from continuing operations of $277.9 million, and net cash used in operating activities of $19.6 million. Further, as of December 31, 2022, the Company had a working capital deficit of $190.5 million, including current maturities of debt, and cash and cash equivalents of $21.5 million available for working capital needs and planned capital asset expenditures.  As a result of the foregoing, the Company does not have sufficient liquidity and capital resources to meet its obligations and fund its operations for the twelve months following the issuance of these financial statements. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company has plans to access additional capital to meet its obligations for the twelve months from the date these financial statements are available to be issued. Historically, the Company has raised additional equity and debt financing to fund its expansion; refer to Note 7 — Notes Payable and Note 8 — Line of Credit. The Company has also funded some of its capital expenditures through long-term financing with lenders and other investors as also described in further detail in Note 7 — Notes Payable and Note 8 — Line of Credit. Our ability to raise the additional capital is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of business risks and uncertainties, our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price that is favorable to us. As of December 31, 2022, the Company has an effective S-3 shelf registration statement for the issuance of various types of securities, including common stock, preferred stock, debt securities and/or warrants in the aggregate of up to $65.9 million. In addition, although no formal agreements exist, the company has solicited interest from various lenders to potentially raise additional term debt to restructure or refinance its existing notes.

There can be no assurance that the Company will succeed in executing these plans. If unsuccessful, the Company will not have sufficient liquidity and capital resources to repay its indebtedness when it matures, or otherwise meet its cash requirements over the next twelve months, as noted above.

Discontinued Operations and Sales of Businesses

As part of the Company’s stated strategy to transform Orbital Infrastructure Group into a diversified energy infrastructure services platform serving North American energy customers, the Company’s board of directors made the decision to divest of its Orbital Gas subsidiaries. The Orbital Gas subsidiaries provide proprietary gas measurement and sampling technologies and the integration of process control and measuring/sampling systems. They are legacy businesses that are not part of the Company’s strategy of building an infrastructure services company serving the electric power, telecommunications and renewable markets. The disposition of the Orbital Gas subsidiaries will facilitate the Company’s restructuring and cost savings initiatives and are intended to realign and simplify its business structure and better position the Company for future growth and improved profitability. In the fourth quarter of 2021, the Company recorded a $9.2 million impairment related to its U.K. operations to write the value of its investment in the U.K. operations to its expected realizable value of 3 million GBP ($4.1 million at December 31, 2021). The Company's U.K. operations were divested in May 2022 and most of the assets of the North American operations were divested in the third quarter of 2022. At December 31, 2022, the remaining assets held for sale were the Company's VE Technology intellectual property and certain fixed assets at Eclipse Foundation Group. Income from discontinued operations and assets and liabilities held for sale are included in the Company's statement of operations and balance sheet and are described below. 

55

 

Selected data for these discontinued businesses consisted of the following:

Reconciliation of the Major Classes of Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations That Are Presented in the Statement of Operations

(In thousands)
	For the Year
	Ended December 31,
Major classes of line items constituting pretax loss of discontinued operations	2022			2021
Revenues	$	7,617		$	19,855
Cost of revenues		(6,090	)		(14,193	)
Selling, general and administrative expense		(4,130	)		(8,550	)
Depreciation and amortization		—			(1,638	)
Research and development		—			(2	)
(Provision) credit for bad debt		(18	)		3
Impairment of assets held for sale		—			(9,185	)
Gain on extinguishment of PPP loan		—			779
Interest expense		(13	)		(2	)
Other income		18			228
Pretax loss of discontinued operations related to major classes of pretax loss		(2,616	)		(12,705	)
Pretax gain on sale of Orbital U.K.		299			—
Total pretax loss on discontinued operations		(2,317	)		(12,705	)
Income tax benefit		—			(1,334	)
Total loss from discontinued operations	$	(2,317	)	$	(11,371	)

56

 

Reconciliation of the Carrying Amounts of Major Classes of Assets and Liabilities of the Discontinued Operation to Total Assets and Liabilities of the Disposal Group Classified as Held for Sale

	As of December 31,		As of December 31,
(In thousands)	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Trade accounts receivables	$	—	$	2,996
Inventories		—		530
Prepaid expenses and other current assets		—		114
Contract assets		—		1,141
Assets held for sale, current portion		—		4,781
Property and equipment		1,385		42
Other intangible assets		1,813		1,813
Deposits and other assets		—		43
Assets held for sale, noncurrent portion		3,198		1,898
Total assets of the disposal group classified as held for sale	$	3,198	$	6,679
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	—	$	1,657
Contract liabilities		—		1,414
Operating lease obligations, current portion		—		76
Accrued expenses		—		1,126
Liabilities held for sale, current portion		—		4,273
Operating lease obligations, less current portion		—		85
Other long-term liabilities		—		9
Liabilities held for sale, noncurrent portion		—		94
Total liabilities held for sale	$	—	$	4,367

The assets and liabilities of the disposal group, which included the U.K. and North America Gas subsidiaries, and certain fixed assets of the Eclipse Foundation Group classified as held for sale are classified as current on the December 31, 2022 and December 31, 2021 balance sheets because of the expectation that the sales will occur within one year of the balance sheet date. 

Net cash used by operating activities of discontinued operations for 2022 and 2021 was $0.6 million and $3.2 million, respectively.

57

 

Net cash provided by investing activities of discontinued operations for 2022 and 2021 was $1.0 million and zero, respectively.

Fair Value of Financial Instruments

Accounting Standards Codification (‘‘ASC’’) 820 ‘‘Fair Value Measurements and Disclosures’’ (‘‘ASC 820’’) defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the U.S., and enhances disclosures about fair value measurements. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

• Level 1 – Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date.

• Level 2 – Pricing inputs are quoted for similar assets, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments.

• Level 3 – Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company determines when a financial instrument transfers between levels based on management’s judgment of the significance of unobservable inputs used to calculate the fair value of the financial instrument.

Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, investment, note receivable, accounts receivable, contract assets, prepaid expense and other assets, accounts payable, accrued liabilities, contract liabilities, and other current liabilities reflected in the accompanying consolidated balance sheet approximate fair value at  December 31, 2022 and 2021 due to the relatively short-term nature of these instruments. At December 31, 2022, and 2021 the carrying value of the notes payable, including the Company's Front Line Power seller notes (Carrying value of $68.8 million  at December 31, 2022), and syndicated term note debt (carrying value of $97.1 million at December 31, 2022), net of original issue discounts, that was issued in November 2021, approximate fair value based on current market conditions. The syndicated debt and seller financed debt include financial instruments that are valued at fair value at  December 31, 2022 and 2021. See Note 3 for fair value of financial instruments.

Cash and Cash Equivalents

Cash includes deposits at financial institutions with maturities of three months or less. The Company at times has cash in banks in excess of FDIC insurance limits and places its temporary cash investments with high credit quality financial institutions. The Company considers all highly liquid marketable securities with maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include money market funds, certificates of deposit and commercial paper. At December 31, 2022 and 2021, the Company had $2.6 million and $2.3 million, respectively, of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposits programs and $0.3 million and $0.4 million, respectively, at foreign financial institutions covered internationally. At December 31, 2022 and 2021, the Company held $1.6 million and $2.1 million respectively, in foreign bank accounts. In addition to the Company's unrestricted cash and cash equivalents at December 31, 2022 and 2021, the Company has $0.1 million and $0.2 million of current restricted cash and $0.5 million and $1.0 million, respectively, of long-term restricted cash on its balance sheet related to contract guarantees. Restricted cash is combined with other cash and cash equivalents in reconciling the change in cash on the Company's Consolidated Statements of Cash Flows.

(In thousands)	As of December 31,
	2022		2021
Cash and cash equivalents at beginning of year	$	26,865	$	3,046
Restricted cash at beginning of year		1,176		1,478
Cash, cash equivalents and restricted cash at beginning of year	$	28,041	$	4,524
Cash and cash equivalents at end of year	$	21,489	$	26,865
Restricted cash at end of year		609		1,176
Cash, cash equivalents and restricted cash at end of year	$	22,098	$	28,041

58

 

Notes Receivable

At December 31, 2021, the Company had a note receivable from Back Porch International that was originated as part of the divestiture of the Company's electromechanical components business. The note had an original stated value of $5 million, and is presented on the balance sheet as of   December 31, 2021 at its present value of $3.3 million including $2.5 million of current maturities. In the first quarter of 2022, the Company received final payment on the note receivable.

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist of the receivables associated with revenue derived from service sales including present amounts due to contracts accounted for under fixed price, cost-to-cost, cost plus, or output method. An allowance for uncollectible accounts is recorded to allow for any amounts that may not be recoverable, based on an analysis of prior collection experience, customer credit worthiness and current economic trends. Based on management’s review of accounts receivable, an allowance for doubtful accounts of $0.8 million and $1.5 million at December 31, 2022 and 2021, respectively, is considered adequate. The reserve in both periods considers aged receivables that management believes should be specifically reserved for as well as historic experience with bad debts to determine the total reserve appropriate for each period. Receivables are determined to be past due based on the payment terms of original invoices. Payment terms and conditions vary by contract, and are within industry standards across our business lines. The Company routinely assesses the financial strength of its customers and, therefore, believes that its accounts receivable credit risk exposure is limited. 

Activity in the allowance for doubtful accounts for the years ended  December 31, 2022 and 2021 is as follows:

(In thousands)	For the Years ended December 31,
	2022			2021
Allowance for doubtful accounts, beginning of year	$	1,487		$	1,172
Bad debt expense		(26	)		346
Deductions		(694	)		(31	)
Allowance for doubtful accounts, end of year	$	767		$	1,487

59

 

Retainage Receivables

At December 31, 2022 and 2021, the Company had $0.9 million and $1.5 million, respectively, billed but not paid by customers under retainage provisions in contracts. These amounts are included as part of contract assets.

Inventories

Inventories consist of finished and unfinished products and are stated at the lower of cost or market through either the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method.

At December 31, 2022, and 2021, inventory is presented on the balance sheet net of reserves. The Company provides reserves for inventories estimated to be excess, obsolete or unmarketable. The Company’s estimation process for assessing the net realizable value is based upon its known backlog, projected future demand, historical usage and expected market conditions. Inventory by category consists of:

(In thousands)	As of December 31,
	2022		2021
Finished goods	$	—	$	—
Raw materials		1,338		1,316
Work-in-process		353		19
Total inventories	$	1,691	$	1,335

Property and equipment, less accumulated depreciation

Land is recorded at cost and includes expenditures made to ready it for use. Land is considered to have an infinite useful life.

Buildings and improvements are recorded at cost.

Furniture, vehicles, and equipment are recorded at cost and include major expenditures, which increase productivity or substantially increase useful lives.

Leasehold improvements are recorded at cost and are depreciated over the lesser of the lease term or estimated useful life.

The cost of buildings, improvements, furniture, vehicles, and equipment is depreciated over the estimated useful lives of the related assets.

Depreciation is computed using the straight-line method for financial reporting purposes. The estimated useful lives for buildings, improvements, furniture, vehicles, and equipment are as follows:

	Estimated
	Useful
	Life (in years)
Leasehold improvements		5 to 10
Equipment		3 to 10

60

 

Maintenance, repairs and minor replacements are charged to expenses when incurred. When buildings, improvements, furniture, equipment and vehicles are sold or otherwise disposed of, the asset and related accumulated depreciation are removed and any gain or loss is included in the statement of operations.

Long-Lived Assets Including Finite-Lived Intangible Assets

Long-lived assets including finite-lived intangible assets are periodically reviewed for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. When testing for impairment, we perform a two-step test. Step one is a test of recoverability. In performing the review for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the long-lived asset, an impairment loss is recognized. In step two, the impairment is calculated as the excess of the carrying amount over the fair value. Management estimates the future cash flows expected and fair value is determined by the discounted future cash flows.

In 2022, the Company did not have any material fixed asset impairments. In 2021, the Company wrote down the assets held for sale of its discontinued Orbital U.K. operations by $9.2 million based on an expected selling price of 3 million GBP ($4.1 million at December 31, 2021). In  September 2022, the Company fully impaired its finance lease equipment related to the Eclipse Foundation Group in the Electric Power segment. See Note 13 - Restructuring and Impairment Charges for more information on impairments of finance lease equipment.

Identifiable Finite-lived Intangible Assets

Intangible assets are stated at cost net of accumulated amortization and impairment. Finite-lived intangible assets includes customer relationships, technology know how, software, noncompete agreements, order backlog, and trade name. The fair value for intangible assets acquired through acquisitions is measured at the time of acquisition utilizing the following inputs, as needed:

1. Inputs used to measure fair value are unadjusted quoted prices available in active markets for the identical assets or liabilities if available.

2. Inputs used to measure fair value, other than quoted prices included in 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in inactive markets. This includes assets and liabilities valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full life of the asset.

3. Inputs used to measure fair value are unobservable inputs supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

4. Expert appraisal and fair value measurement as completed by third-party experts.

	Estimated
	Useful
	Life (in years)
Finite-lived intangible assets
Order backlog		1
Customer Relationships - Front Line Power Construction		15
Customer relationships - Reach Construction Group, LLC		5
Non-compete agreements - Reach Construction Group, LLC		5
Customer Relationships - Gibson Technical Services		10
Customer Relationships - IMMCO		10
Technology - Know How		3
Non-compete agreements - GTS		5
Software, at cost		3 to 5

The Company amortizes the intangible assets that are subject to amortization on a straight line basis, which the company believes approximates the estimated consumption of their economic benefits. Intangible assets are reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For instance, a significant change in business climate or a loss of a significant customer, among other things, may trigger the need for impairment testing of intangible assets. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

61

 

Indefinite-Lived Intangibles and Goodwill Assets

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, ‘‘Business Combinations,’’ where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates if they were known or knowable at the acquisition date. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill.  The unit of accounting for goodwill is at a level of the entity referred to as a reporting unit. Goodwill is assigned to specific reporting units for purposes of the impairment assessments. As of December 31, 2022, the Company has four operating segments that are also considered reporting units for goodwill impairment testing. The four operating segments are, Front Line Power Construction, LLC, Orbital Power Inc., Orbital Solar Services, and Gibson Technical Services.

Annual Test

The Company tests for impairment of indefinite-lived intangibles and Goodwill in the second quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value.

In performing its testing for Goodwill as of May 31, 2022, the Company completed a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. Fair values of the reporting units were determined based on applying a combination of the discounted cash flow method (i.e., income approach) as well as a market approach. Significant assumptions included estimates of future cash flows, discount rates, and market information for comparable companies. The review of goodwill, prepared as of  May 31, 2022, determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended  June 30, 2022. 

The Company’s qualitative assessment for Indefinite-lived assets at May 31, 2022, followed the guidance in ASC 350-30-35-18A and 18B. Fair values of the Indefinite-lived intangible assets were determined using the relief from royalty method, which included assumptions related to revenue growth rates, royalty rates, and discount rates. As a result of the annual impairment test, no impairment was identified as of June 30, 2022.

Interim Tests

The Company performed a goodwill impairment analysis as of  June 30, 2022 due to a 42-percent drop in the Company's stock price between  May 31, 2022 and  June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of  June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill impairment testing of our reporting units as of  September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach. The impairment assessment resulted in a conclusion that goodwill in the Front Line Power and GTS reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended  September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. As a result of the triggering events identified in the third quarter, an impairment assessment was also performed for the Indefinite-lived intangible assets as of September 30, 2022 and no impairment was identified.

During the fourth quarter of 2022, triggering events were again identified around stock price decline and substantial doubt regarding the Company's ability to continue as a going concern, which led to performing Indefinite-lived intangibles impairment testing.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. The impairment assessment included significant assumptions related to revenue growth rates, royalty rates, and discount rates. For the year ended  December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

62

 

Accrued expenses

Accrued expenses are liabilities that reflect expenses on the statement of operations that have not been paid or recorded in accounts payable at the end of the period. At  December 31, 2022 and December 31, 2021, accrued expenses of $39.1 million and $28.3 million, respectively included the following components:

(In thousands)	As of December 31,
	2022		2021
Accrued bonding	$	1,920	$	167
Accrued compensation		5,589		6,369
Working capital adjustment on Front Line Power Construction acquisition		4,592		14,092
Accrued interest		5,885		2,902
Accrued taxes payable		248		102
Accrued subcontractor expenses		11,299		—
Accrued union dues		937		870
Accrued vendor invoices and accrued other expenses		8,595		3,799
Total accrued expense	$	39,065	$	28,301

Financial instrument liability

The Company evaluates embedded conversion features pursuant to FASB Accounting Standards Codification No. 815 (‘‘FASB ASC 815’’), ‘‘Derivatives and Hedging,’’ which requires a periodic valuation of the fair value of derivative instruments and a corresponding recognition of liabilities associated with such derivatives. The Company has limited involvement with derivative instruments and does not trade them. In November 2021, the Company identified a subscription agreement with lenders of the $105 million syndicated debt agreement as a free standing financial instrument since it is legally separate from the credit agreement. The subscription provides the lenders with shares of the Company's common stock, which was recorded by the Company as additional debt discount to be amortized over the life of the loan. The subscription agreement also provided the lenders with protection from downside risk in the event that the Company issues shares prior to paying off the Front Line seller notes at a price lower than the price when the shares were issued to the lenders. This financial instrument liability was recorded by the Company at $0.9 million and was valued at loan inception on November 17, 2021 using the Black Scholes option pricing model. The value of the liability decreased to $0.8 million as of December 31, 2021 and the difference was recorded as income in other income for the fourth quarter of 2021. At December 31, 2022, the value of the derivative was $0.5 million. See Note 3 – Investments and Fair Value Measurements.

Warrant liabilities 

We account for warrants for shares of the Company's common stock that are not indexed to our own stock as liabilities at fair value on the balance sheet. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in our statement of operations. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Warrants issued in connection with Company's offering has been measured based on the Black Scholes Option Pricing Model.

63

 

Loan modifications and gain (losses) on extinguishments

From time to time, the Company negotiates modified loan terms. The Company evaluates the discounted future cash flows of the modified loan compared to the discounted future cash flows of the loan using its original terms. If the discounted cash flows of the new loan are more than 10% different than the original loan, the Company records the transaction as an extinguishment of the original loan and new debt on the modification date. If future discounted cash flows are less than 10%, the change is considered a modification and no extinguishment is recorded with any new fees amortized over the remaining life of the loan. The same steps are taken if a non-recourse loan is paid off via a refinancing with any remaining unamortized original issue discounts and unamortized loan fees recorded as a loss on extinguishment. In 2022, the Company recorded losses on extinguishments of $28.5 million related to loan modifications and loans refinanced of which $26.2 million was related to the seller financed notes payable with the sellers of Front Line Power Construction, LLC. See Note 7  - Notes Payable for more information on the Company's seller financed notes payable. 

The Company has debt with an institutional investor that on occasion has accepted common stock in lieu of a scheduled cash payment. Any difference above or below the Nasdaq minimum price is recorded as a gain or loss on extinguishment. In 2022, the Company recorded net losses on extinguishments of $2.8 million related to debt payments made with common stock. See Note 7 - Notes Payable for more information on the Company's notes payable with an institutional investor.

Stock-Based Compensation

The Company records its stock-based compensation expense under its stock option plans and also issues stock for services. The Company accounts for stock-based compensation using FASB Accounting Standards Codification No. 718 (‘‘FASB ASC 718’’), ‘‘Compensation – Stock Compensation.’’ FASB ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related service period.

Stock bonuses and restricted stock units ("RSU"s) issued to employees are recorded at fair value using the market price of the stock on the date of grant and expensed over the service period or immediately if fully vested on date of issuance. Employee stock options are recorded at fair value using the Black-Scholes or binomial option pricing model. The underlying assumptions in the Black-Scholes and binomial option pricing models used by the Company are taken from publicly available sources including: (1) volatility and grant date stock price, which are sourced from historic stock price information; (2) the appropriate discount rates are sourced from the United States Federal Reserve; and (3) other inputs are determined based on previous experience and related estimates. With regards to expected volatility, the Company utilizes an appropriate period for historical share prices for Orbital Infrastructure Group that best reflect the expected volatility for determining the fair value of its stock options.

See Note 10 Stockholders' Equity and Stock-Based Compensation for additional disclosure and discussion of the employee stock plan and activity.

Common stock and stock options are also recorded on the basis of their fair value, as required by FASB ASC 718, which is measured as of the date required by FASB ASC 718. In accordance with FASB ASC 718, the stock options or common stock warrants are valued using the Black-Scholes or binomial option pricing model on the basis of the market price of the underlying common stock on the ‘‘valuation date,’’ which for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the performance completion date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed based off an estimate of the fair value of the stock award as valued under the Black-Scholes option pricing model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock up through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.

Common stock issued to other than employees or directors subject to performance (performance based awards) require interpretation when the counterparty’s performance is complete based on delivery, or other relevant performance criteria in accordance with the relevant agreement. When performance is complete, the common stock is issued and the expense recorded on the basis of their value as required by FASB ASC 718 on the date the performance requirement is achieved.

Defined Contribution Plans

The Company has a 401(k) retirement savings plan that allows employees to contribute to the plan after they have completed 60 days of service and are 18 years of age. The Company matches the employee's contribution up to 6% of total compensation. GTS, Orbital Power, Inc., Orbital Solar Services, Front Line Power Construction, LLC, Eclipse Foundation, and Corporate made total employer contributions, net of forfeitures, of $1.5 million and $0.6 million for 2022 and 2021, respectively. In addition, in 2022 and 2021, the Company made contributions of $36 thousand and $72 thousand, respectively, associated with discontinued operations.

64

Revenue Recognition

The Electric Power segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, and emergency response sectors of North America through Front Line Power, and Orbital Power Services. The Telecommunications segment composed of Gibson Technical Services and subsidiaries provides technical implementation, design, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.  The Renewables segment, 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.

For our construction contracts, revenue is generally recognized over time. Our fixed price and unit-price construction projects generally use a cost-to-cost input method or an output 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. Under the output method, progress towards completion is measured based on units of work completed based on the contractual pricing amounts.  We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. 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 certain types of over time revenue jobs, the Company utilizes the right-to-invoice practical expedient. In these instances, we have a right to invoice the customer for an amount that corresponds directly with the value transferred to the customer for our performance completed to date. When this practical expedient is used, we recognize revenue based on billing and calculate any additional revenue earned that is unbilled at the period end.  We have contracts which have payment terms dictated by daily or hourly rates where some contracts may have mixed pricing terms which include a fixed fee portion. For contracts in which we charge the customer a fixed rate based on the time or materials spent during the project, we recognize revenue in the amount to which we have the right to invoice which corresponds to the value transferred to the customer. 

For any job where the customer does not simultaneously receive and consume the benefits of our performance as we perform the service, the timing of revenue recognition also depends on the payment terms of the contract. For those contracts 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 or output 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. 

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.

For certain of our revenue streams, such as call-out repair and service work, and outage services, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an input method as the customer receives and consumes the benefits of our performance completed to date.

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.

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 integration systems 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.

65

 

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 customers' 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, and are within industry standards across our business lines. 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 output method or the input cost-to-cost method 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 Consolidated Balance Sheets.

Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the input cost-to-cost or output method 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 years ended  December 31, 2022 and 2021 is as follows:

	For the Year Ended December 31,
	2022			2021
Total contract liabilities - January 1	$	6,503		$	4,873
Contract liability additions acquired through acquisition		—			100
Contract additions, net		6,710			6,371
Change in provision for Loss		4,179
Contract settlements		—			(3,140	)
Revenue recognized		(7,174	)		(1,701	)
Total contract liabilities - December 31	$	10,218		$	6,503

66

 

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 December 31, 2022, the Company's remaining performance obligations are generally expected to be filled within the next 12 months. For the contracts that are greater than 12 months the Company has approximately $164.9 million in the aggregate of remaining performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. T

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. 

Performance Obligations Satisfied Over Time

To determine the proper revenue recognition method for our contracts satisfied over time, 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 output method or the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

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, the Company accounts 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 and are estimated based on the most likely amount that is deemed probable of realization.

Two large solar projects have liquidated damages included within their customer contracts. In the event of a delay in the achievement of project milestones, the contracts specify the dollar amount of delay damages owed each day past the agreed upon milestone date. These delay liquidated damages are capped at 15% of the project contract price. During Q4 2022, the estimated completion dates on these two large solar projects were pushed passed milestone due dates in which the Company is contractually obligated to meet. As a result of these delays, the Company recorded liquidated damages as variable consideration, reducing the contract price on these two projects by a total of $17.1 million in 2022. This reduction in contract price along with additional estimated costs to complete the project resulted in a catch-up adjustment to reduce revenue recorded year-to-date by $21.4 million dollars. The customer on these two solar projects has the right to invoice, but as of March 31, 2023, has not yet sent an invoice for liquidated damages. Although the Company accrued for these liquidated damages in 2022, there is a possibility that some or all of the $17.1 million in liquidated damages could be reversed in future years if the customer does not invoice for these damages or if a legal settlement is reached.

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.

67

 

The following table presents our revenues disaggregated by type of customer:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Utilities	$	148,046	$	915	$	—	$	148,961	$	43,120	$	—	$	—	$	43,120
Telecommunications		1,792		82,901		—		84,693		479		27,799		—		28,278
Renewables		—		—		85,766		85,766		—		—		11,550		11,550
Other		2,797		—		—		2,797		—		—		—		—
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

The following table presents our revenues disaggregated by type of contract:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Cost-plus contracts	$	49,487	$	327	$	—	$	49,814	$	12,198	$	—	$	—	$	12,198
Fixed price contracts		38,712		8,029		85,766		132,507		11,518		5,789		11,550		28,857
Unit price contracts		64,436		75,460		—		139,896		19,883		22,010		—		41,893
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

68

 

Income Taxes

Income taxes are accounted for under the asset and liability method of FASB Accounting Standards Codification No. 740 (‘‘FASB ASC 740’’), ‘‘Income Taxes.’’ Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent that management believes it is more likely than not that such deferred tax assets will not be realized.

Valuation allowances have been established against all domestic based deferred tax assets due to uncertainties in the Company’s ability to generate sufficient taxable income in future periods to make realization of such assets more likely than not. In future periods, tax benefits and related domestic deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

The Company recognizes interest and penalties, if any, related to its tax positions in income tax expense.

Orbital Infrastructure Group files consolidated income tax returns with its U.S. based subsidiaries for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Australia, Canada, India, Belgium and the United Kingdom. As of December 31, 2022, the Company is not under examination by any income tax jurisdiction. The Company is no longer subject to U.S. examination for years prior to 2019.

Net Loss per Share

In accordance with FASB Accounting Standards Codification No. 260 (‘‘FASB ASC 260’’), ‘‘Earnings per Share,’’ basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net 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 net loss in 2022 and 2021, the assumed exercise of stock options using the treasury stock method would have had an antidilutive effect and therefore all options for each of the two years were excluded from the calculation of diluted net loss per share. In addition, the Company had 16.2 million and zero stock warrants and 4.2 million and 3.0 million unvested restricted stock units outstanding at December 31, 2022, and 2021, respectively that were excluded from the calculation of diluted net loss per share. Accordingly, diluted net loss per share is the same as basic net loss per share for 2022 and 2021. 

69

 

The following table summarizes the number of stock options outstanding:

	As of December 31,
	2022		2021
Options, outstanding		197,887		237,985

Any common shares issued as a result of stock options would come from newly issued common shares as granted under our equity incentive plans.

The following is the calculation of basic and diluted earnings per share:

	For the Years Ended December 31,
(In thousands, except dollars per share)	2022			2021
Continuing operations:
Loss from continuing operations, net of income taxes	$	(277,935	)	$	(49,843	)
Discontinued operations:
Income from discontinued operations, net of income taxes		(2,317	)		(11,371	)
Net loss	$	(280,252	)	$	(61,214	)
Basic and diluted weighted average number of shares outstanding		108,313,369			58,348,489
Loss from continuing operations per common share - basic and diluted	$	(2.53	)	$	(0.86	)
Earnings from discontinued operations - basic and diluted		(0.02	)		(0.19	)
Loss per common share - basic and diluted	$	(2.55	)	$	(1.05	)

Foreign Currency Translation

The financial statements of the Company's foreign offices have been translated into U.S. dollars in accordance with FASB ASC 830, ‘‘Foreign Currency Matters’’ (FASB ASC 830). All balance sheet accounts have been translated using the exchange rate in effect at the balance sheet date. Statement of Operations amounts have been translated using an appropriately weighted average exchange rate for the year. The translation gains and losses resulting from the changes in exchange rates during 2022 and 2021 have been reported in accumulated other comprehensive income (loss), except for gains and losses resulting from the translation of short-term intercompany receivables and payables, which are included in earnings for the period.

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 four 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, Telecommunications, and Renewables and an Other category. 

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive solutions to customers in the electric power industries. Front Line Power, LLC is a Houston-based full-service electrical infrastructure service company that provides construction, maintenance, and emergency response services for customers since 2010. 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, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains.

The Telecommunications segment is made up of Gibson Technical Services, Inc. (“GTS”) (acquired April 13, 2021) GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and is the parent of the following companies:

o IMMCO, Inc. (acquired July 28, 2021), which includes two Indian subsidiaries and is an Atlanta-based, full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.

o Full Moon Telecom, LLC (acquired October 22, 2021) a Florida-based telecommunications services provider that offers an extensive array of wireless services capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network ("RAN") Integrations, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna ("DAS") systems.

o Coax Fiber Solutions, LLC (acquired  March 7, 2022), is based in Loganville, Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.  

The Renewables segment consists of Orbital Solar Services based in Raleigh, North Carolina. 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.

The Other category is made up primarily of the Company's corporate activities. This category does not include any operating segments and does not generate revenue. In addition, Orbital’s integrated operations and common administrative support for its operating units require that certain allocations be made to determine segment profitability, including allocations of shared and indirect costs (e.g., insurance costs) and certain general and administrative costs. Certain corporate costs are not allocated and include Board of Director fees and costs, certain legal fees, due diligence costs related to prospective acquisitions, and regulatory costs associated with being a publicly traded company. Unallocated corporate expenses and costs associated with discontinued operations are included in the all-other category.

70

 

The following information represents segment activity as of and for the year ended December 31, 2022:

(In thousands)	Electric Power			Telecommunications			Renewables			Other			Total
Revenues from external customers	$	152,635		$	83,816		$	85,766		$	—		$	322,217
Depreciation and amortization (1)		26,911			4,863			2,001			64			33,839
Interest expense		18,158			218			10			19,427			37,813
Loss from operations		(88,045	)		(22,112	)		(68,137	)		(9,283	)		(187,577	)
Segment assets (2)		167,245			67,920			18,932			17,474			271,571
Other intangibles assets, net		85,355			24,333			1,446			—			111,134
Goodwill		—			—			7,006			—			7,006
Expenditures for segment assets (3)		3,167			1,326			19			98			4,610

The following information represents segment activity as of and for the year ended December 31, 2021:

(In thousands)	Electric Power			Telecommunications		Renewables			Other			Total
Revenues from external customers	$	43,599		$	27,799	$	11,550		$	—		$	82,948
Depreciation and amortization (1)		5,969			2,326		2,931			1,684			12,910
Interest expense		3,129			50		349			4,809			8,337
Income (loss) from operations		(13,215	)		43		(19,043	)		(20,576	)		(52,791	)
Segment assets (2)		273,726			80,800		28,324			28,459			411,309
Other intangibles assets, net		106,377			28,571		7,708			—			142,656
Goodwill		70,151			23,742		7,006			—			100,899
Expenditures for segment assets (3))		5,905			1,615		118			846			8,484

(1)  For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment. 

(2)	Other category includes assets held for sale of the discontinued Orbital Gas subsidiaries and Eclipse Foundation Group fixed assets held for sale.
(3)	Includes purchases of property and equipment and purchases of other intangible assets.

The Company's revenues and long-lived assets are primarily located in the U.S.

71

Recent Accounting Pronouncements

In  September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll-forward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after  December 15, 2022, including interim periods within those fiscal years, except for the disclosure of roll-forward information, which is effective for fiscal years beginning after  December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material effect on the Company's financial position or results of operations.

In  June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value. It also requires the following disclosures for equity securities subject to the contractual sale restrictions: 1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2) the nature and remaining duration of the restriction(s); and 3) the circumstances that could cause a lapse in the restriction(s). ASU 2022-03 is effective for the fiscal years and interim periods within those fiscal years, beginning after  December 15, 2023. Early adoption is permitted. The guidance should be applied prospectively. ASU 2022-03 is not expected to have a material effect on our consolidated financial statements.

On  October 28, 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance will require entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. This standard was designed to provide consistent recognition and measurement guidance for revenue contracts with customers. Legacy guidance requires entities to record contract assets and contract liabilities acquired to be recorded at fair value. The amendments will be effective for the Company beginning for fiscal years beginning after  December 15, 2022. Early adoption is allowed. If an entity early adopts, the entity would be required to apply the new guidance to all acquisitions made in the year of the early adoption. The Company is still reviewing the standard and as of the reporting date of this filing has not elected to early adopt.

3.      INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company’s fair value hierarchy for its cash equivalents, marketable securities and financial instruments as of  December 31, 2022 and December 31, 2021, respectively, was as follows:

(In thousands)
December 31, 2022	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	570	$	570
Front Line Power Construction seller financed debt, net of discount		—		68,753		—		68,753
Financial instrument liability - related to Syndicated debt		—		—		536		536
Financial instrument liability - related to Front Line Power Construction seller financed debt		—		—		43,693		43,693
Prepaid advance agreement		—		1,829		—		1,829
Warrant liability		—		—		1,777		1,777
Total liabilities	$	—	$	70,582	$	46,576	$	117,158

December 31, 2021	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	720	$	720
Front Line Power Construction seller financed debt, net of discount		—		86,183		—		86,183
Financial instrument liability		—		—		825		825
Total liabilities	$	—	$	86,183	$	1,545	$	87,728

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability -related to Front Line Power Construction Seller Financed Debt
Balance at December 31, 2021	$	—
Fair value of financial instrument liability at inception		26,782
Fair value adjustment to financial instrument liability		16,911
Balance at December 31, 2022	$	43,693

As part of the purchase of Front Line, the Company paid the sellers, Tidal Power and Kurt Johnson, a certain number of shares of restricted stock. To the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period on April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period on April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. 

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Contingent Consideration
Balance at December 31, 2021	$	720
Fair value adjustment		(150	)
Balance at December 31, 2022	$	570

72

 

The Company evaluated the contingent consideration for fair value as of December 31, 2022 using a third-party valuation specialist. Significant unobservable inputs include projected future EBITDA, future estimated growth rate, estimated discount rate, and estimated volatility. Based upon this evaluation, the contingent consideration was reduced by $150 thousand resulting in a contingent consideration of $570 thousand at December 31, 2022.

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability - related
	to Syndicated debt
Balance at December 31, 2021	$	825
Issuance of shares upon exercise and reset of financial instrument		(7,667	)
Fair value adjustment to financial instrument liability		7,378
Balance at December 31, 2022	$	536

In conjunction with the Company issuing $105 million of debt to a syndicate of lenders, the Company committed to issuing 1,690,677 shares of stock to the lenders in the syndicate in a subscription agreement. Included in the subscription agreement is a provision that provides for additional shares to be issued to the lenders of the syndicate if the Company issues shares of common stock in an offering at a price lower than $2.36 per share amount ("the reference price"), for the shares initially issued to the lenders in the syndicate. This financial instrument was valued as a put option using the Black Scholes option pricing model. Unobservable inputs include volatility, exercise price, and time to expiration. The put expires at the maturity of the Company's seller notes. In 2022, there were five separate issuances via the financial instrument for a total of 25.0 million shares. The updated reference price as of December 31, 2022 was $0.15. 

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Warrant Liability
Balance at December 31, 2021	$	—
Proceeds from sale of warrants including pre-funded warrants		19,800
Exercise of pre-funded warrants, net of exercise proceeds		(6,938	)
Fair value adjustment to warrant liability		(11,085	)
Balance at December 31, 2022	$	1,777

On  April 28, 2022, the Company entered into a Securities Purchase Agreement with an institutional investor. The Purchase Agreement provides for the sale and issuance by the Company of an aggregate of: (i) 9,000,000 shares of the Company’s common stock, $0.001 par value, (ii) pre-funded warrants to purchase up to 7,153,847 shares of Common Stock and (iii) accompanying warrants to purchase up to 16,153,847 shares of Common Stock. The offering price per share and associated prefunded warrants was $1.30 for the shares and $1.2999 for the prefunded warrants. The prefunded warrants were immediately exercisable, had an exercise price of .0001 and were exercised during the three months ended  June 30, 2022.

The accompanying warrants have an exercise price of $1.31, and were exercisable 6-months after their date of issuance and will expire on the fifth anniversary of the original issuance date. Common stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity's Own Equity (ASC Topic 815), as either derivative liabilities or equity instruments depending on the specific terms of the warrant agreement. The Company’s warrants are considered to be derivative warrants, are classified as liabilities, and are recorded at fair value. The warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of change in fair value of warrant liability in the consolidated statements of operations. The Company uses the Black-Scholes pricing model to estimate the fair value of the related derivative warrant liability. Unobservable inputs include volatility, exercise price, and time to expiration.

There were no transfers between Level 3 and Level 2 in 2022 as determined at the end of the reporting period.

73

 

The fair values of the reporting units subject to the Company’s quantitative impairment analysis were determined utilizing a blend of a market and an income approach to determine the estimated fair values of the reporting units, as discussed in Note 2. The fair value measurements and models were classified as non-recurring Level 3 measurements.

Investment in VPS

The Company has a minority ownership in Virtual Power Systems ("VPS"). The VPS investment basis at  December 31, 2022 and  December 31, 2021 was $1.1 million and $1.1 million, respectively, as reflected on the condensed consolidated balance sheets. The investment is held at  December 31, 2022 under the cost method of accounting for investments. 

4.             PROPERTY AND EQUIPMENT, NET

Property and equipment from continuing operations is summarized as follows:

	At December 31,
(In thousands)	2022			2021
Leasehold improvements	$	292		$	272
Equipment		36,200			32,762
Property and equipment, gross		36,492			33,034
Less accumulated depreciation		(13,562	)		(3,396	)
Property and equipment, net	$	22,930		$	29,638

Depreciation expense from continuing operations for the years ended  December 31, 2022 and 2021 was $15.4 million and $5.0 million, respectively. For the year ended December 31, 2022, depreciation totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand as cost of revenues in the Renewables segment. For the year ended  December 31, 2021, depreciation totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as cost of revenues in the Electric Power segment and $54 thousand as cost of revenues in the Renewables segment.

During the year ended December 31, 2022, the Company's continuing operations disposed of $2.1 million of property and equipment with an accumulated depreciation at disposal of $1.4 million. Cash and non-cash proceeds from sale was $0.6 million and a loss of $49 thousand.

During the year ended December 31, 2021, the Company's continuing operations disposed of $0.2 million of property and equipment with an accumulated depreciation at disposal of $39 thousand. Cash and non-cash proceeds from sale was $0.2 million and a gain of $14 thousand.

74

 

5.             GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The Company records goodwill associated with its acquisitions of businesses when the consideration paid exceeds the fair value of the net tangible and identifiable intangible assets acquired. Goodwill balances are evaluated for potential impairment on an annual basis. The current guidance requires the Company to perform an annual impairment test of our goodwill or at an interim period if there is an event that occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We are required to perform our annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. As of December 31, 2022, the Company has four operating segments that are also considered reporting units for goodwill impairment testing. The four operating segments are: Front Line Power Construction, LLC, Orbital Power Inc., Orbital Solar Services, and Gibson Technical Services, which includes  IMMCO, Inc., Full Moon Telecom, LLC, and Coax Fiber Solutions. The four operating segments are grouped into three reportable segments, Telecommunications (GTS),  Renewables (OSS), and Electric Power (FLP and OPI).

We would be required to recognize an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value up to but not to exceed the amount of the goodwill. The Company acquired Coax Fiber Solutions in the first quarter of 2022 and recorded $1.5 million of goodwill associated with the acquisition. As of May 31, 2022, the annual testing date, the Company completed a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. To complete the review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. The review of goodwill determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended June 30, 2022.

The Company performed a second goodwill impairment analysis as of  June 30, 2022 due to a 42-percent drop in the Company's stock price between  May 31, 2022 and  June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of  June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill impairment testing of our reporting units as of  September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach. The impairment assessment resulted in a conclusion that goodwill in the Front Line Power and GTS reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended  September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. After impairments the Company had $7.0 million of goodwill remaining associated with Orbital Solar Services ("OSS") acquired in 2020. At the same time as the goodwill impairment, the Company assessed the other intangibles in the Renewables segment and determined that the Customer relationship intangible was fully impaired and the remaining $4.3 million of book value was written off. 

In the fourth quarter of 2022, triggering events were identified which led to performing an additional Indefinite-lived intangibles impairment test. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company's ability to continue as a going concern.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. The impairment assessment included significant assumptions related to revenue growth rates, royalty rates, and discount rates. For the year ended December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

For Orbital Solar Systems, (formally known as Reach Construction), management completed a quantitative analysis to determine potential impairment at the May 31st, 2021 annual impairment test date. Goodwill in the Telecommunications segment was qualitatively reviewed due to the fact that this review was performed within 50 days of the initial valuation of GTS. The qualitative review was performed 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. Management determined that no additional testing was necessary and no impairment was necessary. During management's review of goodwill as of December 31, 2021, the Company determined that there were not indicators present and no triggering events to suggest that it was more likely than not that the fair value of each reporting unit and each indefinite-lived intangible was less than its carrying amount and thus no impairment was necessary.

The following table reflects the carrying amount of goodwill as of  December 31, 2022 and 2021, and the 2022 activity:

(In thousands)	Electric Power			Telecommunications			Renewables		Other		Total
Balance, December 31, 2021	$	70,151		$	23,742		$	7,006	$	—	$	100,899
Acquisition of Coax Fiber Solutions		—			1,530			—		—		1,530
Working capital adjustment		—			528			—		—		528
Impairment		(70,151	)		(25,800	)		—		—		(95,951	)
Balance, December 31, 2022	$	—		$	—		$	7,006	$	—	$	7,006

See Note 17 - Business Combinations for more information on Goodwill.

Other intangible assets

At December 31, 2022 and 2021, the gross carrying amount and accumulated amortization of intangible assets, other than goodwill, are as follows:

Finite-lived intangible assets (in thousands)			(In years)		December 31, 2022										December 31, 2021
	Estimated Useful Life (in years)		Weighted average remaining amortization period		Gross Carrying Amount		Accumulated Amortization			Impairment			Identifiable Intangible Assets, less Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Identifiable Intangible Assets, less Accumulated Amortization
Electric Power
Order backlog		1		—		9,186		(9,186	)		—			—		9,186		(1,148	)		8,038
Customer relationships - Front Line		15		13.89		84,012		(6,301	)		—			77,711		84,012		(700	)		83,312
Total Electric Power						93,198		(15,487	)		—			77,711		93,198		(1,848	)		91,350
Telecommunications
Customer Relationships - GTS		10		8.29	$	16,075	$	(2,760	)	$	—		$	13,315	$	16,075	$	(1,152	)	$	14,923
Customer Relationships - IMMCO		10		8.58		3,800		(547	)		—			3,253		3,800		(158	)		3,642
Customer Relationships - Full Moon		10		8.82		210		(25	)		—			185		210		(4	)		206
Technology - Know How		4		2.58		1,459		(519	)		—			940		1,459		(152	)		1,307
Software - IMMCO		3		1.23		1,126		(519	)		—			607		547		(93	)		454
Non-compete agreements - GTS		5		3.29		385		(132	)		—			253		385		(55	)		330
Total Telecommunications						23,055		(4,502	)		—			18,553		22,476		(1,614	)		20,862
Renewables
Customer Relationships		5		—		—		—			(4,323	)		—		8,647		(3,027	)		5,620
Trade name - Reach Construction Group		1		—		1,878		(1,878	)		—			—		1,878		(1,878	)		—
Non-compete agreements		5		2.25		3,212		(1,767	)		—			1,445		3,212		(1,124	)		2,088
Total Renewables						5,090		(3,645	)		(4,323	)		1,445		13,737		(6,029	)		7,708
Other category
Computer software		3		—		726		(726	)		—			—		713		(713	)		—
Product certifications		3		—		—		—			—			—		36		(36	)		—
Total Other category						726		(726	)		—			—		749		(749	)		—
Total identifiable finite-lived other intangible assets						122,069		(24,360	)		(4,323	)		97,709		130,160		(10,240	)		119,920
Identifiable indefinite-lived other intangible assets
Electric Power
Trade name - Front Line						15,027		—			(7,383	)		7,644		15,027		—			15,027
Telecommunications
Trade name - GTS						6,388		—			(1,746	)		4,642		6,388		—			6,388
Trade name - IMMCO						1,162		—			(182	)		980		1,162		—			1,162
Trade name - Full Moon						159		—			—			159		159		—			159
Total Telecommunications						7,709		—			(1,928	)		5,781		7,709		—			7,709
Total identifiable indefinite-lived other intangible assets						22,736		—			(9,311	)		13,425		22,736		—			22,736
Total identifiable other intangible assets					$	144,805	$	(24,360	)	$	(13,634	)	$	111,134	$	152,896	$	(10,240	)	$	142,656

Intangible asset amortization by category was as follows:

	For the Years Ended December 31,
(In thousands)	2022		2021
Trade name	$	—	$	469
Customer relationships		8,915		3,744
Technology - Know How		368		152
Computer software		427		96
Noncompete agreements		720		697
Order Backlog		8,038		1,148
Intangibles held by discontinued operations		—		1,396
Total amortization	$	18,468	$	7,702

75

 

Estimated future amortization by category of finite-lived intangible assets at  December 31, 2022 was as follows:

	For the Years Ended December 31,
											2028 and
(In thousands)	2023		2024		2025		2026		2027		thereafter		Totals
Customer relationships	$	7,609	$	7,609	$	7,609	$	7,609	$	7,609	$	56,419	$	94,464
Technology-Know How		365		365		210		—		—		—		940
Computer software		466		141		—		—		—		—		607
Non-compete agreements		719		719		238		22		—		—		1,698
Total amortization	$	9,159	$	8,834	$	8,057	$	7,631	$	7,609	$	56,419	$	97,709

The Company tests for impairment of Indefinite-lived intangibles in the second quarter of each year and when events or circumstances indicate that the carrying amount of Indefinite-lived intangibles exceeds its fair value and may not be recoverable.

During the third and fourth quarter of 2022, triggering events were identified which led to performing Indefinite-lived intangibles impairment testing.  These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company's ability to continue as a going concern.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment in Q4 2022. For the year ended  December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars.

6.          INSTRUMENTS AND RISK MANAGEMENT

The Company has limited involvement with derivative instruments and does not trade them. Financial instruments held by the Company include warrant liabilities, and financial instruments associated with the Company's Front Line Power seller financed debt and its Syndicated debt. For more information on these financial instruments, see Note 3 Investments and Fair Value Measurements.

At December 31, 2022 and 2021, the Company had no derivative instruments designated as effective hedges.

76

 

7.          NOTES PAYABLE

Notes payable is summarized as follows:

	As of December 31,
(In thousands)	2022			2021
Syndicated debt (1)	$	114,725		$	105,000
Seller Financed notes payable - Front Line Power Construction, LLC acquisition (2)		69,168			86,730
Note payable - financing notes (3)		2,210			1,357
Seller Financed notes payable - Reach Construction Group, LLC acquisition (4)		3,480			3,480
Vehicle and equipment loans (5)		2,014			222
Non-recourse payable agreements (6)		10,400			8,269
Notes payable - Institutional investor (7)		60,780			33,922
Prepaid Advance agreement (8)		1,829			—
Conditional settlement note payable agreement (9)		2,250			3,000
Full Moon and CFS - loans to prior owners (10)		29			2
Subtotal		266,885			241,982
Unamortized prepaid financing fees and debt discounts		(21,649	)		(12,603	)
Total long-term debt		245,236			229,379
Less short term notes and current maturities of long term notes payable		(144,708	)		(72,774	)
Notes payable, less current portion	$	100,528		$	156,605

(1)	On November 17, 2021, the Company entered into a credit agreement and associated documents (the “Credit Agreement”) with Alter Domus (US), LLC (“Alter Domus”), as administrative agent and collateral agent and various lenders (the “Lenders”) in order to enable the Company to finance the acquisition of Front Line Power Construction, LLC. The Lenders made a Term Loan to Front Line in the initial principal amount of $105,000,000 for the purposes of financing the acquisition and the associated expenses. The term loan initially bears interest at the three-month Adjusted LIBOR Rate, plus the Applicable Margin, of which 2.5% may be paid in-kind. The Term Loan shall be repaid in consecutive quarterly installments of $262,500, and commenced on June 30, 2022. The Credit Agreement provides for mandatory prepayments on the occurrence of events such as sales of assets, Consolidated Excess Cash Flow and Excess Receipts during the term. The credit agreement provides for prepayment premiums (initially 5% on prepayments made in the first 30 months of the term, declining to 1% in the final year of the term). The Term Loan matures on November 17, 2026, subject to acceleration on Events of Default. The interest rate on the term notes at December 31, 2022 was 17.15% with an effective rate of 23.2%. In  November 2022, The Company resolved a dispute with the Syndicated lenders whereby the Syndicated lenders deemed the Company to be in default of its credit agreement due to the Company using proceeds from Front Line Power's operations to pay down $9.5 million of the Company's working capital adjustment with the sellers of Front Line Power. As part of a consent agreement with the lenders, the Company agreed to pay the lenders in a paid-in-kind amount of $10.5 million, which was added to the Syndicated debt balance and included $1.0 million of interest calculated from the date of the first intercompany advance that the Company made. The $10.5 million was added to the original issue discount and will be amortized to interest expense over the life of the loan. At December 31, 2022 and 2021, the Company was in compliance with all debt covenants.
(2)	On November 17, 2021, the Company entered into two unsecured promissory notes, one with Kurt A Johnson, Jr, for $34,256,000 and the second for $51,384,000 with Tidal Power Group LLC. These promissory notes bear interest at a rate of 6% per annum and as modified on April 29, 2022 and December 30, 2022, $20 million was paid on May 6, 2022, $15 million is due on or before April 1, 2023 and the remaining balance is due on May 31, 2023. On December 10, 2021, Kurt A Johnson Jr. received an additional unsecured promissory note in the principal sum of $1,090,000 also with a 6% per annum interest rate in exchange for a reduction of shares issued to Kurt of 400,000. This note was paid off as part of the  May 6, 2022 payment. Additionally in amendments to the note, the Company also agreed to reduce the restriction period under the Tidal Lockup letter from two years to one year and to the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period ending April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period ending April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. Any shortfall would be made up by issuing Mr. Johnson additional common shares. In 2022, the Company recorded a $26.2 million loss on extinguishment related to these loan modifications.
(3)	The Company executes notes payable with First Insurance Funding for the purposes of financing a portion of the Company's insurance coverage. The Company executed two notes payable in the third quarter of 2021 for $1.7 million and $54 thousand, respectively at interest rates of 3.00% and 4.35%, respectively. In the fourth quarter of 2021, the Company executed one additional notes payable for $0.5 million at an interest rate of 4.35%. These three notes payable were paid off in 2022. The Company executed a note payable in July 2022 for $3.3 million and one in November 2022 for $0.7 million both at 3.28% interest. These two notes are scheduled to mature in May 2023.
(4)	Includes two seller-financed notes payable, one for $5 million and the second for $1.5 million. In  August 2021, the $5 million note was amended from its original 18-month term; the Company paid $1 million in cash and exchanged 155,763 shares of common stock in exchange for an additional $1 million reduction in principal. The new loan had a face value of $2.0 million at a rate of 6% per annum and was recorded based on an estimated market interest rate of 10% per annum with an original issue discount of $48 thousand. The second seller financed note payable is due 36-months from the  April 1, 2020 acquisition date. Both notes had an original stated interest rate of 6% per annum. In 2022, the Company filed and served a Federal Civil Complaint asserting various causes-of-action against the holder of the note, including misrepresentations made during the course of negotiating this transaction. Based on that complaint, the evidence contained therein, and the conduct described, the Company reasonably believes that it owes no additional compensation as a result of this transaction.
(5)	Includes vehicle and equipment loans with interest rates ranging from 0.00% to 9.15%.
(6)	The Company entered into a non-recourse agreement, which was originated in November 2021 with a face amount of $9.5 million. The Company received net cash proceeds of $6.9 million. The Company recorded a liability of $9.5 million and a debt discount of $2.6 million. Under the terms of the agreement, for the first 12 weeks, the Company made weekly payments of $148 thousand and for the final 20 weeks, the Company was to make payments of $384 thousand. The agreement had no stated interest rate, but the discount and loan origination fees were being amortized based on an 89% interest rate.  In  April, 2022, the Company took out three non-recourse agreements for the sale of future revenues in the combined amount of $20.2 million. The Company received approximately $13.3 million after the deduction of an original issue discount and upfront fees. In  April 2022, the Company used part of the proceeds from these non-recourse agreements to pay off the non-recourse note of $4.2 million that was on the balance sheet as of  March 31, 2022 and recorded a loss on extinguishment of $0.4 million. The loans vary in length from 26 to 48 weeks. The Company paid off the smallest of the three notes in  June 2022 and recorded a loss on extinguishment of $0.1 million. Discounts on the remaining agreements were being amortized based on an effective interest rate of 88% and were scheduled to mature in the first quarter of 2023. In December 2022, The Company refinanced the remaining two agreements and recorded a loss on extinguishment of $0.5 million. As part of the refinancing, the Company took our three new agreements with a combined face amount of $11.4 million, which included combined original issue discounts of $3.6 million. Payments are $260 thousand per week until the agreements mature in October 2023, and the discounts are being amortized at a 94% effective interest rate. The combined carrying value of the agreements net of the approximately $3.0 million of original issue discounts at December 31, 2022 was $7.4 million.
(7)	On  March 23, 2021, the Company completed a note payable agreement with an 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%, and an original issue discount of $1.0 million.  This note was paid off in  August 2022. On  May 11, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0% per annum, and estimated effective interest rate of 19.6% at inception, and a combined original issue discount and unamortized prepaid fees of $1.0 million. The net proceeds were to be used for working capital, future acquisitions and general corporate purposes. 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 million per calendar month, by providing Company with a “Redemption Notice." This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On  December 20, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $16.1 million, an original issue discount of $1.1 million, and a stated interest rate of 9.0%. The original issue discount has been amortized to interest expense starting with an estimated effective interest rate of 16.3%, which was later adjusted to 11.8% as of December 2022 due to changes in timing of payments. The note payable is payable within eighteen (18) months after the purchase date and the creditor  may request payment of up to $1.5 million per month beginning 6 months after initial issuance. The carrying value was $17.2 million at December 31, 2022.  On  June 9, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, which was later adjusted to 14.4% due to changes in timing of payments and an original issue discount of $0.7 million. The note payable is payable within eighteen (18) months after the purchase date and the creditor  may request payment of up to $1.0 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  June and   July 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below.  On  August 2, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $8.6 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, and an original issue discount of $0.6 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.8 million per month beginning 6 months after initial issuance. This note also included a debt reduction clause whereby the Company had agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  October,  November and  December 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On  September 29, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $5.4 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.5%, and an original issue discount of $0.4 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.5 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company has agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  February,  March and  April 2023. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below.  On December 9, 2022, the Company entered into a Forbearance and Investment Agreement with an institutional investor and its successors and/or assigns, an institutional accredited investor pursuant to which the Company issued a Secured Promissory Note in the face amount of $42.1 million (the “New Note”). The New Note reflects the cancellation of $36.7 million of obligations under certain prior promissory notes issued to the institutional investor and $5,000,000 of additional funds made available to the Company.  As part of the cancellation of the former debt, the Company recorded a loss on extinguishment of $1.3 million. The New Note carries an original issue discount of $350,000 and reimbursement of Investor’s transactional expenses of $50,000, which are included in the initial principal balance of the New Note. The New Note bears interests at nine percent (9%) per annum and has a maturity date of 18 months after its issuance date of December 9, 2022. We may prepay all or a portion of the outstanding obligations under the New Note at a price equal to 115% of the amount we elect to prepay. Beginning six (6) months after December 9, 2022, the Investor has the right to redeem up to $2,500,000 per month of amounts due under the New Note, as more fully described in the New Note.     Subject to certain conditions, as described in the New Agreement, the Investor agreed to fund an additional $5.0 million to us on each of January 15, 2023 and February 15, 2023. As a result of the Company not meeting its debt reduction requirements in various months during 2022, the Company recorded a total of $8.0 million of liquidated damages in 2022.
(8)	On  August 18, 2022, the Company entered into a Prepaid Advance Agreement (the “PPA”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). In accordance with the terms of the PPA, the Company  may request advances of up to $5.0 million from Yorkville (or such greater amount that the parties  may mutually agree) (the “Pre-Paid Advance”), with a limitation on outstanding Pre-Paid Advances of $5.0 million and an aggregate limitation on the Pre-Paid Advances of $50.0 million. Each such Pre-Paid Advance will be offset upon the issuance of the Company’s common stock, par value $0.001 per share (“Common Stock”) to Yorkville at a price per share equal to the lower of: (a) a price per share equal to $0.01 above the market price on The Nasdaq Global Select Market (“Nasdaq”) as of the trading day immediately prior to the date of each closing (the “Fixed Price”), or (b) 96% of the lowest daily volume weighted average price of our Common Stock on Nasdaq during the five (5) trading days prior to each conversion date (the “Market Price” and the lower of the Fixed Price and the Market Price shall be referred to as the “Purchase Price”); however, in no event shall the Purchase Price be less than $0.20 per share. The Company elected the fair value option for this agreement with the debt being marked to market on a quarterly basis. The debt had an original issue discount of $150 thousand and with a carrying value of $1.8 million at December 31, 2022. The discount is amortized through interest expense over the life of the loan. The note had an original maturity date of  October 27, 2022, which was extended to  February 2023 in  October 2022. See note 3 for fair value information on this prepaid advance agreement.
(9)	In October 2020, the Company entered into a conditional settlement agreement with a subcontractor as amended to make payments of $3.5 million, of which $2.6 million is at zero interest, $0.9 million is at 5% interest and the total term of the agreement as amended to be two and a half years. The Company made a $0.5 million payment in the fourth quarter of 2021. The Company made a $150,000 payment in February 2022, a $350,000 payment on  March 31, 2022, and a $150,000 payment in December 2022. The Company is scheduled to make the final payments on the note in 2023 with the final payment of $1.5 million along with any accrued interest in April 2023.
(10)	Represents Full Moon Telecom, LLC and Coax Fiber Services opening balance sheet loan to prior Full Moon Telecom, LLC and Coax Fiber Services owners.

77

 

The following shows the elements of the Non-recourse payable agreements:

(In thousands)
	Face Value		Repayments			Loan Origination Fees			Discounts			Amortization of Discounts		Balance as of December 31, 2022
Non-recourse payable agreements	$	11,440	$	(1,040	)	$	(160	)	$	(3,440	)	$	555	$	7,355

The following table details the maturity of the notes payable for Orbital Infrastructure Group, Inc.:

(In thousands)
	As of December 31,
	2022
2023	$	176,383
2024		24,835
2025		21,318
2026		131,680
2027		138
Less interest portion of payments		(109,118	)
Total	$	245,236

78

 

8.           LINE OF CREDIT

On  August 19, 2021, the Company's GTS subsidiary entered into a $4.0 million variable rate line of credit agreement. Interest accrues at a rate of 2.05% over the Daily Simple Secured Overnight Financing Rate ("SOFR") index rate. In November 2022, the maturity date for the line of credit was extended to November 2023. At December 31, 2022 the Company had a $4.0 million outstanding balance on the line of credit and zero dollars were available for borrowing. Collateral on the line of credit includes inventory, accounts receivable, equipment and general intangibles. The line of credit agreement includes certain affirmative covenants, all of which the Company was in compliance with as of December 31, 2022.

9.          COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company may be involved in certain legal actions arising from the ordinary course of business. While it is not feasible to predict or determine the outcome of these matters, we do not anticipate that any of these matters, or these matters in the aggregate, will have a material adverse effect on the financial position or results of operations.

Off-Balance Sheet Arrangements - Performance and Payment Bonds and Parent Guarantees

In the ordinary course of business, Orbital Infrastructure 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. 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  December 31, 2022 the total amount of the outstanding performance and payment bonds was approximately $16.4 million. Orbital Solar Services has bonding for unconsolidated third parties related to two separate projects that had $16.0 million left to complete the jobs. Front Line Power had $0.4 million dollars in bonding related to ongoing electric power work for an individual customer. The Company does not expect any liability associated with these off-balance sheet arrangements.

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.

79

 

Contingent Liabilities

Orbital Infrastructure 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.

The Company recently filed and served a federal civil complaint in the United States District Court for the Northern District of Texas – Dallas Division against the former owner of Reach Construction Group LLC (“Reach”).  The complaint alleges, among other things, misrepresentations and misconduct committed by the former owner in conjunction with the purchase and sale of Reach to Orbital Infrastructure Group, Inc.  Based on the information and evidence contained in the complaint, the Company reasonably believes that it owes no more compensation to the former owner and is seeking return of certain funds already paid and relief of certain debt and accruals currently on the balance sheet.

The Company and its subsidiary, OSS, are also involved in a contract dispute with Jingoli Power (“Jingoli”) regarding the Joint Venture between Jingoli and OSS for construction of the Black Bear and Happy - Lightsource BP Projects.  The Company contends that Jingoli unjustifiably and without proper authority took over management and control of the two projects and that, as a direct result of Jingoli’s mismanagement, the projects have suffered significant losses. The Company has disclosed and accrued losses including liquidated damages for both projects and is currently pursuing its contractual remedies to collect on losses from Jingoli.   

Regarding all lawsuits, claims and proceedings, Orbital Infrastructure Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Orbital Infrastructure 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 Infrastructure 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.

Syndicated debt - subscription agreement financial instrument

To the extent that the Company issues shares of its common stock at a price less than the current reference price, the Company is obligated to issue additional shares to the syndicated lenders based on formulas included in their subscription agreements. When additional shares are issued to the lenders, the reference price is reset. The reference price was $0.15 at  December 31, 2022. The financial instrument liability had a fair value of $0.5 million at  December 31, 2022. See Note 3 for additional information on the fair value of the financial instrument as of December 31, 2022.

10.          STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock Dividend Restrictions

As of December 31, 2022, there are no restrictions on common stock dividends. Also, at December 31, 2022 and 2021, retained earnings were not restricted upon involuntary liquidation.

S-3 registration and share issuances

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 Infrastructure 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. The Company utilized this S-3 registration to issue additional common stock in July 2021 for $38 million before costs of approximately $2.3 million for net proceeds of approximately $35.7 million. In April 2022, the Company issued 9,000,000 shares of common stock and pre-funded warrants to purchase up to 7,153,847 shares of Common Stock for a total raise of $21.0 million before expenses. Warrants were included as warrant liabilities at December 31, 2022. In addition, the Company issued 16,153,847 warrants exercisable at $1.31 that are not prefunded but are reserved against the S-3 in the amount of $21.2 million. In the third and fourth quarters of 2022, the Company issued an additional $3.9 million in common shares against the S-3 leaving $65.9 million against the S-3 for future issuances.

Other share issuances 

The Company has debt with an institutional investor that on occasion has accepted common stock in lieu of scheduled cash payments. In 2022, the Company issued 20,297,993 shares to this investor for $15.9 million including a $2.8 million loss on extinguishment. 

In 2022, the Company issued 24,963,451 common shares as part of a subscription agreement with the lenders of the Company's syndicated debt. See Note 3 - Investments and Fair Value Measurements and Note 9 - Commitments and Contingencies for more information on the related subscription financial instrument.

80

 

Stock Appreciation Rights ("SARS")

Through  December 31, 2021, the Company had been vesting a series of stock appreciation rights (SARS) to be settled in cash to certain executives. At December 31, 2021 there were 3,126,000 of non-vested cash-settled SARS outstanding at a weighted average fair value of $1.45. The Company recorded $2.1 million of compensation related to SARs in the year ended December 31, 2021. Unamortized expense for SARS at December 31, 2021 was $4.3 million.

The SARS were considered liability-classified awards meaning their fair-values were remeasured at the end of each reporting period using a binomial lattice model and any changes in fair value for the vesting periods to-date were recorded through the income statement with a corresponding liability accrued on the balance sheet. Since  December 31, 2021, the SARS have been exchanged for restricted stock units (RSUs) on the modification date of  January 14, 2022 as approved by the Board of Directors. To account for this exchange, the company revalued the SARS as of the modification date of  January 14, 2022 using the binomial lattice model and recorded changes in the vested value since  December 31, 2021 as an adjustment to the income statement. The Company then reclassified the SARS accrued liability to APIC for new RSUs and recognized incremental expense. Shares deemed vested at the modification date were released and issued net of tax in  March 2022. The SARS that converted to RSUs, were added to the Company's existing RSU program.

The number of SARS granted to each of the executives equated to the corresponding dollar amount of a portion of the cash bonus otherwise due to them pursuant to their employment agreements. The SARS were subject to acceleration upon a change in control or termination of the executive’s employment with the Company in certain circumstances. 

Month Issued	April 2021
Number Issued		3,770,960
Interest Rate		0.34	%
Estimated Volatility		156	%
Stock Price at Issuance	$	4.17
Years to Maturity		1.5
Grant date Value per Right	$	3.56

The 2021 grant was issued with a $2.89 exercise price. 

The SARS were valued using a binomial lattice model. Because the SARS were to be settled in cash, the obligation for them was accounted for as a liability rather than equity. Quarterly, the SARS were revalued and the new value was amortized. Information on the 2021 grant date value of the SARS and weighted average inputs to the binomial lattice model are as follows:

	2021
Weighted average expected term at December 31 (years)		1.55
Total fair value of all awards at December 31	$	6,979,824
Total fair value of all vested awards at December 31	$	2,701,802
Total intrinsic value at December 31	$	1,255,078

81

Restricted Stock Units:

In 2022, the Company granted Restricted stock units to certain key employees of the Company from the Company's 2020 Incentive Award Plan. RSUs generally vest over 3 years. In 2022, there were four grants totaling 823,883 units that immediately vested. New common shares are issued for vested RSUs. RSU activity in 2022 and 2021 was as follows:

	Number of restricted stock units			Weighted-average grant date fair value
Non-vested shares, December 31, 2020		—		$	—
Granted		4,386,107			4.64
Vested		(1,367,319	)		4.76
Forfeited		—			—
Non-vested shares, December 31, 2021		3,018,788			4.58
Granted		6,090,765			1.32
Vested		(2,760,687	)		1.67
Forfeited		(2,185,104	)		5.26
Non-vested shares, December 31, 2022		4,163,762		$	1.38

The Company recorded $4.6 million of expense related to vested RSUs in 2022 offset by forfeitures of $5.4 million for a net credit to expense of $0.8 million in 2022. This compares to $10.6 million of expense related to vested RSUs in 2021. Unamortized expense on unvested RSUs was $3.8 million and $9.7 million at December 31, 2022 and December 31, 2021, respectively. Unvested RSUs have a weighted average remaining life of 1.96 years and 1.80 years as of December 31, 2022, and December 31, 2021.

Employee Stock Options and other share-based compensation

At the 2020 Annual Meeting of Shareholders, the Company’s shareholders approved the Orbital Infrastructure Group 2020 Incentive Award Plan and authorized a share limit of 2,000,000 shares. In 2021, the Company's shareholders approved an increase in shares available for the 2020 Incentive Award Plan from a total of 2 million shares to a total of 5 million shares. In 2022, the Company's shareholders approved an additional 5,000,000 shares. As of December 31, 2022 there are 3,039,900 remaining shares available to grant under the 2020 Incentive Award Plan. This Plan replaced the 2008 and 2009 Equity Incentive Plan, which had expired. 

The purpose of the Orbital Infrastructure Group 2020 Incentive Award Plan is to enhance our ability to attract, retain and motivate persons who make (or are expected to make) important contributions to Orbital Infrastructure Group by providing these individuals with equity ownership opportunities. Equity awards are intended to motivate high levels of performance and align the interests of our directors, employees and consultants with those of our stockholders by giving directors, employees and consultants the perspective of an owner with an equity stake in Orbital Infrastructure Group and providing a means of recognizing their contributions to the success of Orbital Infrastructure Group. Our board of directors and management believe that equity awards are necessary to remain competitive in its industry and are essential to recruiting and retaining the highly qualified employees who help Orbital Infrastructure Group meet its goals. A primary purpose of the plan is to provide OIG with appropriate capacity to issue equity compensation in anticipation of future acquisitions.

The Orbital Infrastructure Group 2020 Incentive Award Plan provides for the grant of stock options, including ISOs and nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards. Certain awards under the Orbital Infrastructure Group 2020 Incentive Award Plan may constitute or provide for payment of “nonqualified deferred compensation” under Section 409A of the Code. All awards under the Orbital Infrastructure Group 2020 Incentive Award Plan will be set forth in the award agreement, which will detail the terms and conditions of awards, including any applicable vesting and payment terms and post termination exercise limitations. Most awards shall be subject to a minimum vesting of one year from the Grant Date. A brief description of each award type follows.

● Stock Options and SARs. Stock options provide for the purchase of shares of common stock of Orbital Infrastructure Group in the future at an exercise price set on the grant date. ISOs, in contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from Orbital Infrastructure Group an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The plan administrator will determine the number of shares covered by each option and SAR, the exercise price of each option and SAR and the conditions and limitations applicable to the exercise of each option and SAR. The exercise price of a stock option or SAR will not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of a stock option or SAR may not be longer than five years.

● Restricted Stock. Restricted stock is an award of nontransferable shares of common stock of Orbital Infrastructure Group that remain forfeitable unless and until specified conditions are met and which may be subject to a purchase price. Upon issuance of restricted stock, recipients generally have the rights of a stockholder with respect to such shares, which generally include the right to receive dividends and other distributions in relation to the award. The terms and conditions applicable to restricted stock will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan.

● RSUs. RSUs are contractual promises to deliver shares of common stock of Orbital Energy Group in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of common stock of Orbital Infrastructure Group prior to the delivery of the underlying shares (i.e., dividend equivalent rights). The Company accounts for forfeitures of employee awards as they occur. The plan administrator may provide that the delivery of the shares underlying RSUs will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to RSUs will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan.

● Other Stock or Cash Based Awards. Other stock or cash-based awards are awards of cash, shares of common stock of Orbital Infrastructure Group and other awards valued wholly or partially by referring to, or otherwise based on, shares of common stock of Orbital Infrastructure Group or other property. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled. The plan administrator will determine the terms and conditions of other stock or cash-based awards, which may include any purchase price, performance goal, transfer restrictions and vesting conditions, subject to the conditions and limitations in the Orbital Infrastructure Group 2020 Incentive Award Plan.

The Orbital Infrastructure Group 2020 Incentive Award Plan provides that the plan administrator may establish compensation for non-employee directors from time to time subject to the Orbital Infrastructure Group 2020 Incentive Award Plan’s limitations. The plan administrator will from time to time determine the terms, conditions and amounts of all non-employee director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that, the sum of any cash compensation or other compensation and the grant date fair value of any equity awards granted under the Orbital Infrastructure Group 2020 Incentive Award Plan as compensation for services as a non-employee director during any fiscal year may not exceed $250,000 per year of a non-employee director’s service as a non-employee director. The non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving the non-employee Director.

82

 

A summary of the stock options granted to employees and directors and changes during the year are presented below:

	For the Year Ended December 31, 2022
	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contract Life (years)		Aggregate Intrinsic Value ($ '000)
Balance at beginning of year		237,985		$	6.14		1.41	$	—
Exercised		—			—		—		—
Expired		(40,098	)		4.56		—		—
Balance at end of year		197,887		$	6.46		0.63		—
Exercisable		197,887		$	6.46		0.63		—

As of  December 31, 2022 and 2021 all issued and outstanding stock options were fully vested. There was no unamortized expense related to unvested stock options at December 31, 2022 and 2021. There were no options granted during 2022 and 2021.

11.          RELATED PARTY TRANSACTIONS

Executive Chairman of the Board of Directors, Chief Legal Counsel, and former Chief Executive Officer, William J. Clough’s son Nicholas J. Clough, serves as Vice President of Greenfield Operations, Orbital Infrastructure Group. In 2022 and 2021, Mr. Clough received an aggregate salary of $375 thousand and $360 thousand, respectively, and received a cash bonus of zero and $309 thousand in fiscal 2022 and 2021, respectively. In 2021, Mr. Clough was granted 235,876 stock appreciation rights with a grant date fair value of $840 thousand. These SARS were to vest and be payable on the first, second and third anniversaries of the grant date. He also received other benefits valued at $33 thousand and $43 thousand in 2022 and 2021, respectively. Nicholas J. Clough does not report to William J. Clough nor does William J. Clough have input regarding Nicholas J. Clough’s salary, bonus, or performance. Mr. Clough’s salary and bonus is set by his direct supervisor and relevant market conditions, while his performance is evaluated and monitored by his direct supervisor. In addition, pursuant to Company policy, any related-party bonus and/or salary change in excess of $50,000 is independently reviewed and approved by the Company’s Compensation Committee, comprised of Independent Board Members from the Company’s Board of Directors.

12.     ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows:

(In thousands)	As of December 31,
	2022			2021
Foreign currency translation adjustment	$	(691	)	$	(3,995	)
Accumulated other comprehensive loss	$	(691	)	$	(3,995	)

83

 

13.     RESTRUCTURING AND IMPAIRMENT CHARGES

Restructuring Charges

In  September 2022, the Company fully impaired its finance lease equipment related to the Eclipse Foundation Group in the Electric Power segment. These pieces of equipment are drilling specific and at this time, the Company does not plan to use the equipment for the remaining term of the leases. As these leases are non-cancelable and do not include a sub-leasing option, the full finance lease assets related to Eclipse in the Electric Power segment have been removed from the balance sheet and an equal impairment was recognized in the amount of $4.5 million. Future payments at the time of impairment related to these leases was approximately $5.2 million to be paid through  June 2026.

During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. 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 and the lease for the CUI-Canada facility expired in the fourth quarter of 2020. This termination accrual was adjusted down by $0.3 million Canadian dollars ($0.2 million US dollars) based on updated estimates in 2020. 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. Final amounts were paid in 2021 (see table below). All restructuring costs related to CUI-Canada are included in the statement of operations on the line labeled Income from operations of discontinued operations.

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

	For the Year ended December 31,
CUI-Canada termination benefits (In thousands)	2021
January 1 liability balance	$	371
Severance accrual adjustments		—
Severance payouts		(376	)
Translation		5
December 31 liability balance	$	—

14. INCOME TAXES

(Loss) income before income taxes consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022			2021
Continuing operations	$	(277,089	)	$	(60,351	)
Discontinued operations		(2,317	)		(12,705	)
Loss before income taxes	$	(279,406	)	$	(73,056	)

Loss from continuing operations before taxes consisted of the following:    

(In thousands)	For the Years Ended December 31,
	2022			2021
U.S. operations	$	(277,904	)	$	(60,351	)
Foreign operations		815			—
Loss before income taxes	$	(277,089	)	$	(60,351	)

 

The income tax (benefit) expense allocation for the years ended  December 31, 2022 and 2021 consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022		2021
Continuing operations	$	846	$	(10,508	)
Discontinued operations		—		(1,334	)
Total income tax expense (benefit)	$	846	$	(11,842	)

The income tax (benefit) expense from continuing operations consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022			2021
Current:
Federal	$	—		$	—
State and local		129			370
Foreign		1,063			—
Total current provision		1,192			370
Deferred:
Federal		(260	)		(8,714	)
State and local		—			(2,164	)
Foreign		(86	)		—
Total deferred (benefit)		(346	)		(10,878	)
Total income tax expense (benefit)	$	846		$	(10,508	)

84

 

The following table provides a reconciliation of the federal statutory tax at 21% to the recorded tax expense (benefit) from continuing operations for the years ended December 31, 2022 and 2021, respectively:

(In thousands)	For the Years Ended December 31,
	2022			2021
Computed federal income taxes at the statutory rate (benefit)	$	(58,189	)	$	(12,674	)
State taxes		(3,764	)		292
Permanent tax differences		1,662			2,140
Foreign tax rates and tax credits differing from USA		73			—
Federal true-ups and carryovers		1,106			—
Expired NOL's		—			541
Change in valuation allowance		59,958			(807	)
Total income tax (benefit)	$	846		$	(10,508	)
Effective tax rate		(0.31	)%		17.41	%

The Company accounts for income taxes under the asset-liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when it is “more likely than not” that the benefits of existing deferred tax assets will not be realized in a future period. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021, respectively, are as follows:

(In thousands)	As of December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	43,885		$	23,941
Property and equipment		257		$	—
Intangible assets		19,113			—
163(j) interest expense limitation		11,139			—
Inventory and accounts receivable reserves		952			1,826
Operating lease obligations		7,175			8,058
Debt related		1,627			—
Accrued liabilities		2,530			786
Other		11			4,371
Valuation allowance		(77,944	)		(20,129	)
Deferred tax assets after valuation allowance		8,745			18,853
Deferred tax liabilities:
Intangible assets		—			(9,426	)
Property, plant and equipment		—			(9,588	)
ROU assets		(5,825	)		—
Accounting method change		(2,742	)		—
Total deferred tax liabilities		(8,567	)		(19,014	)
Net deferred tax asset (liability)	$	178		$	(161	)

The Company adopted the provisions of ASU 2015-17 in 2015. ASU 2015-17 requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The net deferred tax asset as of  December 31, 2022 is recorded within other assets. 

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $57.8 million during 2022 and $0.3 million during 2021.

Net operating loss carryforwards as of the financial statement date are as follows:

(in thousands)
	Amount		Expiration Years
Net operating losses, federal (post- December 31, 2017)	$	158,811	Do Not Expire
Net operating losses, federal (pre-January 1, 2018)		34,110		2027-2038
Net operating losses, state		957		2033-2038

The Company files consolidated income tax returns for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Australia, Canada, India, Belgium and the United Kingdom. As of December 31, 2022, the Company is not under examination by any income tax jurisdiction. The Company is no longer subject to examination in the USA for years prior to 2019.

85

 

15.      CONCENTRATIONS

During 2022, 75% of revenues were derived from four customers that individually had over 10% of our total revenues: Customer 1 with 27%, Customer 2 with 23%, Customer 3 with 15% and customer 4 with 10%. During 2021, 26% of revenues were derived from two customers that individually had over 10% of our total revenues: Customer 2 with 11% and Customer 3 with 15%. 

The Company’s major product lines in 2022 and 2021 were electric power transmission and distribution maintenance and service, utility-scale solar construction projects and telecommunications maintenance and services.

At December 31, 2022, of the gross trade accounts receivable totaling approximately $53.4 million, four individual customers made up approximately 72% of the Company's total trade accounts receivable: Customer 1 at 11%. Customer 2 at 26%, Customer 3 at 14% and Customer 4 at 21%. At December 31, 2021, of the gross trade accounts receivable totaling approximately $50.2 million, two individual customers made up approximately 46% of the Company's total trade accounts receivable: Customer 1 at 16% and Customer 2 at 30%.

For the 12 months ended December 31, 2022, there were no supplier concentrations. For the 12 months ended December 31, 2021, there was one supplier concentration of approximately 12%.

For the years ended December 31, 2022 and 2021, the Company had no foreign revenue concentrations or foreign trade accounts receivable concentrations outside the United States.

As of December 31, 2022 and 2021, 13% and 15%, respectively, of the Company's total labor force was subject to a collective bargaining agreement.

16. LEASES

Effective January 1, 2019, the Company implemented the new accounting guidance on leases found in ASC 842, Leases. As part of its transition, the Company elected to utilize the transition method of adoption. Under the transition method, the Company includes the new required disclosures for the current period and provides the disclosures required by the previous guidance found in ASC 840 for the prior year comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classifications and allowed the Company to exclude leases with an initial term of 12 months or less (after consideration of renewal options) from being recorded on the Company's consolidated balance sheet; the Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. At  December 31, 2022 the Company did not factor in any renewal options when calculating its consolidated right-of-use assets and lease obligations as the options were not considered reasonably certain to be exercised. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company reviewed outstanding service contracts to determine if any of the Company's service contracts contained an embedded lease. Determining whether a contract contains a lease requires judgement. The Company did not identify any new leases through this process. The new lease accounting guidance also changes the name of leases formerly referred to as Capital leases under ASC 840 to Financing leases under ASC 842.

86

 

The Company rents office space and warehouse space, which it uses for the Corporate Headquarters in Houston, Texas. The Houston Headquarters property lease expired in the second half of 2022 and the Company began a lease at a new facility in November 2022 that runs through August 2026. During the year ended  December 31, 2022, rent expense on this lease was approximately $33 thousand per month for the lease that expired in 2022, and approximately $7 thousand per month for the new lease entered into in late 2022. In addition, the company has two corporate leases in Portland, Oregon, one running through April 2027 and another running through December 2028. These leases when combined approximate $28 thousand monthly as of December 31, 2022.

The Company sublets office space in Irving, Texas for corporate support services and Orbital Power Inc. office personnel; the lease runs through 2023. Orbital Power Inc. also maintains an equipment yard in Sherman, Texas that houses equipment primarily for Orbital Power, Inc. for which the lease runs until 2023. During the year ended December 31, 2022, rent expense on these leases were a combined average of $7 thousand per month.

Orbital Power Inc. and Eclipse Foundation Group rent equipment as well as vehicles for use on their jobs. These vehicle leases range from 3 to 7-year terms. During the year ended December 31, 2022, rent expense on operating leases when combined approximated $0.4 million monthly. Depreciation and interest expense on finance leases at Orbital Power, Inc. and Eclipse Foundation for the year ending December 31, 2022 averaged $0.4 million monthly.

Gibson Technical Services leases six properties, one in Georgia, North Carolina, South Carolina, Virginia, Louisiana, and New York with lease terms ranging from 2-8 years. During the year ended December 31, 2022, rent expense on these leases were a combined average of $20 thousand per month. In addition, Gibson Technical Services rents multiple pieces of equipment. Rent expenses on these equipment leases combined were approximately $28 thousand per month. IMMCO, a subsidiary of Gibson Technical Services, rents four office spaces in Kochi, India. Rent expenses on these leases when combined approximate $10 thousand per month with one lease running through 2023, two leases running through 2026, and one lease running through 2036.

Front Line Power Construction rents four office spaces in Rosharon, Texas, three of which run through November 2024 and one which runs through September 2025. Rent expense on these leases when combined approximate $26 thousand per month. In addition, Front Line Power Construction has finance equipment leases at December 31, 2022, that approximate $33 thousand monthly in depreciation and interest expense.

Orbital Solar Services rents office space in Raleigh, North Carolina and Phoenix, Arizona through February 2024 as well as multiple pieces of equipment.   Rent expense on these leases were a combined approximately $34 thousand per month. Orbital Solar Services has one equipment finance lease with approximately $1 thousand in cost a year.

Consolidated rental expense on operating leases was $6.7 million and depreciation on financing leases was $5.0 million for the year ended  December 31, 2022 and is included in cost of revenue and selling, general and administrative expense, on the condensed consolidated statement of operations. Interest expense for finance leases was $0.9 million for the year ended December 31, 2022.

Future minimum operating lease obligations for continuing operations at  December 31, 2022 are as follows for the years ended December 31:

(In thousands)
2023	$	5,565
2024		4,676
2025		3,103
2026		2,584
2027		2,352
Thereafter		1,512
Less interest portion		(2,902	)
Total operating lease obligations	$	16,890

Total lease cost and other lease information is as follows:

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
(In thousands)
Operating lease cost	$	6,487		$	3,897
Short-term lease cost		83			265
Variable lease cost		666			732
Sublease income		(516	)		(501	)
Total lease cost	$	6,720		$	4,393
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in operating leases	$	(8,509	)	$	(3,515	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	4,152		$	13,707
Weighted-average remaining lease term - operating leases (in years)		4.5			4.6
Weighted-average discount rate - operating leases		7.1	%		6.9	%

Future minimum finance lease obligations are as follows:

(In thousands)
2023	$	5,977
2024		5,331
2025		1,846
2026		896
2027		48
Thereafter		—
Less interest portion		(1,109	)
Total financing lease obligations	$	12,989

Total financing lease costs are as follows:

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
Depreciation of financing lease assets	$	4,958		$	2,166
Interest on lease liabilities		889			402
Total finance lease cost	$	5,847		$	2,568
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in financing leases	$	(889	)	$	(402	)
Financing cash flows from financing leases	$	(5,073	)	$	(1,995	)
Right-of-use assets obtained in exchange for new financing lease obligations	$	1,369		$	16,868
Weighted-average remaining lease term - financing leases (in years)		2.7			2.9
Weighted-average discount rate - financing leases		6.6	%		6.5	%

87

 

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

17.         Business Combinations 

See Note 5 - Goodwill and Other Intangible assets for information on 2022 Goodwill impairments.

Acquisition of Coax Fiber Solutions

Effective  March 7, 2022, GTS, an OIG subsidiary included in the Telecommunications segment, entered into a share purchase agreement to acquire Coax Fiber Solutions (CFS), a Georgia based GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation. GTS paid $0.8 million and issued 125,000 shares of restricted common stock to the Seller to purchase CFS with the stock valued at $146,000. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded opening balance items of $0.4 million of current assets, $0.5 million of fixed assets, $1.5 million of goodwill, and $1.5 million of liabilities as part of this transaction. As this was a stock acquisition, goodwill is not tax deductible. 

Front Line Power Construction, LLC

On November 17, 2021, Kurt A. Johnson, Jr. (the Active Seller) and Tidal Power Group LLC, a Texas limited liability company (the Passive Seller and together with the Active Seller, collectively, the Sellers), and Orbital Infrastructure Group, Inc., a Colorado corporation (Buyer or the Company) entered into a Membership Unit Purchase Agreement (the Purchase Agreement).  Under the Purchase Agreement, the Company purchased all of the issued and outstanding membership interests of Front Line Power Construction, LLC (FLP) from the Sellers for the purpose of expanding the Company’s market opportunities and creating synergies. FLP is a Houston-based full-service electrical infrastructure service company that provides construction, maintenance, and emergency response services. The Company has included the financial results of FLP in the consolidated financial statements from the date of acquisition and recorded $9.2 million of revenues and $98 thousand loss for the period from November 17, 2021 through December 31, 2021. The transaction costs associated with the acquisition were approximately $230 thousand and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for FLP was approximately $219.2 million, which consisted of the following (in thousands):

Cash	$	101,536
Working capital adjustment payable		14,092
Fair value of unsecured promissory notes		86,001
Fair value of common stock issued to Sellers		17,612
Fair value of purchase consideration	$	219,241

The cash consideration paid by the Buyer includes cash paid to the Sellers of $101.5 million, cash paid for the Sellers indebtedness of $1.0 million, and cash paid for the Sellers transaction expenses of $4.4 million. The Company funded the FLP acquisition through the issuance of a $105 million term loan on November 17, 2021, with a maturity date of November 21, 2026 (see Note 7).

The Buyer issued two unsecured promissory notes to the Sellers of FLP, in the aggregate principal amount outstanding of $86.7 million (the Seller Notes) and an estimated fair value of $86.0 million. The Seller Notes as amended are due in full, including any accrued and unpaid interest, on May 31, 2023 and accrue interest at a rate of 6% per annum. The Sellers also received a total of 11,622,018 shares of restricted common stock of the Buyer. The fair value of the unsecured promissory notes and the Buyer equity issued to Sellers was estimated using a market approach. 

The Company accounted for the acquisition as a business combination in accordance with ASC Topic 805, Business Combinations.  The Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values of assets and preliminary purchase price allocation for assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Cash and cash equivalents	$	6,779
Trade accounts receivable		15,726
Contract assets		2,092
Prepaid expenses and other current assets		481
Property and equipment		18,730
Other long-term assets		531
Indefinite lived intangible assets		15,027
Definite lived intangible assets		93,211
Accounts payable		(620	)
Contract liabilities		(120	)
Accrued expenses		(2,747	)
Net assets acquired		149,090
Goodwill		70,151
Purchase price allocation	$	219,241

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce, synergies, and expanded market opportunities, for which there is no basis for U.S. income tax purposes.  Goodwill amounts are not amortized, but are rather tested for impairment at least annually during the second quarter.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

	Fair Value		Useful Life
Customer relationships	$	84,012	15 years
Backlog		9,186	1 year
Tradename		15,027	Indefinite
Software		13	3 years
Total intangible assets	$	108,238

Full Moon Telecom, LLC

Effective October 22, 2021, the Company's subsidiary, Gibson Technical Services, Inc. ("GTS") entered into and closed upon a Purchase Agreement by and among the Company and the owners of Full Moon Telecom, LLC (“Full Moon”). Full Moon is a Florida-based privately-owned telecommunications service provider that offers an extensive array of wireless service capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network (“RAN”) Integration, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna (“DAS”) systems. 

The acquisition adds revenues and was accretive to earnings for GTS and OIG in its first fiscal quarter with the Company. Full Moon is a wholly-owned subsidiary of GTS, expanding GTS’s service offerings to its customers.

Full Moon’s additional capabilities include providing site surveys, regulatory support, project management, continuous wave testing, scanner walks, optimization/data collection and E911 data validation and testing.  These additional skill sets combined with Full Moon’s RAN integration and DAS commissioning efforts have allowed for an expanded service offering and turnkey approach to ensuring the on time delivery and quality on end-to-end solutions to wireless customers. Factors that contribute to the Company’s goodwill in Full Moon Telecom, LLC, include the highly skilled and technically competent workforce at Full Moon. This workforce when combined with Gibson Technical Services and IMMCO provide synergies that increase the unique portfolio of services provided to their customers and further penetrate the telecommunications market.

Subject to the terms and conditions set forth in the Purchase Agreement, the purchase consideration for 100% of the ownership of Full Moon was $2.0 million, with the consideration structured as follows:

$1.2 million in cash paid at closing less the amount needed to pay certain outstanding debt of Full Moon; and plus or minus the amount needed for estimated closing working capital to equal a 2 to 1 ratio; and

227,974 shares of restricted common stock issued to the Full Moon owners with an aggregate fair value of $368 thousand based upon a per share value of $1.614. 

The Purchase Agreement provided for the adjustment of the selling price to adjust the final closing working capital at the acquisition date as a post-closing adjustment for net working capital above or below a 2-1 ratio for the closing working capital ratio estimated on the acquisition date and to be finalized within 45 days after the closing date of October 22, 2021. This was calculated to be an additional $381 thousand of cash consideration. 

The Purchase Agreement contains various customary representations, warranties and covenants.

The Company accounted for the acquisition as a business combination in accordance with ASC Topic 805, Business Combinations.  The Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values and preliminary purchase of assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Cash and cash equivalents	$	747
Trade accounts receivable		297
Property and equipment		124
Intangible, Tradename (indefinite)		159
Intangible, Customer relationships (10-year life)		210
Accounts payable		(197	)
Accrued expenses and other liabilities		(182	)
Net assets acquired		1,158
Goodwill		826
Purchase price allocation	$	1,984

The Company has included the financial results of Full Moon Telecom, LLC in the consolidated financial statements from the date of acquisition and recorded $1.0 million of revenues and $0.3 million of earnings for the period from October 22, 2021 through December 31, 2021.

IMMCO, Inc.

Effective  July 28, 2021, the Company entered into a share purchase agreement to acquire IMMCO, Inc., an Atlanta-based telecommunications company providing enterprise solutions to the cable and telecommunications industries since 1992. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), with the shareholders of IMMCO (the "Seller"). Orbital Infrastructure Group paid $16 million and issued 874,317 shares of restricted common stock issued to the Seller ($2.5 million estimated fair value as of  July 28, 2021) plus a $0.6 million working capital adjustment for a combined total of $19.1 million. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded $11.0 million of goodwill as part of this transaction and all of this goodwill is deductible for tax purposes. Factors that contribute to the Company’s goodwill at IMMCO include the significant synergies added to the Company’s Telecommunications segment by expanding the depth and breadth of the customer solutions provided. Acquisition-related expenses incurred during the year ended December 31, 2021 for the IMMCO acquisitions were approximately $0.6 million before taxes, which were recognized within the Selling, general and administrative expense line of the Condensed Consolidated Statements of Operations.

The purchase consideration was as follows (in thousands):

Purchase Consideration
Cash payment	$	16,597
Fair value of common stock issued to Sellers		2,024
Total	$	18,621

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):

Cash and cash equivalents	$	1,634
Trade accounts receivable, net		1,254
Contract assets		1,001
Prepaid expenses and other current assets		551
Property and equipment		760
Intangible, customer relationships		3,800
Intangible, trade name		1,162
Intangible, technology know how		1,459
Other long-term assets		76
Deferred tax liability		(2,090	)
Liabilities assumed		(2,100	)
Net assets acquired		7,507
Goodwill		11,114
Purchase price allocation	$	18,621

The Company has included the financial results of IMMCO, Inc.in the consolidated financial statements from the date of acquisition and recorded $3.7 million of revenues and $2.8 million of net income for the period from July 28th, 2021 through December 31, 2021.The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in 2021 within the income tax benefit line of the Condensed Consolidated Statement of Operations and is included in the net income of IMMCO, Inc. 

Gibson Technical Services, Inc.

Effective  April 13, 2021, the Company entered into a share purchase agreement to acquire Gibson Technical Services, an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), dated as of  April 13, 2021, between Orbital Infrastructure Group and the shareholders of GTS (the "Seller"). Orbital Infrastructure Group paid $22 million and issued 5,929,267 shares of restricted common stock issued to the Seller ($16.9 million estimated fair value as of  April 13, 2021) for a combined total of $38.9 million. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded $12.3 million of goodwill as part of this transaction and all of this goodwill is deductible for tax purposes. Factors that contributed to the Company’s goodwill in Gibson Technical Services included GTS’s sterling reputation within the telecommunications industry which when combined with the Company’s resources, provided synergies that helped OIG penetrate the telecommunications market. Acquisition-related expenses incurred during the year ended December 31, 2021 were approximately $0.9 million before tax which were recognized within the Selling, general and administrative expense line of the Condensed Consolidated Statements of Operations.

The purchase consideration was as follows (in thousands):

Cash payment	$	22,000
Fair value of common stock issued to Sellers		16,932
Total	$	38,932

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).

Cash and cash equivalents	$	610
Trade accounts receivable		7,871
Contract assets		1,686
Contingent receivable		1,424
Prepaid expenses and other current assets		408
Property and equipment		3,795
Right of use assets - Operating leases		860
Intangible, customer relationships (10-year life)		16,075
Intangible, tradename (indefinite life)		6,388
Intangible, non-compete agreements (5-year life)		385
Other long-term assets		123
Deferred tax liability		(9,048	)
Liabilities assumed		(3,984	)
Net assets acquired		26,593
Goodwill		12,339
Purchase price allocation	$	38,932

The Company has included the financial results of Gibson Technical Services, Inc.in the consolidated financial statements from the date of acquisition and recorded $23.1 million of revenues and $9.2 million of earnings for the period from April 13, 2021 through December 31, 2021. The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit 2021 within the income tax benefit line of the Condensed Consolidated Statement of Operations and is included in the total earnings of GTS. 

The table below summarizes the unaudited condensed pro forma information of the results of operations of Orbital Infrastructure Group, Inc. for the year ended December 31, 2021 as though the Company's 2021 acquisitions had been completed as of January 1, 2020 (in thousands):

	(Unaudited)
	For the Years Ended December 31,
	2021
Gross revenue	$	158,625
Loss from continuing operations, net of income taxes	$	(69,671	)

88

 

18.        SUBSEQUENT EVENTS

Shares issued in Q1 2023

In the first quarter of 2023, the Company issued an additional 28,313,924 shares. These shares were issued primarily to an institutional investor as part of an exchange agreement to make payments on outstanding debt and as payment on our prepaid advance agreement with Yorkville.

Note Payable Agreement

On March 6, 2023, the Company entered into an amended and restated secured promissory note with Streeterville Capital, LLC (“Streeterville”) with a face amount of $20.9 million which will result in net proceeds of $13.8 million funded incrementally during the first half of 2023.  The documents also confirmed Streeterville’s agreement to forebear on any action regarding this and previous notes with Streeterville as relates to certain compliance matters. In addition, the agreements contain milestone events and deadlines which require the Company to pursue divestment of certain businesses in 2023. Refer to the Company's Current Report on Form 8-K dated March 13, 2023 for further details.

89

Item 9.     Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief Executive Officer and its Chief Financial Officer, 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 annual report. In designing and evaluating our disclosure controls and procedures, our 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 our 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 December 31, 2022, the Company’s disclosure controls and procedures were effective.

90

Management's Annual Report on Internal Control over Financial Reporting

Management of Orbital Infrastructure Group, Inc. is responsible for establishing and maintaining effective internal control over financial reporting. The Company’s internal control over financial reporting is a process designed 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 in the United States of America (“U.S. GAAP”). Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company assets that could have a material effect on the financial statements.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Because of such inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (“2013 framework”). Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2022.

Orbital Infrastructure Group management is responsible for establishing and maintaining adequate internal control over financial reporting for Orbital Infrastructure Group, Inc. and its subsidiaries. Based on the criteria for effective internal control over financial reporting established in the 2013 framework, management has assessed the Company’s internal control over financial reporting as effective as of December 31, 2022. 

Attestation Report of Registered Public Accounting Firm 

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 was not required to be audited by the Company’s auditors under Section 404(b) of the Sarbanes Oxley Act due to the Company being deemed a Smaller Reporting Company (SRC) within the definition of Rule 12b-2 as the Company’s public float was below the specified thresholds as of June 30, 2022. Accordingly, this Annual Report on Form 10-K does not include an attestation report of our independent registered accounting firm.  

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.  Other Information

There are no matters to be reported under this Item.

91

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Our bylaws permit the number of directors to be fixed by resolution of the board of directors, but to be no less than one. The board of directors has set the maximum number of members to no more than twelve members. Directors are elected by a majority of the votes cast by the stockholders and serve a one-year term or until their successors have been elected and qualified or their earlier resignation or removal. At December 31, 2022, we have nine directors, six of whom are ‘‘independent’’ in accordance with applicable rules promulgated by the Securities and Exchange Commission and within the meaning of Rule 5605(a)(2) of the Nasdaq Stock Market.

The board of directors has five standing committees: Audit Committee, Compensation Committee, Disclosure Committee, Investment Committee and Nomination Committee, each of which has a written charter and/or statement of policy approved by our board. Our board currently appoints the members of each committee. Copies of the current committee charters and/or statement of policy for each committee are posted on our website at www.OrbitalInfrastructureGroup.com.

The following are officers and directors of the Company with their ages as of December 31, 2022, and a list of the members of our five standing committees: Audit Committee, Compensation Committee, Disclosure Committee, Investment Committee and Nomination Committee.

William J. Clough, Esq. Executive Chairman of the board of directors and Chief Legal Officer of the Company and its wholly owned subsidiaries, age 71.

Mr. Clough has served on the board of directors since 2006 and was reelected at the 2021 Annual Meeting of Stockholders to serve a one-year term. A seasoned executive and entrepreneur, Mr. Clough joined the company’s Board in 2006 and was subsequently appointed chief executive officer in 2008. In his role as CEO, a position he held until 2019, he led the establishment of the company’s Energy division, formed its Energy operations in North America, and guided the company to its largest Energy contract award in its history while concurrently managing the company’s Power & Electro-Mechanical division to greater than average electronics industry growth rates in recent years. As CEO, he directed company’s capital markets strategy, including leading several equity offerings to institutional investors and spearheaded the company’s uplist to the Nasdaq Capital Market in 2012.

Mr. Clough previously founded and operated a multi-state, multi-office law firm for 14 years. He received a Juris Doctorate, Cum Laude, from the University of California’s Hastings College of Law in 1990. He is a former law enforcement officer and U.S. Federal Air Marshal. Mr. Clough serves on the board of directors of privately-held Virtual Power Systems, creator of Software Defined Power®, in which Orbital Infrastructure Group holds a minority equity investment.

James F. O’Neil III, Vice Chairman of the board of directors and Chief Executive Officer of the Company and its wholly owned subsidiaries, age 64.

Mr. O’Neil was appointed to the Board of Directors in July 2019 and reelected at the 2021 Annual Meeting of Stockholders to serve a one-year term. James (Jim) O'Neil joined Orbital Infrastructure Group as vice chairman in July 2019 and was subsequently appointed chief executive officer in October 2019. He is a veteran executive of the power industry and has been instrumental in formulating and is overseeing execution on Orbital Infrastructure Group’s transformation plan that reshapes the company into a diversified energy services platform.

Mr. O’Neil was previously chief operating officer, chief executive officer and president of Quanta Services, Inc. (Quanta) from 2008 to 2016, an infrastructure solutions provider for the electric power, oil and natural gas, telecommunications and renewable industries. During this period, he grew the company into a Fortune 500 enterprise with $7+ billion in annual revenue at its peak through a combination of both organic growth and many strategic acquisitions.

Mr. O’Neil joined Quanta in 1999 and over his tenure was responsible for various initiatives including the company’s growth strategy, internal audit, and merger and acquisition initiatives. He began his career at Halliburton Company in 1980 where he held various positions, lastly as Director, Global Deepwater Development.

Mr. O’Neil holds a B.S. in Civil Engineering from Tulane University.

Nicholas M. Grindstaff, Chief Financial Officer, age 60.

Mr. Grindstaff assumed the role of Chief Financial Officer for Orbital Infrastructure Group in November 2021. Prior to that, Mr. Grindstaff served as Vice President – Finance from May 2011 and Treasurer from October 1999 through October 2021 for Quanta Services, Inc., a leading provider of specialty contracting services, delivering comprehensive infrastructure solutions for the electric and gas utility, communications, pipeline and energy industries primarily in the United States, Canada and Australia. 

As an executive officer at Quanta Services, Inc. he was responsible for capital structure, which included numerous capital raises across various markets, managing acquisitions, financial planning and analysis, internal and SOX control compliance, procurement, working capital allocation, treasury operations as well as numerous other strategic initiatives.  Mr. Grindstaff holds a Master of Science degree in Accounting.

C. Stephen Cochennet, Director, age 66

Mr. Cochennet was elected to serve as a director at the 2018 Annual Meeting and continues to serve on the board of directors as an independent director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market. Mr. Cochennet was reelected at the 2021 Annual Meeting of Stockholders to serve a one-year term.

Mr. Cochennet, as an independent director, serves on the nominating committee and is also a member of our Audit Committee, Compensation Committee and Investment Committee.

Mr. Cochennet has served as CEO/President, of Kansas Resource Development Company, a private oil and gas exploration company since 2011. From 2011 through 2015 he was also the CEO and president of Guardian 8 Corporation. From 2005 to 2010 Mr. Cochennet was the Chairman, President, and Chief Executive Officer of EnerJex Resources, Inc., a publicly traded SEC registered Oil and Gas Company. Prior to joining EnerJex, Mr. Cochennet was President of CSC Group, LLC in which he supported several Fortune 500 corporations, international companies, and natural gas/electric utilities as well as various startup organizations. The services provided included strategic planning, capital formation, corporate development, executive networking and transaction structuring. From 1985 to 2002, he held several executive positions with UtiliCorp United Inc. (Aquila) in Kansas City, Missouri. His responsibilities included finance, administration, operations, human resources, corporate development, natural gas/energy marketing, and managing several new startup operations. Prior to his experience at Aquila Mr. Cochennet served 6 years with the Federal Reserve System managing problem and failed banking institutions primarily within the oil and gas markets.

Mr. Cochennet graduated from the University of Nebraska with a B.A. in Finance and Economics.

92

Corey A. Lambrecht, Director, age 53

Mr. Lambrecht was elected to serve as a director at the 2007 Annual Meeting of Stockholders and continues to serve on the board of directors as an independent director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market. Mr. Lambrecht was reelected at the 2021 Annual Meeting to serve a one-year term.

Mr. Lambrecht, as an independent director, serves as the Chairman of the Compensation Committee, and is a member of the Nominating, Audit, and Investments Committees.

Mr. Lambrecht is a 20+ year public company executive with broad experience in strategic acquisitions, corporate turnarounds, new business development, pioneering consumer products, corporate licensing, and interactive technology services. In addition, Mr. Lambrecht has held public company executive roles with responsibilities including day-to-day business operations, management, raising capital, board of directors' communication and investor relations. Mr. Lambrecht holds a certificate as a Certified Director from the UCLA Anderson Graduate School of Management Accredited Directors program.

Mr. Lambrecht is a director of ORHub, a SaaS company as well as a strategic consultant for American Rebel Holdings, Inc. He served as Director of Sales for Leveraged Marketing Associates, the worldwide leader in licensed brand extension strategies. While Executive Vice President for Smith & Wesson Holding Corporation, he was responsible for Smith & Wesson Licensing, Advanced Technologies and Interactive Marketing divisions. Previously, Mr. Lambrecht served as an independent director of Guardian 8 Holdings. He was the former President of A For Effort, an interactive database marketing company specializing in online content (advergaming) for clients such as the National Hockey League. Mr. Lambrecht's prior experience also includes Pre-IPO founder for Premium Cigars International and VP Sales/Marketing for ProductExpress.com.

Sarah Tucker, Director, age 77

Sarah Tucker was appointed to the Board of Directors in October 2019, and was elected at the 2020 Annual Meeting to serve a one-year term as an Independent Director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market. Ms. Tucker was reelected at the 2021 Annual Meeting to serve a one-year term.  Ms. Tucker, as an independent director, serves as a member of the Nominating Committee.

Sarah Tucker is a veteran executive for the business strategy/development, risk management, planning, engineering, procurement and construction of oil and gas projects globally. She has led projects with budgets from $5 million to over $3 billion in refining, petrochemicals, power, and offshore (both shallow and deep-water) for oil and liquified natural gas in Angola, Brazil, China, India, Italy, Korea, Mexico, Nigeria, Oman, Qatar, Spain, the United Kingdom and the United States.

She has served as an operations executive and managing director for major engineering, construction and petrochemical technology companies including Kellogg, KBR, Kellogg-Mitsubishi Development Company, Raytheon Engineers and Constructors, Kvaerner Engineering and Construction of Norway and Silvertech of United Kingdom, a Process Control and High Integrity Safety System Solutions.

Sarah headed the Pollution Prevention Task Force Committee with eight Oil Companies' representatives participating and contributing to the Study for "Refinery Crude Unit Pollution Prevention Project" which is now an American Petroleum Institute DC Publication number 31101. 

Over the past several years, she has worked closely with Mexican national oil company PEMEX to establish the country’s first deep water project valued at $14 billion.

According to her personal and professional philosophy, Sarah believes in developing strong relationships and respecting diverse cultures. As part of her philosophy, she led in 1992 a program to author a 51-page report which became the American Petroleum Institute publication, Environmental Design Considerations for Petroleum Refining Crude Processing Units.

93

Her parallel and subsequent effort with the World Bank was successful in striking a balance between the interests of indigenous people and major oil companies allowing projects to proceed in Africa. The publication became an influential guide for doing business in the developing world.

Paul T. Addison, Director, age 75  

Paul T. Addison was appointed to the Board of Directors in June 2021, as an Independent Director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market. Mr. Addison was reelected at the 2021 Annual Meeting to serve a one-year term.  Mr. Addison, as an independent director, serves as the Chairman of the Audit Committee and a member of the Nominating Committee. 

Paul T. Addison earned a B. A. in political science and economics from Howard University in 1969 and a M.B.A. from Harvard University in 1972.

He began his career as a loan specialist for The Economic Development Administration of the US Department of Commerce in 1972 providing loan assistance for companies that agreed to expand operations in areas of high unemployment before moving to New York in 1974 to join a Chase Manhattan subsidiary as Vice President and Treasurer that provided financing and startup capital for minority small business enterprises (a MESBIC). In 1978, he joined Citibank/Citicorp as a banker in the firm’s energy and utilities department rising to the level of a senior credit officer and Managing Director.

In this capacity, he managed the bank’s significant exposure to a large segment of the gas and electric utility industry. He also provided financial advice to the firm’s clients and on numerous occasions provided testimony before state and federal regulatory commissions. He also developed financing structures which allowed a number of utilities to rate base large nuclear projects without which a number of utilities would have suffered significant losses. This was a particular issue during the last significant construction cycle for the industry.

He also approved and structured a number of large energy project financings for the firm.

Mr. Addison continued his work in the utility industry when he joined Solomon Smith Barney (Citigroup) in 1997 as a Managing Director in the electric and gas utility space until his retirement from the firm in 2002.

Upon retirement from Citigroup, Mr. Addison became an independent director of First Energy Corporation of Akron, Ohio, serving until his mandatory retirement in 2019. In his capacity as independent director, he served as Chair of the Finance Committee, and member of the Audit Committee as a designated financial expert. He was heavily involved in numerous financings over his term on the board and significantly participated in the company’s $4.7 billion acquisition of Allegheny Energy in 2010.

Mr. Addison is also a Trustee of the Maimonides Medical Center in Brooklyn New York, where he resides. Maimonides is the largest nonprofit hospital in Brooklyn with revenues approaching $1.5 billion and serves an extremely diverse population where over 60 languages are spoken. In his capacity as Trustee, Mr. Addison serves as Chair of the Budget and Finance Committee, member of the Legal and Audit Committee, member of the Quality and Safety Committee, and member of the Executive Committee. Mr. Addison also has served as the hospital’s representative on their self-insurance malpractice company, Hospital Insurance Company (HIC). Mr. Addison also served as Chair of the Audit Committee of HIC’s parent, the Federation of Jewish Philanthropies (FOJP), until its dissolution in 2019.

Jerry Sue Thornton, Director, age 75

Dr. Thornton was appointed to the Board of Directors in July 2021, as an Independent Director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market.

Dr. Jerry Sue Thornton earned her B.A. and M. A. in Communications from Murray State University (Kentucky) and Ph.D. in Higher Education Leadership/Administration from The University of Texas (Austin). She earned a post-doctorate certificate from Harvard University.

Dr. Thornton is President of DreamCatcher Education Consulting providing professional development, coaching and mentoring for newly appointed presidents of colleges. She is President Emeritus of the Cuyahoga Community College District serving from 1992 to 2013 which is headquartered in Cleveland, Ohio. The College serves over 30,000 students on four campuses with a budget over $300 million. She brings over 45 years of experience in leading and managing higher education institutions in Chicago, Minnesota and Ohio with a focus on workforce training and professional education.

She also has extensive corporate board service beginning in 1992 with National City Bank/Corporation, Office Max, American Greetings and Bridgestreet Worldwide, Inc. until those companies had a change of control. She later served on the Boards of American Family Insurance, Applied Industrial Technologies, Inc., Republic Powdered Metals, (RPM, Inc.) and First Energy. She is currently serving on the Boards of Barnes and Noble Education (BNED) and Parkwood LLC (an Ohio financial planning company).

Gaining extensive business experience through her board director services of public and private companies, she has been a member of compensation, nominating and governance and audit committees. From manufacturing through distribution; industrial through commercial; financial through merchandizing and energy, Dr. Thornton has amassed over 29 years of business experience. During that tenure, she has served on Special Committees of the Board of Directors involved in acquisition.

Dr. Thornton brings to the Board of Directors broad leadership and business skills as well as an extensive background in workforce/talent acquisition, development and evaluation/assessment.

94

La Forrest V. Williams, Director, age 71

Mr. Williams was appointed to the Board of Directors in July 2021, as an Independent Director within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market and was reelected at the 2021 Annual Meeting to serve a one-year term.  Mr. Williams, as an independent director, serves on the Nominating Committee.

Mr. Williams is a veteran executive of the communications, computer and information assurance business of the Department of Defense and Intelligence community. He served in the civilian Defense Intelligence Senior Executive Service and the United States Air Force senior officer corps as a communication/computer intelligence and information assurance strategist for more than 40 years. His activity in information assurance became a nexus with the vulnerabilities of the energy grid.

His accomplishments include serving as a leader in the original merging of communications and computer systems technology into one management structure for the United States Air Force. His energy focus evolved through his engagement in studying cybersecurity threats to our energy grid during his career at the National Security Agency. Mr. Williams has a history of leadership positions which includes, Chief Information Officer (CIO) of the National Security Agency (NSA), Director of Information Assurance for the U.S. European Command and Director of Legislative Affairs for the National Security Agency. Mr. Williams' experience includes leading a military Communications Group of more than 500 technicians and staff, supporting Nellis Air Force Base Nevada networks. He has installed, managed, upgraded and secured communication cable and space networks worldwide; to include the United States, Europe and South Pacific.

Mr. Williams holds a B.S. degree in Business Administration from San Jose State University and an M.S. Degree in Technology of Management Information Systems from the American University, Washington D.C. He has served at the forefront in the Information Age and was an early leader at NSA in advocating concern about the vulnerability of our nation's energy grid. His advocacy led to the formation of customer assistance teams that he established to advise on the survivability of energy systems of national security concern. He later joined the National War College faculty in 2010 to teach National Security Strategy as a visiting Professor until 2013.  

He is a proven results-oriented leader with broad experience as an Air Force Colonel and three years of Board of Director experience with The Government Employees Benefit Association for federal employees. In his spare time, he is a volunteer Docent at the Smithsonian Institute in Washington D.C. and gives tours through the National Museum of American History.

Corporate Governance and Board of Directors Matters

We are committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders well and maintaining our integrity in the marketplace. We have adopted a Corporate Code of Ethics and Business Conduct, a code of business conduct and ethics for employees, directors and officers (including our principal executive officer and principal financial and accounting officer). We have also adopted the following governance guides: Charters for each of the Audit Committee, Compensation Committee, Disclosure Committee, Investment Committee, Nominating Committee, a policy for Director Independence, and Whistleblower Policy, all of which, in conjunction with our certificate of incorporation and bylaws, form the framework for our corporate governance. These corporate governance documents are available on the Internet at our website www.OrbitalInfrastructureGroup.com.

95

Our Corporate Governance Practices

We have always believed in strong and effective corporate governance procedures and practices. In that spirit, we have summarized several of our corporate governance practices below.

The Board of Director’s Role in Risk Oversight

The board of directors and its committees have an important role in the Company’s risk oversight, management and assessment process. The board regularly reviews with management the Company’s financial and business strategies, which include a discussion of relevant material risks as appropriate. The board discusses with the Company’s outside general counsel, as appropriate, its risk oversight and assessment as well as any material risks to the Company. In addition, the board delegates risk management responsibilities to the Audit Committee and Compensation Committee, which committees are each comprised of independent directors. The Audit Committee, as part of its charter, oversees the Company’s risk oversight, management and assessment of the Company and oversees and assesses the risks associated with the corporate governance and ethics of the Company. Risk considerations are a material aspect of the Compensation Committee. The Compensation Committee is responsible for overseeing the management of risks relating to executive compensation. In addition, the Compensation Committee also, as appropriate, assesses the risks relating to the Company’s overall compensation programs. The Investment Committee is responsible for overseeing and advising on possible investment opportunities as well as to administer and operate the Company’s investment portfolio. This includes aligning investment policies and strategies with the Company’s short and long-term goals, as well as setting benchmarks to evaluate long-term objectives and continual evaluation of the investment strategies. While the Committees oversee the management of the risk areas identified above, the entire board is regularly informed through committee reports about such risks. This enables the board and its committees to coordinate the risk management, assessment and oversight roles.

Adopting Governance Guidelines

Our board of directors has adopted a set of corporate governance guidelines to establish a framework within which it will conduct its business and to guide management in its running of the Company. The governance guidelines can be found on our website at www.OrbitalInfrastructureGroup.com and are summarized below.

Monitoring Board Effectiveness

It is important that our board of directors and its committees are performing effectively and in the best interest of the Company and its stockholders. The board of directors and each committee are responsible for annually assessing their effectiveness in fulfilling their obligations.

Conducting Formal Independent Director Sessions

On a regular basis, at the conclusion of regularly scheduled board meetings, the independent directors are encouraged to meet privately, without our management or any non-independent directors.

Hiring Outside Advisors

The board and each of its committees may retain outside advisors and consultants of their choosing at our expense, without management's consent.

Avoiding Conflicts of Interest

We expect our directors, executives and employees to conduct themselves with the highest degree of integrity, ethics and honesty. Our credibility and reputation depend upon the good judgment, ethical standards and personal integrity of each director, executive and employee. In order to provide assurances to the Company and its stockholders, we have implemented standards of business conduct, which provide clear conflict of interest guidelines to its employees and directors, as well as an explanation of reporting and investigatory procedures.

96

Providing Transparency

We believe that it is important that stockholders understand our governance practices. In order to help ensure transparency of our practices, we have posted information regarding our corporate governance procedures on our website at www.OrbitalInfrastructureGroup.com.

Whistleblower Policy

In furtherance of our governance transparency and ethical standards, we adopted a comprehensive Whistleblower Policy that encourages employees to report to proper authorities incorrect financial reporting, unlawful activity, activities that are not in line with the Orbital Infrastructure Group Code of Business Conduct or activities, which otherwise amount to serious improper conduct. Our Whistleblower Policy is posted on our website at www.OrbitalInfrastructureGroup.com.

Accuracy of All Public Disclosure

It is the Company's policy that all public disclosure made by the Company should be accurate and complete, fairly present, in all material respects, the Company's financial condition and results of operations, and be made on a timely basis as required by applicable laws and securities exchange requirements. In order to oversee this policy, a Disclosure Committee Charter has been adopted by the Chief Executive Officer and Chief Financial Officer and ratified by our Audit Committee. You can view a copy of this document on our website at www.OrbitalInfrastructureGroup.com or obtain a copy by making a written request to the Company at Orbital Infrastructure Group, Inc., 5444 Westheimer Road Suite 1650 Houston, Texas 77056.

Communications with the Board of Directors

Stockholders may communicate with the board of directors by writing to the Company at Orbital Infrastructure Group, Inc., 5444 Westheimer Road Suite 1650 Houston, Texas 77056. Stockholders who would like their submission directed to a member of the board may so specify and the communication will be forwarded as appropriate.

Standards of Business Conduct

The board of directors has adopted a Code of Ethics and Business Conduct for all our employees and directors, including the Company's principal executive and senior financial officers. You can obtain a copy of these documents on our website at www.OrbitalInfrastructureGroup.com or by making a written request to the Company at Orbital Infrastructure Group, Inc., 5444 Westheimer Road Suite 1650 Houston, Texas 77056. We will disclose any amendments to the Code of Ethics and Business Conduct or waiver of a provision therefrom on our website at www.OrbitalInfrastructureGroup.com.

Ensuring Auditor Independence

We have taken several steps to ensure the continued independence of our independent registered public accounting firm. That firm reports directly to the Audit Committee, which also has the ability to pre-approve or reject any non-audit services proposed to be conducted by our independent registered public accounting firm.

Committees of the Board and Meetings

At December 31, 2022, our board of directors consists of nine directors. Six of our nine directors are ‘‘independent’’ as defined in Rule 5605(a)(2) of The Nasdaq Stock Market. Our board of directors has the following standing committees: Audit Committee, Compensation Committee, Disclosure Committee, Investment Committee and Nominating Committee. Each of the committees operates under a written charter adopted by the board of directors. All committee charters are available on our website at OrbitalInfrastructureGroup.com.

Audit Committee

The Audit Committee is established pursuant to the Sarbanes-Oxley Act of 2002 for the purposes of overseeing the company’s accounts and financial reporting processes and audits of its financial statements. The Audit Committee reviews the financial information that will be provided to the stockholders and others, the systems of internal controls established by management and the board and the independence and performance of the Company’s audit process. The Audit Committee is directly responsible for, among other things, the appointment, compensation, retention and oversight of our independent registered public accounting firm, review of financial reporting, internal company processes of business/financial risk and applicable legal, ethical and regulatory requirements. During 2022, the Audit Committee held seven formal meetings.

97

At December 31, 2022, the Audit Committee is comprised of Paul T. Addison, Chairman, C. Stephen Cochennet, and Corey A. Lambrecht. Messrs. Addison, Cochennet, and Lambrecht are independent in accordance with Rule 10A-3 under the Securities Exchange Act of 1934 and Rule 5605(a)(2) of The Nasdaq Stock Market.

Audit Committee Report

THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER COMPANY FILING UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES THIS REPORT BY REFERENCE THEREIN.

Audit Committee Report

The Audit Committee reviews the financial information that will be provided to the stockholders and others, the systems of internal controls established by management and the board and the independence and performance of the Company’s audit process.

The Audit Committee has:

• reviewed and discussed with management the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K and the most recent Quarterly Report on Form 10-Q;

• discussed with PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by General Auditing Standard 1301: Communications with Audit Committees as adopted by the Public Company Accounting Oversight Board; and

• received the written disclosures and letter from PricewaterhouseCoopers LLP as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP its independence from Orbital Infrastructure Group.

Based on these reviews and discussions, the Audit Committee has recommended that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The Audit Committee has also considered whether the amount and nature of non-audit services provided by PricewaterhouseCoopers  LLP is compatible with the auditor’s independence and determined that it is compatible.

Submitted by: Audit Committee by

Paul T. Addison, Chairman

C. Stephen Cochennet

Corey A. Lambrecht

Nominating Committee

The nominating committee consists of all of the members of the board of directors who are ‘‘independent directors’’ within the meaning of Rule 5605(a)(2) of The Nasdaq Stock Market. The nominating committee is responsible for the evaluation of nominees for election as director, the nomination of director candidates for election by the stockholders and evaluation of sitting directors. The board has developed a formal policy for the identification and evaluation of nominees, Charter of the Nominating Committee of the Board of Directors, which can be reviewed on our website at OrbitalInfrastructureGroup.com. In general, when the board determines that expansion of the board or replacement of a director is necessary or appropriate, the nominating committee will review, through candidate interviews with members of the board and management, consultation with the candidate's associates and through other means, a candidate's honesty, integrity, reputation in and commitment to the community, judgment, personality and thinking style, willingness to invest in the Company, residence, willingness to devote the necessary time, potential conflicts of interest, independence, understanding of financial statements and issues, and the willingness and ability to engage in meaningful and constructive discussion regarding Company issues. The committee reviews any special expertise, for example, that qualifies a person as an audit committee financial expert, membership or influence in a geographic or business target market, or other relevant business experience. To date the Company has not paid any fee to any third party to identify or evaluate, or to assist it in identifying or evaluating, potential director candidates.

98

The nominating committee considers director candidates nominated by stockholders during such times as the Company is actively considering obtaining new directors. Candidates recommended by stockholders will be evaluated based on the same criteria described above. Stockholders desiring to suggest a candidate for consideration should send a letter to the Company's secretary and include: (a) a statement that the writer is a stockholder (providing evidence if the person's shares are held in street name) and is proposing a candidate for consideration; (b) the name and contact information for the candidate; (c) a statement of the candidate's business and educational experience; (d) information regarding the candidate's qualifications to be director, including but not limited to an evaluation of the factors discussed above which the board would consider in evaluating a candidate; (e) information regarding any relationship or understanding between the proposing stockholder and the candidate; (f) information regarding potential conflicts of interest and (g) a statement that the candidate is willing to be considered and willing to serve as director if nominated and elected. Because of the small size of the Company and the limited need to seek additional directors, there is no assurance that all stockholder proposed candidates will be fully considered, that all candidates will be considered equally or that the proponent of any candidate or the proposed candidate will be contacted by the Company or the board and no undertaking to do so is implied by the willingness to consider candidates proposed by stockholders.

Disclosure Committee

We have formed a Disclosure Committee, which has been adopted by our CEO and CFO (‘‘Principal Officers’’) and ratified by our Audit Committee. The Disclosure Committee assists our Principal Officers in fulfilling their responsibility for oversight of the accuracy, completeness and timeliness of our public disclosures including, but not limited to our SEC filings, press releases, correspondence disseminated to security holders, presentations to analysts and release of financial information or earnings guidance to security holders or the investment community. The Disclosure Committee consists of our Principal Officers, the individual or representative of the firm primarily charged with investor/public relations, the Audit Committee Chairman and outside SEC counsel. Our Executive Chairman is Chairman of the committee. Our Senior Officers may replace or add new members from time to time. Our Senior Officers have the option to assume all the responsibilities of this committee or designate a committee member, who shall be a person with expertise in SEC and SRO rules and regulations with respect to disclosure, who shall have the power, acting together with our Senior Officers, to review and approve disclosure statements when time or other circumstances do not permit the full committee to meet. You may review the full text of our Disclosure Committee Charter on our website, OrbitalInfrastructureGroup.com, under the link, governance.

Generally, the committee serves as a central point to which material information should be directed and a resource for people who have questions regarding materiality and the requirement to disclose. In discharging its duties, the committee has full access to all Company books, records, facilities and personnel, including the board of directors, Audit Committee, independent public accountants and outside counsel.

Investment Committee

The purpose of the investment committee is to administer and to operate the portfolio. The members of the investment committee are fiduciaries of the portfolio, with responsibility for overseeing investment policies, general policies, guidelines, investment performance and related risk management. Committee members will fulfill their duties solely on behalf of the company’s mission. In addition to aligning investment policies and strategies with the company’s short- and long-term goals, investment committees must set benchmarks to evaluate long-term objectives and continually evaluate their strategies to keep pace with market fluctuations and changes.

The Investment Committee shall also provide initial oversight and analysis of potential acquisition targets being considered by Management. In that capacity, Investment Committee members may, among other things, participate in reviewing initial due diligence; visit prospective acquisition targets; participate in strategy and other discussions with Management; and, where appropriate, more.

At December 31, 2022, the Investment Committee is comprised of C. Stephen Cochennet, Corey A. Lambrecht, Chairman, and Nicholas M. Grindstaff, CFO.

99

Compensation Committee

The Compensation Committee discharges the board’s responsibilities relating to general compensation policies and practices and to compensation of our executives. In discharging its responsibilities, the Compensation Committee establishes principles and procedures in order to ensure to the board and the stockholders that the compensation practices of the Company are appropriately designed and implemented to attract, retain and reward high quality executives and are in accordance with all applicable legal and regulatory requirements. In this context, the Compensation Committee’s authority, duties and responsibilities are:

• To annually review the Company’s philosophy regarding executive compensation.

• To periodically review market and industry data to assess the Company’s competitive position, and to retain any compensation consultant to be used to assist in the evaluation of directors’ and executive officers’ compensation.

• To establish and approve the Company goals and objectives, and associated measurement metrics relevant to compensation of the Company’s executive officers.

• To establish and approve incentive levels and targets relevant to compensation of the executive officers.

• To annually review and make recommendations to the board to approve, for all principal executives and officers, the base and incentive compensation, taking into consideration the judgment and recommendation of the Chief Executive Officer for the compensation of the principal executives and officers.

• To separately review, determine and approve the Chief Executive Officer’s applicable compensation levels based on the Committee’s evaluation of the Chief Executive Officer’s performance considering the Company’s and the individual goals and objectives.

• To review for any related party employee situations, to ensure appropriate controls are implemented surrounding compensation changes, bonuses and performance reviews of the related party employee, and to participate in such controls as appropriate.

• To periodically review and make recommendations to the board with respect to the compensation of directors, including board and committee retainers, meeting fees, equity-based compensation and such other forms of compensation as the Compensation Committee may consider appropriate.

• To administer and annually review the Company’s incentive compensation plans and equity-based plans.

• To review and make recommendations to the board regarding any executive employment agreements, any proposed severance arrangements or change in control and similar agreements/provisions, and any amendments, supplements or waivers to the foregoing agreements, and any perquisites, special or supplemental benefits.

• The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser.

• The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultant, legal counsel and other adviser retained by the Committee. The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to a compensation consultant, legal counsel or any other adviser retained by the Committee.

• The Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the Committee, other than in-house legal counsel, only after taking into consideration the following factors:

(i) the provision of other services to the Company by the person that employs the compensation consultant, legal counsel or other adviser;

(ii) the amount of fees received from the Company by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser;

(iii) the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;

(iv) any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the Committee;

(v) any stock of the Company owned by the compensation consultant, legal counsel or other adviser; and

100

(vi) any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company.

• The Committee is not required to implement or act consistently with the advice or recommendations of the compensation consultant, legal counsel or other adviser to the Committee.

Compensation Committee Members

The Compensation Committee of the board of directors is appointed by the board of directors to discharge the board’s responsibilities with respect to all forms of compensation of the Company’s executive officers, to administer the Company’s equity incentive plans and to produce an annual report on executive compensation for use in the Company’s Form 10-K and the proxy statement on Schedule 14A. At December 31, 2022, the Compensation Committee consists of two independent members of the board of directors, Messrs. Corey A. Lambrecht, and C. Stephen Cochennet, both of whom are ‘‘independent directors’’ within the meaning of Rule 5605(a) (2) of the Nasdaq Stock Market.

Committee Meetings

Our Compensation Committee meets formally and informally as often as necessary to perform its duties and responsibilities. The Compensation Committee held three formal meetings during fiscal 2022. On an as requested basis, our Compensation Committee receives and reviews materials prepared by management, consultants or committee members, in advance of each meeting. Depending on the agenda for the particular meeting, these materials may include, among other factors:

• minutes and materials from the previous meeting(s);

• reports on year-to-date Company financial performance versus budget;

• reports on progress and levels of performance of individual and Company performance objectives;

• reports on the Company’s financial and stock performance versus a peer group of companies;

• reports from the Committee’s compensation consultant regarding market and industry data relevant to executive officer compensation;

• reports and executive compensation summary worksheets, which sets forth for each executive officer: current total compensation and incentive compensation target percentages, current equity ownership holdings and general partner ownership interest and current and projected value of each and all such compensation elements, including distributions and dividends therefrom, over a five-year period.

Compensation Committee Charter

Our Compensation Committee Charter is posted on our website at www.OrbitalInfrastructureGroup.com.

Compensation Committee Interlocks and Insider Participation

None of the members of the Company’s Compensation Committee is or has at any time during the last completed fiscal year been an officer or employee of the Company. None of the Company’s executive officers has served as a member of the board of directors, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on the Company’s board of directors or Compensation Committee during the last completed fiscal year.

101

Item 11.      Executive Compensation

Summary Compensation Table

The following table sets forth the compensation paid and accrued to be paid by the Company for the fiscal years 2022 and 2021 to the Company’s Chief Executive Officer, Chief Financial Officer and Executive Chairman/Chief Legal Counsel

Summary Compensation Table

Name and Principal Position	Year		Salary (dollars)				Stock Awards (dollars)				Option Awards (dollars)				Non-equity Incentive Plan Compensation (dollars)				All Other Compensation (dollars)		Total (dollars)
William J. Clough, Executive Chairman/ Chief Legal Officer/former CEO/ Director (1)	2022	$	850,000	(2	)	$	535,500	(2	)	$	—	(2	)	$	200,000	(2	)	$	10,988	$	1,596,488
	2021		831,442	(2	)		—	(2	)		3,203,800	(2	)		531,250	(2	)		18,669		4,585,161
James F. O'Neil, CEO/Vice Chairman/Director (3)	2022		800,000	(4	)		642,600	(4	)		—	(4	)		—	(4	)		36,764		1,479,364
	2021		800,000	(4	)		—	(4	)		5,695,644	(4	)		—	(4	)		41,271		6,536,915
Nicholas M. Grindstaff, CFO (5)	2022		650,000	(6	)		472,500	(6	)		—	(6	)		650,000	(6	)		33,380		1,805,880

Footnotes:

1. Mr. Clough joined the Company on September 1, 2005. Effective September 13, 2007, Mr. Clough was appointed CEO/President of Orbital Infrastructure Group and Chief Executive Officer of all wholly owned subsidiaries of the Company. Effective October 1, 2019 Mr. Clough stepped down as Chief Executive Officer and was appointed Executive Chairman and Chief Legal Officer.

2. Mr. Clough is employed under a two-year extension of an employment contract with the Company, which became effective May 14, 2019 and was extended effective April 1, 2022. Said contract extension provides, in relevant part, for salary in year 1 of $850 thousand with subsequent year increases at the discretion of the Compensation Committee, which will take into consideration, among other things, cost-of-living, performance, and increase in shareholder returns. His employment agreement includes bonus provisions for each calendar year targeted at 100% of base salary to be based on performance objectives, goals and milestones for each calendar year including company performance. Bonuses are approved based on various performance-related factors and an evaluation of current performance and includes a discretionary bonus based upon the reasonable judgment of the compensation committee. Employee has the ability to earn a larger bonus based on the performance criteria set forth and the reasonable judgment and discretion of the compensation committee. The agreement provides for up to $9,999 of annual premium life insurance expenses along with the ordinary benefits provided to employees of the Company. The agreement entitles Mr. Clough to severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans.

102

3. Mr. O'Neil was appointed Director July 9, 2019 and was appointed Vice Chairman and Chief Executive Officer effective October 1, 2019.

4. Mr. O'Neil is employed under a two-year extension of an employment contract with the Company, which became effective October 1, 2019 and was extended effective April 1, 2022. Said contract extension provides, in relevant part, for salary in year 1 of $800 thousand with subsequent year increases at the discretion of the Compensation Committee, which will take into consideration, among other things, cost-of-living, performance, and increase in shareholder returns. The employment agreement includes bonus provisions for each calendar year targeted at 100% of base salary to be based on performance objectives, goals and milestones for each calendar year including company performance. Bonuses are approved based on various performance-related factors and an evaluation of current performance and includes a discretionary bonus based upon the reasonable judgment of the compensation committee. Employee has the ability to earn a larger bonus based on the performance criteria set forth and the reasonable judgment and discretion of the compensation committee. The agreement provides for up to $9,999 of annual premium life insurance expenses along with the ordinary benefits provided to employees of the Company. The agreement entitles Mr. O'Neil to a severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans.

5. Mr. Grindstaff joined the Company on November 15, 2021 and was appointed Chief Financial Officer effective November 16, 2021.

6. Mr. Grindstaff is employed under a four-year employment contract with the Company, which became effective November 15, 2021. Said contract provides, in relevant part, for salary in year 1 of $650 thousand with minimum annual increases of 3% per year. The employment agreement includes minimum bonus provisions for each calendar year of 100% of his annual salary. Mr. Grindstaff also receives long-term incentive compensation in the form of restricted stock units, which vest over thirty-six months. The agreement provides for up to $9,999 of annual premium life insurance expenses along with the ordinary benefits provided to employees of the Company. The agreement entitles Mr. Grindstaff to a severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans. 

7. All other compensation includes health care, insurance and 401(k) matching benefits.

103

The following table summarizes potential payments upon termination of employment to each of the named executive officers employed on the last day of our most recently completed fiscal year. The amounts set forth in the table are based on the assumption that the triggering event occurred on the last business day of our last completed fiscal year.

		Involuntary
		Termination or
		Resignation for			Termination
		Good Reason			upon Disability
Name	Benefit
	Salary and bonus continuation	$	4,250,000	(1)	$	318,750	(1)
William J. Clough, Executive Chairman/ Chief Legal Officer/ former CEO/Director	Benefits		16,482	(1)		16,482	(1)
	Salary and bonus continuation		4,000,000	(2)		300,000	(2)
James F. O'Neil, CEO/ Director	Benefits		30,646	(2)		30,646	(2)
	Salary and bonus continuation		3,250,000	(3)		243,750	(3)
Nicholas M. Grindstaff, CFO	Benefits		22,620	(3)		22,620	(3)

1. Mr. Clough's employment contract with the Company entitles Mr. Clough to a severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans. Under involuntary termination without cause or resignation for good reason, Mr. Clough would receive any amounts earned, accrued or owing but not yet paid; full vesting of any unvested stock options and any deferred past bonuses that have been earned but not paid. Should Mr. Clough be terminated on account of disability he is entitled to 75% of his then current annual base salary for six months and eighteen months of medical coverage.

2. Mr. O'Neil's employment contract with the Company entitles Mr. O'Neil to a severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans. Under involuntary termination without cause or resignation for good reason, Mr. O'Neil would receive any amounts earned, accrued or owing but not yet paid; full vesting of any unvested stock options and any deferred past bonuses that have been earned but not paid. Should Mr. O'Neil be terminated on account of disability he is entitled to 75% of his then current annual base salary for six months and eighteen months of medical coverage.

3. Mr. Grindstaff's employment contract with the Company entitles Mr. Grindstaff to a severance package of 2.5 times the sum of annual base salary and target bonus along with eighteen months of medical coverage under the Company's medical plans. Under involuntary termination without cause or resignation for good reason, Mr. Grindstaff would receive any amounts earned, accrued or owing but not yet paid; full vesting of any unvested stock options and any deferred past bonuses that have been earned but not paid. Should Mr. Grindstaff be terminated on account of disability he is entitled to 75% of his then current annual base salary for six months and eighteen months of medical coverage.

104

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the outstanding equity awards at December 31, 2022 to each of the named executive officers:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Name	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)
James F. O'Neil (1)		765,000	$	0.197
William J. Clough (1)		637,500		0.197
Nicholas Grindstaff (1)		500,000		0.197

Footnotes:

1. Effective September 15, 2022, Mr. O'Neil, Mr. Clough, and Mr. Grindstaff received 1,020,000, 850,000 and 750,000 restricted stock units, respectively, to vest over three years for Mr. O'Neil and Mr. Clough and over two years for Mr. Grindstaff, with the first tranche vesting immediately.

105

Director Compensation

For 2022, each of our directors received the following compensation pursuant to our director compensation plan:

Non-employee directors earned/received annual compensation of $100,000.

• The $100,000 annual compensation for non-employee directors is issued in the form of $50,000 cash compensation and $50,000 common stock calculated by using the Nasdaq Stock Market closing price per share on the date of issuance. In addition, the chairman and member of the Investment Committee received $6,500 of additional cash compensation for their services. 

• At the election of each director, all or any portion of the cash compensation may be converted to stock purchase options calculated by using the strike price of ten percent (10%) above the Nasdaq Stock Market closing price per share on the date of grant. 

• At the election of each director, all or any portion of the cash compensation may be converted to stock calculated by using the Nasdaq Stock Market closing price per share on the date of conversion. 

The following table sets forth the compensation of the non-employee directors for the fiscal year ended December 31, 2022:

	Fees						Non-
	earned						Equity		Nonqualified
	or						Incentive		Deferred
	paid in		Stock		Option		Plan		Compensation		All Other
	Cash		Awards		Awards		Compensation		Earnings		Compensation		Total
Name	($)		($)		($)		($)		($)		($)		($)
Paul Addison, Director	$	50,001	$	49,999	$	—	$	—	$	—	$	—	$	100,000
C. Stephen Cochennet, Director		56,501		49,999		—		—		—		—		106,500
Corey A. Lambrecht, Director		56,501		49,999		—		—		—		—		106,500
Jerry Sue Thornton, Director		50,001		49,999		—		—		—		—		100,000
Sarah Tucker, Director		50,001		49,999		—		—		—		—		100,000
La Forrest Williams, Director		50,001		49,999		—		—		—		—		100,000

106

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding beneficial ownership of our voting shares as of December 31, 2022 by: (i) each stockholder known by us to be the beneficial owner of 5% or more of the outstanding voting shares, (ii) each of our directors and executives and (iii) all directors and executive officers as a group. Except as otherwise indicated, we believe that the beneficial owners of the voting shares listed below, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Shares of common stock issuable upon exercise of options and warrants that are currently exercisable or that will become exercisable within 60 days of December 31, 2022 have been included in the table.

No shares of preferred stock are outstanding at the date of this report.

Beneficial Interest Table

			Percentages of
	Number of		Shares
	Securities		Beneficially
Name and Address of Beneficial Owner (1)	Owned		Owned (2)
Paul T. Addison (3)		61,706		*	%
William J. Clough (4)		943,011		*	%
James F. O'Neil (5)		1,947,831		1.24	%
Nicholas M. Grindstaff (6)		296,052		*	%
C. Stephen Cochennet (7)		297,617		*	%
Corey A. Lambrecht (8)		243,322		*	%
Jerry Sue Thornton (9)		59,659		*	%
Sarah Tucker (10)		147,328		*	%
La Forrest V. Williams (11)		59,659		*	%
Irradiant Partners, LP, 201 Santa Monica Blvd, Suite 500, Santa Monica, CA 90401		11,199,995		7.13	%
Officers, Directors, Executives as Group		4,056,185		2.58	%

Footnotes:

1.	Except as otherwise indicated, the address of each beneficial owner is c/o Orbital Infrastructure Group, Inc., 5444 Westheimer Road, Houston Suite 1650, Texas 77056.
2.	Calculated on the basis of 157,503,312 shares of common stock outstanding at December 31, 2022 except that shares of common stock underlying options and RSUs exercisable within 60 days and issued within 60 days of the date hereof are deemed to be outstanding for purposes of calculating the beneficial ownership of securities of such holder of options and shares. A * denotes less than 1 percent beneficially owned.
3.	Mr. Addison is an Independent Director.
4.	Mr. Clough is a Director, Executive Chairman and Chief Legal Officer of Orbital Infrastructure Group, Inc.
5.	Mr. O'Neil is a Director, Vice Chairman, and Chief Executive Officer of Orbital Infrastructure Group, Inc.
6.	Mr. Grindstaff is Chief Financial Officer of Orbital Infrastructure Group, Inc.
7.	Mr. Cochennet is an Independent Director.
8.	Mr. Lambrecht is an Independent Director.  Mr. Lambrecht’s shares include vested options to purchase 10,000 common shares.
9.	Ms. Thornton is an Independent Director.
10.	Ms. Tucker is an Independent Director.
11.	Mr. Williams is an Independent Director.

We relied upon Section 4(2) of the Securities Act of 1933 as the basis for an exemption from registration for the issuance of the above securities.

107

Employee Equity Incentive Plans

At December 31, 2022, the Company had outstanding the following equity compensation plan information:

	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Future issuance under equity compensation plans (excluding securities reflected in column )
Plan Category
Equity compensation plans approved by security holders		—	$	—		3,039,900
Equity compensation plans not approved by security holders		197,887		6.46		—
		197,887	$	6.46		3,039,900

Equity Compensation Plans Approved by Stockholders

At the 2020 Annual Meeting of Shareholders, the Company’s shareholders approved the Orbital Infrastructure Group 2020 Incentive Award Plan and authorized a share limit of 2,000,000 shares. At the 2021 Annual Meeting of Shareholders, the Company's shareholders approved an increase in authorized share limit to 5,000,000.  In 2022, the Company's shareholders approved an additional 5,000,000 shares.

The purpose of the Orbital Infrastructure Group 2020 Incentive Award Plan is to enhance our ability to attract, retain and motivate persons who make (or are expected to make) important contributions to Orbital Infrastructure Group by providing these individuals with equity ownership opportunities. Equity awards are intended to motivate high levels of performance and align the interests of our directors, employees and consultants with those of our stockholders by giving directors, employees and consultants the perspective of an owner with an equity stake in Orbital Infrastructure Group and providing a means of recognizing their contributions to the success of Orbital Infrastructure Group. Our board of directors and management believe that equity awards are necessary to remain competitive in its industry and are essential to recruiting and retaining the highly qualified employees who help Orbital Infrastructure Group meet its goals. A primary purpose of the plan is to provide OIG with appropriate capacity to issue equity compensation in anticipation of future acquisitions. 

The Orbital Infrastructure Group 2020 Incentive Award Plan provides for the grant of stock options, including ISOs and nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards. Certain awards under the Orbital Infrastructure Group 2020 Incentive Award Plan may constitute or provide for payment of “nonqualified deferred compensation” under Section 409A of the Code. All awards under the Orbital Infrastructure Group 2020 Incentive Award Plan will be set forth in the award agreement, which will detail the terms and conditions of awards, including any applicable vesting and payment terms and post termination exercise limitations. All Awards shall be subject to a minimum vesting of one year from the Grant Date. A brief description of each award type follows.

● Stock Options and SARs. Stock options provide for the purchase of shares of common stock of Orbital Infrastructure Group in the future at an exercise price set on the grant date. ISOs, in contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from Orbital Infrastructure Group an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The plan administrator will determine the number of shares covered by each option and SAR, the exercise price of each option and SAR and the conditions and limitations applicable to the exercise of each option and SAR. The exercise price of a stock option or SAR will not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of a stock option or SAR may not be longer than five years and are subject to any limitations of the Plan or that the Administrator may impose or provide in the Award Agreement.

● Restricted Stock. Restricted stock is an award of nontransferable shares of common stock of Orbital Infrastructure Group that remain forfeitable unless and until specified conditions are met and which may be subject to a purchase price. Upon issuance of restricted stock, recipients generally have the rights of a stockholder with respect to such shares, which generally include the right to receive dividends and other distributions in relation to the award. The terms and conditions applicable to restricted stock will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan.

● RSUs. RSUs are contractual promises to deliver shares of common stock of Orbital Infrastructure Group in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of common stock of Orbital Infrastructure Group prior to the delivery of the underlying shares (i.e., dividend equivalent rights). The Company accounts for forfeitures of employee awards as they occur. The plan administrator may provide that the delivery of the shares underlying RSUs will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to RSUs will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan or as provided in the Award Agreement.

● Other Stock or Cash Based Awards. Other stock or cash-based awards are awards of cash, shares of common stock of Orbital Infrastructure Group and other awards valued wholly or partially by referring to, or otherwise based on, shares of common stock of Orbital Infrastructure Group or other property. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled. The plan administrator will determine the terms and conditions of other stock or cash-based awards, which may include any purchase price, performance goal, transfer restrictions and vesting conditions, subject to the conditions and limitations in the Orbital Infrastructure Group 2020 Incentive Award Plan or as provided in the Award Agreement.

108

The Orbital Infrastructure Group 2020 Incentive Award Plan provides that the plan administrator may establish compensation for non-employee directors from time to time subject to the Orbital Infrastructure Group 2020 Incentive Award Plan’s limitations. The plan administrator will from time to time determine the terms, conditions and amounts of all non-employee director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that, the sum of any cash compensation or other compensation and the grant date fair value of any equity awards granted under the Orbital Infrastructure Group 2020 Incentive Award Plan as compensation for services as a non-employee director during any fiscal year may not exceed $250,000 per year of a non-employee director’s service as a non-employee director. The non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving the non-employee Director.

As of December 31, 2022 there are 3,039,900 remaining shares available to grant under the 2020 Incentive Award Plan.

Equity Compensation Plans Not Approved by Stockholders

Pursuant to a board resolution in January 2009, following recommendation by the Compensation Committee, the 2009 Equity Incentive Plan (Executive), a Non-Qualified Stock Option Plan, was created and funded with 4,200,000 shares of $0.001 par value common stock. The Compensation Committee was appointed as the Plan Administrator to manage the plan. In October 2010 and September 2012, the board of directors authorized an additional 3,060,382 and 330,000 options, respectively, under the 2009 Equity Incentive Plan (Executive).

Issuances of stock options under the 2009 Equity Incentive Plan (Executive) were made to attract, retain and motivate executive and management employees and directors and to encourage these individuals to acquire an equity interest in the Company, to make monetary payments to certain management employees and directors based upon the value of the Company’s stock and to provide these individuals with an incentive to maximize the success of the Company and further the interest of the shareholders. The 2009 Plan allowed for the issuance of Incentive Non-Statutory Options.

The Company has outstanding at December 31, 2022, the following options issued under equity compensation plans not approved by security holders:

• During 2012, the Company granted options to purchase restricted common stock at $4.56 per share to officers and directors as follows: 19,800 options that vest one year after the April 16, 2012 grant date; 64,875 options that vest over four years, 25% at one year after the grant date, thereafter in equal monthly installments, and 330,000 options to purchase restricted common stock at $6.00 per share were granted to an officer that vest in equal monthly installments over the course of forty-eight consecutive months beginning September 2012. Of these 2012 grants, zero remain outstanding and fully vested at December 31, 2022.

• During 2013, the Company issued 350,000 options to purchase restricted common stock at $6.25 per share to three officers as follows: one third that vest one year after the June 24, 2013 grant date, one third that vest two years after the grant date and the balance that vest three years after the grant date. At December 31, 2022, 150,000 of these 2013 granted options are outstanding and fully vested.

• During 2014, the Company issued options to purchase 10,000 shares of restricted common stock at a price of $6.92 per share to each board member who is not an employee of the Company. The options vested in twelve equal installments during 2014. The Company issued options to purchase 42,890 restricted shares of common stock at a price of $6.92 per share to two board members, who chose to receive a portion of their annual board compensation in the form of equity. The Company granted options to purchase 7,500 restricted shares of common stock at a price of $8.15 per share to each of the two then newly elected directors that vested August 31, 2015. Of these 2014 options grants, 47,887 options are outstanding and fully vested at December 31, 2022.

As of December 31, 2022, there are no remaining shares available to grant under the 2009 Equity Incentive Plan (Executive).

The description of the Company’s capital stock does not purport to be complete and is subject to and qualified by its Articles of Incorporation, Bylaws, and amendments thereto and by the provisions of applicable Colorado law. The Company’s transfer agent is Computershare Trust Company, Inc., 350 Indiana Street, Suite 800, Golden, Colorado 80401.

Item 13.  Certain Relationships and Related Transactions and Director Independence

The Board of Directors is responsible for the review and approval of all related party transactions. Although the Board does not have written policies and procedures with respect to the review of related party transactions, we intend that any such transactions will be reviewed by the Board of Directors or one of its committees, which will consider all relevant facts and circumstances and will consider, among other factors:

• the material terms of the transaction;

• the nature of the relationship between the Company and the related party;

• the significance of the transaction to the Company; and

• whether or not the transaction would be likely to impair (or create the appearance of impairing) the judgment of a director or executive officer to act in the best interest of the Company.

Except as set forth herein, no related party of the Company, including, but not limited to, any director, officer, nominee for director, immediate family member of a director or officer, immediate family member of any nominee for director, security holder that beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to its outstanding shares, or immediate family member of any such security holder, since the beginning of fiscal year 2022, has any material interest, direct or indirect, in any transaction or in any presently proposed transaction with the Company where the amount involved exceeds $120,000 which has or will materially affect the Company.

Chief Legal Officer and Executive Chairman of the Board of Directors, William J. Clough’s son, Nicholas J. Clough, serves as Vice President of Greenfield Operations. Additional Information on Nicholas Clough’s compensation is included in Note 11 Related Party Transactions, to the Consolidated Financial Statements under Part II, Item 8, ‘‘Financial Statements and Supplementary Data.’’

109

Item 14.  Principal Accountants Fees and Services

Fees or controlled billings for services billed by the Company’s principal accountant, PricewaterhouseCoopers in 2022 and Grant Thornton LLP in 2021, were as follows:

	For the Years Ended December 31,
(In thousands)	2022		2021
Audit fees (1)	$	800	$	725
Tax fees and other fees (2)		—		106
Total Fees	$	800	$	831

(1) Includes fees for audit of the Company's consolidated financial statements, review of the related quarterly financial statements, and services that are normally provided by our independent registered public accounting firm in connection with the statutory and regulatory filings, including reviews of documents filed with the SEC.

(2) Includes fees for tax planning and tax compliance/preparation fees for professional services rendered by our independent registered public accounting firm to certain subsidiaries of the Company.

In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder, the Audit Committee has adopted an informal approval policy that it believes will result in an effective and efficient procedure to pre-approve services performed by the independent registered public accounting firm.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons owning more than 10% of our common stock to file reports of ownership and reports of changes of ownership with the Securities and Exchange Commission. These reporting persons are required to furnish us with copies of all Section 16(a) forms that they file. We have made all officers and directors aware of their reporting obligations and have appointed an employee to oversee Section 16 compliance for future filings.

Stockholder Communications

Company stockholders who wish to communicate with the board of directors or an individual director may write to Orbital Infrastructure Group, Inc., 5444 Westheimer Road, Suite 1650, Houston, TX 77056 or to the attention of an individual director. Your letter should indicate that you are a stockholder and whether you own your shares in street name. Letters received will be retained until the next Board meeting when they will be available to the addressed director. Such communications may receive an initial evaluation to determine, based on the substance and nature of the communication, a suitable process for internal distribution, review and response or other appropriate treatment. There is no assurance that all communications will receive a response.

Certain Provisions of the Articles of Incorporation and Colorado Business Corporation Act Relating to Indemnification of Directors and Officers

The Colorado General Corporation Act, as revised, provides that if so provided in the articles of incorporation, the corporation shall eliminate or limit the personal liability of a director to the corporation or to its stockholders for monetary damages for breach of fiduciary duty as a director; except that any such provision shall not eliminate or limit the liability of a director to the corporation or to its stockholders for monetary damages for any breach of the director's duty of loyalty to the corporation or to its stockholders, acts or omissions not in good faith or, which involve intentional misconduct or a knowing violation of law, unlawful distributions, or any transaction from which the director directly or indirectly derived an improper personal benefit.

Our Articles of Incorporation and bylaws provide that a person who is performing his or her duties shall not have any liability by reason of being or having been a director of the corporation and that the Company shall indemnify and advance expenses to a director or officer in connection with a proceeding to the fullest extent permitted or required by and in accordance with the indemnification sections of Colorado statutes.

Insofar as indemnification for liabilities may be invoked to disclaim liability for damages arising under the Securities Act of 1933, as amended, or the Securities Act of 1934 (collectively, the ‘‘Acts’’), as amended, it is the position of the Securities and Exchange Commission that such indemnification is against public policy as expressed in the Acts and are therefore, unenforceable.

110

Reports to Stockholders

We intend to voluntarily send Form 10-Ks to our stockholders, which will include audited consolidated financial statements. We are a reporting company and file reports with the Securities and Exchange Commission (SEC), including this Form 10-K as well as quarterly reports under Form 10-Q. The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The company files its reports electronically and the SEC maintains an Internet site that contains reports, proxy and information statements and other information filed by the company with the SEC electronically. The address of that site is www.sec.gov.

The company also maintains an Internet site, which contains information about the company, news releases, governance documents and summary financial data. The address of that site is www.OrbitalInfrastructureGroup.com.

Part IV

Item 15. Exhibits, Financial Statement Schedules

No schedules are included because the required information is inapplicable, not required or are presented in the financial statements or the related notes thereto.

111

EXHIBITS

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

Exhibit No.	Description
3.12(i) 13	Certificate of Formation.
3.13(ii) 13	Bylaws of Orbital Infrastructure Group, Inc.
10.91 2	Four-year lease for Irving, Texas facility effective January 1, 2020.
10.94 3	10-year lease for Tualatin, OR facility effective December 21, 2018.
10.95 4	Employment agreement with William J. Clough effective May 14, 2019.
10.97 5	Employment agreement with James F. O'Neil effective October 1, 2019.
10.104 6	Registered Direct Offering for the sale and issuance by the Company of an aggregate of 5,555,556 common shares for gross proceeds of $10.0 million filed January 4, 2021.
10.105 7	Placement Agency Agreement for the sale of shares at a price to the public of $1.80 per share.
10.106 8	Registered Direct Offering for the sale and issuance of an aggregate of 10,000,000 common shares at an offering price of $3.50.
10.107 9	Placement Agency Agreement for the sale of shares at a price to the public of $3.50 per share.
10.108 10	Amended and restated Securities Purchase Agreement with institutional investor dated February 12, 2021.
10.111 11	Note Purchase Agreement with institutional investor for issuance of note payable dated March 23, 2021.
10.113 12	Note purchase Agreement with institutional investor for issuance of note payable dated December 20, 2021.
10.114 13	Employment agreement with Nick Grindstaff effective November 16, 2021.
23.1 13	Consent of PricewaterhouseCoopers, LLP
23.2 13	Consent of Grant Thornton, LLP
23.3 13	List of all subsidiaries, state of incorporation and name under which the subsidiary does business.
31.1 13	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2 13	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1 13	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 13	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 13	Inline XBRL-Related Documents.
101.INS 13	Inline XBRL Instance Document.
101.SCH 13	Inline XBRL Taxonomy Extension Schema Document.
101.CAL 13	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF 13	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB 13	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE 13	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 13	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

Footnotes to Exhibits:

1. Incorporated by reference to our Report on Form 8-K filed with the Commission on May 8, 2020.

112

2. Incorporated by reference to our Report on Form 10-K filed with the Commission on March 30, 2020.

3.	Incorporated by reference to our Report on Form 10-Q filed with the Commission on May 20, 2020.
4.	Incorporated by reference to our Report on Form 8-K filed with the Commission on November 18, 2020.
5.	Incorporated by reference to our Report on Form 424B5 Prospectus supplement filed with the Commission on January 4, 2021.
6.	Incorporated by reference to our Report on Form 8-K filed with the Commission on January 4, 2021.
7.	Incorporated by reference to our Report on Form 424B5 Prospectus supplement filed with the Commission on January 15, 2021.
8.	Incorporated by reference to our Report on Form 8-K filed with the Commission on January 15, 2021.
9.	Incorporated by reference to our Report on Form 8-K filed with the Commission on February 16, 2021.
10.	Incorporated by reference to our Report on Form 8-K filed with the Commission on April 6, 2020.
11.	Incorporated by reference to our Report on Form 8-K filed with the Commission on March 26, 2021.
12.	Incorporated by reference to our Report on Form 10-K filed with the Commission on March 31, 2022.
13.	Filed herewith.

Item 16. Form 10-K Summary

None.

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

Orbital Infrastructure Group, Inc.

Signature		Title	Date
By	/s/ James F. O'Neil	CEO/Principal Executive	April 6, 2023
	James F. O'Neil	Officer/Director
By	/s/ Nicholas M. Grindstaff	CFO/ Principal Financial	April 6, 2023
	Nicholas M. Grindstaff	and Accounting Officer

113

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities on the dates indicated.

Signature		Title	Date
By	/s/ James F. O'Neil	CEO/Principal Executive	April 6, 2023
	James F. O'Neil	Officer/Director
By	/s/ William J. Clough	Executive Chairman/Chief Legal	April 6, 2023
	William J. Clough	Counsel/Director
By	/s/ Nicholas M. Grindstaff	CFO/ Principal Financial	April 6, 2023
	Nicholas M. Grindstaff	and Accounting Officer
By	/s/ Paul Addison	Director	April 6, 2023
	Paul Addison
By	/s/ C. Stephen Cochennet	Director	April 6, 2023
	C. Stephen Cochennet
By	/s/ Corey A. Lambrecht	Director	April 6, 2023
	Corey A. Lambrecht
By	/s/ Jerry Sue Thornton	Director	April 6, 2023
	Jerry Sue Thornton
By	/s/ Sarah Tucker	Director	April 6, 2023
	Sarah Tucker
By	/s/ La Forrest Williams	Director	April 6, 2023
	La Forrest Williams

114

EX-3.12I

Exhibit 3.12(i)

Certificate of Formation

of

Orbital Infrastructure Group, Inc.

a Texas For-Profit Corporation

This certificate of formation (“Certificate of Formation”) is submitted for filing pursuant to the applicable provisions of the Texas Business Organizations Code, as amended from time to time (the “TBOC.”)

ARTICLE I

Entity Name, Type, and Initial Mailing Address

The name of the entity is Orbital Infrastructure Group, Inc. (the "Corporation"). The Corporation is a for-profit corporation. The initial mailing address of the Corporation is 1924 Aldine Western, Houston, Texas 77038-1204.

ARTICLE II

Registered Agent and Registered Office

The initial registered agent of the Corporation is an individual resident of Texas whose name is William J. Clough. The business address of the registered agent and the registered office address is 1924 Aldine Western, Houston, Texas 77038-1204.

ARTICLE III
Corporate Address

The address of the Corporation's principal office in this state is: 1924 Aldine Western, Houston, Texas 77038-1204.

ARTICLE IV

Capital

The aggregate number of shares which the Corporation shall have the authority to issue is 335,000,000 shares of which a portion shall be common stock and a portion shall be preferred stock, as described below.

1. Common Stock.  The aggregate number of common stock shares which the Corporation shall have the authority to issue is 325,000,000, each with $0.001 par value which shares shall be designated as “Common Stock.”  Subject to all of the rights of the Preferred stock as expressly provided herein, by law or by the Board of Directors pursuant to this Article, the Common Stock of the Corporation shall possess all such rights and privileges as are afforded to capital stock by applicable law in the absence of any express grant of rights or privileges in this Certificate of Formation, including, but not limited to, the following rights and privileges;

a. Dividends may be declared and set apart for payment on the Common Stock or of any assets or funds of the Corporation legally available for the payment of dividends;

b. The holders of Common Stock shall have unlimited voting rights, including the right to vote for the election of directors and on all other matters requiring stockholder action.  Each holder of Common Stock shall have one vote for each share of Common Stock standing in the holder’s name on the books of the Corporation and entitled to vote. Cumulative voting shall not be permitted in the election of directors or otherwise.

c. On the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and after paying or adequately providing for the payment of all of the Corporation’s obligations and amounts payable in liquidation, dissolution or winding up, and subject to the rights of the holders of Preferred Stock, if any, the net assets of the Corporation shall be distributed pro rata to the holders of the Common Stock.

2. Preferred Stock.  The aggregate number of preferred shares which this corporation shall have the authority to issue is 10,000,000 shares, each with $0.001 par value, which shares shall be designated “Preferred Stock.”  Shares of Preferred Stock may be issued from time to time in one or more series as determined by the Board of Directors.  The Board of Directors is hereby authorized, by resolution or resolutions, to provide from time to time, out of the unissued shares of Preferred Stock, not then allocated to any series of Preferred Stock, for a series of the Preferred Stock.  Each such series shall have distinctive serial designations.  Before any shares of any such series of Preferred Stock are issued, the Board of Directors shall fix and determine, and is hereby expressly empowered to fix and determine, by resolution or resolutions, the voting powers, full or limited, or no voting powers, and the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions thereof as provided by Texas law.

ARTICLE V

Perpetual Existence

The Corporation shall have perpetual existence.

ARTICLE VI

Formation Purpose

The Corporation is formed for the purpose of transacting any and all lawful business as a for-profit corporation organized under the TBOC.

ARTICLE VII

Plan of Conversion

This Certificate of Formation is being filed under a plan of conversion. The name of the prior entity is Orbital Energy Group, Inc. The prior entity was located at 1924 Aldine Western, Houston, Texas 77038-1204. It was formed on April 21, 1998 as a corporation pursuant to the laws of and in the jurisdiction of Colorado.

ARTICLE VIII

Special Shareholder Meetings

Special shareholders’ meetings may be called by the Executive Chairman, Chief Executive Officer, Board of Directors, holders of not less than 35% of all of the shares entitled to vote at the proposed meeting or such additional parties as authorized by the bylaws.

ARTICLE IX

Shareholder Action by Less than Unanimous Written Consent.

For any action required or permitted by the TBOC, this Certificate of Formation, or this Corporation's Bylaws to be taken at any annual or special meeting of shareholders may be taken without a meeting, without prior notice, and without a vote, if one or more written consents setting forth the action so taken shall be signed by the holder or holders of shares having not less than the minimum number of votes that would be necessary to take such action at a meeting at which the holders of all shares entitled to vote on the action were present and voted, constituting at least a majority of the outstanding shares entitled to vote thereon.

The last dated signing of a holder for such written consent shall not be later than the 60^th day of the first dated signing by a holder for the written consent.  The Corporation shall promptly notify any holder who did not sign such written consent about the action that is subject of the written consent.

Notwithstanding anything contained in this Certificate of Formation to the contrary, the affirmative vote of at least a majority of the then outstanding voting shares of the Corporation shall be required to amend, repeal, or adopt any provision inconsistent with this Article if such a resolution is submitted by the Board of Directors to the shareholders for consideration.

ARTICLE X

Voting Quorum

Unless otherwise ordered by a  court of competent jurisdiction, at all meetings of shareholders one-third of the shares of a voting group entitled to vote at such meeting, represented in person or by proxy, shall constitute a quorum of that voting group.

ARTICLE XI

Preemptive Rights

A shareholder of the corporation shall not be entitled to a preemptive right to purchase, subscribe for, or otherwise acquire any unissued shares of stock of the corporation, or any options or warrants to purchase, subscribe for or otherwise acquire any such unissued shares, or any shares, bonds, notes, debentures, or other securities convertible into or carrying options or warrants to purchase, subscribe for or otherwise acquire any such unissued shares.

ARTICLE XII

Cumulative Voting

The shareholders shall not be entitled to use cumulative voting in the election of directors.

ARTICLE XIII

Initial Board of Directors

The Corporation is to be managed by a board of directors (the “Board of Directors.”) The initial Board of Directors of the Corporation shall consist of the following eight named individuals, who shall serve as directors until the next annual meeting of shareholders and until their successor is elected and qualified, is as follows: James F. O’Neil, William J. Clough, Corey A. Lambrecht, C. Stephen Cochennet, Sarah Tucker, Jerry Sue Thornton, Paul T. Addison, LaForrest V. Williams.  The address as to all is: 1924 Aldine Western, Houston, Texas 77038-1204.

The number of directors shall be fixed in accordance with the Bylaws, or if the Bylaws fail to fix such number, then by resolution adopted from time to time by the Board of Directors, provided that the number of directors shall not be less than one. At present the number of directors is set at no more than 12.

ARTICLE XIV
Bylaws Amendment

The Corporate Bylaws may be amended by the vote of at least two-thirds of the members of the Board of Directors or by two-thirds of the holders of the outstanding shares entitled to vote, provided that any amendment to the Bylaw Anti-takeover Provisions requires approval by either (i) a majority of the continuing and unaffiliated directors and holders of a majority of the Company’s outstanding shares or (ii) a majority of all of the Company’s directors and holders of at least 66 and 2/3% of the Company’s outstanding shares not held by the “affiliated shareholder”.

ARTICLE XV

Certificate of Formation Amendment

An amendment to the Certificate of Formation requires the approval by holders of a majority of the outstanding shares entitled to vote thereon.

ARTICLE XVI

Effectiveness of Filing

This Certificate of Formation becomes effective when it is filed by the Texas Secretary of State.

ARTICLE XVII

Director's Limited Liability

A director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for an act or omission in the director's capacity as a director, except to the extent the director is found liable for: (1) a breach of the director's duty of loyalty to the Corporation or its shareholders; (2) an act or omission not in good faith that constitutes a breach of duty of the director to the Corporation or an act or omission that involves intentional misconduct or a knowing violation of the law; (3) a transaction from which the director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director's duties; or (4) an act or omission for which the liability of a director is expressly provided by applicable law.

ARTICLE XVIII

Indemnification

1. Pursuant to the terms of the TBOC, Title 1, Chapter 8, Subchapters A-C, as amended from time to time (the “Indemnification Sections”), the Corporation shall indemnify and advance expenses to a director or officer in connection with a proceeding to the fullest extent permitted or required by and in accordance with the Indemnification Sections.

2.         The Corporation may, as determined by the Board of Directors of the Corporation in a specific instance or by resolution of general application, indemnify and advance expenses to an employee, fiduciary, agent or such other nongoverning persons in connection with a proceeding to the extent permitted or required by and in accordance with the Indemnification Sections.

3.         This Article XVIII shall not be deemed exclusive of any other rights to which those indemnified may be entitled under this Certificate of Formation, any bylaw, agreement, vote of shareholders or disinterested directors or otherwise.  The rights provided under this Article shall continue as to a person who has ceased to be in this position which entitled him to such indemnification and shall inure to the benefit of the heirs, estate or personal representative of such a person.  This Article shall not be deemed to preclude the Corporation from indemnifying other persons from similar or other expenses and liabilities as the Board of Directors of the Corporation may determine in a specific instance or by resolution of general application.

ARTICLE XIX

Directors’ Conflicting Interests Transactions

1.         Conflicting Interest Transaction.  As used in this section, “Conflicting Interest Transaction” means any of the following:

(a)  A loan or other assistance by the Corporation to a director of the Corporation or to an entity in which a director of the Corporation is a director or officer or has a financial interest;

(b)  A guaranty by the Corporation of an obligation of a director of the Corporation or of any obligation of an entity in which a director of the Corporation is a director or officer or has a financial interest; or

(c)  A contract or transaction between the Corporation and a director of the Corporation or between the Corporation and an entity in which a director of the Corporation is a director or officer or has a financial interest.

Conflicting Interest Transaction shall not include any transactions which are deemed not to be Conflicting Interest Transactions under the TBOC.

2.         Effect of Conflicting Interest Transaction.  No Conflicting Interest Transaction shall be void or voidable or be enjoined, set aside, or give rise to an award of damages or other sanctions in a proceeding by a shareholder or by or in the right of the Corporation, solely because the Conflicting Interest Transaction involves a director of the Corporation or an entity in which a director of the Corporation is a director or officer or has a financial interest or solely because the director is present at or participates in the meeting of the Corporation’s Board of Directors or of the committee of the Board of Directors which authorizes, approves, or ratifies the conflicting interest transaction or solely because the director’s vote is counted for such purpose if:

(a)  The material facts as to the director’s relationship or interest and as to the Conflicting Interest Transaction are disclosed or are known to the Board of Directors of the committee, and the Board of Directors or committee in good faith authorizes, approves, or ratifies the Conflicting Interest Transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum; or

(b)  The material facts as to the director’s relationship or interest and as to the conflicting interest transaction are disclosed or are known to the shareholders entitled to vote thereon, and the conflicting interest transaction is specifically authorized, approved, or ratified in good faith by a vote of the shareholders; or

(c)  The Conflicting Interest Transaction is fair as to the Corporation.

3.         Common or Interested Directors.  Common or interested directors may be counted in determining the presences of a quorum at a meeting of the Board of Directors or of a committee which authorizes, approves or ratifies the conflicting interest transaction.

4.         Notice to Shareholders.  The Board of Directors of the Corporation or a committee thereof shall not authorize a loan, by the Corporation to a director of the Corporation or to an entity in which a director of the Corporation is a director or officer or has a financial interest, or a guaranty, by the Corporation of an obligation of a director of the Corporation or of an obligation of an entity in which a director of the Corporation is a director or officer or has a financial interest, as provided in paragraph (a) of section (2) of this Article until at least 10 days after written notice of the proposed authorization of the loan or guaranty has been given to the shareholders who would be entitled to vote thereon if the issue of the loan or guaranty were  submitted to a vote of the shareholders.

ARTICLE XX

Distributions to Shareholders

The Corporation may pay distributions on its shares without considering the amount that would be needed if the Corporation were to be dissolved at the time of the distribution to satisfy the preferential rights upon dissolution to shareholders whose preferential rights are superior to those receiving the distributions.

ARTICLE XXI
Merger or Other Business Combination

Any merger or other business combination with a third party requires the approval of such transactions by affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon, unless any class or series of shares is entitled to vote as a class thereon, in which event the vote required shall be the affirmative vote of the holders of a majority of the outstanding shares within each class or series of shares entitled to vote thereon as a class and at least a majority of the outstanding shares otherwise entitled to vote thereon.

ARTICLE XXII

Sale, Lease, or Exchange of Corporate Assets

The sale, lease, exchange or other disposition of all, or substantially all, of the property and assets of the Corporation requires the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon.

ARTICLE XXIII

Execution

The undersigned affirms that the person designated as registered agent has consented to the appointment. The undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or fraudulent instrument and certifies under penalty of perjury that the undersigned is authorized to execute the filing instrument.

IN WITNESS WHEREOF, the below named incorporator signed this Certificate of Formation on July 21, 2022.

___/s/_________________________

William J. Clough,

Executive Chairman and

Chief Legal Officer of

Orbital Infrastructure Group, Inc.

EX-3.13II

Exhibit 3.13(ii)

BYLAWS

of

Orbital Infrastructure Group, Inc.

ARTICLE I

OFFICES

Section 1.1 Registered Office.  The registered office of the corporation shall be located at the corporation’s principal place of business or at the office of the person or entity then acting as the corporation’s registered agent in Texas.  The registered office and/or registered agent of the corporation may be changed from time to time by resolution of the Board of Directors (the “Board”).

Section 1.2 Other Offices.  The corporation may also have offices at such other places as the Board may determine from time to time or as the business of the corporation may require.

ARTICLE II

STOCKHOLDERS

Section 2.1 Annual Meeting.  The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board, the Executive Chairman of the Board (the “Executive Chairman”), or the Chief Executive Officer, which date shall not be a legal holiday, in the place, if any, where the meeting is to be held. The Board acting pursuant to a resolution adopted by the majority of the Board may postpone, reschedule or cancel any previously scheduled annual meeting of stockholders, before or after the notice for such meeting has been sent to the stockholders.

Section 2.2 Special Meetings.  Special meetings of stockholders may be called for any purpose and may be held at such time and place as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof.  Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the corporation’s notice of meeting.

(a) A special meeting of stockholders may be called at any time by the Executive Chairman, Chief Executive Officer, President or, if directed by resolution of the Board, the Secretary.

(b) A special meeting of stockholders shall be called by the Secretary at the written request (“Special Meeting Request”) of holders of record of at least 35% of the outstanding common stock of the corporation entitled to vote on the matter or matters to be brought before the proposed special meeting (the “Requisite Percentage”).  A Special Meeting Request to the Secretary shall be signed by each stockholder requesting the special meeting (each, a “Requesting Stockholder”) and shall be accompanied by a notice setting forth the information required by Section 2.14(a)(2)(A)-(D) of these bylaws (the “Bylaws”), as if such Section were applicable to Special Meeting Requests.  Requesting Stockholders who collectively hold at least the Requisite Percentage on the date the Special Meeting Request is submitted to the Secretary must (i) continue to hold at least the number of shares of common stock set forth in the Special Meeting Request with respect to each such Requesting Stockholder through the date of the special meeting and (ii) submit a written certification (an “Ownership Certification”) confirming the continuation of such holdings on the business day immediately preceding the special meeting, which Ownership Certification shall include the information required by Section 2.14(a)(2)(A) of these Bylaws as of the date of such special meeting with respect to each such Requesting Stockholder.

(c) A special meeting called pursuant to Section 2.2 of these Bylaws shall be held at such date, time and place as may be set by the Board in accordance with these Bylaws; provided, however, that the date of any special meeting called pursuant to Section 2.2(b) of these Bylaws shall not be more than 90 days after a Special Meeting Request that satisfies the requirements of this Section 2.2 is received by the Secretary.  The day, place and hour of such special meeting shall be set forth in the notice of special meeting.  If a valid Special Meeting Request is received by the Secretary subsequent to a valid Special Meeting Request and before the date of the corresponding special meeting of stockholders, all items of business contained in such Special Meeting Requests may be presented at one special meeting.

(d) Notwithstanding the foregoing provisions of this Section 2.2, a special meeting requested by stockholders pursuant to Section 2.2(b) of these Bylaws shall not be held if (i) the Special Meeting Request does not comply with this Section 2.2; (ii) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law; (iii) the Special Meeting Request is received by the corporation during the period commencing 90 days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the date of the next annual meeting; (iv) an annual or special meeting of stockholders that included a substantially similar item of business (“Similar Business”) (as determined in good faith by the Board) was held not more than 120 days before the Special Meeting Request was received by the Secretary; (v) the Board has called or calls for an annual or special meeting of stockholders to be held within 90 days after the Special Meeting Request is received by the Secretary and the Board determines in good faith that the business to be conducted at such meeting includes the Similar Business; (vi) such Special Meeting Request was made in a manner that involved a violation of Regulation 14A under the Securities Exchange Act of 1934, as amended from time to time (the “Exchange Act”), or other applicable law; or (vii) two or more special meetings of stockholders called pursuant to the request of stockholders have been held within the 12-month period before the Special Meeting Request was received by the Secretary. For purposes of this Section 2.2(d), the nomination, election or removal of directors shall be deemed to be Similar Business with respect to all items of business involving the nomination, election or removal of directors, changing the size of the Board and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors.

(e) Any Requesting Stockholder may revoke such stockholder’s participation in a Special Meeting Request at any time by written revocation delivered to the Secretary and if, following any such revocation, there are outstanding un-revoked requests from stockholders holding less than the Requisite Percentage in accordance with this Section 2.2, the Board may, in its discretion, cancel the special meeting.  If none of the Requesting Stockholders appears or sends a duly authorized agent to present the business to be presented for consideration that was specified in the Special Meeting Request, or if the Ownership Certification does not satisfy the requirements set forth in Section 2.2(b) of these Bylaws, the corporation need not present such business for a vote at such special meeting.

(f) Business conducted at a special meeting requested by stockholders pursuant to Section 2.2(b) of these Bylaws shall be limited to the matters described in the applicable Special Meeting Request; provided that, nothing herein shall prohibit the Board from submitting matters to the stockholders at any such special meeting requested by stockholders.

Section 2.3 Place of Meetings.  Annual and special meetings may be held at such place as the Board may determine, including but not limited to telephonic or virtual meetings.

Section 2.4 Notice.  Written notice stating the place, day and hour of the meeting of stockholders shall be delivered not less than 10 nor more than 60 days before the date of the meeting, except that (i) if the number of authorized shares is to be increased, at least thirty 30 days’ notice shall be given, or (ii) any other longer notice period is required by the Texas  Business Organizations Code (the “TBOC”).  Notice of a special meeting shall include a description of the purpose or purposes of the meeting.  Notice of an annual meeting need not include a description of the purpose or purposes of the meeting except the purpose or purposes shall be stated with respect to (i) an amendment to the certificate of formation of the corporation (the “Certificate of Formation”), (ii) a merger or share exchange in which the corporation is a party and, with respect to a share exchange, in which the corporation's shares will be acquired, (iii) a sale, lease, exchange or other disposition, other than in the usual and regular course of business, of all or substantially all of the property of the corporation or of another entity which this corporation controls, in each case with or without the goodwill, (iv) a dissolution of the corporation, or (v) any other purpose for which a statement of purpose is required by the TBOC. Notice shall be given personally or by mail, private carrier, telegraph, teletype, electronically transmitted facsimile or other form of wire or wireless communication, by or at the direction of the Executive Chairman, Chief Executive Officer, Chief Legal Officer, President, or the Secretary, or the officer or other persons calling the meeting, to each stockholder entitled to vote at such meeting.  If mailed and in a comprehensible form, such notice shall be deemed to be delivered when deposited in the United States mail.  If notice is given other than by mail, and provided such notice is in a comprehensible form, the notice is given and effective on the date received by the stockholder.

If three successive letters mailed to the last-known address of any stockholder of record are returned as undeliverable, no further notices to such stockholder shall be necessary until another address for such stockholder is made known to the corporation.

Section 2.5 Setting a Record Date for Stockholder Meetings.  In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may set a record date, which record date shall not precede the date upon which the resolution setting the record date is adopted by the Board, and which record date shall not be more than 60 nor less than 10 days before the date of any such meeting.  Only stockholders as of the record date are entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof.  If no record date is set by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment or postponement of the meeting; provided, however, that the Board may set a new record date for the adjourned or postponement meeting.

Section 2.6 Quorum.  One-third of the votes entitled to be cast on the matter by a voting group, represented in person or by proxy, constitutes a quorum of that voting group for the action on the matter.  If no specific voting group is designated in the Certificate of Formation or under the TBOC for a particular matter, all outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a voting group.  In the absence of a quorum at any such meeting, a majority of the shares so represented may adjourn the meeting from time to time for a period not to exceed 120 days without further notice.  However, if the adjournment is for more than 120 days, or if after the adjournment a new record date is set for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 2.7 Adjourned Meetings.  When a meeting is adjourned to another date, time or place, notice need not be given of the new date, time or place, if the new date, time or place of such meeting is announced before adjournment at the meeting at which the adjournment is taken.  At the adjourned meeting the corporation may transact any business which may have been transacted at the original meeting.  If the adjournment is for more than 120 days, or if a new record date is set for the adjourned meeting, a new notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting as of the new record date.

Section 2.8 Voting by Stockholders on Matters Other Than the Election of Directors.  With respect to any matters as to which no other voting requirement is specified by the TBOC , the Certificate of Formation or these Bylaws, the affirmative vote required for stockholder action shall be that of a majority of the shares present in person or represented by proxy (as counted for purposes of determining the existence of a quorum) and entitled to vote at a meeting of stockholders at which a quorum is present. In the case of a matter submitted for a vote of the stockholders as to which a stockholder approval requirement is applicable under the stockholder approval policy of the NASDAQ Stock Market, the requirements of Rule 16b-3 under the Exchange Act, or any provision of the Internal Revenue Code of 1986, as amended from time to time (the “Code”), including Code Section 162(m), in each case for which no higher voting requirement is specified by the TBOC, the Certificate of Formation or these Bylaws, the vote required for approval shall be the requisite vote specified in such stockholder approval policy, Rule 16b-3 or such Code provision, as the case may be (or the highest such requirement if more than one is applicable). For the approval of the appointment of independent public accountants (if submitted for a vote of the stockholders), the vote required for approval shall be a majority of the votes cast on the matter.

Section 2.9 Voting by Stockholders in the Election of Directors.  Each director to be elected by the stockholders shall be elected by a plurality of the votes cast at any meeting held for the purpose of the election of directors at which a quorum is present, subject to the following provisions:

(a) Resignation of Incumbent Director Who Fails to Receive a Majority Vote.  In any non-contested election of directors, any director nominee who is an incumbent director who receives a greater number of votes “withheld” from his or her election (or “against” or “no” votes) than votes “for” such election shall immediately tender his or her resignation to the Board, which resignation shall be irrevocable.  Thereafter, the Board shall decide, through a process managed by the Corporate Nominating Committee (and excluding the nominee in question from all Board and Committee deliberations), whether to accept such resignation within 90 days of the date of such resignation.  Absent a compelling reason for the director to remain on the Board (as determined by the Board), the Board shall accept the resignation from the director.  To the extent that the Board determines that there is a compelling reason for the director to remain on the Board and does not accept the resignation, the Board’s explanation of its decision shall be disclosed promptly in a Current Report on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) or in a press release that is widely disseminated.

(b) Definition of “Compelling Reason”.  For purposes of this policy, a “compelling reason” shall be determined by the Board (excluding the nominee in question from all Board and Committee deliberations) and could include, by way of example and without limitation, situations in which a director nominee was the target of a “vote no” or “withhold” campaign on what the Board believes to be an illegitimate or inappropriate basis or if the resignation would cause the corporation to be in violation of its constituent documents or regulatory requirements.

(c) Acceptance or Non-Acceptance of a Director’s Resignation.  If such incumbent director’s resignation is accepted by the Board, then such director shall immediately cease to be a member of the Board upon the date of action taken by the Board to accept such resignation.  If such incumbent director’s resignation is not accepted by the Board, such director will continue to serve until the next annual meeting, or until his or her subsequent resignation or removal.

(d) Failure of a Non-Incumbent Director to Win Election.  If any nominee for director who is not an incumbent fails in a non-contested election to receive a majority vote for his or her election at any meeting for the purpose of the election of directors at which a quorum is present, such candidate shall not be elected and shall not take office.

(e) Filling Vacancies.  If an incumbent director’s resignation is accepted by the Board pursuant to these Bylaws, or if a non-incumbent nominee for director is not elected, the Board, may, subject to the provisions of Article III of these Bylaws, fill any resulting vacancy pursuant to the provisions of Article III, Section 3.12 of these Bylaws, or may set the size of the Board pursuant to the provisions of Article III, Section 3.3 of these Bylaws.

(f) Nominees to Agree in Writing to Abide by these Bylaws.  To be eligible for election as a director of the corporation, each nominee (including incumbent directors and nominees proposed by stockholders in accordance with Article II of these Bylaws) must agree in writing in advance to comply with the requirements of this Article II of these Bylaws.

(g) Majority Vote Defined.  For purposes of these Bylaws, a majority of votes cast shall mean that the number of shares voted “for” a director’s election exceeds 50% of the total number of votes cast with respect to that director’s election.  Votes “cast” shall include votes “against” and “no” votes, but shall exclude withhold and abstentions with respect to a director’s election or with respect to the election of directors in general.

(h) Vote Standard in Contested Elections.  Notwithstanding anything to the contrary contained in this Article II, Section 9 of these Bylaws, in the event of a contested election, directors shall be elected by the vote of a plurality of the votes cast at any meeting for the election of directors at which a quorum is present.  For purposes of these Bylaws, a contested election shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected, with the determination thereof being made by the Secretary (i) as of the close of the applicable notice of nomination period set forth in Article II, Section 2.14 of these Bylaws based on whether one or more notice(s) of nomination were timely filed in accordance with said Bylaws or (ii) if later, reasonably promptly following the determination by any court or other tribunal of competent jurisdiction that one or more notice(s) of nomination were timely filed in accordance with said Bylaws; provided, that the determination that an election is a contested election by the Secretary pursuant to clause (i) or (ii) shall be determinative only as to the timeliness of a notice of nomination and not otherwise as to its validity.

Section 2.10 Voting Rights. 

(a) One Vote per Share.  Unless otherwise provided by these Bylaws or the Certificate of Formation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of stockholders.  The corporation is not obligated to issue fractional shares. Only whole shares are entitled to vote.

(b) No Cumulative Voting.  No stockholder shall be permitted to cumulate his or her votes in the election for directors or otherwise.

(c) Voting by Ballot.  Voting on any question or in any election may be by voice vote unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.

Section 2.11 Proxies.  At all meetings of stockholders, a stockholder may vote by proxy by signing an appointment form or similar writing, either personally or by his or her duly authorized attorney-in-fact.  A stockholder may also appoint a proxy by transmitting or authorizing the transmission of a telegram, teletype, or other electronic transmission providing a written statement of the appointment to the proxy, a proxy solicitor, proxy support service organization, or other person duly authorized by the proxy to receive appointments as agent for the proxy, or to the corporation.  The transmitted appointment shall set forth or be transmitted with written evidence from which it can be determined that the stockholder transmitted or authorized the transmission of the appointment.  The proxy appointment form or similar writing shall be filed with the Secretary of the corporation before or at the time of the meeting.  The appointment of a proxy is effective when received by the corporation and is valid for eleven months unless a different period is expressly provided in the appointment form or similar writing.

Any complete copy, including an electronically transmitted facsimile, of an appointment of a proxy may be substituted for or used in lieu of the original appointment for any purpose for which the original appointment could be used.

Revocation of a proxy does not affect the right of the corporation to accept the proxy's authority unless (i) the corporation had notice that the appointment was coupled with an interest and notice that such interest is extinguished is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment, or (ii) other notice of the revocation of the appointment is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment. Other notice of revocation may, in the discretion of the corporation, be deemed to include the appearance at a stockholders' meeting of the stockholder who granted the proxy and his or her voting in person on any matter subject to a vote at such meeting.

The death or incapacity of the stockholder appointing a proxy does not affect the right of the corporation to accept the proxy's authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment.

The corporation shall not be required to recognize an appointment made irrevocably if it has received a writing revoking the appointment signed by the stockholder (including a stockholder who is a successor to the stockholder who granted the proxy) either personally or by his or her attorney-in-fact, notwithstanding that the revocation may be a breach of an obligation of the stockholder to another person not to revoke the appointment.

Section 2.12 Action by Written Consent.

(a) General.  Any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken and bearing the dates of signature of the stockholders who signed the consent or consents, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to the corporation’s principal place(s) of business, or an officer or agent of the corporation having custody of the book or books in which proceedings of meetings of the stockholders are recorded. Delivery made to the corporation’s principal place(s) of business office shall be by hand, by certified or registered mail, return receipt requested, or other receipted delivery, provided, however, that no consent or consents delivered by certified or registered mail or other receipted delivery shall be deemed delivered until received at the registered office.  All consents properly delivered in accordance with this Section shall be deemed to be recorded when so delivered.  Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting of stockholders.

(b) Inspectors of Written Consent.  In the event of the delivery, in the manner provided by Section 2.12(a) of these Bylaws, to the corporation of the requisite written consent or consents to take corporate action and/or any related revocation or revocations, the corporation shall engage an inspector(s) of elections for the purpose of promptly performing a ministerial review of the validity of the consents and revocations.  For the purpose of permitting the inspector(s) to perform such review, no action by written consent without a meeting shall be effective until such date as the inspector(s) certify to the corporation that the consents delivered to the corporation in accordance with Section 2.12(a) of these Bylaws represent at least the minimum number of votes that would be necessary to take the corporate action.  Nothing contained in this paragraph shall in any way be construed to suggest or imply that the Board or any stockholder shall not be entitled to contest the validity of any consent or revocation thereof, whether before or after such certification by the inspector(s), or to take any other action (including, without limitation, the commencement, prosecution or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(c) Effectiveness of Action by Written Consent.  No written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the corporation as required by this Section, written consents signed by the holders of a sufficient number of shares to take such corporate action are so recorded.

(d) Notice of Action by Written Consent.  Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were recorded.

(e) Setting a Record Date for Action by Written Consent.  In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may set a record date, which record date shall not precede the date upon which the resolution setting the record date is adopted by the Board, and which date shall not be more than 10 days after the date upon which the resolution setting the record date is adopted by the Board.  Only stockholders as of the record date are entitled to consent to corporate action in writing without a meeting.  Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board to set a record date.  The Board shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution setting the record date (unless a record date has previously been set by the Board pursuant to the first sentence of this Bylaw).  If no record date has been set by the Board, pursuant to these Bylaws or otherwise within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by statute, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Texas, its principal place(s) of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. If no record date has been set by the Board and prior action by the Board is required by statute, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

Section 2.13 Stock Records.  The officer or agent having charge of the stock transfer books for shares of the corporation shall make, at the earlier of 10 days before such meeting of stockholders or two business days after notice of the meeting, a complete list of the stockholders entitled to vote at each meeting of stockholders or any adjournment thereof.  The list shall be arranged by voting groups and within each voting group by class or series of shares, shall be arranged in alphabetical order, within each class or series, and shall show the address of and the number of shares of each class or series held by each stockholder.  For the period beginning the earlier of 10 days prior to such meeting or two business days after notice of the meeting is given and continuing through the meeting and any adjournment thereof, this list shall be kept on file at the principal office of the corporation, or at a place (which shall be identified in the notice) in the city where the meeting will be held.  Such list shall be available for inspection on written demand by any stockholder (including for the purpose of this Section any holder of voting trust certificates) or his or her agent or attorney during regular business hours and during the period available for inspection.  The original stock transfer books shall be prima facie evidence as to the stockholders entitled to examine such list or to vote at any meeting of stockholders.

Any stockholder, his or her agent or attorney, may copy the list during regular business hours and during the period it is available for inspection, provided (i) the stockholder has been a stockholder for at least three months immediately preceding the demand or is a stockholder of at least five percent of all of the outstanding shares of any class of shares as of the date of the demand, (ii) the demand is made in good faith and for a purpose reasonably related to the demanding stockholder's interest as a stockholder, (iii) the stockholder describes with reasonable particularity the purpose and the list the stockholder desires to inspect, (iv) the list is directly connected with the described purpose; and (v) the stockholder pays a reasonable charge covering the cost of labor and material for such copies.

Section 2.14 Notice of Stockholder Nominations and Other Business.

(a) Annual Meetings of Stockholders.

(1) Nominations and Other Business.  Nominations of persons for election to the Board and the proposal of other business to be considered by the corporation’s stockholders may be made at an annual meeting of stockholders (A) by or at the direction of the Board, including pursuant to the corporation’s notice of meeting, or (B) by any stockholder of the corporation who (i) at the time of giving of notice provided for in these Bylaws and at the time of the stockholder meeting (including any adjournment or postponement thereof) is a stockholder of the corporation who has continuously held at least $2,000 in market value, or 1%, of the corporation's securities entitled to be voted at a stockholder meeting for at least one year by the date the proposal is submitted and continue to hold those securities through the date of the stockholder meeting and shall be in full compliance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended, (ii) is entitled to vote at the meeting and (iii) complies with the notice procedures set forth in these Bylaws as to such business or nomination; this clause (B) shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the corporation’s notice of meeting) before an annual meeting of stockholders.

(2) Timely Advance Notice in Writing.  Without qualification, for any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.14(a)(1)(B) of these Bylaws, the stockholder must have given timely advance notice (“notice”) in writing to the Secretary and such other business must otherwise be a proper matter for stockholder action.  To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the 120^th day and not later than the close of business on the 90^th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120^th day prior to the date of such annual meeting and not later than the close of business on the later of the 90^th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made by the corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.  To be in proper form, a stockholder’s notice (whether given pursuant to this Section 2.14(a)(2) or Section 2.14(b) of these Bylaws) to the Secretary must:

(A) Set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:

(i) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, if any,

(ii) (1) the class or series and number of shares of the corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (2) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation, (3) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the corporation, (4) any short interest in any security of the corporation (for purposes of these Bylaws a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (5) any rights to dividends on the shares of the corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the corporation, (6) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (7) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to, based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation, any such interests held by members of such stockholder’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and

(iii) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;

(B) If the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the annual meeting, set forth:

(i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, in such business and

(ii) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder;

(C) Set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board:

(i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and

(ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K of the Securities Act of 1933 as amended if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(D) With respect to each nominee for election or reelection to the Board, include a completed and signed questionnaire, representation and agreement required by Article II, Section 2.15 of these Bylaws.  The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(E) Without exception, no person shall be eligible for election or re-election as a director of the corporation at a meeting of stockholders unless nominated in accordance with the provisions set forth in this Section 2.14. In addition, a nominee shall not be eligible for election or re-election if any of the responses required by this Section 2.14 contain an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. The chairman of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 2.14 (including the previous sentence of this Section), and if the chairman should determine that a nomination was not made in accordance with the provisions of this Section 2.14, the chairman shall so declare to the meeting and such nomination shall not be brought before the meeting.

(F) Except as otherwise required by law, nothing in this Section 2.14 shall obligate the corporation or the Board to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board information with respect to any nominee for director submitted by a stockholder.

(G) Notwithstanding the foregoing provisions of this Section 2.14, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the corporation. For purposes of this Section 2.14, to be considered a “qualified representative of the stockholder”, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(H) For purposes of this Section 2.14, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(I) Notwithstanding the foregoing provisions of this Section 2.14, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder with respect to the matters set forth in this Section 2.14, provided however, that any references in these Bylaws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations to be considered pursuant to this Section 2.14 (including paragraph (a)(ii) hereof), and compliance with paragraph (a)(ii) of this Section 2.14 shall be the exclusive means for a stockholder to make nominations. Nothing in this Section 2.14 shall be deemed to affect any rights of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Formation.

(3) Increased Number of Directors.  Notwithstanding anything in the second sentence of Section 2.14(a)(2) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement by the corporation naming all of the nominees for director or specifying the size of the increased Board at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by these Bylaws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10^th day following the day on which such public announcement is first made by the corporation.

(b) Director Nominations-Special Meetings of Stockholders.  Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected (1) by or at the direction of the Board, including pursuant to the corporation’s notice of meeting, (2) pursuant to Section 2.2 of these Bylaws, or (3) by any stockholder of the corporation who:

(i) is a stockholder of the corporation who has continuously held at least $2,000 in market value, or 1%, of the corporation's securities entitled to be voted at a stockholder meeting for at least one year by the date the proposal is submitted and continue to hold those securities through the date of the stockholder meeting and shall be in full compliance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended,

(ii) is entitled to vote at the meeting (including any adjournment or postponement thereof), and

(iii) complies with the notice procedures set forth in these Bylaws as to such nomination. In the event a special meeting of stockholders is called for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be) for election to such position(s) as specified in the corporation’s notice of meeting, if the stockholder’s notice required by Section 2.14(a)(2) of these Bylaws with respect to any nomination (including the completed and signed questionnaire, representation and agreement required by Section 2.15 of these Bylaws) shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the 120^th day prior to the date of such special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a special meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above.

(c) General.

(1) Procedure to be Followed.  Only such persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these Bylaws.  Except as otherwise provided by law, the Certificate of Formation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall be disregarded.

(2) Public Announcement.  For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by a national news service or in a document publicly filed by the corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3) Comply with the Exchange Act.  Notwithstanding the foregoing provisions of these Bylaws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in these Bylaws; provided, however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.14(a)(1)(B) or Section 2.14(b) of these Bylaws. Nothing in these Bylaws shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock if and to the extent provided for under law, the Certificate of Formation or these Bylaws.

(d) Stockholder Access to the Corporation’s Proxy Materials.

(1)  Right of Access.  The corporation shall include in the proxy statement (such right of inclusion being sometimes referred to as “Access”) distributed on behalf of the Board for the meeting of stockholders the information specified below (the “Required Information”) with respect to the Eligible Stockholder (as defined below) proposing to nominate a candidate to be elected as a director of the corporation and the candidate to be nominated (an “Access Candidate”); provided that the nomination complies with the requirements of this Section, all other applicable provisions of these Bylaws and the corporation’s Certificate of Formation and all applicable state and federal laws or regulations.  The Required Information shall be (i) all information concerning the Access Candidate and the Eligible Stockholder required to be provided by a stockholder in connection with a solicitation of proxies for the election as a director of the Access Candidate under the rules of the Securities and Exchange Commission, these Bylaws, the corporation’s Certificate of Formation, the rules and listing guidelines of the NASDAQ Stock Market or such other principal U.S. securities market in which the common stock of the corporation trades and all other applicable state and federal laws and regulations and (ii) if the Eligible Stockholder so elects, a statement (the “Statement”), of not more than 500 words in support of the nomination.  The Required Information shall be furnished to the corporation by the Eligible Stockholder in accordance with this Section 2.14(d).

The form of proxy that the corporation distributes for the meeting of stockholders shall permit stockholders to give instructions for the voting of their shares with respect to the election of the Access Candidate in substantially the same manner as provided with respect to the nominees of the Board, but shall clearly distinguish between an Access Candidate and a nominee of the Board.  Nominees need not be listed in alphabetical order either in the proxy statement or the form of proxy.  Moreover, the form of proxy may permit stockholders to vote for all of the Board’ nominees without specifying each such nominee, as well as to give discretion to the named proxies to vote for (or withhold votes from) nominees of their choice.

The corporation shall not be required to provide Access with respect to any meeting of stockholders (a) for more than the Maximum Number of Access Candidates or (b) if it receives timely notice pursuant to the corporation’s advance notice bylaw that any stockholder proposes to nominate a candidate for election with respect to which Access is not being requested.

(2)  Eligibility.  In order for information about an Access Candidate of an Eligible Stockholder to be included in the corporation’s proxy materials, the following requirements must be satisfied:

A. The Eligible Stockholder shall have provided to the corporation notice of the candidate for whom it seeks Access pursuant to this Section (“Notice of Access”) not later than the last date by which notice of a proposed nomination is required to be provided to the corporation in accordance with the corporation’s advance notice bylaw, Section 2.14(a)(2).  

B. The Eligible Stockholder’s Notice of Access shall identify only one Access Candidate for election as a director at the meeting of stockholders.

C. The Access Candidate shall be Independent and shall not be a Disqualified Repeat Nominee.

D. The Eligible Stockholder shall represent and undertake in its Notice of Access that it, its Access Candidate and each of its and its Access Candidate’s Affiliates and Associates (a) has not nominated and will not nominate for election to the Board at the meeting of stockholders any individual other than the individual named in its Notice of Access, (b) has not engaged and will not engage in, and has not and will not be a “participant” in another person’s “solicitation” within the meaning of SEC Rule 14a-1(l) in support of the election of any individual as a director at the meeting of stockholders other than its named Access Candidate or a nominee of the Board and (c) will not distribute to any stockholder any form of proxy for the meeting of stockholders other than the form distributed by the corporation.

E. The Eligible Stockholder shall represent and undertake in its Notice of Access that at the time of giving its Notice of Access and at all times until the election of directors at the meeting of stockholders neither it nor the Access Candidate nor the Affiliates and Associates of it and its Access Candidate shall own any securities of the corporation for the purpose, or with the effect, of changing or influencing the control of the corporation, or in connection with or as a participant in any transaction having that purpose or effect, including any transaction referred to in SEC Rule 13d–3(b), other than solely by reason of seeking the election as a director of its named Access Candidate.

F. The Eligible Stockholder shall not have submitted a Notice of Access with respect to the immediately preceding meeting of stockholders, except where the individual named in such Notice of Access received at such meeting votes in favor of his or her election representing at least 25% of the total votes cast with respect to the election.

(3)  Process.

A. The Nominating Committee shall consider a Notice of Access and shall determine if the Access Candidate is Independent based on the information regarding the Independence of such Access Candidate that is received by the Board pursuant to the corporation’s advance notice bylaw.  If the Committee believes it needs additional information to make the Independence determination, it shall notify the Eligible Stockholder of the nature and type of information required and afford the Eligible Stockholder and the Access Candidate a reasonable period of time to submit such additional information.  The Committee may, in its sole discretion, permit the Eligible Stockholder and/or the Access Candidate and its or their representatives an opportunity to appear before the Committee in connection with its consideration of the Independence of the Access Candidate.  The Committee may, in its sole discretion, make a recommendation to the Board as to whether the Access Candidate should be nominated by the Board for election at the meeting of stockholders.  

B. If the Board nominates an Access Candidate as part of the Board’ slate of nominees, the Notice of Access will be deemed withdrawn and the former Access Candidate shall be presented to the stockholders in the same manner as every other nominee of the Board.  However, if elected, the Access Candidate shall be considered a director for whom Access was provided for all purposes of this Section, including the determination of the Maximum Number of nominees.  If the Board does not so nominate the Access Candidate, Access shall be provided in accordance with the terms and subject to the conditions of this Section 2.14(d).

C. If an Access Candidate or an Eligible Stockholder fails to continue to meet the requirements of this Section for Access or if an Access Candidate fails to meet all of the requirements of the corporation’s advance notice bylaw to be properly nominated as a candidate for election as a director at the meeting of stockholders or if an Access Candidate dies, becomes disabled or is otherwise disqualified from being nominated for election or serving as a director prior to the meeting of stockholders:

i. The corporation may, to the extent feasible, remove the name of the Access Candidate and the Statement from its proxy statement, remove the name of the Access Candidate from its form of proxy and/or otherwise communicate to its stockholders that the Access Candidate will not be eligible for nomination at the meeting of stockholders.

ii. The Eligible Stockholder may not name another Access Candidate or, subsequent to the last day on which a stockholder’s notice of an intent to make a nomination would be timely, otherwise cure in any way any defect preventing the nomination of the Access Candidate at the meeting of stockholders.

D. The Board or a committee thereof may adopt such rules or guidelines for applying the provisions of this Section as it determines are appropriate.

E. If there are more than the Maximum Number of candidates for which Access has been sought in compliance with this Section, Access hereunder shall be provided for the Maximum Number of Access Candidates made by those Eligible Stockholders who Net Long Beneficially Own the highest number of shares of common stock of the corporation, based on the Net Long Beneficial Ownership of each Eligible Stockholder on the date as of which it reported its Net Long Beneficial Ownership in its Notice of Access.  

(4)  Other Requirements

A. The Eligible Stockholder shall have executed and delivered to the corporation simultaneously with its delivery of its Notice of Access an undertaking acknowledging its responsibility for the Required Information, all other information submitted to the corporation pursuant to this Section and all of its and its Access Candidate’s communications to stockholders in connection with the election of directors at the meeting of stockholders.  In such undertaking, the Eligible Stockholder shall expressly assume all liability to which the corporation or any of its Affiliates, or any director, officer, employee or representative thereof, may be subject as a result of any legal or regulatory violation arising out of any such information or communication made available by or on behalf of the Eligible Stockholder or any of its Affiliates or its Access Candidate to the corporation or to any stockholder of the corporation in connection with the election of directors at the meeting of stockholders.

B. The Eligible Stockholder and its Access Candidate shall each provide to the corporation prompt written notice of (a) any material change in its Net Long Beneficial Ownership of common stock of the corporation occurring since the date as of which the Eligible Stockholder reported its Net Long Beneficial Ownership in its Notice of Access and before the election of directors at the meeting and (b) any material error recognized by the Eligible Stockholder or its Access Candidate in, or any change in circumstances that makes incorrect or misleading in any material respect, the information previously provided by the Eligible Stockholder or its nominee in the Notice of Access or otherwise provided in accordance with this Section.  The Eligible Stockholder, in addition, shall certify as to the accuracy in all material respects of its Notice of Access as of the record date for notice of the meeting of stockholders and as of the date that is 10 business days prior to the meeting or any adjournment or postponement thereof, or, if there are fewer than 10 business days between the date of the meeting of stockholders and such adjourned or postponed meeting, then as of the date of the meeting so adjourned or postponed. Such certification shall be delivered to, or mailed to and received by, the Secretary at the principal executive offices of the corporation not later than five business days after the record date for notice of the meeting (in the case of a certification required to be made as of such record date), and not later than eight business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of a certification required to be made as of 10 business days prior to the meeting or any adjournment or postponement thereof).

(5)  Definitions.  For the purposes of this Section, the following definitions shall apply:

A. An “Affiliate” of a person shall mean another person that, directly or indirectly through one of more intermediaries, controls, is controlled by or is under common control with such person.

B. An “Associate” of a person shall mean any:

i. Corporation or organization (other than a majority-owned subsidiary of such person) of which such person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;

ii. Trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and

iii. Relative or spouse of such person, or any relative of such spouse, who has the same home as such person or  who is a director or officer of the registrant or any of its parents or subsidiaries.

C. “Net Long Beneficial Ownership” (and its correlative terms), when used to describe the nature of a person’s ownership of common stock of the corporation, shall mean those shares of common stock of the corporation as to which the person in question possesses (a) the full unhedged power to vote or direct the voting of such shares, (b) the full unhedged economic incidents of ownership of such shares (including the full right to profits and the full risk of loss), and (c)  the full unhedged power to dispose of or direct the disposition of such shares; provided that the number of shares calculated in accordance with clauses (a), (b) and (c) shall not include any shares (i) sold by such person or any of its Affiliates in any transaction that has not been settled or closed, (ii) borrowed by such person or any of its Affiliates for any purposes or purchased by such person or any of its Affiliates pursuant to an agreement to resell or (iii) subject to any option, warrant, forward contract, swap, contract of sale, other derivative or other agreement or understanding sold or acquired by such person or any of its Affiliates, whether any such instrument is to be settled with shares or with cash based on the notional amount of shares subject thereto, in any such case which has, or is intended to have, the purpose or effect of (A) reducing in any manner, to any extent or at any time in the future, such person’s or Affiliates’ full rights to vote or direct the voting and full rights to dispose or direct the disposition of any of such shares, and/or (B) offsetting to any degree gain or loss arising from the full economic ownership of such shares by such person or Affiliate.

D. A “Disqualified Repeat Nominee” in respect of a meeting of stockholders shall mean an individual as to whom Access to the corporation’s proxy materials for the immediately preceding meeting of stockholders was provided and who withdrew from or became ineligible or unavailable for election at the meeting or received at such meeting votes in favor of his or her election representing less than 25% of the total votes cast for or withheld from his or her election.

E. An “Eligible Stockholder” shall mean a person who, as of the date of submission of the Notice of Access:

i. Is a stockholder of the corporation who has continuously held at least $2,000 in market value, or 1%, of the corporation's securities entitled to be voted at a stockholder meeting for at least one year by the date the proposal is submitted and continue to hold those securities through the date of the stockholder meeting.

ii. Has or have had continuous Net Long Beneficial Ownership of at least the same amount of securities so owned by such person on the date as of which the Eligible Stockholder reported its Net Long Beneficial Ownership in its Notice of Access for a minimum of one year prior to the date of submission of the Notice of Access,

iii. Continue(s) to have Net Long Beneficial Ownership of at least the same amount of securities so owned by such person as of the date of which the Eligible Stockholder reported its Net Long Beneficial Ownership in its Notice of Access through the date of the election of directors at the meeting of stockholders to which the Notice of Access pertains and

iv. Complies with all other provisions of this Section and shall be in full compliance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended.  Each Eligible Stockholder shall submit with the Notice of Access one or more written statements from the registered holder of the shares (and from each intermediary through which each such person derives, or during the minimum holding period has derived, Net Long Beneficial Ownership of such shares) verifying that, as of a date within seven days preceding the date of submission of the Notice of Access, such person beneficially owns such shares and has beneficially owned at least that amount of shares continuously for at least the minimum holding period.  For purposes of this Section, persons who jointly nominate an individual for election as a director shall be considered an Eligible Stockholder only if they have agreed in writing to so act, are so identified in the Notice of Access and the information and the undertakings required by this Section for an Eligible Stockholder are provided with respect to each such person.  For the avoidance of doubt, for purposes of determining if persons who claim jointly to satisfy the minimum stock ownership  and minimum holding period requirements for an Eligible Stockholder, only the common stock of the corporation Net Long Beneficially Owned by any member of a group continuously for at least one full year shall be aggregated with the common stock Net Long Beneficially Owned continuously for one year by each other person acting jointly to constitute an Eligible Stockholder.  No person may be a member of more than one group of persons constituting an Eligible Stockholder with respect to any annual meeting of stockholders.

F. “Independent” with respect to an Access Candidate shall mean (a) that the nominee would be considered an independent director in accordance with applicable rules promulgated by the Securities and Exchange Commission and within the meaning of Rule 5605(a)(2) of The NASDAQ Stock Market or such other principal U.S. securities market in which the common stock of the corporation trades and any additional standards used by the Board or a duly authorized committee thereof in determining and disclosing the independence of the corporation’s directors and (b) the nominee is not an employee or officer of, or consultant to, the Eligible Stockholder or any of its Affiliates and has no other material association, by agreement, understanding or familial or other relationship, with the Eligible Stockholder or any of its Affiliates or Associates.

G. The “Maximum Number” of candidates for which Access to the corporation’s proxy materials must be provided in respect of a meeting of stockholders (“Maximum Number of Access Candidates”) shall be that number of directors representing 25% of the entire Board in office on the immediate preceding annual meeting, rounded down to the nearest whole number.  This Maximum Number of Access Candidates shall be set as of the last date by which advance notice of the proposed nomination by a stockholder of an individual for election as a director at the meeting of stockholders may be timely given to the corporation in accordance with the corporation’s advance notice bylaw.  The Maximum Number of Access Candidates shall in no event exceed the number of nominees of the Board.

H. All references in this Section to rules of the Securities and Exchange Commission shall refer to the rules of the Securities and Exchange Commission as in effect on the date this Section becomes effective and as such rules may be amended from time to time thereafter or any successor provision of such rules.

A. An “annual meeting of stockholders” shall include a special meeting of stockholders to elect directors held in lieu of an annual meeting of stockholders and any adjournment of an annual meeting of stockholders or any such special meeting.

(e) Bylaw Anti-takeover Provisions Defined. Sections 2.2(b), 2.14(a)(1), 2.14(a)(2), and 2.14(b) of these Bylaws are the “Bylaw Anti-takeover Provisions.”

Section 2.15 Submission of Questionnaire, Representation and Agreement.  To be eligible to be a nominee for election or reelection as a director of the corporation, a person must complete and deliver (in accordance with the time periods prescribed for delivery of notice under Article II, Section 2.14 of these Bylaws) to the Secretary at the principal executive offices of the corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be in the form provided by the corporation, and shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person (a) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the corporation, with such person’s fiduciary duties under applicable law, (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein and (c) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation.

Section 2.16 Court Ordered Meetings.  A stockholder may apply to the district court in the county in Texas  where the corporation's principal office is located or, if the corporation has no principal office in Texas , to the appropriate court of the county in which the corporation's corporate office is located to seek an order that a stockholder meeting be held (i) if an annual meeting was not held within 15 months after its last annual meeting, or (ii) if a stockholder participated in a proper call of or demand for a special meeting and notice of the special meeting was not given within 30 days after the date of the call or the date of the last of the demands necessary to require the calling of the meeting was received by the corporation pursuant to the TBOC, or the special meeting was not held in accordance with the notice.

Section 2.17 Voting of Shares by Certain Stockholders.  If the name on a vote, consent, waiver, proxy appointment, or proxy appointment revocation corresponds to the name of a stockholder, the corporation is entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and give it effect as the act of the stockholder.

If the name signed on a vote, consent, waiver, proxy appointment or proxy appointment revocation does not correspond to the name of a stockholder, the corporation is, nevertheless, entitled to accept the vote, consent, waiver, proxy appointment or proxy appointment revocation and to give it effect as the act of the stockholder if:

(a) The stockholder is an entity and the name signed purports to be that of an officer or agent of the entity;

(b) The name signed purports to be that of an administrator, executor, guardian or conservator representing the stockholder and, if the corporation requests, evidence of fiduciary status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation;

(c) The name signed purports to be that of a receiver or trustee in bankruptcy of the stockholder and, if the corporation requests, evidence of this status acceptable to the corporation has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation;

(d) The name signed purports to be that of a pledge, beneficial owner or attorney-in-fact of the stockholder and, if the corporation requests, evidence acceptable to the corporation of the signatory's authority to sign for the stockholder has been presented with respect to the vote, consent, waiver, proxy appointment or proxy appointment revocation;

(e) Two or more persons are the stockholder as co-tenants or fiduciaries and the name signed purports to be the name of at least one of the co-tenants or fiduciaries, and the person signing appears to be acting on behalf of all the co-tenants or fiduciaries; or

(f) The acceptance of the vote, consent, waiver, proxy appointment or proxy appointment revocation is otherwise proper under rules established by the corporation that are not inconsistent with this Section 2.17.

The corporation is entitled to reject a vote, consent, waiver, proxy appointment or proxy appointment revocation if the Secretary or other officer or agent authorized to tabulate votes has reasonable basis for doubt about the validity of the signature on it or about the signatory's authority to sign for the stockholder.

Neither the corporation nor any of its directors, officers, employees or agents who accepts or rejects a vote, consent, waiver, proxy appointment or proxy appointment revocation in good faith and in accordance with the standards of this Section is liable in damages for the consequences of the acceptance or rejection.

Section 2.18 Waiver of Notice.  When any notice is required to be given to any stockholder, a waiver thereof in writing signed by the person entitled to such notice, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.  Such waiver shall be delivered to the corporation for filing with the corporate records.

The attendance of a stockholder at any meeting shall constitute a waiver of notice, waiver of objection to defective notice of such meeting, or a waiver of objection to the consideration of a particular matter at the stockholder meeting unless the stockholder, at the beginning of the meeting, objects to the holding of the meeting, the transaction of business at the meeting, or the consideration of a particular matter at the time it is presented at the meeting.

Section 2.19 Conduct of Meetings.

(a) Meetings of stockholders shall be presided over by the Executive Chairman of the Board, if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by a chairman designated by the Board. The Secretary shall act as secretary of the meeting, but in the absence of the Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.

(b) The Board may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board, the chairman of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

(c) The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

(d) In advance of any meeting of stockholders, the Board, the Executive Chairman of the Board or the Chief Executive Officer shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the corporation. The inspector shall have the duties prescribed by law and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1 General Powers.  The business and affairs of the corporation shall be managed by or under the direction of the Board, who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Formation.

Section 3.2 Performance of Duties.  A director of the corporation shall perform his or her duties as a director, including his or her duties as a member of any committee of the board upon which he or she may serve, in good faith, in a manner he or she reasonably believes to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.  In performing his or her duties, a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by persons and groups listed in paragraphs (a), (b), and (c) of this Section 3.2; but he or she shall not be considered to be acting in good faith if he or she has knowledge concerning the matter in question that would cause such reliance to be unwarranted.  A person who so performs his or her duties shall not have any liability by reason of being or having been a director of the corporation.

Those persons and groups on whose information, opinions, reports, and statements a director is entitled to rely upon are:

(a) One or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the matters presented;

(b) Counsel, public accountants, or other persons as to matters which the director reasonably believes to be within such persons’ professional or expert competence; or

(c) A committee of the board upon which he or she does not serve, duly designated in accordance with the provision of the Certificate of Formation or these Bylaws, as to matters within its designated authority, which committee the director reasonably believes to merit confidence.

Section 3.3 Number, Tenure and Qualifications.  The number of directors of the corporation shall be set from time to time by resolution of the Board, but in no instance shall there be less than one director.  Each director shall hold office until the next annual meeting of stockholders or until his or her successor shall have been elected and qualified.  Directors need not be residents of the State of Texas  or stockholders of the corporation.

Section 3.4 Executive Chairman of the Board.  Subject to the provisions of Article III of these Bylaws, the Executive Chairman of the Board shall be appointed by resolution of the Board and shall preside at all meetings of the Board and stockholders. 

Section 3.5 Quorum, Required Vote and Adjournment.  A majority of the total number of directors shall constitute a quorum for the transaction of business except as otherwise provided by statute or by the Certificate of Formation or these Bylaws.  The vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the Board, unless otherwise provided by an applicable provision of law, by these Bylaws, by the Certificate of Formation or by a resolution of the Board.  If a quorum shall not be present at any meeting of the Board, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.6 Regular Meetings.  A regular meeting of the Board shall be held without notice other than these Bylaws immediately after, and at the same place as, the annual meeting of stockholders.  The Board may provide, by resolution, the time and place, either within or without the State of Texas , for the holding of additional regular meetings without notice other than such resolution.

Section 3.7 Special Meetings.  Special meetings of the Board may be called by or at the request of the Executive Chairman, Vice Chairman of the Board, the Chief Executive Officer or any two directors.  The person or persons authorized to call special meetings of the Board may set any place, either within or without the State of Texas , as the place for holding any special meetings of the Board called by them.

Section 3.8 Notice.  Written notice of any special meeting of directors shall be given as follows:

(a)  By mail to each director at his or her business address at least four days prior to the meeting; or

(b)  By personal delivery, facsimile, email or other electronic means at least 24 hours prior to the meeting to the business address of each director, or in the event such notice is given on a Saturday, Sunday or holiday, to the residence address of each director.

(c)  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, so addressed, with postage thereon prepaid.  If notice is given by facsimile, email or other electronic means, such notice shall be deemed to be delivered when a confirmation of the transmission has been received by the sender.  Any director may waive notice of any meeting before or after the time and date of the meeting stated in the notice.  The waiver shall be in writing and signed by the director entitled to the notice.  The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meetings of the Board need be specified in the notice or waiver of notice of such meeting.

Section 3.9 Manner of Acting.  Except as otherwise required by the TBOC or by the Certificate of Formation, the act of the majority of the directors present at a meeting at which a quorum is present when a vote is taken shall be the act of the Board.

Section 3.10 Informal Action by Directors or Committee Members.  Unless the Certificate of Formation or these Bylaws provide otherwise, any action required or permitted to be taken at a meeting of the Board or any committee designated by said Board may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by each director or committee member, and delivered to the Secretary for inclusion in the minutes or for filing with the corporate records.  Action taken under this Section is effective when all directors or committee members have signed the consent unless the consent specifies a different effective date.  Such consent has the same force and effect as a unanimous vote of the directors or committee members and may be stated as such in any document.

Section 3.11 Participation by Electronic Means.  Any members of the Board or any committee designated by such Board may participate in a meeting of the Board or committee by means of telephone conference or similar communications equipment by which all persons participating in the meeting can hear each other at the same time.  Such participation shall constitute presence in person at the meeting.

Section 3.12 Vacancies.  Any vacancy occurring in the Board may be filled by the affirmative vote of a majority of the stockholders or the Board.  If the directors remaining in office constitute less than a quorum of the Board, the directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.

If elected by the directors, the director filling the vacancy shall hold office until the next annual stockholders' meeting at which directors are elected.  If elected by the stockholders, the director filling the vacancy shall hold office for the unexpired term of his or her predecessor in office; except that, if the director's predecessor was elected by the directors to fill a vacancy, the director elected by the stockholders shall hold the office for the unexpired term of the last predecessor elected by the stockholders.

If the vacant office was held by a director elected by a voting group of stockholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the stockholders, and, if one or more of the remaining directors were elected by the same voting group, only such directors so elected by the same voting group are entitled to vote to fill the vacancy if it is filled by the directors.

Section 3.13 Resignation.  Any director of the corporation may resign at any time by giving written notice to the Secretary.  The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.  When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.

Section 3.14 Removal.  Subject to any limitations contained in the Certificate of Formation, any director or directors of the corporation may be removed at any time, with or without cause, in the manner provided in the TBOC.

Section 3.15 Committees.  By resolution adopted by a majority of the Board, the directors may designate two or more directors to constitute a committee, any of which shall have such authority in the management of the corporation as the Board shall designate and as shall be prescribed by or limited by the TBOC and Article III of these Bylaws.

Section 3.16 Limitations on Committee Powers.  No committee of the Board, acting without concurrence of the entire Board, shall have power or authority to:

(a) Amend the Certificate of Formation or recommend the same to the stockholders;

(b) Adopt an agreement of merger or consolidation or recommend the same to the stockholders; 

(c) Recommend to the stockholders the sale, lease, or exchange of all or substantially all of the corporation’s property and assets;

(d) Recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution;

(e) Amend or repeal these Bylaws;

(f) Unless expressly so provided by resolution of the Board, (i) declare a dividend; or (ii) authorize the issuance of shares of the corporation of any class; and

(g) Amend, alter, or repeal any resolution of the Board which, by its terms, provides that it shall not be amended, altered or repealed by any committee or, as applicable, a certain committee.

Section 3.17 Committee Rules.  Each committee of the Board may set its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board designating such committee.  Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum.  In the event that a member of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

Section 3.18 Use of Communications Equipment in Conducting Meetings.  Members of the Board or any committee thereof may participate in and act at any meeting of the Board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this Section shall constitute attendance and presence in person at the meeting of the person or persons so participating.

Section 3.19 Compensation.  By resolution of the Board and irrespective of any personal interest of any of the directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the Board and/or Committee, and may be paid a stated salary as director or committee member or a set sum for attendance at each meeting of the Board or both.  No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

Section 3.20 Presumption of Assent.  A director of the corporation who is present at a meeting of the Board or committee of the Board at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless (i) the director objects at the beginning of the meeting, or promptly upon his or her arrival, to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to any action taken at the meeting, (ii) the director contemporaneously requests that his or her dissent or abstention as to any specific action taken be entered in the minutes of the meeting, or (iii) the director causes written notice of his or her dissent or abstention as to any specific action to be received by the presiding officer or the meeting before its adjournment or by the corporation promptly after the adjournment of the meeting. A director may dissent to a specific action at a meeting, while assenting to others.  The right to dissent to a specific action taken at a meeting of the Board or a committee of the board shall not be available to a director who voted in favor of such action.

Section 3.21 Books and Records.  The Board shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the corporation.

ARTICLE IV

OFFICERS

Section 4.1 Officers Delineated.  The officers of the corporation shall be: Executive Chairman, Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, President, Secretary, and Treasurer, each of whom must be a natural person who is eighteen years or older and shall be elected by the Board.  Such other officers and assistant officers as may be deemed necessary may be elected or appointed by the Board, the Executive Chairman or the Chief Executive Officer. 

Any number of offices may be held by the same person, except that neither the Executive Chairman, Chief Executive Officer nor any President shall also hold the office of either Treasurer or Secretary.  All officers, as between themselves and the corporation, shall have such authority and perform such duties in the management of the business and affairs of the corporation as may be provided in these Bylaws, or, to the extent not so provided, as may be prescribed by the Board or by the Chief Executive Officer.

Section 4.2 Election and Term of Office.  The officers of the corporation to be elected by the Board shall be elected annually by the Board at the first meeting of the Board held after the annual meeting of the stockholders.  If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as practicable.  Each officer shall hold office until his or her successor shall have been duly elected and shall have qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided.

Section 4.3 Removal.  Any officer or agent may be removed by the Board at any time, with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.  Election or appointment of an officer or agent shall not of itself create contract rights.

An officer may resign at any time by giving written notice of the resignation to the Secretary of the corporation.  The resignation is effective when the notice is received by the corporation unless the notice specifies a later effective date.

Section 4.4 Vacancies.  A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the Board for the unexpired portion of the term.

Section 4.5 Executive Chairman.  The Executive Chairman shall preside at all meetings of the directors or if the offices of the Chief Executive Officer and Executive Chairman are separate, the Executive Chairman may delegate such duties to the Chief Executive Officer.  The Executive Chairman shall have the general charge of the business and affairs of the corporation and shall oversee the management of the business of the corporation. The Executive Chairman shall perform such other duties as are required of him or her by the Board and shall have no other duties except such as are delegated to him or her by the Board. The Executive Chairman shall have the power to execute any and all instruments and documents on behalf of the corporation and to delegate to any other officer of the corporation the power to execute any and all such instruments and documents.

Section 4.6 Chief Executive Officer.  Subject to the provisions of the Article IV, the Chief Executive Officer of the corporation shall have the general charge of the business and affairs of the corporation and shall oversee the management of the business of the corporation.  In the absence of the Executive Chairman of the Board, or if designated to do so by the Board, the Chief Executive Officer shall preside at all meetings of the stockholders and of the directors and shall exercise the other powers and perform the other duties of the Executive Chairman of the Board or designate the executive officers of the corporation by whom such other powers shall be exercised and other duties performed.  The Chief Executive Officer shall see to it that all resolutions and orders of the Board are carried into effect, and the Chief Executive Officer shall have full power of delegation in so doing.  The Chief Executive Officer shall have such other powers and perform such other duties as the Board or these Bylaws may, from time to time, prescribe.  The Chief Executive Officer shall have the power to execute any and all instruments and documents on behalf of the corporation and to delegate to any other officer of the corporation the power to execute any and all such instruments and documents.

Section 4.7 Chief Financial Officer.  The Chief Financial Officer shall have charge and custody of and be responsible for all funds and securities of the corporation, including primarily responsibility for managing the financial risks of the corporation, financial planning and record-keeping, budget management, cost benefit analysis, forecasting financial needs, monitoring cash flow, analysis of the company's financial strengths and weaknesses and suggestion of plans for improvement, ensure that the company's financial reports are accurate and completed on time, evaluate the cost of projects and advise financial feasibility, oversee banking, investments, liquidity management and create investment strategies.

Section 4.8 President.  The President shall be the chief executive officer of the corporation and, subject to the control of the Board, shall in general supervise and control all of the business and affairs of the corporation. He or she may sign certificates for shares of the corporation and deeds, mortgages, bonds, contracts, or other instruments which the Board has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board or by these Bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time. The President or his or her designees may sell, lease, exchange, or otherwise dispose of any or all of the corporation's property in the usual and regular course of business.

Section 4.9 Chief Legal Officer.  The Chief Legal Officer shall have full oversight of all legal issues related to the corporation and the Board and has full authority to engage legal private legal counsel and have full oversight thereof. Chief Legal Officer and shall perform such other duties as from time to time may be assigned to him or her by the Executive Chairman, Chief Executive Officer or by the Board.

Section 4.10 Secretary.  The Secretary shall (a) prepare and maintain as permanent records the minutes of the proceedings of the stockholders and the Board, a record of all actions taken by the stockholders or Board without a meeting, a record of all actions taken by a committee of the Board in place of the Board on behalf of the corporation, and a record of all waivers of notice and meetings of stockholders and of the Board or any committee thereof, (b) ensure that all notices are duly given in accordance with the provisions of these Bylaws and as required by law, (c) serve as custodian of the corporate records and of the seal of the corporation and affix the seal to all documents when authorized by the Board, (d) keep at the corporation's registered office or principal place of business a record containing the names and addresses of all stockholders in a form that permits preparation of a list of stockholders arranged by voting group and by class or series of shares within each voting group, that is alphabetical within each class or series and that shows the address of, and the number of shares of each class or series held by, each stockholder, unless such a record shall be kept at the office of the corporation's transfer agent or registrar, (e) maintain at the corporation's principal office the originals or copies of the corporation's Certificate of Formation, Bylaws, minutes of all stockholders' meetings and records of all action taken by stockholders without a meeting for the past three years, all written communications within the past three years to stockholders as a group or to the holders of any class or series of shares as a group, a list of the names and business addresses of the current directors and officers, a copy of the corporation's most recent corporate report filed with the Secretary of State, and financial statements showing in reasonable detail the corporation's assets and liabilities and results of operations for the last three years, (f) have general charge of the stock transfer books of the corporation, unless the corporation has a transfer agent, (g) authenticate records of the corporation, and (h) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the president or by the Board. Assistant Secretaries, if any, shall have the same duties and powers, subject to supervision by the Secretary.  The directors or stockholders may respectively designate a person other than the Secretary or Assistant Secretary to keep the minutes of their respective meetings.

Any books, records, or minutes of the corporation may be in written form or in any form capable of being converted into written form within a reasonable time.

Section 4.11 Treasurer.  The Treasurer shall: (a) have charge and custody of and be responsible for all funds and securities of the corporation; (b) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of these Bylaws; and (c) in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Chief Executive Officer, President or by the Board.

Section 4.12 Assistant Secretaries and Assistant Treasurers.  The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President, Chief Executive Officer or the Board.

Section 4.13 Other Officers, Assistant Officers and Agents.  The Board may also elect or may delegate to the Executive Chairman of the Board and the Chief Executive Officer the power to appoint such other officers, assistant officers and agents, as it may at any time or from time to time deem advisable, and any officers, assistant officers and agents so elected or appointed shall have such authority and perform such duties as the Board, Chief Executive Officer or President may from time to time prescribe.

Section 4.14 Reservation of Authority.  All other powers not expressly delegated or provided for herein, or in the TBOC to any officer, are expressly reserved to the Board and may be delegated by it to any officer by resolution adopted from time to time by the Board.

Section 4.15 Salaries.  The salaries of the officers shall be set from time to time by the Board and no officer shall be prevented from receiving such salary by reason of the fact that he or she is also a director of the corporation.

Section 4.16 Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

Section 4.17 Execution of Contracts. Each Executive Officer and Non-Executive Officer of the corporation may execute, affix the corporate seal and/or deliver, in the name and on behalf of the corporation, deeds, mortgages, notes, bonds, contracts, agreements, powers of attorney, guarantees, settlements, releases, evidences of indebtedness, conveyances or any other document or instrument which (i) is authorized by the Board or (ii) is executed in accordance with policies adopted by the Board from time to time, except in each case where the execution, affixation of the corporate seal and/or delivery thereof shall be expressly and exclusively delegated by the Board to some other officer or agent of the corporation.

ARTICLE V

WAIVER OF NOTICE

Whenever a notice is required to be given by any provision of law, by these Bylaws, or by the Certificate of Formation, a written waiver, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to such notice.  Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the sole and express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

ARTICLE VI

INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

Section 6.1 Coverage.  Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director, officer of the corporation (which term shall include any predecessor corporation of the corporation) or is or was serving at the request of the corporation as a director, officer, employee, fiduciary or agent of another corporation or of a partnership, joint venture, trust or other enterprise of any type or kind, domestic or foreign, including service with respect to employee benefit plans (“indemnitee”), whether the basis of such proceeding is an alleged action in an official capacity as a director, officer, employee, fiduciary or agent or in any other capacity while serving as a director, officer, employee, fiduciary or agent, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the TBOC , as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than the applicable law permitted the corporation to provide prior to such amendment), against all expenses, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement or other disposition) incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. The right to indemnification conferred in these Bylaws shall be a contract right that vests at the time of such person’s service to or at the request of the corporation and includes the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the corporation within 20 days after the receipt by the corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the TBOC requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under these Bylaws or otherwise.

Section 6.2 Claims.  To obtain indemnification under these Bylaws, a claimant shall submit to the corporation a written request, including therein or therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification.  Upon such written request by a claimant for indemnification, a determination, if required by applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (a) if requested by the claimant, by Independent Counsel (as defined below), or (b) if no request is made by the claimant for a determination by Independent Counsel, (i) by the Board by a majority vote of a quorum consisting of Disinterested Directors (as defined below), or (ii) if a quorum of the Board consisting of Disinterested Directors is not obtainable or, even if obtainable, such quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to the claimant, or (iii) if a quorum of Disinterested Directors so directs, by the stockholders of the corporation. In the event the determination of entitlement to indemnification is to be made by Independent Counsel at the request of the claimant, the Independent Counsel shall be selected by the Board. If it is so determined that the claimant is entitled to indemnification, payment to the claimant shall be made within 10 days after such determination.

For purposes of these Bylaws:

“Disinterested Director” means a director of the corporation who is not and was not a party to the matter in respect of which indemnification is sought by the claimant.

“Independent Counsel” means a law firm, a member of a law firm, or an independent practitioner, who is experienced in matters of corporation law and shall include any person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the corporation or the claimant in an action to determine the claimant’s rights under these Bylaws.

Section 6.3 Enforcement of Claims.  If a claim under Section 6.1 of these Bylaws is not paid in full by the corporation within 60 days after a written claim pursuant to Section 6.2 of these Bylaws has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim.  It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the corporation) that the claimant has not met the standard of conduct which makes it permissible under the TBOC for the corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including its Board, Independent Counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the TBOC , nor an actual determination by the corporation (including its Board, Independent Counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. If a determination shall have been made pursuant to this Section 6.2 that the claimant is entitled to indemnification, the corporation shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 6.3.  The corporation shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 6.3 that the procedures and presumptions of these Bylaws are not valid, binding and enforceable and shall stipulate in such proceeding that the corporation is bound by all the provisions of these Bylaw.

Section 6.4 Enforceability.  If any provision or provisions of these Bylaws shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of these Bylaws (including, without limitation, each portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of these Bylaws (including, without limitation, each such portion of any paragraph of these Bylaws containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

Section 6.5 Rights Not Exclusive.  The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in these Bylaws (i) shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or Disinterested Directors or otherwise and (ii) cannot be terminated by the corporation, the Board or the stockholders of the corporation with respect to a person’s service prior to the date of such termination. No repeal or modification of these Bylaws shall in any way diminish or adversely affect the rights of any current or former director, officer, employee or agent of the corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification.

Section 6.6 Employees and Agents.  Persons who are not covered by the foregoing provisions of this Article VI and who are or were employees or agents of the corporation may be indemnified and may have their expenses paid to the extent and subject to such terms and conditions as may be authorized at any time or from time to time by the Board or the Chief Executive Officer.

Section 6.7 Insurance.  The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary or agent of the corporation or who is serving or has served at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation would have the power to indemnify such person against such liability under this Article VII.

Section 6.8 Notices.  Any notice, request or other communication required or permitted to be given to the corporation under this Article VI shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the Secretary and shall be effective only upon receipt by the Secretary.

ARTICLE VII

CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 7.1 Contracts.  The Board may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

Section 7.2 Loans.  No loans shall be contracted on behalf of the corporation and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of the Board.  Such authority may be general or confined to specific instances.

Section 7.3 Checks, Drafts, etc.  All checks, drafts or other orders for the payment of money, notes or other evidence of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board.

Section 7.4 Deposits.  All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board may select.

ARTICLE VIII

SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES

Section 8.1 Regulation.  The Board may make such rules and regulations as it may deem appropriate concerning the issuance, transfer and registration of certificates for shares of the corporation, including the appointment of transfer agents and registrars.

The shares of the corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of the corporation’s stock shall be uncertificated shares. Every holder of stock of the corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Sections 3.202-204 of the TBOC.

Section 8.2 Shares Without Certificates.  Unless otherwise provided by the Certificate of Formation or these Bylaws, the Board may authorize the issuance of any of its classes or series of shares without certificates.  Such authorization shall not affect shares already represented by certificates until they are surrendered to the corporation.

Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Section 3.205 of the TBOC or a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 8.3 Certificates for Shares.  If shares of the corporation are represented by certificates, the certificates shall be respectively numbered serially for each class of shares, or series thereof, as they are issued, and shall be signed by the corporate Secretary and either the Executive Chairman or the Chief Executive Officer or by such other officers of the corporation authorized by a resolution of the Board and complies with Sections 3.202-204 of the TBOC; provided that such signatures may be facsimile.  Each certificate shall state the name of the corporation, the fact that the corporation is organized or incorporated under the laws of the State of Texas, the name of the person to whom issued, the date of issue, the class (or series of any class), the number of shares represented thereby. 

A statement of the designations, preferences, qualifications, limitations, restrictions and special or relative rights of the shares of each class shall be set forth in full or summarized on the face or back of the certificates which the corporation shall issue, or in lieu thereof, the certificate may set forth that such a statement or summary will be furnished to any stockholder upon request without charge.  Each certificate shall be otherwise in such form as may be prescribed by the Board and as shall conform to the rules of any stock exchange on which the shares may be listed.

If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

The corporation shall not issue certificates representing fractional shares and shall not be obligated to make any transfers creating a fractional interest in a share of stock.  The corporation may, but shall not be obligated to, issue scrip in lieu of any fractional shares, such scrip to have terms and conditions specified by the Board.

Section 8.4 Cancellation of Certificates.  All certificates surrendered to the corporation for transfer shall be cancelled and no new certificates shall be issued in lieu thereof until the former certificate for a like number of shares shall have been surrendered and cancelled, except as herein provided with respect to lost, stolen or destroyed certificates.

Section 8.5 Consideration for Shares.  Certificated or uncertificated shares shall not be issued until the shares represented thereby are fully paid.  The Board may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed or other securities of the corporation.  Future services shall not constitute payment or partial payment for shares of the corporation.  The promissory note of a subscriber or an affiliate of a subscriber shall not constitute payment or partial payment for shares of the corporation unless the note is negotiable, recourse and is secured by collateral, other than the shares being purchased, having a fair market value of at least equal to the principal amount of the note.

Section 8.6 Lost, Stolen or Destroyed Certificates.  Any stockholder claiming that his or her certificate for shares is lost, stolen or destroyed may make an affidavit or affirmation of that fact and lodge the same with the Secretary of the corporation, accompanied by a signed application for a new certificate.  Thereupon, and upon the giving of a satisfactory bond of indemnity to the corporation or transfer agent not exceeding an amount double the value of the shares as represented by such certificate (the necessity for such bend and the amount required to be determined by the President and Treasurer of the corporation), a new certificate may be issued of the same tenor and representing the same number, class and series of shares as were represented by the certificate alleged to be lost, stolen or destroyed.

Section 8.7 Transfer of Shares.  Subject to the terms of any stockholder agreement relating to the transfer of shares or other transfer restrictions contained in the Certificate of Formation or authorized therein, shares of the corporation shall be transferable on the books of the corporation by the holder thereof in person or by his or her duly authorized attorney, upon the surrender and cancellation of a certificate or certificates for a like number of shares.  Upon presentation and surrender of a certificate for shares properly endorsed and payment of all taxes therefor, the transferee shall be entitled to a new certificate or certificates in lieu thereof.  As against the corporation, a transfer of shares can be made only on the books of the corporation and in the manner hereinabove provided, and the corporation shall be entitled to treat the holder of record of any share as the owner thereof and shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the TBOC.

ARTICLE IX

FISCAL YEAR

Except as from time to time otherwise designated by the Board, the fiscal year of the corporation shall begin on the first day of January of each year and end on the last day of December in each year.

ARTICLE X

DIVIDENDS AND DISTRIBUTIONS

The Board shall have full power and discretion pursuant to law, at any regular or special meeting, subject to the provisions of the Certificate of Formation or the terms of any other corporate document or instrument, to determine what, if any, dividends or distributions shall be declared and paid or made upon or with respect to outstanding shares of the capital stock of the corporation.  Dividends may be paid in cash, bonds, property, or in shares of the capital stock, subject to the provisions of the Certificate of Formation.  Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created.

ARTICLE XI

CORPORATE SEAL

The Board may authorize the use of a corporate seal which shall be circular in form and shall have inscribed thereon the name of the corporation and the state of incorporation and the words "CORPORATE SEAL."

ARTICLE XII

AMENDMENTS

Corporate Bylaws may be amended by the vote of at least a majority of the members of the board of directors or by a majority of the holders of the outstanding shares entitled to vote, provided that any amendment to the Bylaw Anti-takeover Provisions requires approval by either (i) a majority of the continuing and unaffiliated directors and holders of a majority of the Company’s outstanding shares or (ii) a majority of all of the Company’s directors and holders of at least 66 and 2/3% of the Company’s outstanding shares not held by the “affiliated shareholder”.

ARTICLE XIII

EXECUTIVE COMMITTEE

Section 13.1 Appointment.  The Board by resolution adopted by a majority of all directors in office, may designate two or more of its members to constitute an Executive Committee.  The designation of such Committee and the delegation thereto of authority shall not operate to relieve the Board, or any member thereof, of any responsibility imposed by law.

Section 13.2 Authority.  The Executive Committee, when the Board is not in session shall have and may exercise all of the authority of the Board except to the extent, if any, that such authority shall be limited by the resolution appointing the Executive Committee and except also that the Executive Committee shall not have the authority of the Board in reference to authorizing distributions, filling vacancies on the Board, authorizing reacquisition of shares, authorizing and determining rights for shares, amending the Certificate of Formation, adopting a plan of merger or share exchange, recommending to the stockholders the sale, lease or other disposition of all or substantially all of the property and assets of the corporation otherwise than in the usual and regular course of its business, recommending to the stockholders a voluntary dissolution of the corporation or a revocation thereof, or amending the Bylaws of the corporation.

Section 13.3 Tenure and Qualifications.  Each member of the Executive Committee shall hold office until the next regular annual meeting of the Board following his or her designation and until his or her successor is designated as a member of the Executive Committee and is elected and qualified.

Section 13.4 Meetings.  Regular meetings of the Executive Committee may be held without notice at such time and places as the Executive Committee may set from time to time by resolution.  Special meetings of the Executive Committee may be called by any member thereof upon not less than one day's notice stating the place, date and hour of the meeting, which notice may be written or oral.  Any member of the Executive Committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person.  The notice of a meeting of the Executive Committee need not state the business proposed to be transacted at the meeting.

Section 13.5 Quorum.  A majority of the members of the Executive Committee shall constitute a quorum for the transaction of business at any meeting thereof, and action of the Executive Committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a quorum is present when a vote is taken.

Section 13.6 Informal Action by Executive Committee.  Any action required or permitted to be taken by the Executive Committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members of the Executive Committee entitled to vote with respect to the subject matter thereof.

Section 13.7 Vacancies.  Any vacancy in the Executive Committee may be filled by a resolution adopted by a majority of the Board.

Section 13.8 Resignations and Removal.  Any member of the Executive Committee may be removed at any time with or without cause by resolution adopted by a majority of the Board.  Any member of the Executive Committee may resign from the Executive Committee at any time by giving written notice to the President or Secretary of the corporation, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 13.9 Procedure.  The Executive Committee shall elect a presiding officer from its members and may set its own rules of procedure which shall not be inconsistent with these Bylaws.  It shall keep regular minutes of its proceedings and report the same to the Board for its information at the meeting thereof held next after the proceedings shall have been taken.

ARTICLE XIV

EMERGENCY BYLAWS

The Emergency Bylaws provided in this Article XIV shall be operative during any emergency in the conduct of the business of the corporation resulting from a catastrophic event causing a quorum of directors to be not readily available as a result thereof, notwithstanding any different provision in the preceding articles of the Bylaws or in the Certificate of Formation of the corporation or in the TBOC.  To the extent not inconsistent with the provisions of this Article, the Bylaws provided in the preceding articles shall remain in effect during such emergency and upon its termination the Emergency Bylaws shall cease to be operative.

During any such emergency:

(a) A meeting of the Board may be called by any officer or director of the corporation.  Notice of the time and place of the meeting shall be given by the person calling the meeting to such of the directors as it may be feasible to reach by any available means of communication.  Such notice shall be given at such time in advance of the meeting as circumstances permit in the judgment of the person calling the meeting.

(b) At any such meeting of the Board, a quorum shall consist of the number of directors in attendance at such meeting.

(c) The Board, either before or during any such emergency, may, effective in the emergency, change the principal office or designate several alternative principal offices or regional offices, or authorize the officers so to do.

(d) The Board, either before or during any such emergency, may provide, and from time to time modify, lines of succession in the event that during such an emergency any or all officers or agents of the corporation shall for any reason be rendered incapable of discharging their duties.

(e) No officer, director or employee acting in accordance with these Emergency Bylaws shall be liable except for willful misconduct.

(f) These Emergency Bylaws shall be subject to repeal or change by further action of the Board or by action of the stockholders, but no such repeal or change shall modify the provisions of the next preceding paragraph with regard to action taken prior to the time of such repeal or change.  Any amendment of these Emergency Bylaws may make any further or different provision that may be practical and necessary for the circumstances of the emergency.

ARTICLE XV

GENERAL PROVISIONS

Section 15.1 Voting Securities Owned by the Corporation.  Voting securities in any other entity held by the corporation shall be voted by the Executive Chairman of the Board or the Chief Executive Officer, unless the Board specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer.  Any person authorized to vote securities shall have the power to appoint proxies, with or without general power of substitution.

Section 15.2 General and Special Bank Accounts.  The Board may authorize from time to time the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may designate or as may be designated by any officer or officers of the corporation to whom such power of designation may be delegated by the Board from time to time.  The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

Section 15.3 Section Headings.  Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 15.4 Forum Selection.  Unless the corporation consents in writing to the selection of an alternative forum, the courts of the State of Texas (or, in the event that the Texas state judicial system does not have jurisdiction, the federal district court for the District of Texas shall, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of the corporation to the corporation or the corporation’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the TBOC , the Certificate of Formation or these Bylaws, or (4) any action asserting a claim governed by the internal affairs doctrine, except as to each of (1) through (4) above, for any claim as to which the court determines that there is an indispensable party not subject to the jurisdiction of the court (and the indispensable party does not consent to the personal jurisdiction of the court within ten days following such determination). Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Section 15.

Section 15.5 Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Formation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

Section 15.6 Voting of Securities. Except as the Board may otherwise designate, the Executive Chairman, Chief Executive Officer, the President or the Treasurer may waive notice, vote, consent, or appoint any person or persons to waive notice, vote or consent, on behalf of the corporation, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) with respect to, the securities of any other entity which may be held by this corporation.

Section 15.7 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

Section 15.8 Certificate of Formation. All references in these Bylaws to the Certificate of Formation shall be deemed to refer to the Certificate of Formation of the corporation, as amended and/or restated and in effect from time to time.

Section 15.9 Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

Section 15.10 Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

Section 15.11 Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, which creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

EX-10.114

Exhibit 10.114

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), effective as of November 16, 2021, (the "Effective Date"), is made and entered into by and between ORBITAL ENERGY GROUP, INC., a Colorado corporation (the "Company"), and NICK GRINDSTAFF (the "Executive").

WITNESSETH:

WHEREAS, the Executive shall be employed as the Company's Chief Financial Officer and is expected to make, major contributions to the Company and its subsidiaries strategic short and long-term goals, growth, and financial strength of the Company; and

WHEREAS, the Company has determined that appropriate arrangements should be taken to hire Executive and to encourage the continued attention and dedication of the Executive to his assigned duties without distraction; and

WHEREAS, in consideration of the Executive's employment with the Company, the Company desires to provide the Executive with certain compensation and benefits as set forth in this Agreement; and

WHEREAS, the Executive is agreeable to the Restrictive Covenants, which is in the best interests of the Company and its shareholders as part of this Agreement; and

WHEREAS, the Compensation Committee has determined that entering into this Agreement is in the best interests of the Company and its shareholders.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the Company and the Executive agree as follows:

1.         Duties of Executive; Employment Rights; Terms.

(a)        Duties of Executive.  The duties of Executive shall be those that are commensurate with the position of Chief Financial Officer and such duties shall be rendered at the Company's office and at such other place or places as the Company shall in good faith require or as the interest, needs, business, or opportunity of the Company shall require.  Executive agrees that Executive will at all times faithfully, industriously, and to the best of Executive's ability, experience, and talents, perform all of the services and duties that may be required of and from Executive pursuant to the terms hereof. Executive shall during the term of his employment hereunder, subject to control of the board of directors and the Chief Executive Officer, have the executive powers of the chief financial officer and exercise active financial management and supervision over the business and affairs of the Company and its subsidiaries and its several officers, and shall perform such executive and/or administrative duties consistent with the office of Chief Financial Officer. 

(b)        Employment Rights.  Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Company or the Executive to have the Executive remain in the employment of the Company or any subsidiary prior to or following any Change in Control.

2.         Executive Compensation.

(a)        Annual Base Compensation.  Executive’s Annual Base Salary shall equal $650,000 per annum.  The Annual Base Salary payable in periodic installments in accordance with the Company’s customary payroll practices, but no less frequently than monthly.  The Executive’s Annual Base Salary shall be reviewed at least annually by the Compensation Committee, and the Compensation Committee may, but shall not be required to, increase the Executive’s Annual Base Salary; providing, however, Executive’s Annual Base Salary shall be increased a minimum of 3% annually to cover “cost-of-living” adjustments.  The Executive’s Annual Base Salary shall not be reduced without the written consent of the Executive.

(b)        Short Term Incentive Plan (STIP). Executive shall be entitled to receive a minimum annual STIP payment of one hundred percent (100%) of his Annual Base Salary (“Target Bonus”) during the Term. Said bonus shall be based on performance objectives, goals, and milestones agreed to by the Executive, OEG’s CEO, and the Compensation Committee. Executive shall have the ability to earn a larger bonus based on performance criteria and the reasonable judgment and discretion of the Compensation Committee.  The Executive shall have the right to have any bonuses paid in the form of restricted stock units or other equity incentive arrangements provided for under the proposed new Equity Incentive Plan.  Any issuance of equity based compensation to the Executive shall be consistent with the provisions of NASDAQ Listing Rule 5635(c).

(c)        Long Term Incentive Plan (LTI).  Executive shall be granted, subject to the restrictions and understandings described below, $750,000 in Restricted Stock Units (RSU) annually on April 1 of each calendar year during the term (grant date). The number of RSU’s will be determined by the average stock price the last 10 trading days prior to the grant date. Such RSU’s shall vest in one-third increments with the first vest occurring at the date of grant and the remainder of the RSU increments vesting annually on the anniversary of the initial grant. The RSU’s shall immediately vest in the event of an involuntary termination, including death or disability of the Executive by the Company for any reason other than Cause, of this Agreement by Executive for Good Reason.

(d)        PTO (Paid Time Off). Executive may take up to four (4) weeks of paid PTO in each calendar year at in accordance with the terms and conditions of such PTO policies generally applicable to Company's executive employees.

(e)        Reimbursement of Expenses.  During the term hereof, Executive shall be entitled to reimbursement for all normal and reasonable expenses necessarily incurred by Executive in the performance of his obligations hereunder, subject to such substantiation requirements as may be imposed by the Company.

(f)        Other Benefits.  Executive shall be entitled to participate in any other group hospitalization, health, dental care or sick-leave plan, life or other insurance or death benefit plan, travel or accident insurance, or executive contingent compensation plan, including, without limitation, stock option plan, retirement, income or pension plans, or other present or future group employee benefit plans, programs or arrangements of the Company for which executives are or shall become eligible, and Executive shall be eligible to receive during the term of this Agreement all benefits for which executives are eligible under every such plan, program or arrangement to the extent permissible under the general terms and provisions of such plans, programs or arrangements and in accordance with the provisions thereof.

(g)        Life Insurance.  The Company shall pay up to a $9,999 per year annual premium for a life insurance policy with a face amount equal to one (1) year’s salary plus the Target Bonus, which names the Executive’s estate as the beneficiary. Any premiums above $9,999 are the responsibility of the Executive.

(h)        Past Bonuses.  If Executive’s employment with the Company terminates for any reason other than Cause, any bonus amounts previously approved by the Compensation Committee but not yet paid to Executive shall be payable to the Executive within sixty (60) days of the Termination Date and require no further actions or approvals.

(i)        Indemnification & Hold Harmless.  The Company shall hold Executive harmless and indemnify him for any costs (including legal fees) associated with his previous Employment Agreement, including, but not limited to the Non-Competition clause contained therein.

3.         Involuntary Termination or Resignation for Good Reason.

(a)        Payments/Benefits.  In no event will the Company involuntarily terminate the Executive’s employment for any reason other than death, disability or Cause for a period of one (1) year after the occurrence of a Change in Control event.  In the event of: (i) an involuntary termination of Executive's employment by the Company for any reason other than Cause, death, or Disability, or (ii) Executive's resignation for Good Reason, Executive shall be entitled to the following benefits: 

(i)         2.5 times the sum of Annual Base Salary and Target Bonus, paid in a single lump sum cash payment on or before the sixtieth (60th) day following Executive's Termination Date. Annual Base Salary shall mean: Executive's Annual Base Salary immediately prior to Executive’s Termination Date. Target Bonus shall mean Executive's Target Bonus immediately prior to Executive's Termination Date.

(ii)        For a period of up to eighteen (18) months following Executive's Termination Date, Executive and, where applicable, Executive's spouse and eligible dependents, will continue to be eligible to receive medical coverage under the Company's medical plans in accordance with the terms of the applicable plan documents; provided, however, that in order to receive such continued coverage at such rates, Executive will be required to pay the applicable premiums directly to the plan provider, and the Company will reimburse the Executive, within thirty (30) days following the date such monthly premium payment is due, an amount equal to the monthly COBRA premium payment, less applicable tax withholdings. Notwithstanding the foregoing, if Executive obtains full-time employment during the aforementioned eighteen (18) month period which employment entitles him and his spouse and eligible dependents to comprehensive medical coverage, Executive must immediately notify the Company in writing and no further reimbursements will be paid by the Company to the Executive pursuant to this subsection.  In addition, if Executive does not pay the applicable monthly COBRA premium for a particular month at any time during the eighteen (18) month period and coverage is lost as a result, no further reimbursements will be paid by the Company to the Executive. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot provide the foregoing COBRA benefits without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to Executive a taxable lump sum payment in an amount equal to the monthly (or then remaining) COBRA premium that Executive would be required to pay to continue his group health coverage in effect on the Termination Date (which amount shall be based on the premium for the first month of COBRA coverage).  The payment of any tax relating to such lump-sum payment shall be the sole responsibility of Executive

(iii)       Executive shall receive any amounts earned, accrued or owing but not yet paid to Executive as of his Termination Date, payable in a lump sum, and any benefits accrued or earned in accordance with the terms of any applicable benefit plans and programs of the Company on or before the sixtieth (60^th) day following Executive’s Termination Date.

(iv)       All unvested RSU’s, issued to Executive shall immediately vest in full, and shall be exercisable at any time prior to such instruments stated expiration date.

(v)        Any deferred past bonuses that have been earned but not paid shall be payable in a lump sum on or before the sixtieth (60^th) day following Executive’s Termination Date.

4.         Termination of Employment on Account of Disability, Death, Cause or Voluntarily Without Good Reason.

(a)        Termination on Account of Disability. Notwithstanding anything in this Agreement to the contrary, if Executive's employment terminates on account of Executive's Disability, Executive shall be entitled to receive (i) 75% of his then current Annual Base Salary for six (6) months payable over such six (6) month period, and (ii) disability benefits under any disability program maintained by the Company that covers  Executive, and Executive shall  not receive benefits pursuant to Section 3 hereof, except that, subject to the provisions of Section 6 hereof, the Executive shall be entitled to the following benefits provided that Executive executes and does not revoke the Release: For a period of up to eighteen (18) months following Executive's Termination Date, Executive and where applicable, Executive's spouse and eligible dependents, will continue to be eligible to receive medical coverage under the Company's medical plans in accordance with the terms of the applicable plan  documents; provided, however, that in order to receive such continued coverage at such rates, Executive will  be required  to pay  the applicable premiums directly to the plan provider, and the Company will reimburse the Executive, within thirty (30) days following the date such monthly premium payment is due, an amount equal to the monthly COBRA premium payment, less applicable tax withholdings. Notwithstanding the foregoing, if Executive obtains full-time employment during the aforementioned eighteen (18) month period that entitles him and his spouse and eligible  dependents to comprehensive medical coverage, Executive must immediately notify the Company in writing and no further reimbursements will be paid by the Company to the Executive pursuant to this subsection (i) of Section 4(a).  In addition, if Executive does not pay the applicable monthly COBRA premium for a particular month at any time during the eighteen (18) month period and coverage is lost as a result, no further reimbursements will be paid by the Company to the Executive pursuant to this subsection (i) of Section 4(a). Notwithstanding the above, if the Company determines in its sole discretion that it cannot provide the foregoing COBRA benefits without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof provide to Executive a taxable lump-sum payment in an amount equal to the monthly (or then remaining) COBRA premium that Executive would be required to pay to continue his group health coverage in effect on the Termination Date (which amount shall be based on the premium for the first month of COBRA coverage). The payment of any tax relating to such lump‐ sum payment shall be the sole responsibility of Executive.

(b)        Termination on Account of Death. Notwithstanding anything in this Agreement to the contrary, if Executive's employment terminates on account of Executive's death, Executive shall be entitled to receive death benefits under any death benefit program maintained by the Company that covers Executive, and Executive not receive benefits pursuant to Sections 3 hereof.

(c)        Termination on Account of Cause.  Notwithstanding anything in this Agreement to the contrary, if Executive's employment terminates by the Company on account of Cause, Executive shall not receive benefits pursuant to Sections 3 hereof and all unvested options or other equity compensation interests shall be immediately forfeited.

(d)        Termination on Account of Voluntary Resignation Without Good Reason. Notwithstanding anything in this Agreement to the contrary, if Executive's employment terminates on account of a resignation by Executive for no reason or any reason other than on account of Good Reason, Executive shall not receive benefits pursuant to Sections 3 hereof.

(e)        Options and Other Equity Compensation Interests.  Notwithstanding the foregoing, Executive, his estate or legal representation shall be entitled to all rights that are provided to Executive under under any stock options, restricted stock or other equity compensation arrangements through the expiration date for such instruments in the event of death, disability or termination of employment without Cause by the Company.

5.         [Reserved]

6.         Release.  Notwithstanding the foregoing,  no payments or other benefits under this Agreement shall be made to Executive unless Executive executes, and does not revoke, the Company's standard written release, substantially in the form as attached hereto as Annex “B” (the "Release"), of any and all claims against the Company and all related parties with respect to all matters arising out of Executive's employment with the Company (other than entitlements under the terms of this Agreement or under any other plans or programs of the Company in which Executive participated and under which Executive has accrued or become entitled to a benefit) or a termination thereof, with such release being effective not later than sixty (60) days following Executive's Termination Date.

7.         No Mitigation Obligation.  Except as otherwise provided herein, Executive shall not  be required to mitigate the amount of any payment or benefit provided for in this Agreement  by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

8.         Term of Agreement.  This Agreement shall continue in full force and effect until the fourth (4^th) anniversary of the Effective Date (the "Initial Term"). This Agreement shall be extended following the Initial Term (or any successor, extended, or renewal term, (a "Renewal Term") for continuing one year terms; provided, however, that within the ninety (90) day period prior to the expiration of the Initial Term or any Renewal Term, at its discretion, the Compensation Committee or the Board may propose for consideration by Executive, such amendments to the Agreement as it deems appropriate.  If Executive's employment with the Company terminates during the Initial Term or a Renewal Term, this Agreement shall remain in effect until all of the obligations of the parties hereunder are satisfied or have expired.

9.         Certain Defined Terms.  In addition to terms defined elsewhere herein, the following terms have the following meanings when used in this Agreement with initial capital letters:

(a)        "Annual Base Salary" means the Executive's annual base salary, exclusive of bonuses, commissions, and other incentive pay, as in effect immediately preceding Executive's Termination Date. For informational purposes, as of the Effective Date, Executive's Annual Base Salary is $650,000.00.

(b)        "Board" means the Board of Directors of the Company.

(c)        "Change in Control" means:

(i)         any persons or entities becoming the beneficial owners, directly or indirectly, of securities of the Company representing greater than fifty percent (50%) of the total voting power of all of the Company's then outstanding voting securities in one or a series of related transactions;

(ii)        a merger or consolidation of the Company in which the Company's voting securities immediately prior to such merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately following the merger or consolidation;

(iii)       a sale of substantially all of the assets of the Company or a liquidation or dissolution of the Company; or

(iv)       individuals who, as of the date of execution of this Agreement, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of the Company subsequent to the date of execution of this Agreement, whose election, or nomination for election by the Company's stockholders, was approved by the vote of at least a majority of the directors then in office shall be deemed a member of the Incumbent Board.

(d)        "Cause" means:

(i)         Executive’s final conviction by a court of competent jurisdiction for fraud, misappropriation or embezzlement;

(ii)        Executive’s material breach of this Agreement or serious, willful gross misconduct or willful gross neglect of duties (other than any such neglect resulting from Executive’s incapacity due to physical or mental illness or Disability or any such neglect after the issuance of a notice of termination by Executive for Good Reason), which breach or conduct is not cured or corrected by Executive within thirty (30) days of receiving written notice thereof from the Company; or

(iii)       Executive’s material breach of any written policy of the Company, including but not limited to the Code of Ethics for the Chief Executive Officer and Senior Financial Officers, which breach is not cured or corrected by Executive within thirty (30) days of receiving written notice thereof from the Company.

(e)        "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended.

(f)        "Compensation Committee" shall mean committee of the Board appointed in accordance with related listing requirements of NASDAQ, NYSE, AMEX or other exchange in which the Company’s securities are listed.

(g)        "Disability" means (i) the Executive's incapacity by bodily injury, illness, or disease so as to prevent Executive from engaging in the performance  of the Executive's duties (provided, however, that the Company acknowledges its obligations to provide reasonable accommodation to the extent required by applicable law); (ii) such incapacity shall have continued for a period of six (6) consecutive months; and (iii) such incapacity will, in the opinion of a qualified physician to be selected by the Company, be permanent and continuous during the remainder of the Executive's life.

(h)        "Good Reason" means

(i)         a material diminution in the Executive's base compensation or target bonus below the amount as of the date of this Agreement, or as increased during the course of Executive's employment with the Company, excluding one or more reductions (totaling no more than twenty percent (20%) in the aggregate) generally applicable to all senior executives; or

(ii)        any action or inaction that constitutes a material breach by the Company of this Agreement; provided, however, that for the Executive to be able to terminate his employment with the Company on account of Good Reason, Executive must provide notice of the occurrence of the event constituting Good Reason and his desire to terminate his employment with the Company on account of such within ninety (90) days following the initial existence of the condition constituting Good Reason.  Thereafter, the Company shall have a period of thirty (30) days following receipt of such notice in which to cure the condition. If the Company does not cure the event constituting Good Reason within such thirty (30) day period, the Executive's Termination Date shall be the day immediately following the end of such thirty (30) day period, unless the Company provides for an earlier Termination Date.

(i)         "Termination Date" means the last day of Executive's employment with the Company.

(j)         "Termination of Employment" means the termination of Executive's employment relationship with the Company, for any reason.

10.       Tax Matters.

(a)        Withholding of Taxes.  The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation, or ruling.

(b)        Indemnity.  If the Company breaches its covenant not to terminate the Executive involuntarily for any reason other than death, disability or Cause within one (1) year of a Change in Control event, as set forth in Section 3(a), then the Company shall indemnify the Executive for any taxes, penalties, interests, fees and costs, including accounting and legal fees, grossed up for any additional taxable income resulting from such indemnification that the Executive incurs relating to any IRS determinations or proceedings that would subject the Executive to assessment of the Excise Tax imposed by Section 4999 of the Internal Revenue Code, or any comparable successor provision.

11.       Section 409A of the Code.

(a)        Interpretation.  Notwithstanding the other provisions hereof, this Agreement is intended to comply with the requirements of Section 409A of the Code, to the extent applicable, and this Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Code. Accordingly, all provisions herein, or incorporated by reference, shall be construed and interpreted to comply with Section 409A of the Code and, if necessary, any such provision shall be deemed amended to comply with Section 409A of the Code and regulations thereunder.  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. Any amount payable under this Agreement that constitutes deferred compensation subject to Section 409A of the Code shall be paid at the time provided under this Agreement or such other time as permitted under Section 409A of the Code. No interest will be payable with respect to any amount paid within a time period permitted by, or delayed because of, Section 409A of the Code. All payments to be made upon a termination of Executive's employment under this Agreement that are deferred compensation may only be made upon a "separation from service" under Section 409A of the Code. For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment.  In no event may Executive, directly or indirectly, designate the calendar year of payment.

(b)        Payment Delay. To the maximum extent permitted under Section 409A of the Code, the severance benefits payable under this Agreement are intended to comply with the "short‐ term deferral exception" under Treasury Regulation §l.409A-l(b)(4), and any remaining amount is intended to comply with the "separation pay exception" under Treasury Regulation §l.409A-1(b)(9)(iii); provided , however, any amount payable to Executive during the six (6) month period following Executive's Termination Date that does not qualify within either of the foregoing exceptions and constitutes deferred compensation subject to the requirements of Section 409A of the Code, then such amount shall hereinafter be referred to as the "Excess Amount".  If at the time of Executive's separation from service, the Company's (or any entity required to be aggregated with the Company under Section 409A of the Code) stock is publicly-traded on an established securities market or otherwise and Executive is a "specified employee" (as defined in Section 409A of the Code and determined in the sole discretion of the Company (or any successor thereto) in accordance with the Company's (or any successor thereto) "specified employee" determination policy), then the Company shall postpone the commencement of the payment of the portion of the Excess Amount that is payable within the six (6) month period following Executive's Termination Date with the Company (or any successor thereto) for six (6) months following Executive's Termination Date with the Company (or any successor thereto). The delayed Excess Amount shall be paid in a lump sum to Executive within ten (10) days following the date that is six (6) months following Executive's Termination Date with the Company (or any successor thereto).  If Executive dies during such six (6) month period and prior to the payment of the portion of the Excess Amount that is required to be delayed on account of Section 409A of the Code, such Excess Amount shall be paid to the personal representative of Executive's estate within sixty (60) days after Executive's death.

(c)        Reimbursements.  All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement  that (i) any reimbursement is for expenses incurred during Executive's lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. Any tax gross up payments to be made hereunder shall be made not later than the end of Executive's taxable year next following Executive's taxable year in which the related taxes are remitted to the taxing authority.

12.       Restrictive Covenants.

(a)        Legitimate Business Interests. The Company is entitled to protection of its legitimate business interests, and the parties agree that these interests include without limitation: the Company's confidential business and professional information; the Company's substantial relationships with existing or prospective clients and customers, prospects and referral sources; the Company's trade secrets; the Company's patented and unpatented technology and user manuals; marketing plans; and business strategies. The parties further agree that the Company has a legitimate business interest in its employees and independent contractors who are an integral part of its business and a valuable resource due to the Company's substantial investment in the training of its employees and independent contractors.  The parties further agree that the Company has a legitimate business interest in client and referral source goodwill associated with the marketing area in the United States. The parties agree that the Restrictive Covenants in this Section 12 are reasonably necessary to protect these legitimate business interests.

(b)        Non-Competition.  Executive covenants and agrees that during the Restricted Period, Executive will not directly or indirectly own, manage, operate, control, be employed by, act as an agent for, participate in or be connected in any manner with the ownership, management , operation or control of any business which is engaged in businesses which are competitive to the business of the Company. Executive agrees that this restrictive covenant shall encompass the United States.  For purposes of this Section 12(b), the term "Restricted Period" shall mean the term of this Agreement (including any renewal or extended terms), and for a period of twenty-four (24) months following termination of this Agreement or termination of Executive's relationship with the Company, for any reason.

(c)        Non-Solicitation.

(i)         Non-Solicitation of Customers/Clients.  Executive covenants and agrees that during the Restricted Period, Executive shall not, directly or indirectly, on behalf of himself or through another person or entity, solicit, induce, entice, divert, take away or interfere with or attempt to do any of the foregoing with respect to, or trade of or trade with, any Customer of the Company on behalf of a competing business. The term "Customer" shall include, without limitation, any client, customer, supplier, consultant, advisor, or contractor of the Company, as well as those current and prospective persons or entities having a business relationship with the Company during the term of Executive's employment or at the time of Executive's solicitation, inducement, enticement, diversion, take away or interference (or attempt) or at any time within the twenty-four (24) month period prior to such action by Executive. For purposes  of this Section 12(c), the term "Restricted Period" shall mean the term of this Agreement (including any renewal or extended terms), and for a period of twenty-four (24) months following termination of this Agreement or termination of Executive's relationship with the Company for any reason.

(ii)        Non-Solicitation of Employees.  Executive covenants and agrees that during the Restricted Period, he shall not, directly or indirectly, solicit or induce or attempt to solicit or induce, initiate or have contact with any employee of the Company for the purpose of persuading them to leave the employ of the Company for any reason whatsoever, or offer such employee employment with anyone or otherwise hire or engage the services of any employee of the Company.

(d)        Intellectual Property; Work for Hire.  The following provisions shall apply with respect to the Company's Intellectual Property (as defined below):

(i)         Executive has disclosed and will continue to disclose promptly to the Company all Intellectual Property made, conceived, created, discovered, reduced to practice or learned by Executive, either alone or jointly with others, during the term of this Agreement, including the period preceding the execution of this Agreement during which services may have been provided by Executive. As used in this Agreement, "Intellectual Property" means all intellectual property, including all Works (including all works of authorship), computer programs, methods, systems, processes, formulae, data, functional specifications, know-how, improvements, inventions, discoveries, developments, techniques, licenses, Confidential Information and all information relating thereto, patents, patent applications, copyrights, moral rights, trademarks, trade names, service marks and trade dress, in each case whether or not patentable, registrable under copyright or similar statutes, or subject to analogous protection.

(ii)        All Works which are or may be protected by a copyright, are works made for hire within the meaning of applicable copyright laws and are the sole property of the Company.  For purposes of this Agreement, "Works" means all subject matter invented, conceived, developed, created or enhanced by Executive in connection with the Company's Intellectual Property or while performing services prior to or during the term of this Agreement.

(iii)       All Intellectual Property that Executive has, may have or may acquire prior to or during the term of this Agreement, is and will be the sole property of the Company. Executive assigns to the Company all of Executive's present rights, title and interests in and to that Intellectual Property. Executive waives and irrevocably quitclaims to the Company any claims that Executive now or in the future has for infringement of that Intellectual Property. Executive agrees to take all measures requested by the Company to witness and record the assignment of all of Executive's rights, title and interests in or to that Intellectual Property to the Company or its designee. Executive agrees to take all measures requested by the Company to help the Company in obtaining protection for, and benefit from, that Intellectual Property. The Company will bear all costs of such measures taken by Executive.

(iv)       Executive hereby grants to the Company a nonexclusive, royalty free, perpetual, irrevocable, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, publicly display and perform, use, sell and otherwise distribute any and all Intellectual Property that Executive made, conceived, created, discovered, reduced to practice or learned before the execution of this Agreement with the Company and that Executive incorporates or may incorporate into any products, process or other property of the Company.

(v)        Executive hereby irrevocably designates and appoints the Company and his duly authorized officers and agents as the Executive's agent and attorney-in-fact in the following limited capacity: to act for and on Executive's behalf and to execute and file any such application or applications and to perform all other lawfully permitted acts to further the prosecution and issuance of patents, copyrights or similar protections with the same legal force and effect as if executed by Executive but only if the Company is unable, after reasonable effort, to secure Executive's cooperation.

(e)        Confidentiality.

(i)         Nature and Restriction.  Executive agrees that during the term of this Agreement (including any renewal or extended terms), Executive shall not (i) disclose to any other person or entity, (ii) use for the benefit of Executive or persons or entities other than the Company, directly or indirectly, or (iii) provide for use by other persons or entities any Confidential Information of the Company. Executive also agrees that upon termination of this Agreement or of the relationship between Executive and the Company, for any reason, the Executive shall return to the Company any and all documents and materials of any type related to the Company's business or other documents and material, including any and all Confidential Information, that Executive received in connection within the scope of Executive's employment with the Company.

(ii)        Confidential Information.  For purposes of this Agreement, the term "Confidential Information" shall mean the Company's (i) trade secrets, (ii) lists of existing and prospective clients, trade vendors, contractors, and other persons or entities with whom the Company has or contemplates business relationships, (iii) pricing and cost information related to the Business, (iv) marketing techniques, plans, and know-how, (v) computer programs and software, (vi) coding systems and processes, (vii) networking concepts and processes, (viii) contract terms and prospective contract terms with existing and prospective clients, accounts and other persons or entities with whom the Company has or contemplates business relationships, (ix) existing and prospective geographic locations,  and (x) other business information, financing strategies and practices, training and operational procedures, strategies, methodologies and processes which are not generally and lawfully known of public record, public domain or by third parties.

(f)        Non-Disparagement.  Executive agrees that he will not, whether orally or in writing, make any disparaging statements or comments, either as fact or as opinion, about the Company or its products and services, business, technologies, market position, agents, representatives, directors, officers, shareholders, attorneys, employees, vendors, affiliates, successors or assigns, or any person acting by, through, under or in concert with any of them.

(g)        Reasonableness of Restrictive Covenants. Executive has carefully read, reviewed, and considered the provisions of this Section 12 (collectively, "Restrictive Covenants"), and having done so, stipulates and agrees that that the understandings and restrictions set forth in the Restrictive Covenants are fair and reasonable, and are reasonably necessary for the protection of the interests of the Company. The parties acknowledge that legitimate business interests of the Company can be protected under applicable Florida law with respect to covenants like the Restrictive Covenants.

(h)        Rights and Remedies Upon Breach of Restrictive Covenants.  If Executive breaches, or threatens to commit a breach of, the Restrictive Covenants, the Company shall have the right to have the Restrictive Covenants specifically enforced or to have any actual or threatened breach thereof enjoined by a court having competent jurisdiction, including a temporary restraining order, in addition to any and all other remedies.  The Company will not be required to post a bond or provide other collateral in any such proceeding. It is further expressly understood that and stipulated that a violation of the Restrictive Covenants by Executive will inherently result in irreparable harm to the Company. Executive hereby waives any adequate remedy at law defense and failure or lack of consideration defense to the remedy of injunctive relief. In the event of any litigation for the construction, interpretation, or enforcement of any of the terms or provisions of the Restrictive Covenants, reasonable attorney's fees and costs shall be awarded to the substantially prevailing party(ies). Executive covenants and agrees that the obligations contained herein shall be extended by the length of time which Executive shall have been in breach of any of said provisions. Accordingly, Executive recognizes that the time periods included in the Restrictive Covenants contained herein shall begin on the date a court of competent jurisdiction enters an order enjoining Executive from violating such provisions unless good cause can be shown as to why the periods described should not begin at that time.

(i)         Considerations of the Restrictive Covenants.  Executive acknowledges and understands that but for Executive's execution of this Agreement and the agreement to the Restrictive Covenants, the Company will/would not engage the continued services of Executive and that the offer to Executive, together with any compensation paid (including any compensation payable to Executive following termination), the Company considers sufficient consideration for the execution of this Agreement.

(j)         Enforcement. Executive and the Company desire that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies of the State of Texas. Executive acknowledges and confirms that enforcement of the Restrictive Covenants shall not impair his ability to earn a livelihood. Executive acknowledges that the restrictions contained herein are reasonable.  If a court of competent jurisdiction, however, determines that any restrictions imposed on Executive under this Agreement are unreasonable or unenforceable because of duration or otherwise, Executive and the Company agree and intend that the court shall enforce this Agreement to the maximum extent the court deems reasonable and that the court shall have the right to strike or change any provisions of this Agreement and substitute therefor different provisions to effect the intent of this Agreement to the maximum extent possible.

(k)        Independent Covenants. The Restrictive Covenants set forth in this Section 12 are given and made by Executive to induce the Company to continue to employ Executive, and Executive hereby acknowledges the sufficiency of the consideration for such covenants, and acknowledges that but for such covenants, the Company would not have agreed to employ Executive. These covenants on the part of Executive shall be construed as an agreement independent of any other terms of employment, and the existence of any claim or cause of action of Executive against the Company shall not constitute a defense to the enforcement by the Company of these covenants.

13.       Successors; Binding Agreement; Assignment.

(a)        This Agreement will be binding upon and inure to the benefit of the Company and any successor to the Company, including without limitation any persons acquiring directly or indirectly all or substantially all of the business or assets of the Company whether by purchase, merger, consolidation, reorganization or otherwise (and such successor will thereafter be deemed the " Company" for the purposes of this Agreement).

(b)        This Agreement will inure to the benefit of, and be enforceable by, the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees. This Agreement will supersede the provisions of any employment, severance or other agreement between the Executive and the Company that relate to any matter that is also the subject of this Agreement, and such provisions in such other agreements will be null and void.

(c)        This Agreement is personal in nature and Executive shall not, without the consent of the Company, assign, transfer, or delegate this Agreement or any rights or obligations hereunder. Without limiting the generality or effect of the foregoing, the Executive's right to receive payments hereunder will not be assignable, transferable, or delegable, whether by pledge, creation of a security interest, or otherwise, other than by a transfer by the Executive's will or by the laws of descent and distribution and, in the event of any attempted assignment or transfer contrary to this Section 13(c), the Company will have no liability to pay any amount so attempted to be assigned, transferred, or delegated. The rights and obligations of the Company under this Agreement (including, without limitation, the Restrictive Covenants in Section 12 hereof) may be assigned by the Company at any time without the consent of Executive, and shall inure to the benefit of and be enforceable by the successors and assigns of the Company.

14.       Notices.  For purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three (3) business days after having been sent by a nationally recognized overnight courier service such as FedEx or UPS, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive office and to the Executive at his principal residence, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

15.       Gender, Etc.  Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

16.       Governing Law. The validity, interpretation, construction, and performance of this Agreement will be governed by and construed in accordance with the substantive laws of the State of Texas, without giving effect to the principles of conflict of laws of such State

17.       Validity.  If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances will not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be reformed to the extent (and only to the extent) necessary to make it enforceable, valid or legal.

18.       Miscellaneous. No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto or compliance with any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, expressed or implied with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. References to Sections are to references to Sections of this Agreement. Any reference in this Agreement to a provision of a statute, rule or regulation will also include any successor provision thereto.

19.       Indemnification and D&O Insurance.  Executive will be provided indemnification to the maximum extent permitted by the Company' s and its subsidiaries' and affiliates' Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.

20.       Employee Benefits.  Executive will be eligible to participate in the Company employee benefit plans, policies and arrangements that are applicable to other executive officers of the Company, as such plans, policies and arrangements may exist from time to time and on terms at least as favorable as provided to any other executive officer of the Company.

21.       No Duplication of Benefits.  The benefits provided to Executive in this Agreement shall offset substantially similar benefits provided to Executive pursuant to another Company policy, plan or agreement.

22.       Survival.  Notwithstanding any provision of this Agreement to the contrary, the parties' respective rights and obligations under this Agreement, will survive any termination or expiration of this Agreement or the termination of the Executive's employment for any reason whatsoever.

23.       Counterparts.  This Agreement may be executed in multiple counterparts, and it is not necessary that signatures of all parties appear on the same counterpart, but such counterparts together will constitute a single binding agreement between and among all parties hereto. Counterparts may be executed by hand or by any electronic signature complying with the U.S. federal ESIGN Act of 2000 (the “ESIGN Act”).  Executed counterparts may be delivered via facsimile, electronic mail or other similar transmission method, and any executed counterpart so delivered shall be valid and effective for all purposes.  No party shall raise the use of any electronic signature that complies with the ESIGN Act (including www.docusign.com), or the use of a facsimile machine, electronic mail or other similar transmission method as a means to deliver a signature to this Agreement or any amendment hereto as a defense to the formation or enforceability of a contract and each party forever waives any such defense.

24.       Headings; Captions.  The headings and captions of the various Sections (including any subsections) herein contained are intended for ease of reference only and are not to be construed as evidence of the intent as to the content thereof.

25.       Construction. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement, or any amendments or exhibits hereto or thereto.

26.       Legal Fees.  If  a legal action is initiated by any party to this Agreement against the other party arising out of or relating to the alleged performance or non-performance of any right or obligation established hereunder, any and all fees, costs and expenses reasonably incurred by the successful party or his or its legal counsel in investigating, preparing for, prosecuting, defending against, or providing evidence, producing documents or taking any other action in respect of, such action will be the obligation of and will be paid or reimbursed by the unsuccessful party.

27.       Representation by Independent Legal Counsel.  Executive hereby acknowledges that he has been provided with a copy of this Agreement for review prior to signing it, that he has been given the opportunity to have this Agreement reviewed by his own attorney prior to signing it, that he understands the purposes and effects of this Agreement and that the counsel for the Company, Johnson, Pope, Bokor, Ruppel & Burns, LLP prepared this Agreement on behalf of and in the course of its representation of the Company.

28.       Supersedes all Prior Agreements.  This Agreement supersedes and replaces in their entirety any previous written agreements or oral understandings regarding Executive’s employment relationship with the Company and its subsidiaries.

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

ORBITAL ENERGY GROUP, INC.

By:         /s/ William J. Clough                                                         

            William J. Clough

  Executive Chairman & CLO

“Company”

                 /s/ Nicholas Grindstaff                                                      

NICK GRINDSTAFF

“Executive”

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We have issued our report dated March 31, 2022, with respect to the consolidated financial statements included in the Annual Report of Orbital Infrastructure Group, Inc. (formally known as Orbital Energy Group, Inc.), on Form 10-K for the year ended December 31, 2022. We consent to the incorporation by reference of said report in the Registration Statements of Orbital Infrastructure Group, Inc. on Form S-3 (File No. 333-252682).

/s/ Grant Thornton LLP

Dallas, Texas

April 6, 2023

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-252682) of Orbital Infrastructure Group, Inc. of our report dated April 6, 2023 relating to the financial statements, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
Houston, Texas
April 6, 2023

EX-23.3

Exhibit 23.3

List of all subsidiaries, state of incorporation and name under which the subsidiary does business.

Effective October 29, 2019, Orbital Infrastructure Group, Inc. formed a wholly owned subsidiary, Orbital Power, Inc., a Texas corporation doing business as Orbital Power Services.

Effective April 1, 2020, Orbital Infrastructure Group, Inc. closed on an equity purchase agreement to acquire 100% of the equity in Reach Construction Group, LLC. Reach Construction Group, LLC, a North Carolina limited liability company was renamed to Orbital Solar Services, LLC. 

Effective July 1, 2020, Orbital Infrastructure Group, Inc. formed a wholly owned subsidiary, Orbital Renewables, LLC., a Texas corporation.

Effective October 29, 2020, Orbital Infrastructure Group, Inc. formed a wholly owned subsidiary, Eclipse Foundation Group, Inc., a Texas corporation.

Effective April 13, 2021, Orbital Infrastructure Group, Inc. closed on a share purchase agreement to acquire 100% of the equity of Gibson Technical Services, Inc., a Georgia corporation.

Effective July 28, 2021, Orbital Infrastructure Group, Inc. closed on a share purchase agreement to acquire 100% of the equity of IMMCO, Inc., a Georgia corporation. This corporation included two wholly-owned subsidiaries incorporated in India: Saranga Geosoftware and Engineering Services, Pvt., Ltd. and IMMCO Software Solutions, Pvt., Ltd.

Effective October 22, 2021, Gibson Technical Services, Inc. closed on a purchase agreement to acquire 100% of the ownership of Full Moon Telecom, LLC, a Georgia corporation.

Effective November 17, 2021, Orbital Infrastructure Group, Inc. entered into a Membership Unit Purchase agreement to acquire Front Line Power Construction, LLC, a Texas corporation.

Effective February 26, 2022, Gibson Technical Services, Inc. closed on a purchase agreement to acquire 100% of the ownership of Coax Companies that includes Coax Fiber Solutions, LLC, a Georgia limited liability company, V-Tac Communications, LLC, a Georgia limited liability company and PON Communications, LLC, a Georgia limited liability company.

Effective March 7, 2022, Orbital Infrastructure Group, Inc. entered into a purchase agreement to acquire 100% of the ownership of Coax Fiber Solutions, LLC, which included the following wholly-owned Georgia-based limited liability companies: V-Tac Communications, LLC and PON Communications, LLC.

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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

1.     I have reviewed this annual report on Form 10-K of Orbital Infrastructure 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(s) 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(s) 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 the registrant's board of directors (or persons performing the equivalent functions):

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	April 6, 2023
	James F. O'Neil
	Chief Executive Officer /Principal Executive Officer/Director

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nicholas M. Grindstaff, certify that:

1.     I have reviewed this annual report on Form 10-K of Orbital Infrastructure 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(s) 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(s) 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 the registrant's board of directors (or persons performing the equivalent functions):

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;

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/ Nicholas M. Grindstaff	April 6, 2023
	Nicholas M. Grindstaff
	Chief Financial Officer/Principal Financial and Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION 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 annual report of Orbital Infrastructure Group, Inc. (the ‘‘Company’’), on Form 10-K for the period ended December 31, 2022, 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 annual 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 annual report fairly presents, in all materials respects, the financial condition and results of operations of the Company.

By:/s/	James F. O'Neil	April 6, 2023
	James F. O'Neil
	Chief Executive Officer/Principal Executive Officer/Director

EX-32.2

Exhibit 32.2

CERTIFICATION 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 annual report of Orbital Infrastructure Group, Inc. (the ‘‘Company’’), on Form 10-K for the period ended December 31, 2022, 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 annual 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 annual report fairly presents, in all materials respects, the financial condition and results of operations of the Company.

By:	/s/ Nicholas M. Grindstaff	April 6, 2023
	Nicholas M. Grindstaff
	Chief Financial Officer/Principal Financial and Accounting Officer

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2022	Mar. 31, 2023	Jun. 30, 2022
Document Information [Line Items]
Entity Central Index Key	0001108967
Entity Registrant Name	Orbital Infrastructure Group, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2022
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	0-29923
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	84-1463284
Entity Address, Address Line One	5444 Westheimer Road Suite 1650
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056
City Area Code	832
Local Phone Number	467-1420
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OIG
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 68,232,566
Entity Common Stock, Shares Outstanding		185,464,173
Auditor Firm ID	238
Auditor Name	GRANT THORNTON LLP
Auditor Location	Dallas, Texas

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 21,489	$ 26,865
Restricted cash - current portion	123	150
Trade accounts receivable, net of allowance	52,652	48,752
Inventories	1,691	1,335
Contract assets	13,917	7,478
Notes receivable, current portion	1,442	3,536
Prepaid expenses and other current assets	7,840	6,919
Assets held for sale, current portion	3,198	6,679
Total current assets	102,352	101,714
Property and equipment, less accumulated depreciation	22,930	29,638
Investment	1,063	1,063
Right of use assets - Operating leases	16,588	18,247
Right of use assets - Financing leases	8,394	14,702
Goodwill	7,006	100,899
Other intangible assets, net	111,134	142,656
Restricted cash, noncurrent portion	486	1,026
Note receivable	0	836
Deposits and other assets	1,618	1,558
Total assets	271,571	412,339
Current Liabilities:
Accounts payable	41,333	10,111
Notes payable, current	144,708	72,774
Line of credit	4,000	2,500
Operating lease obligations - current portion	4,540	4,674
Financing lease obligations - current portion	5,316	4,939
Accrued expenses	39,065	28,301
Contract liabilities	10,218	6,503
Financial instrument liability, current portion	43,693	825
Liabilities held for sale, current portion	0	4,367
Total current liabilities	292,873	134,994
Financial instrument liability, noncurrent portion	536	0
Warrant liability	1,777	0
Deferred tax liabilities	0	260
Notes payable, less current portion	100,528	156,605
Operating lease obligations, less current portion	12,350	13,555
Financing lease obligations, less current portion	7,673	9,939
Contingent consideration	570	720
Total liabilities	416,307	316,073
Commitments and contingencies
Stockholders' Equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized; no shares issued at December 31, 2022 or December 31, 2021	0	0
Common stock, par value $0.001; 325,000,000 shares authorized; 157,884,024 shares issued and 157,530,961 shares outstanding at December 31, 2022 and 82,259,739 shares issued and 81,906,676 shares outstanding at December 31, 2021	158	82
Additional paid-in capital	347,357	311,487
Treasury stock at cost; 353,063 shares held at December 31, 2022 and December 31, 2021	(413)	(413)
Accumulated deficit	(487,121)	(210,934)
Accumulated other comprehensive loss	(691)	(3,995)
Total Orbital Energy Group, Inc.'s stockholders' equity	(140,710)	96,227
Noncontrolling interest	(4,026)	39
Total stockholders' equity	(144,736)	96,266
Total liabilities and stockholders' equity	$ 271,571	$ 412,339

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
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)	157,884,024	82,259,739
Common stock, shares outstanding (in shares)	157,530,961	81,906,676
Treasury stock, shares (in shares)	353,063	353,063

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenues	$ 322,217	$ 82,948
Cost of revenues	328,318	78,630
Gross profit	(6,101)	4,318
Operating expenses:
Selling, general and administrative expense	47,428	50,024
Depreciation and amortization	20,060	6,762
Impairment of goodwill and intangible assets	109,586	0
Impairment of financing leased assets	4,467	0
Provision for bad debt	(26)	346
Other operating (income) expenses	(39)	(23)
Total operating expenses	181,476	57,109
Loss from operations	(187,577)	(52,791)
Gain (loss) on extinguishment of debt	(31,258)	365
Gain (loss) on financial instruments	(24,487)	33
Gain on warrant liabilities	11,085	0
Other income (expense)	(7,039)	379
Interest expense	(37,813)	(8,337)
Loss from continuing operations before taxes	(277,089)	(60,351)
Income tax expense (benefit)	846	(10,508)
Loss from continuing operations, net of income taxes	(277,935)	(49,843)
Discontinued operations (Note 2)
Loss from operations of discontinued businesses	(2,317)	(12,705)
Income tax benefit	0	(1,334)
Loss from discontinued operations, net of income taxes	(2,317)	(11,371)
Net loss	(280,252)	(61,214)
Less: net income (loss) attributable to noncontrolling interest	(4,065)	39
Net loss attributable to Orbital Infrastructure Group, Inc.	$ (276,187)	$ (61,253)
Basic and diluted weighted average number of shares outstanding (in shares)	108,313,369	58,348,489
Loss from continuing operations per common share - basic and diluted (in dollars per share)	$ (2.53)	$ (0.86)
Loss from discontinued operations per common share - basic and diluted (in dollars per share)	(0.02)	(0.19)
Loss per common share - basic and diluted (in dollars per share)	$ (2.55)	$ (1.05)

XML

Consolidated Statements of Comprehensive Income and (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Net loss	$ (280,252)	$ (61,214)
Foreign currency translation adjustment	(304)	411
Reclassification adjustment upon sale of Orbital U.K.	3,608	0
Other comprehensive income (loss)	3,304	411
Comprehensive loss	$ (276,948)	$ (60,803)

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
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	$ 0	$ 17,147
Issuance of common stock via equity raises (in shares)	25,966,515		0
Issuance of common stock via equity raises	$ 26	78,020	$ 0	0	0	78,046	0	78,046
Common stock issued for acquisitions (in shares)	18,653,576		0
Common stock issued for acquisitions	$ 18	36,917	$ 0	0	0	36,935	0	36,935
Common stock issued and issuable for compensation, services and royalty payments (in shares)	1,891,056		0
Common stock issued and issuable for compensation, services and royalty payments	$ 2	12,155	$ 0	0	0	12,157	0	12,157
Common stock issued to lenders for OID (in shares)	1,636,651		0
Common stock issued to lenders for OID	$ 2	3,811	$ 0	0	0	3,813	0	3,813
Common stock issued for debt repayment (in shares)	3,082,299		0
Common stock issued for debt repayment	$ 3	8,968	$ 0	0	0	8,971	0	8,971
Net loss	0	0	0	(61,253)	0	(61,253)	39	(61,214)
Other comprehensive loss	$ 0	0	$ 0	0	411	411	0	411
Balance (in shares) at Dec. 31, 2021	82,259,739		(353,063)
Balance at Dec. 31, 2021	$ 82	311,487	$ (413)	(210,934)	(3,995)	96,227	39	96,266
Issuance of common stock via equity raises (in shares)	20,194,537		0
Issuance of common stock via equity raises	$ 20	3,935	$ 0	0	0	3,955	0	3,955
Common stock issued for acquisitions (in shares)	125,000		0
Common stock issued for acquisitions	$ 0	146	$ 0	0	0	146	0	146
Common stock issued and issuable for compensation, services and royalty payments (in shares)	2,889,457		0
Common stock issued and issuable for compensation, services and royalty payments	$ 3	1,299	$ 0	0	0	1,302	0	1,302
Common stock issued to lenders for OID (in shares)	24,963,451		0
Common stock issued to lenders for OID	$ 25	7,642	$ 0	0	0	7,667	0	7,667
Common stock issued for debt repayment (in shares)	20,297,993		0
Common stock issued for debt repayment	$ 21	15,916	$ 0	0	0	15,937	0	15,937
Net loss	0	0	0	(276,187)	0	(276,187)	(4,065)	(280,252)
Other comprehensive loss	$ 0	0	$ 0	0	3,304	3,304	0	3,304
Issuance of common stock upon exercise of pre-funded warrants, net (in shares)	7,153,847		0
Issuance of common stock upon exercise of pre-funded warrants, net	$ 7	6,932	$ 0	0	0	6,939	0	6,939
Balance (in shares) at Dec. 31, 2022	157,884,024		(353,063)
Balance at Dec. 31, 2022	$ 158	$ 347,357	$ (413)	$ (487,121)	$ (691)	$ (140,710)	$ (4,026)	$ (144,736)

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (280,252)	$ (61,214)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	15,371	5,208
Amortization of intangibles	18,468	7,702
Amortization of debt discount	11,037	3,392
Loss (gain) on extinguishment of debt and loan modifications	31,258	(1,134)
Gain on disposal of assets	(154)	(26)
Gain on sale of businesses	(299)	0
Amortization of note receivable discount	(63)	(319)
Stock-based compensation and expense	(1,144)	12,168
Fair value adjustment to liability for stock appreciation rights	(269)	2,054
Fair value adjustment to financial instrument liabilities	24,487	(33)
Fair value adjustment to warrant liabilities	(11,085)	(0)
Provision for bad debt	(8)	343
Deferred income taxes	(347)	(10,878)
Non-cash unrealized foreign currency (gain) loss	(7)	492
Liquidated damages from debt	7,969	0
Impairment of goodwill and intangible assets	109,586	0
Impairment of financing leased assets	4,467	0
Impairment of assets held for sale	0	9,185
Inventory reserve	(9)	(350)
Change in operating assets and liabilities, net of acquisition:
Trade accounts receivable	(1,844)	(19,173)
Inventories	58	(425)
Contract assets	(5,086)	(296)
Prepaid expenses and other current assets	3,540	41
Right of use assets/lease liabilities, net of acquisitions:	234	49
Deposits and other assets	(39)	(24)
Increase (decrease) in operating liabilities:
Accounts payable	30,269	(38)
Accrued expenses	19,905	4,540
Contingent consideration	(150)	0
Contract liabilities	4,482	3,060
NET CASH USED IN OPERATING ACTIVITIES	(19,625)	(45,676)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions, net of cash received	(773)	(132,518)
Cash paid for working capital adjustment on Front Line Power acquisition	(9,500)	0
Purchases of property and equipment	(4,511)	(7,779)
Deposits on financing lease property and equipment/ proceeds from deposits	158	(762)
Proceeds from sale of businesses, net of cash included in business	1,027	0
Proceeds from sale of property and equipment	485	141
Purchase of other intangible assets	(99)	(705)
Purchase of investments	(469)	(1,025)
Proceeds from notes receivable	3,500	621
NET CASH USED IN INVESTING ACTIVITIES	(10,182)	(142,027)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit	4,250	3,250
Payments on line of credit	(2,750)	(1,191)
Payments on financing lease obligations	(5,090)	(1,995)
Proceeds from notes payable, net of debt discounts and issuances costs	90,522	143,045
Payments on notes payable	(83,162)	(9,941)
Proceeds from sales of common stock and warrants	20,395	78,046
NET CASH PROVIDED BY FINANCING ACTIVITIES	24,165	211,214
Effect of exchange rate changes on cash	(301)	6
Net (decrease) increase in cash, cash equivalents and restricted cash	(5,943)	23,517
Cash, cash equivalents and restricted cash at beginning of year	28,041	4,524
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	22,098	28,041
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid (net refunded)	336	(316)
Interest paid	26,584	2,257
Non-cash investment in acquisitions including seller notes, equity issued and contingent consideration	146	123,457
Financing note payable issued for payment on certain insurance policies	4,761	2,854
Equipment purchased with debt	969	138
Accrued property and equipment purchases at December 31	$ 9	$ 404

XML

Note 1 - Nature of Operations and Basis of Presentation

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Orbital Infrastructure Group, Inc. f/k/a Orbital Energy Group, Inc. (Orbital Infrastructure Group, "OIG," "The Company") is a diversified infrastructure services company serving customers in the electric power, telecommunications, and renewable markets. The Company’s reportable segments are the Electric Power segment, the Telecommunications segment, and the Renewables segment. In December 2021, the Company announced the planned divestiture of its previous Integrated Energy Infrastructure Solutions and Services segment.

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas and Orbital Power, Inc. based in Dallas, Texas. The segment provides comprehensive infrastructure solutions to customers in the electric power industry. Services performed by Front Line Power and Orbital Power, Inc. generally include but are not limited to the engineering, design, installation, upgrade, repair and maintenance of electric power transmission and distribution infrastructure and substation facilities as well as emergency restoration services. Eclipse Foundation Group, which began operations in January 2021 and was integrated into Front Line Power in the third quarter of 2022, is a drilled shaft foundation construction company that specializes in providing services to the electric transmission and substation, industrial, telecommunication and disaster restoration market sectors, with expertise performing services in water, marsh and rock terrains.

The Telecommunications segment is made up of Gibson Technical Services, Inc. (“GTS”) (acquired April 13, 2021). GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and is the parent of the following companies:

o IMMCO, Inc. (acquired July 28, 2021), which includes two Indian subsidiaries and is an Atlanta-based, full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.

o Full Moon Telecom, LLC (acquired October 22, 2021) a Florida-based telecommunications service provider that offers an extensive array of wireless service capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network (“RAN”) Integration, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna (“DAS”) systems.

o Coax Fiber Solutions, LLC (acquired  March 7, 2022), is based in Loganville, Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.  

The Renewables segment consists of Orbital Solar Services based in Raleigh, North Carolina. 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. Orbital Solar Services entered into an agreement in 2021 to form OSS-JPOW Solar Services, LLC (OSS-JPOW), a partnership with Jingoli Power, LLC. OSS-JPOW is considered a Variable Interest Entity (VIE) to Orbital Solar Services.

XML

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 record purchase price allocation for the Company's acquisitions, fair value measurements used in goodwill impairment tests, impairment estimations of long-lived assets, revenue recognition on cost-to-cost type contracts, allowances for uncollectible accounts, valuations of non-cash capital stock issuances, estimates of the incremental borrowing rate for long-term leases, fair value estimates and the valuation allowance on deferred tax 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 assumptions or conditions.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Orbital Infrastructure Group, Inc. and its wholly owned subsidiaries Front Line Power Construction, LLC, Orbital Power, Inc., Eclipse Foundation Group, Orbital Solar Services, Gibson Technical Services, Inc., and GTS's wholly owned subsidiaries, IMMCO, Inc., Full Moon Telecom, LLC, and Coax Fiber Solutions, LLC, hereafter referred to as the ‘‘Company.’’ Additionally, the following wholly owned subsidiaries are included in these financial statements as discontinued operations: Orbital Gas Systems, Ltd. and Orbital Gas Systems, North America, Inc. Intercompany accounts and transactions have been eliminated in consolidation.

Variable Interest Entity

Orbital Solar Services entered into an agreement in 2021 to form OSS-JPOW Solar Services, LLC (OSS-JPOW), a partnership with Jingoli Power, LLC. Orbital Solar Services holds a controlling interest in OSS-JPOW and the portions of OSS-JPOW’s net earnings and equity not attributable to Orbital Solar Service’s controlling interest are shown separately as noncontrolling interests in the consolidated statements of operations and consolidated balance sheets. OSS-JPOW is considered a Variable Interest Entity ("VIE") to Orbital Solar Services. At 12/31/2022, OSS-JPOW had $10.6 million dollars of assets and $68.2 million dollars of liabilities on their balance sheet.  

Orbital Solar Services, through its controlling interest in OSS-JPOW, has the contractual power to direct the activities that significantly affect the economic performance of OSS-JPOW and the obligation to absorb losses or the right to receive benefits that could be significant to OSS-JPOW; therefore, Orbital Solar Services is considered the primary beneficiary and consolidates OSS-JPOW. The VIE has been jointly financed by the Company and JPOW. For the years ended December 31, 2022 and 2021, a $54.5 million loss and $0.1 million of income was attributable to OSS-JPOW with a $4.1 million dollar loss and $39 thousand of income allocated to non-controlling interest.

Company Conditions and Sources of Liquidity 

The Company has experienced net losses, cash outflows from cash used in operating activities and a decline in share value over the past years. As of and for the year ended December 31, 2022, the Company had an accumulated deficit of $487.1 million, loss from continuing operations of $277.9 million, and net cash used in operating activities of $19.6 million. Further, as of December 31, 2022, the Company had a working capital deficit of $190.5 million, including current maturities of debt, and cash and cash equivalents of $21.5 million available for working capital needs and planned capital asset expenditures.  As a result of the foregoing, the Company does not have sufficient liquidity and capital resources to meet its obligations and fund its operations for the twelve months following the issuance of these financial statements. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company has plans to access additional capital to meet its obligations for the twelve months from the date these financial statements are available to be issued. Historically, the Company has raised additional equity and debt financing to fund its expansion; refer to Note 7 — Notes Payable and Note 8 — Line of Credit. The Company has also funded some of its capital expenditures through long-term financing with lenders and other investors as also described in further detail in Note 7 — Notes Payable and Note 8 — Line of Credit. Our ability to raise the additional capital is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of business risks and uncertainties, our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price that is favorable to us. As of December 31, 2022, the Company has an effective S-3 shelf registration statement for the issuance of various types of securities, including common stock, preferred stock, debt securities and/or warrants in the aggregate of up to $65.9 million. In addition, although no formal agreements exist, the company has solicited interest from various lenders to potentially raise additional term debt to restructure or refinance its existing notes.

There can be no assurance that the Company will succeed in executing these plans. If unsuccessful, the Company will not have sufficient liquidity and capital resources to repay its indebtedness when it matures, or otherwise meet its cash requirements over the next twelve months, as noted above.

Discontinued Operations and Sales of Businesses

As part of the Company’s stated strategy to transform Orbital Infrastructure Group into a diversified energy infrastructure services platform serving North American energy customers, the Company’s board of directors made the decision to divest of its Orbital Gas subsidiaries. The Orbital Gas subsidiaries provide proprietary gas measurement and sampling technologies and the integration of process control and measuring/sampling systems. They are legacy businesses that are not part of the Company’s strategy of building an infrastructure services company serving the electric power, telecommunications and renewable markets. The disposition of the Orbital Gas subsidiaries will facilitate the Company’s restructuring and cost savings initiatives and are intended to realign and simplify its business structure and better position the Company for future growth and improved profitability. In the fourth quarter of 2021, the Company recorded a $9.2 million impairment related to its U.K. operations to write the value of its investment in the U.K. operations to its expected realizable value of 3 million GBP ($4.1 million at December 31, 2021). The Company's U.K. operations were divested in May 2022 and most of the assets of the North American operations were divested in the third quarter of 2022. At December 31, 2022, the remaining assets held for sale were the Company's VE Technology intellectual property and certain fixed assets at Eclipse Foundation Group. Income from discontinued operations and assets and liabilities held for sale are included in the Company's statement of operations and balance sheet and are described below. 

Selected data for these discontinued businesses consisted of the following:

Reconciliation of the Major Classes of Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations That Are Presented in the Statement of Operations

(In thousands)
	For the Year
	Ended December 31,
Major classes of line items constituting pretax loss of discontinued operations	2022			2021
Revenues	$	7,617		$	19,855
Cost of revenues		(6,090	)		(14,193	)
Selling, general and administrative expense		(4,130	)		(8,550	)
Depreciation and amortization		—			(1,638	)
Research and development		—			(2	)
(Provision) credit for bad debt		(18	)		3
Impairment of assets held for sale		—			(9,185	)
Gain on extinguishment of PPP loan		—			779
Interest expense		(13	)		(2	)
Other income		18			228
Pretax loss of discontinued operations related to major classes of pretax loss		(2,616	)		(12,705	)
Pretax gain on sale of Orbital U.K.		299			—
Total pretax loss on discontinued operations		(2,317	)		(12,705	)
Income tax benefit		—			(1,334	)
Total loss from discontinued operations	$	(2,317	)	$	(11,371	)

Reconciliation of the Carrying Amounts of Major Classes of Assets and Liabilities of the Discontinued Operation to Total Assets and Liabilities of the Disposal Group Classified as Held for Sale

	As of December 31,		As of December 31,
(In thousands)	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Trade accounts receivables	$	—	$	2,996
Inventories		—		530
Prepaid expenses and other current assets		—		114
Contract assets		—		1,141
Assets held for sale, current portion		—		4,781
Property and equipment		1,385		42
Other intangible assets		1,813		1,813
Deposits and other assets		—		43
Assets held for sale, noncurrent portion		3,198		1,898
Total assets of the disposal group classified as held for sale	$	3,198	$	6,679
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	—	$	1,657
Contract liabilities		—		1,414
Operating lease obligations, current portion		—		76
Accrued expenses		—		1,126
Liabilities held for sale, current portion		—		4,273
Operating lease obligations, less current portion		—		85
Other long-term liabilities		—		9
Liabilities held for sale, noncurrent portion		—		94
Total liabilities held for sale	$	—	$	4,367

The assets and liabilities of the disposal group, which included the U.K. and North America Gas subsidiaries, and certain fixed assets of the Eclipse Foundation Group classified as held for sale are classified as current on the December 31, 2022 and December 31, 2021 balance sheets because of the expectation that the sales will occur within one year of the balance sheet date. 

Net cash used by operating activities of discontinued operations for 2022 and 2021 was $0.6 million and $3.2 million, respectively.

Net cash provided by investing activities of discontinued operations for 2022 and 2021 was $1.0 million and zero, respectively.

Fair Value of Financial Instruments

Accounting Standards Codification (‘‘ASC’’) 820 ‘‘Fair Value Measurements and Disclosures’’ (‘‘ASC 820’’) defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the U.S., and enhances disclosures about fair value measurements. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

• Level 1 – Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date.

• Level 2 – Pricing inputs are quoted for similar assets, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments.

• Level 3 – Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company determines when a financial instrument transfers between levels based on management’s judgment of the significance of unobservable inputs used to calculate the fair value of the financial instrument.

Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, investment, note receivable, accounts receivable, contract assets, prepaid expense and other assets, accounts payable, accrued liabilities, contract liabilities, and other current liabilities reflected in the accompanying consolidated balance sheet approximate fair value at  December 31, 2022 and 2021 due to the relatively short-term nature of these instruments. At December 31, 2022, and 2021 the carrying value of the notes payable, including the Company's Front Line Power seller notes (Carrying value of $68.8 million  at December 31, 2022), and syndicated term note debt (carrying value of $97.1 million at December 31, 2022), net of original issue discounts, that was issued in November 2021, approximate fair value based on current market conditions. The syndicated debt and seller financed debt include financial instruments that are valued at fair value at  December 31, 2022 and 2021. See Note 3 for fair value of financial instruments.

Cash and Cash Equivalents

Cash includes deposits at financial institutions with maturities of three months or less. The Company at times has cash in banks in excess of FDIC insurance limits and places its temporary cash investments with high credit quality financial institutions. The Company considers all highly liquid marketable securities with maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include money market funds, certificates of deposit and commercial paper. At December 31, 2022 and 2021, the Company had $2.6 million and $2.3 million, respectively, of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposits programs and $0.3 million and $0.4 million, respectively, at foreign financial institutions covered internationally. At December 31, 2022 and 2021, the Company held $1.6 million and $2.1 million respectively, in foreign bank accounts. In addition to the Company's unrestricted cash and cash equivalents at December 31, 2022 and 2021, the Company has $0.1 million and $0.2 million of current restricted cash and $0.5 million and $1.0 million, respectively, of long-term restricted cash on its balance sheet related to contract guarantees. Restricted cash is combined with other cash and cash equivalents in reconciling the change in cash on the Company's Consolidated Statements of Cash Flows.

(In thousands)	As of December 31,
	2022		2021
Cash and cash equivalents at beginning of year	$	26,865	$	3,046
Restricted cash at beginning of year		1,176		1,478
Cash, cash equivalents and restricted cash at beginning of year	$	28,041	$	4,524
Cash and cash equivalents at end of year	$	21,489	$	26,865
Restricted cash at end of year		609		1,176
Cash, cash equivalents and restricted cash at end of year	$	22,098	$	28,041

Notes Receivable

At December 31, 2021, the Company had a note receivable from Back Porch International that was originated as part of the divestiture of the Company's electromechanical components business. The note had an original stated value of $5 million, and is presented on the balance sheet as of   December 31, 2021 at its present value of $3.3 million including $2.5 million of current maturities. In the first quarter of 2022, the Company received final payment on the note receivable.

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist of the receivables associated with revenue derived from service sales including present amounts due to contracts accounted for under fixed price, cost-to-cost, cost plus, or output method. An allowance for uncollectible accounts is recorded to allow for any amounts that may not be recoverable, based on an analysis of prior collection experience, customer credit worthiness and current economic trends. Based on management’s review of accounts receivable, an allowance for doubtful accounts of $0.8 million and $1.5 million at December 31, 2022 and 2021, respectively, is considered adequate. The reserve in both periods considers aged receivables that management believes should be specifically reserved for as well as historic experience with bad debts to determine the total reserve appropriate for each period. Receivables are determined to be past due based on the payment terms of original invoices. Payment terms and conditions vary by contract, and are within industry standards across our business lines. The Company routinely assesses the financial strength of its customers and, therefore, believes that its accounts receivable credit risk exposure is limited. 

Activity in the allowance for doubtful accounts for the years ended  December 31, 2022 and 2021 is as follows:

(In thousands)	For the Years ended December 31,
	2022			2021
Allowance for doubtful accounts, beginning of year	$	1,487		$	1,172
Bad debt expense		(26	)		346
Deductions		(694	)		(31	)
Allowance for doubtful accounts, end of year	$	767		$	1,487

Retainage Receivables

At December 31, 2022 and 2021, the Company had $0.9 million and $1.5 million, respectively, billed but not paid by customers under retainage provisions in contracts. These amounts are included as part of contract assets.

Inventories

Inventories consist of finished and unfinished products and are stated at the lower of cost or market through either the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method.

At December 31, 2022, and 2021, inventory is presented on the balance sheet net of reserves. The Company provides reserves for inventories estimated to be excess, obsolete or unmarketable. The Company’s estimation process for assessing the net realizable value is based upon its known backlog, projected future demand, historical usage and expected market conditions. Inventory by category consists of:

(In thousands)	As of December 31,
	2022		2021
Finished goods	$	—	$	—
Raw materials		1,338		1,316
Work-in-process		353		19
Total inventories	$	1,691	$	1,335

Property and equipment, less accumulated depreciation

Land is recorded at cost and includes expenditures made to ready it for use. Land is considered to have an infinite useful life.

Buildings and improvements are recorded at cost.

Furniture, vehicles, and equipment are recorded at cost and include major expenditures, which increase productivity or substantially increase useful lives.

Leasehold improvements are recorded at cost and are depreciated over the lesser of the lease term or estimated useful life.

The cost of buildings, improvements, furniture, vehicles, and equipment is depreciated over the estimated useful lives of the related assets.

Depreciation is computed using the straight-line method for financial reporting purposes. The estimated useful lives for buildings, improvements, furniture, vehicles, and equipment are as follows:

	Estimated
	Useful
	Life (in years)
Leasehold improvements		5 to 10
Equipment		3 to 10

Maintenance, repairs and minor replacements are charged to expenses when incurred. When buildings, improvements, furniture, equipment and vehicles are sold or otherwise disposed of, the asset and related accumulated depreciation are removed and any gain or loss is included in the statement of operations.

Long-Lived Assets Including Finite-Lived Intangible Assets

Long-lived assets including finite-lived intangible assets are periodically reviewed for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. When testing for impairment, we perform a two-step test. Step one is a test of recoverability. In performing the review for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the long-lived asset, an impairment loss is recognized. In step two, the impairment is calculated as the excess of the carrying amount over the fair value. Management estimates the future cash flows expected and fair value is determined by the discounted future cash flows.

In 2022, the Company did not have any material fixed asset impairments. In 2021, the Company wrote down the assets held for sale of its discontinued Orbital U.K. operations by $9.2 million based on an expected selling price of 3 million GBP ($4.1 million at December 31, 2021). In  September 2022, the Company fully impaired its finance lease equipment related to the Eclipse Foundation Group in the Electric Power segment. See Note 13 - Restructuring and Impairment Charges for more information on impairments of finance lease equipment.

Identifiable Finite-lived Intangible Assets

Intangible assets are stated at cost net of accumulated amortization and impairment. Finite-lived intangible assets includes customer relationships, technology know how, software, noncompete agreements, order backlog, and trade name. The fair value for intangible assets acquired through acquisitions is measured at the time of acquisition utilizing the following inputs, as needed:

1. Inputs used to measure fair value are unadjusted quoted prices available in active markets for the identical assets or liabilities if available.

2. Inputs used to measure fair value, other than quoted prices included in 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in inactive markets. This includes assets and liabilities valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full life of the asset.

3. Inputs used to measure fair value are unobservable inputs supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

4. Expert appraisal and fair value measurement as completed by third-party experts.

	Estimated
	Useful
	Life (in years)
Finite-lived intangible assets
Order backlog		1
Customer Relationships - Front Line Power Construction		15
Customer relationships - Reach Construction Group, LLC		5
Non-compete agreements - Reach Construction Group, LLC		5
Customer Relationships - Gibson Technical Services		10
Customer Relationships - IMMCO		10
Technology - Know How		3
Non-compete agreements - GTS		5
Software, at cost		3 to 5

The Company amortizes the intangible assets that are subject to amortization on a straight line basis, which the company believes approximates the estimated consumption of their economic benefits. Intangible assets are reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For instance, a significant change in business climate or a loss of a significant customer, among other things, may trigger the need for impairment testing of intangible assets. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

Indefinite-Lived Intangibles and Goodwill Assets

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, ‘‘Business Combinations,’’ where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates if they were known or knowable at the acquisition date. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill.  The unit of accounting for goodwill is at a level of the entity referred to as a reporting unit. Goodwill is assigned to specific reporting units for purposes of the impairment assessments. As of December 31, 2022, the Company has four operating segments that are also considered reporting units for goodwill impairment testing. The four operating segments are, Front Line Power Construction, LLC, Orbital Power Inc., Orbital Solar Services, and Gibson Technical Services.

Annual Test

The Company tests for impairment of indefinite-lived intangibles and Goodwill in the second quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value.

In performing its testing for Goodwill as of May 31, 2022, the Company completed a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. Fair values of the reporting units were determined based on applying a combination of the discounted cash flow method (i.e., income approach) as well as a market approach. Significant assumptions included estimates of future cash flows, discount rates, and market information for comparable companies. The review of goodwill, prepared as of  May 31, 2022, determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended  June 30, 2022. 

The Company’s qualitative assessment for Indefinite-lived assets at May 31, 2022, followed the guidance in ASC 350-30-35-18A and 18B. Fair values of the Indefinite-lived intangible assets were determined using the relief from royalty method, which included assumptions related to revenue growth rates, royalty rates, and discount rates. As a result of the annual impairment test, no impairment was identified as of June 30, 2022.

Interim Tests

The Company performed a goodwill impairment analysis as of  June 30, 2022 due to a 42-percent drop in the Company's stock price between  May 31, 2022 and  June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of  June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill impairment testing of our reporting units as of  September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach. The impairment assessment resulted in a conclusion that goodwill in the Front Line Power and GTS reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended  September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. As a result of the triggering events identified in the third quarter, an impairment assessment was also performed for the Indefinite-lived intangible assets as of September 30, 2022 and no impairment was identified.

During the fourth quarter of 2022, triggering events were again identified around stock price decline and substantial doubt regarding the Company's ability to continue as a going concern, which led to performing Indefinite-lived intangibles impairment testing.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. The impairment assessment included significant assumptions related to revenue growth rates, royalty rates, and discount rates. For the year ended  December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

Accrued expenses

Accrued expenses are liabilities that reflect expenses on the statement of operations that have not been paid or recorded in accounts payable at the end of the period. At  December 31, 2022 and December 31, 2021, accrued expenses of $39.1 million and $28.3 million, respectively included the following components:

(In thousands)	As of December 31,
	2022		2021
Accrued bonding	$	1,920	$	167
Accrued compensation		5,589		6,369
Working capital adjustment on Front Line Power Construction acquisition		4,592		14,092
Accrued interest		5,885		2,902
Accrued taxes payable		248		102
Accrued subcontractor expenses		11,299		—
Accrued union dues		937		870
Accrued vendor invoices and accrued other expenses		8,595		3,799
Total accrued expense	$	39,065	$	28,301

Financial instrument liability

The Company evaluates embedded conversion features pursuant to FASB Accounting Standards Codification No. 815 (‘‘FASB ASC 815’’), ‘‘Derivatives and Hedging,’’ which requires a periodic valuation of the fair value of derivative instruments and a corresponding recognition of liabilities associated with such derivatives. The Company has limited involvement with derivative instruments and does not trade them. In November 2021, the Company identified a subscription agreement with lenders of the $105 million syndicated debt agreement as a free standing financial instrument since it is legally separate from the credit agreement. The subscription provides the lenders with shares of the Company's common stock, which was recorded by the Company as additional debt discount to be amortized over the life of the loan. The subscription agreement also provided the lenders with protection from downside risk in the event that the Company issues shares prior to paying off the Front Line seller notes at a price lower than the price when the shares were issued to the lenders. This financial instrument liability was recorded by the Company at $0.9 million and was valued at loan inception on November 17, 2021 using the Black Scholes option pricing model. The value of the liability decreased to $0.8 million as of December 31, 2021 and the difference was recorded as income in other income for the fourth quarter of 2021. At December 31, 2022, the value of the derivative was $0.5 million. See Note 3 – Investments and Fair Value Measurements.

Warrant liabilities 

We account for warrants for shares of the Company's common stock that are not indexed to our own stock as liabilities at fair value on the balance sheet. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in our statement of operations. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Warrants issued in connection with Company's offering has been measured based on the Black Scholes Option Pricing Model.

Loan modifications and gain (losses) on extinguishments

From time to time, the Company negotiates modified loan terms. The Company evaluates the discounted future cash flows of the modified loan compared to the discounted future cash flows of the loan using its original terms. If the discounted cash flows of the new loan are more than 10% different than the original loan, the Company records the transaction as an extinguishment of the original loan and new debt on the modification date. If future discounted cash flows are less than 10%, the change is considered a modification and no extinguishment is recorded with any new fees amortized over the remaining life of the loan. The same steps are taken if a non-recourse loan is paid off via a refinancing with any remaining unamortized original issue discounts and unamortized loan fees recorded as a loss on extinguishment. In 2022, the Company recorded losses on extinguishments of $28.5 million related to loan modifications and loans refinanced of which $26.2 million was related to the seller financed notes payable with the sellers of Front Line Power Construction, LLC. See Note 7  - Notes Payable for more information on the Company's seller financed notes payable. 

The Company has debt with an institutional investor that on occasion has accepted common stock in lieu of a scheduled cash payment. Any difference above or below the Nasdaq minimum price is recorded as a gain or loss on extinguishment. In 2022, the Company recorded net losses on extinguishments of $2.8 million related to debt payments made with common stock. See Note 7 - Notes Payable for more information on the Company's notes payable with an institutional investor.

Stock-Based Compensation

The Company records its stock-based compensation expense under its stock option plans and also issues stock for services. The Company accounts for stock-based compensation using FASB Accounting Standards Codification No. 718 (‘‘FASB ASC 718’’), ‘‘Compensation – Stock Compensation.’’ FASB ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related service period.

Stock bonuses and restricted stock units ("RSU"s) issued to employees are recorded at fair value using the market price of the stock on the date of grant and expensed over the service period or immediately if fully vested on date of issuance. Employee stock options are recorded at fair value using the Black-Scholes or binomial option pricing model. The underlying assumptions in the Black-Scholes and binomial option pricing models used by the Company are taken from publicly available sources including: (1) volatility and grant date stock price, which are sourced from historic stock price information; (2) the appropriate discount rates are sourced from the United States Federal Reserve; and (3) other inputs are determined based on previous experience and related estimates. With regards to expected volatility, the Company utilizes an appropriate period for historical share prices for Orbital Infrastructure Group that best reflect the expected volatility for determining the fair value of its stock options.

See Note 10 Stockholders' Equity and Stock-Based Compensation for additional disclosure and discussion of the employee stock plan and activity.

Common stock and stock options are also recorded on the basis of their fair value, as required by FASB ASC 718, which is measured as of the date required by FASB ASC 718. In accordance with FASB ASC 718, the stock options or common stock warrants are valued using the Black-Scholes or binomial option pricing model on the basis of the market price of the underlying common stock on the ‘‘valuation date,’’ which for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the performance completion date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed based off an estimate of the fair value of the stock award as valued under the Black-Scholes option pricing model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock up through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.

Common stock issued to other than employees or directors subject to performance (performance based awards) require interpretation when the counterparty’s performance is complete based on delivery, or other relevant performance criteria in accordance with the relevant agreement. When performance is complete, the common stock is issued and the expense recorded on the basis of their value as required by FASB ASC 718 on the date the performance requirement is achieved.

Defined Contribution Plans

The Company has a 401(k) retirement savings plan that allows employees to contribute to the plan after they have completed 60 days of service and are 18 years of age. The Company matches the employee's contribution up to 6% of total compensation. GTS, Orbital Power, Inc., Orbital Solar Services, Front Line Power Construction, LLC, Eclipse Foundation, and Corporate made total employer contributions, net of forfeitures, of $1.5 million and $0.6 million for 2022 and 2021, respectively. In addition, in 2022 and 2021, the Company made contributions of $36 thousand and $72 thousand, respectively, associated with discontinued operations.

Revenue Recognition

The Electric Power segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, and emergency response sectors of North America through Front Line Power, and Orbital Power Services. The Telecommunications segment composed of Gibson Technical Services and subsidiaries provides technical implementation, design, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.  The Renewables segment, 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.

For our construction contracts, revenue is generally recognized over time. Our fixed price and unit-price construction projects generally use a cost-to-cost input method or an output 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. Under the output method, progress towards completion is measured based on units of work completed based on the contractual pricing amounts.  We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. 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 certain types of over time revenue jobs, the Company utilizes the right-to-invoice practical expedient. In these instances, we have a right to invoice the customer for an amount that corresponds directly with the value transferred to the customer for our performance completed to date. When this practical expedient is used, we recognize revenue based on billing and calculate any additional revenue earned that is unbilled at the period end.  We have contracts which have payment terms dictated by daily or hourly rates where some contracts may have mixed pricing terms which include a fixed fee portion. For contracts in which we charge the customer a fixed rate based on the time or materials spent during the project, we recognize revenue in the amount to which we have the right to invoice which corresponds to the value transferred to the customer. 

For any job where the customer does not simultaneously receive and consume the benefits of our performance as we perform the service, the timing of revenue recognition also depends on the payment terms of the contract. For those contracts 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 or output 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. 

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.

For certain of our revenue streams, such as call-out repair and service work, and outage services, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an input method as the customer receives and consumes the benefits of our performance completed to date.

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.

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 integration systems 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.

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 customers' 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, and are within industry standards across our business lines. 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 output method or the input cost-to-cost method 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 Consolidated Balance Sheets.

Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the input cost-to-cost or output method 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 years ended  December 31, 2022 and 2021 is as follows:

	For the Year Ended December 31,
	2022			2021
Total contract liabilities - January 1	$	6,503		$	4,873
Contract liability additions acquired through acquisition		—			100
Contract additions, net		6,710			6,371
Change in provision for Loss		4,179
Contract settlements		—			(3,140	)
Revenue recognized		(7,174	)		(1,701	)
Total contract liabilities - December 31	$	10,218		$	6,503

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 December 31, 2022, the Company's remaining performance obligations are generally expected to be filled within the next 12 months. For the contracts that are greater than 12 months the Company has approximately $164.9 million in the aggregate of remaining performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. T

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. 

Performance Obligations Satisfied Over Time

To determine the proper revenue recognition method for our contracts satisfied over time, 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 output method or the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

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, the Company accounts 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 and are estimated based on the most likely amount that is deemed probable of realization.

Two large solar projects have liquidated damages included within their customer contracts. In the event of a delay in the achievement of project milestones, the contracts specify the dollar amount of delay damages owed each day past the agreed upon milestone date. These delay liquidated damages are capped at 15% of the project contract price. During Q4 2022, the estimated completion dates on these two large solar projects were pushed passed milestone due dates in which the Company is contractually obligated to meet. As a result of these delays, the Company recorded liquidated damages as variable consideration, reducing the contract price on these two projects by a total of $17.1 million in 2022. This reduction in contract price along with additional estimated costs to complete the project resulted in a catch-up adjustment to reduce revenue recorded year-to-date by $21.4 million dollars. The customer on these two solar projects has the right to invoice, but as of March 31, 2023, has not yet sent an invoice for liquidated damages. Although the Company accrued for these liquidated damages in 2022, there is a possibility that some or all of the $17.1 million in liquidated damages could be reversed in future years if the customer does not invoice for these damages or if a legal settlement is reached.

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 table presents our revenues disaggregated by type of customer:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Utilities	$	148,046	$	915	$	—	$	148,961	$	43,120	$	—	$	—	$	43,120
Telecommunications		1,792		82,901		—		84,693		479		27,799		—		28,278
Renewables		—		—		85,766		85,766		—		—		11,550		11,550
Other		2,797		—		—		2,797		—		—		—		—
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

The following table presents our revenues disaggregated by type of contract:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Cost-plus contracts	$	49,487	$	327	$	—	$	49,814	$	12,198	$	—	$	—	$	12,198
Fixed price contracts		38,712		8,029		85,766		132,507		11,518		5,789		11,550		28,857
Unit price contracts		64,436		75,460		—		139,896		19,883		22,010		—		41,893
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

Income Taxes

Income taxes are accounted for under the asset and liability method of FASB Accounting Standards Codification No. 740 (‘‘FASB ASC 740’’), ‘‘Income Taxes.’’ Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent that management believes it is more likely than not that such deferred tax assets will not be realized.

Valuation allowances have been established against all domestic based deferred tax assets due to uncertainties in the Company’s ability to generate sufficient taxable income in future periods to make realization of such assets more likely than not. In future periods, tax benefits and related domestic deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

The Company recognizes interest and penalties, if any, related to its tax positions in income tax expense.

Orbital Infrastructure Group files consolidated income tax returns with its U.S. based subsidiaries for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Australia, Canada, India, Belgium and the United Kingdom. As of December 31, 2022, the Company is not under examination by any income tax jurisdiction. The Company is no longer subject to U.S. examination for years prior to 2019.

Net Loss per Share

In accordance with FASB Accounting Standards Codification No. 260 (‘‘FASB ASC 260’’), ‘‘Earnings per Share,’’ basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net 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 net loss in 2022 and 2021, the assumed exercise of stock options using the treasury stock method would have had an antidilutive effect and therefore all options for each of the two years were excluded from the calculation of diluted net loss per share. In addition, the Company had 16.2 million and zero stock warrants and 4.2 million and 3.0 million unvested restricted stock units outstanding at December 31, 2022, and 2021, respectively that were excluded from the calculation of diluted net loss per share. Accordingly, diluted net loss per share is the same as basic net loss per share for 2022 and 2021. 

The following table summarizes the number of stock options outstanding:

	As of December 31,
	2022		2021
Options, outstanding		197,887		237,985

Any common shares issued as a result of stock options would come from newly issued common shares as granted under our equity incentive plans.

The following is the calculation of basic and diluted earnings per share:

	For the Years Ended December 31,
(In thousands, except dollars per share)	2022			2021
Continuing operations:
Loss from continuing operations, net of income taxes	$	(277,935	)	$	(49,843	)
Discontinued operations:
Income from discontinued operations, net of income taxes		(2,317	)		(11,371	)
Net loss	$	(280,252	)	$	(61,214	)
Basic and diluted weighted average number of shares outstanding		108,313,369			58,348,489
Loss from continuing operations per common share - basic and diluted	$	(2.53	)	$	(0.86	)
Earnings from discontinued operations - basic and diluted		(0.02	)		(0.19	)
Loss per common share - basic and diluted	$	(2.55	)	$	(1.05	)

Foreign Currency Translation

The financial statements of the Company's foreign offices have been translated into U.S. dollars in accordance with FASB ASC 830, ‘‘Foreign Currency Matters’’ (FASB ASC 830). All balance sheet accounts have been translated using the exchange rate in effect at the balance sheet date. Statement of Operations amounts have been translated using an appropriately weighted average exchange rate for the year. The translation gains and losses resulting from the changes in exchange rates during 2022 and 2021 have been reported in accumulated other comprehensive income (loss), except for gains and losses resulting from the translation of short-term intercompany receivables and payables, which are included in earnings for the period.

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 four 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, Telecommunications, and Renewables and an Other category. 

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive solutions to customers in the electric power industries. Front Line Power, LLC is a Houston-based full-service electrical infrastructure service company that provides construction, maintenance, and emergency response services for customers since 2010. 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, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains.

The Telecommunications segment is made up of Gibson Technical Services, Inc. (“GTS”) (acquired April 13, 2021) GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and is the parent of the following companies:

o IMMCO, Inc. (acquired July 28, 2021), which includes two Indian subsidiaries and is an Atlanta-based, full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.

o Full Moon Telecom, LLC (acquired October 22, 2021) a Florida-based telecommunications services provider that offers an extensive array of wireless services capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network ("RAN") Integrations, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna ("DAS") systems.

o Coax Fiber Solutions, LLC (acquired  March 7, 2022), is based in Loganville, Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.  

The Renewables segment consists of Orbital Solar Services based in Raleigh, North Carolina. 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.

The Other category is made up primarily of the Company's corporate activities. This category does not include any operating segments and does not generate revenue. In addition, Orbital’s integrated operations and common administrative support for its operating units require that certain allocations be made to determine segment profitability, including allocations of shared and indirect costs (e.g., insurance costs) and certain general and administrative costs. Certain corporate costs are not allocated and include Board of Director fees and costs, certain legal fees, due diligence costs related to prospective acquisitions, and regulatory costs associated with being a publicly traded company. Unallocated corporate expenses and costs associated with discontinued operations are included in the all-other category.

The following information represents segment activity as of and for the year ended December 31, 2022:

(In thousands)	Electric Power			Telecommunications			Renewables			Other			Total
Revenues from external customers	$	152,635		$	83,816		$	85,766		$	—		$	322,217
Depreciation and amortization (1)		26,911			4,863			2,001			64			33,839
Interest expense		18,158			218			10			19,427			37,813
Loss from operations		(88,045	)		(22,112	)		(68,137	)		(9,283	)		(187,577	)
Segment assets (2)		167,245			67,920			18,932			17,474			271,571
Other intangibles assets, net		85,355			24,333			1,446			—			111,134
Goodwill		—			—			7,006			—			7,006
Expenditures for segment assets (3)		3,167			1,326			19			98			4,610

The following information represents segment activity as of and for the year ended December 31, 2021:

(In thousands)	Electric Power			Telecommunications		Renewables			Other			Total
Revenues from external customers	$	43,599		$	27,799	$	11,550		$	—		$	82,948
Depreciation and amortization (1)		5,969			2,326		2,931			1,684			12,910
Interest expense		3,129			50		349			4,809			8,337
Income (loss) from operations		(13,215	)		43		(19,043	)		(20,576	)		(52,791	)
Segment assets (2)		273,726			80,800		28,324			28,459			411,309
Other intangibles assets, net		106,377			28,571		7,708			—			142,656
Goodwill		70,151			23,742		7,006			—			100,899
Expenditures for segment assets (3))		5,905			1,615		118			846			8,484

(1)  For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment. 

(2)	Other category includes assets held for sale of the discontinued Orbital Gas subsidiaries and Eclipse Foundation Group fixed assets held for sale.
(3)	Includes purchases of property and equipment and purchases of other intangible assets.

The Company's revenues and long-lived assets are primarily located in the U.S.

Recent Accounting Pronouncements

In  September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll-forward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after  December 15, 2022, including interim periods within those fiscal years, except for the disclosure of roll-forward information, which is effective for fiscal years beginning after  December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material effect on the Company's financial position or results of operations.

In  June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value. It also requires the following disclosures for equity securities subject to the contractual sale restrictions: 1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2) the nature and remaining duration of the restriction(s); and 3) the circumstances that could cause a lapse in the restriction(s). ASU 2022-03 is effective for the fiscal years and interim periods within those fiscal years, beginning after  December 15, 2023. Early adoption is permitted. The guidance should be applied prospectively. ASU 2022-03 is not expected to have a material effect on our consolidated financial statements.

On  October 28, 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance will require entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. This standard was designed to provide consistent recognition and measurement guidance for revenue contracts with customers. Legacy guidance requires entities to record contract assets and contract liabilities acquired to be recorded at fair value. The amendments will be effective for the Company beginning for fiscal years beginning after  December 15, 2022. Early adoption is allowed. If an entity early adopts, the entity would be required to apply the new guidance to all acquisitions made in the year of the early adoption. The Company is still reviewing the standard and as of the reporting date of this filing has not elected to early adopt.

XML

Note 3 - Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

3.      INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company’s fair value hierarchy for its cash equivalents, marketable securities and financial instruments as of  December 31, 2022 and December 31, 2021, respectively, was as follows:

(In thousands)
December 31, 2022	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	570	$	570
Front Line Power Construction seller financed debt, net of discount		—		68,753		—		68,753
Financial instrument liability - related to Syndicated debt		—		—		536		536
Financial instrument liability - related to Front Line Power Construction seller financed debt		—		—		43,693		43,693
Prepaid advance agreement		—		1,829		—		1,829
Warrant liability		—		—		1,777		1,777
Total liabilities	$	—	$	70,582	$	46,576	$	117,158

December 31, 2021	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	720	$	720
Front Line Power Construction seller financed debt, net of discount		—		86,183		—		86,183
Financial instrument liability		—		—		825		825
Total liabilities	$	—	$	86,183	$	1,545	$	87,728

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability -related to Front Line Power Construction Seller Financed Debt
Balance at December 31, 2021	$	—
Fair value of financial instrument liability at inception		26,782
Fair value adjustment to financial instrument liability		16,911
Balance at December 31, 2022	$	43,693

As part of the purchase of Front Line, the Company paid the sellers, Tidal Power and Kurt Johnson, a certain number of shares of restricted stock. To the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period on April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period on April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. 

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Contingent Consideration
Balance at December 31, 2021	$	720
Fair value adjustment		(150	)
Balance at December 31, 2022	$	570

The Company evaluated the contingent consideration for fair value as of December 31, 2022 using a third-party valuation specialist. Significant unobservable inputs include projected future EBITDA, future estimated growth rate, estimated discount rate, and estimated volatility. Based upon this evaluation, the contingent consideration was reduced by $150 thousand resulting in a contingent consideration of $570 thousand at December 31, 2022.

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability - related
	to Syndicated debt
Balance at December 31, 2021	$	825
Issuance of shares upon exercise and reset of financial instrument		(7,667	)
Fair value adjustment to financial instrument liability		7,378
Balance at December 31, 2022	$	536

In conjunction with the Company issuing $105 million of debt to a syndicate of lenders, the Company committed to issuing 1,690,677 shares of stock to the lenders in the syndicate in a subscription agreement. Included in the subscription agreement is a provision that provides for additional shares to be issued to the lenders of the syndicate if the Company issues shares of common stock in an offering at a price lower than $2.36 per share amount ("the reference price"), for the shares initially issued to the lenders in the syndicate. This financial instrument was valued as a put option using the Black Scholes option pricing model. Unobservable inputs include volatility, exercise price, and time to expiration. The put expires at the maturity of the Company's seller notes. In 2022, there were five separate issuances via the financial instrument for a total of 25.0 million shares. The updated reference price as of December 31, 2022 was $0.15. 

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Warrant Liability
Balance at December 31, 2021	$	—
Proceeds from sale of warrants including pre-funded warrants		19,800
Exercise of pre-funded warrants, net of exercise proceeds		(6,938	)
Fair value adjustment to warrant liability		(11,085	)
Balance at December 31, 2022	$	1,777

On  April 28, 2022, the Company entered into a Securities Purchase Agreement with an institutional investor. The Purchase Agreement provides for the sale and issuance by the Company of an aggregate of: (i) 9,000,000 shares of the Company’s common stock, $0.001 par value, (ii) pre-funded warrants to purchase up to 7,153,847 shares of Common Stock and (iii) accompanying warrants to purchase up to 16,153,847 shares of Common Stock. The offering price per share and associated prefunded warrants was $1.30 for the shares and $1.2999 for the prefunded warrants. The prefunded warrants were immediately exercisable, had an exercise price of .0001 and were exercised during the three months ended  June 30, 2022.

The accompanying warrants have an exercise price of $1.31, and were exercisable 6-months after their date of issuance and will expire on the fifth anniversary of the original issuance date. Common stock warrants are accounted for in accordance with applicable accounting guidance provided in ASC Topic 815, Derivatives and Hedging - Contracts in Entity's Own Equity (ASC Topic 815), as either derivative liabilities or equity instruments depending on the specific terms of the warrant agreement. The Company’s warrants are considered to be derivative warrants, are classified as liabilities, and are recorded at fair value. The warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as a component of change in fair value of warrant liability in the consolidated statements of operations. The Company uses the Black-Scholes pricing model to estimate the fair value of the related derivative warrant liability. Unobservable inputs include volatility, exercise price, and time to expiration.

There were no transfers between Level 3 and Level 2 in 2022 as determined at the end of the reporting period.

The fair values of the reporting units subject to the Company’s quantitative impairment analysis were determined utilizing a blend of a market and an income approach to determine the estimated fair values of the reporting units, as discussed in Note 2. The fair value measurements and models were classified as non-recurring Level 3 measurements.

Investment in VPS

The Company has a minority ownership in Virtual Power Systems ("VPS"). The VPS investment basis at  December 31, 2022 and  December 31, 2021 was $1.1 million and $1.1 million, respectively, as reflected on the condensed consolidated balance sheets. The investment is held at  December 31, 2022 under the cost method of accounting for investments. 

XML

Note 4 - Property and Equipment, Net

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

4.             PROPERTY AND EQUIPMENT, NET

Property and equipment from continuing operations is summarized as follows:

	At December 31,
(In thousands)	2022			2021
Leasehold improvements	$	292		$	272
Equipment		36,200			32,762
Property and equipment, gross		36,492			33,034
Less accumulated depreciation		(13,562	)		(3,396	)
Property and equipment, net	$	22,930		$	29,638

Depreciation expense from continuing operations for the years ended  December 31, 2022 and 2021 was $15.4 million and $5.0 million, respectively. For the year ended December 31, 2022, depreciation totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand as cost of revenues in the Renewables segment. For the year ended  December 31, 2021, depreciation totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as cost of revenues in the Electric Power segment and $54 thousand as cost of revenues in the Renewables segment.

During the year ended December 31, 2022, the Company's continuing operations disposed of $2.1 million of property and equipment with an accumulated depreciation at disposal of $1.4 million. Cash and non-cash proceeds from sale was $0.6 million and a loss of $49 thousand.

During the year ended December 31, 2021, the Company's continuing operations disposed of $0.2 million of property and equipment with an accumulated depreciation at disposal of $39 thousand. Cash and non-cash proceeds from sale was $0.2 million and a gain of $14 thousand.

XML

Note 5 - Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5.             GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The Company records goodwill associated with its acquisitions of businesses when the consideration paid exceeds the fair value of the net tangible and identifiable intangible assets acquired. Goodwill balances are evaluated for potential impairment on an annual basis. The current guidance requires the Company to perform an annual impairment test of our goodwill or at an interim period if there is an event that occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. We are required to perform our annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. As of December 31, 2022, the Company has four operating segments that are also considered reporting units for goodwill impairment testing. The four operating segments are: Front Line Power Construction, LLC, Orbital Power Inc., Orbital Solar Services, and Gibson Technical Services, which includes  IMMCO, Inc., Full Moon Telecom, LLC, and Coax Fiber Solutions. The four operating segments are grouped into three reportable segments, Telecommunications (GTS),  Renewables (OSS), and Electric Power (FLP and OPI).

We would be required to recognize an impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value up to but not to exceed the amount of the goodwill. The Company acquired Coax Fiber Solutions in the first quarter of 2022 and recorded $1.5 million of goodwill associated with the acquisition. As of May 31, 2022, the annual testing date, the Company completed a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. To complete the review, management evaluated the fair value of the Goodwill and considered all known events and circumstances that might trigger an impairment of goodwill. The review of goodwill determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended June 30, 2022.

The Company performed a second goodwill impairment analysis as of  June 30, 2022 due to a 42-percent drop in the Company's stock price between  May 31, 2022 and  June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of  June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill impairment testing of our reporting units as of  September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach. The impairment assessment resulted in a conclusion that goodwill in the Front Line Power and GTS reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended  September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. After impairments the Company had $7.0 million of goodwill remaining associated with Orbital Solar Services ("OSS") acquired in 2020. At the same time as the goodwill impairment, the Company assessed the other intangibles in the Renewables segment and determined that the Customer relationship intangible was fully impaired and the remaining $4.3 million of book value was written off. 

In the fourth quarter of 2022, triggering events were identified which led to performing an additional Indefinite-lived intangibles impairment test. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company's ability to continue as a going concern.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. The impairment assessment included significant assumptions related to revenue growth rates, royalty rates, and discount rates. For the year ended December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

For Orbital Solar Systems, (formally known as Reach Construction), management completed a quantitative analysis to determine potential impairment at the May 31st, 2021 annual impairment test date. Goodwill in the Telecommunications segment was qualitatively reviewed due to the fact that this review was performed within 50 days of the initial valuation of GTS. The qualitative review was performed 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. Management determined that no additional testing was necessary and no impairment was necessary. During management's review of goodwill as of December 31, 2021, the Company determined that there were not indicators present and no triggering events to suggest that it was more likely than not that the fair value of each reporting unit and each indefinite-lived intangible was less than its carrying amount and thus no impairment was necessary.

The following table reflects the carrying amount of goodwill as of  December 31, 2022 and 2021, and the 2022 activity:

(In thousands)	Electric Power			Telecommunications			Renewables		Other		Total
Balance, December 31, 2021	$	70,151		$	23,742		$	7,006	$	—	$	100,899
Acquisition of Coax Fiber Solutions		—			1,530			—		—		1,530
Working capital adjustment		—			528			—		—		528
Impairment		(70,151	)		(25,800	)		—		—		(95,951	)
Balance, December 31, 2022	$	—		$	—		$	7,006	$	—	$	7,006

See Note 17 - Business Combinations for more information on Goodwill.

Other intangible assets

At December 31, 2022 and 2021, the gross carrying amount and accumulated amortization of intangible assets, other than goodwill, are as follows:

Finite-lived intangible assets (in thousands)			(In years)		December 31, 2022										December 31, 2021
	Estimated Useful Life (in years)		Weighted average remaining amortization period		Gross Carrying Amount		Accumulated Amortization			Impairment			Identifiable Intangible Assets, less Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Identifiable Intangible Assets, less Accumulated Amortization
Electric Power
Order backlog		1		—		9,186		(9,186	)		—			—		9,186		(1,148	)		8,038
Customer relationships - Front Line		15		13.89		84,012		(6,301	)		—			77,711		84,012		(700	)		83,312
Total Electric Power						93,198		(15,487	)		—			77,711		93,198		(1,848	)		91,350
Telecommunications
Customer Relationships - GTS		10		8.29	$	16,075	$	(2,760	)	$	—		$	13,315	$	16,075	$	(1,152	)	$	14,923
Customer Relationships - IMMCO		10		8.58		3,800		(547	)		—			3,253		3,800		(158	)		3,642
Customer Relationships - Full Moon		10		8.82		210		(25	)		—			185		210		(4	)		206
Technology - Know How		4		2.58		1,459		(519	)		—			940		1,459		(152	)		1,307
Software - IMMCO		3		1.23		1,126		(519	)		—			607		547		(93	)		454
Non-compete agreements - GTS		5		3.29		385		(132	)		—			253		385		(55	)		330
Total Telecommunications						23,055		(4,502	)		—			18,553		22,476		(1,614	)		20,862
Renewables
Customer Relationships		5		—		—		—			(4,323	)		—		8,647		(3,027	)		5,620
Trade name - Reach Construction Group		1		—		1,878		(1,878	)		—			—		1,878		(1,878	)		—
Non-compete agreements		5		2.25		3,212		(1,767	)		—			1,445		3,212		(1,124	)		2,088
Total Renewables						5,090		(3,645	)		(4,323	)		1,445		13,737		(6,029	)		7,708
Other category
Computer software		3		—		726		(726	)		—			—		713		(713	)		—
Product certifications		3		—		—		—			—			—		36		(36	)		—
Total Other category						726		(726	)		—			—		749		(749	)		—
Total identifiable finite-lived other intangible assets						122,069		(24,360	)		(4,323	)		97,709		130,160		(10,240	)		119,920
Identifiable indefinite-lived other intangible assets
Electric Power
Trade name - Front Line						15,027		—			(7,383	)		7,644		15,027		—			15,027
Telecommunications
Trade name - GTS						6,388		—			(1,746	)		4,642		6,388		—			6,388
Trade name - IMMCO						1,162		—			(182	)		980		1,162		—			1,162
Trade name - Full Moon						159		—			—			159		159		—			159
Total Telecommunications						7,709		—			(1,928	)		5,781		7,709		—			7,709
Total identifiable indefinite-lived other intangible assets						22,736		—			(9,311	)		13,425		22,736		—			22,736
Total identifiable other intangible assets					$	144,805	$	(24,360	)	$	(13,634	)	$	111,134	$	152,896	$	(10,240	)	$	142,656

Intangible asset amortization by category was as follows:

	For the Years Ended December 31,
(In thousands)	2022		2021
Trade name	$	—	$	469
Customer relationships		8,915		3,744
Technology - Know How		368		152
Computer software		427		96
Noncompete agreements		720		697
Order Backlog		8,038		1,148
Intangibles held by discontinued operations		—		1,396
Total amortization	$	18,468	$	7,702

Estimated future amortization by category of finite-lived intangible assets at  December 31, 2022 was as follows:

	For the Years Ended December 31,
											2028 and
(In thousands)	2023		2024		2025		2026		2027		thereafter		Totals
Customer relationships	$	7,609	$	7,609	$	7,609	$	7,609	$	7,609	$	56,419	$	94,464
Technology-Know How		365		365		210		—		—		—		940
Computer software		466		141		—		—		—		—		607
Non-compete agreements		719		719		238		22		—		—		1,698
Total amortization	$	9,159	$	8,834	$	8,057	$	7,631	$	7,609	$	56,419	$	97,709

The Company tests for impairment of Indefinite-lived intangibles in the second quarter of each year and when events or circumstances indicate that the carrying amount of Indefinite-lived intangibles exceeds its fair value and may not be recoverable.

During the third and fourth quarter of 2022, triggering events were identified which led to performing Indefinite-lived intangibles impairment testing.  These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company's ability to continue as a going concern.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment in Q4 2022. For the year ended  December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars.

XML

Note 6 - Instruments and Risk Management

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

6.          INSTRUMENTS AND RISK MANAGEMENT

The Company has limited involvement with derivative instruments and does not trade them. Financial instruments held by the Company include warrant liabilities, and financial instruments associated with the Company's Front Line Power seller financed debt and its Syndicated debt. For more information on these financial instruments, see Note 3 Investments and Fair Value Measurements.

At December 31, 2022 and 2021, the Company had no derivative instruments designated as effective hedges.

XML

Note 7 - Notes Payable

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

7.          NOTES PAYABLE

Notes payable is summarized as follows:

	As of December 31,
(In thousands)	2022			2021
Syndicated debt (1)	$	114,725		$	105,000
Seller Financed notes payable - Front Line Power Construction, LLC acquisition (2)		69,168			86,730
Note payable - financing notes (3)		2,210			1,357
Seller Financed notes payable - Reach Construction Group, LLC acquisition (4)		3,480			3,480
Vehicle and equipment loans (5)		2,014			222
Non-recourse payable agreements (6)		10,400			8,269
Notes payable - Institutional investor (7)		60,780			33,922
Prepaid Advance agreement (8)		1,829			—
Conditional settlement note payable agreement (9)		2,250			3,000
Full Moon and CFS - loans to prior owners (10)		29			2
Subtotal		266,885			241,982
Unamortized prepaid financing fees and debt discounts		(21,649	)		(12,603	)
Total long-term debt		245,236			229,379
Less short term notes and current maturities of long term notes payable		(144,708	)		(72,774	)
Notes payable, less current portion	$	100,528		$	156,605

(1)	On November 17, 2021, the Company entered into a credit agreement and associated documents (the “Credit Agreement”) with Alter Domus (US), LLC (“Alter Domus”), as administrative agent and collateral agent and various lenders (the “Lenders”) in order to enable the Company to finance the acquisition of Front Line Power Construction, LLC. The Lenders made a Term Loan to Front Line in the initial principal amount of $105,000,000 for the purposes of financing the acquisition and the associated expenses. The term loan initially bears interest at the three-month Adjusted LIBOR Rate, plus the Applicable Margin, of which 2.5% may be paid in-kind. The Term Loan shall be repaid in consecutive quarterly installments of $262,500, and commenced on June 30, 2022. The Credit Agreement provides for mandatory prepayments on the occurrence of events such as sales of assets, Consolidated Excess Cash Flow and Excess Receipts during the term. The credit agreement provides for prepayment premiums (initially 5% on prepayments made in the first 30 months of the term, declining to 1% in the final year of the term). The Term Loan matures on November 17, 2026, subject to acceleration on Events of Default. The interest rate on the term notes at December 31, 2022 was 17.15% with an effective rate of 23.2%. In  November 2022, The Company resolved a dispute with the Syndicated lenders whereby the Syndicated lenders deemed the Company to be in default of its credit agreement due to the Company using proceeds from Front Line Power's operations to pay down $9.5 million of the Company's working capital adjustment with the sellers of Front Line Power. As part of a consent agreement with the lenders, the Company agreed to pay the lenders in a paid-in-kind amount of $10.5 million, which was added to the Syndicated debt balance and included $1.0 million of interest calculated from the date of the first intercompany advance that the Company made. The $10.5 million was added to the original issue discount and will be amortized to interest expense over the life of the loan. At December 31, 2022 and 2021, the Company was in compliance with all debt covenants.
(2)	On November 17, 2021, the Company entered into two unsecured promissory notes, one with Kurt A Johnson, Jr, for $34,256,000 and the second for $51,384,000 with Tidal Power Group LLC. These promissory notes bear interest at a rate of 6% per annum and as modified on April 29, 2022 and December 30, 2022, $20 million was paid on May 6, 2022, $15 million is due on or before April 1, 2023 and the remaining balance is due on May 31, 2023. On December 10, 2021, Kurt A Johnson Jr. received an additional unsecured promissory note in the principal sum of $1,090,000 also with a 6% per annum interest rate in exchange for a reduction of shares issued to Kurt of 400,000. This note was paid off as part of the  May 6, 2022 payment. Additionally in amendments to the note, the Company also agreed to reduce the restriction period under the Tidal Lockup letter from two years to one year and to the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period ending April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period ending April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. Any shortfall would be made up by issuing Mr. Johnson additional common shares. In 2022, the Company recorded a $26.2 million loss on extinguishment related to these loan modifications.
(3)	The Company executes notes payable with First Insurance Funding for the purposes of financing a portion of the Company's insurance coverage. The Company executed two notes payable in the third quarter of 2021 for $1.7 million and $54 thousand, respectively at interest rates of 3.00% and 4.35%, respectively. In the fourth quarter of 2021, the Company executed one additional notes payable for $0.5 million at an interest rate of 4.35%. These three notes payable were paid off in 2022. The Company executed a note payable in July 2022 for $3.3 million and one in November 2022 for $0.7 million both at 3.28% interest. These two notes are scheduled to mature in May 2023.
(4)	Includes two seller-financed notes payable, one for $5 million and the second for $1.5 million. In  August 2021, the $5 million note was amended from its original 18-month term; the Company paid $1 million in cash and exchanged 155,763 shares of common stock in exchange for an additional $1 million reduction in principal. The new loan had a face value of $2.0 million at a rate of 6% per annum and was recorded based on an estimated market interest rate of 10% per annum with an original issue discount of $48 thousand. The second seller financed note payable is due 36-months from the  April 1, 2020 acquisition date. Both notes had an original stated interest rate of 6% per annum. In 2022, the Company filed and served a Federal Civil Complaint asserting various causes-of-action against the holder of the note, including misrepresentations made during the course of negotiating this transaction. Based on that complaint, the evidence contained therein, and the conduct described, the Company reasonably believes that it owes no additional compensation as a result of this transaction.
(5)	Includes vehicle and equipment loans with interest rates ranging from 0.00% to 9.15%.
(6)	The Company entered into a non-recourse agreement, which was originated in November 2021 with a face amount of $9.5 million. The Company received net cash proceeds of $6.9 million. The Company recorded a liability of $9.5 million and a debt discount of $2.6 million. Under the terms of the agreement, for the first 12 weeks, the Company made weekly payments of $148 thousand and for the final 20 weeks, the Company was to make payments of $384 thousand. The agreement had no stated interest rate, but the discount and loan origination fees were being amortized based on an 89% interest rate.  In  April, 2022, the Company took out three non-recourse agreements for the sale of future revenues in the combined amount of $20.2 million. The Company received approximately $13.3 million after the deduction of an original issue discount and upfront fees. In  April 2022, the Company used part of the proceeds from these non-recourse agreements to pay off the non-recourse note of $4.2 million that was on the balance sheet as of  March 31, 2022 and recorded a loss on extinguishment of $0.4 million. The loans vary in length from 26 to 48 weeks. The Company paid off the smallest of the three notes in  June 2022 and recorded a loss on extinguishment of $0.1 million. Discounts on the remaining agreements were being amortized based on an effective interest rate of 88% and were scheduled to mature in the first quarter of 2023. In December 2022, The Company refinanced the remaining two agreements and recorded a loss on extinguishment of $0.5 million. As part of the refinancing, the Company took our three new agreements with a combined face amount of $11.4 million, which included combined original issue discounts of $3.6 million. Payments are $260 thousand per week until the agreements mature in October 2023, and the discounts are being amortized at a 94% effective interest rate. The combined carrying value of the agreements net of the approximately $3.0 million of original issue discounts at December 31, 2022 was $7.4 million.
(7)	On  March 23, 2021, the Company completed a note payable agreement with an 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%, and an original issue discount of $1.0 million.  This note was paid off in  August 2022. On  May 11, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0% per annum, and estimated effective interest rate of 19.6% at inception, and a combined original issue discount and unamortized prepaid fees of $1.0 million. The net proceeds were to be used for working capital, future acquisitions and general corporate purposes. 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 million per calendar month, by providing Company with a “Redemption Notice." This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On  December 20, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $16.1 million, an original issue discount of $1.1 million, and a stated interest rate of 9.0%. The original issue discount has been amortized to interest expense starting with an estimated effective interest rate of 16.3%, which was later adjusted to 11.8% as of December 2022 due to changes in timing of payments. The note payable is payable within eighteen (18) months after the purchase date and the creditor  may request payment of up to $1.5 million per month beginning 6 months after initial issuance. The carrying value was $17.2 million at December 31, 2022.  On  June 9, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, which was later adjusted to 14.4% due to changes in timing of payments and an original issue discount of $0.7 million. The note payable is payable within eighteen (18) months after the purchase date and the creditor  may request payment of up to $1.0 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  June and   July 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below.  On  August 2, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $8.6 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, and an original issue discount of $0.6 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.8 million per month beginning 6 months after initial issuance. This note also included a debt reduction clause whereby the Company had agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  October,  November and  December 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On  September 29, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $5.4 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.5%, and an original issue discount of $0.4 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.5 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company has agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of  February,  March and  April 2023. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below.  On December 9, 2022, the Company entered into a Forbearance and Investment Agreement with an institutional investor and its successors and/or assigns, an institutional accredited investor pursuant to which the Company issued a Secured Promissory Note in the face amount of $42.1 million (the “New Note”). The New Note reflects the cancellation of $36.7 million of obligations under certain prior promissory notes issued to the institutional investor and $5,000,000 of additional funds made available to the Company.  As part of the cancellation of the former debt, the Company recorded a loss on extinguishment of $1.3 million. The New Note carries an original issue discount of $350,000 and reimbursement of Investor’s transactional expenses of $50,000, which are included in the initial principal balance of the New Note. The New Note bears interests at nine percent (9%) per annum and has a maturity date of 18 months after its issuance date of December 9, 2022. We may prepay all or a portion of the outstanding obligations under the New Note at a price equal to 115% of the amount we elect to prepay. Beginning six (6) months after December 9, 2022, the Investor has the right to redeem up to $2,500,000 per month of amounts due under the New Note, as more fully described in the New Note.     Subject to certain conditions, as described in the New Agreement, the Investor agreed to fund an additional $5.0 million to us on each of January 15, 2023 and February 15, 2023. As a result of the Company not meeting its debt reduction requirements in various months during 2022, the Company recorded a total of $8.0 million of liquidated damages in 2022.
(8)	On  August 18, 2022, the Company entered into a Prepaid Advance Agreement (the “PPA”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). In accordance with the terms of the PPA, the Company  may request advances of up to $5.0 million from Yorkville (or such greater amount that the parties  may mutually agree) (the “Pre-Paid Advance”), with a limitation on outstanding Pre-Paid Advances of $5.0 million and an aggregate limitation on the Pre-Paid Advances of $50.0 million. Each such Pre-Paid Advance will be offset upon the issuance of the Company’s common stock, par value $0.001 per share (“Common Stock”) to Yorkville at a price per share equal to the lower of: (a) a price per share equal to $0.01 above the market price on The Nasdaq Global Select Market (“Nasdaq”) as of the trading day immediately prior to the date of each closing (the “Fixed Price”), or (b) 96% of the lowest daily volume weighted average price of our Common Stock on Nasdaq during the five (5) trading days prior to each conversion date (the “Market Price” and the lower of the Fixed Price and the Market Price shall be referred to as the “Purchase Price”); however, in no event shall the Purchase Price be less than $0.20 per share. The Company elected the fair value option for this agreement with the debt being marked to market on a quarterly basis. The debt had an original issue discount of $150 thousand and with a carrying value of $1.8 million at December 31, 2022. The discount is amortized through interest expense over the life of the loan. The note had an original maturity date of  October 27, 2022, which was extended to  February 2023 in  October 2022. See note 3 for fair value information on this prepaid advance agreement.
(9)	In October 2020, the Company entered into a conditional settlement agreement with a subcontractor as amended to make payments of $3.5 million, of which $2.6 million is at zero interest, $0.9 million is at 5% interest and the total term of the agreement as amended to be two and a half years. The Company made a $0.5 million payment in the fourth quarter of 2021. The Company made a $150,000 payment in February 2022, a $350,000 payment on  March 31, 2022, and a $150,000 payment in December 2022. The Company is scheduled to make the final payments on the note in 2023 with the final payment of $1.5 million along with any accrued interest in April 2023.
(10)	Represents Full Moon Telecom, LLC and Coax Fiber Services opening balance sheet loan to prior Full Moon Telecom, LLC and Coax Fiber Services owners.

The following shows the elements of the Non-recourse payable agreements:

(In thousands)
	Face Value		Repayments			Loan Origination Fees			Discounts			Amortization of Discounts		Balance as of December 31, 2022
Non-recourse payable agreements	$	11,440	$	(1,040	)	$	(160	)	$	(3,440	)	$	555	$	7,355

The following table details the maturity of the notes payable for Orbital Infrastructure Group, Inc.:

(In thousands)
	As of December 31,
	2022
2023	$	176,383
2024		24,835
2025		21,318
2026		131,680
2027		138
Less interest portion of payments		(109,118	)
Total	$	245,236

XML

Note 8 - Line of Credit

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Working Capital, Line of Credit and Overdraft Facility [Text Block]

8.           LINE OF CREDIT

On  August 19, 2021, the Company's GTS subsidiary entered into a $4.0 million variable rate line of credit agreement. Interest accrues at a rate of 2.05% over the Daily Simple Secured Overnight Financing Rate ("SOFR") index rate. In November 2022, the maturity date for the line of credit was extended to November 2023. At December 31, 2022 the Company had a $4.0 million outstanding balance on the line of credit and zero dollars were available for borrowing. Collateral on the line of credit includes inventory, accounts receivable, equipment and general intangibles. The line of credit agreement includes certain affirmative covenants, all of which the Company was in compliance with as of December 31, 2022.

XML

Note 9 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9.          COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company may be involved in certain legal actions arising from the ordinary course of business. While it is not feasible to predict or determine the outcome of these matters, we do not anticipate that any of these matters, or these matters in the aggregate, will have a material adverse effect on the financial position or results of operations.

Off-Balance Sheet Arrangements - Performance and Payment Bonds and Parent Guarantees

In the ordinary course of business, Orbital Infrastructure 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. 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  December 31, 2022 the total amount of the outstanding performance and payment bonds was approximately $16.4 million. Orbital Solar Services has bonding for unconsolidated third parties related to two separate projects that had $16.0 million left to complete the jobs. Front Line Power had $0.4 million dollars in bonding related to ongoing electric power work for an individual customer. The Company does not expect any liability associated with these off-balance sheet arrangements.

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 Infrastructure 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.

The Company recently filed and served a federal civil complaint in the United States District Court for the Northern District of Texas – Dallas Division against the former owner of Reach Construction Group LLC (“Reach”).  The complaint alleges, among other things, misrepresentations and misconduct committed by the former owner in conjunction with the purchase and sale of Reach to Orbital Infrastructure Group, Inc.  Based on the information and evidence contained in the complaint, the Company reasonably believes that it owes no more compensation to the former owner and is seeking return of certain funds already paid and relief of certain debt and accruals currently on the balance sheet.

The Company and its subsidiary, OSS, are also involved in a contract dispute with Jingoli Power (“Jingoli”) regarding the Joint Venture between Jingoli and OSS for construction of the Black Bear and Happy - Lightsource BP Projects.  The Company contends that Jingoli unjustifiably and without proper authority took over management and control of the two projects and that, as a direct result of Jingoli’s mismanagement, the projects have suffered significant losses. The Company has disclosed and accrued losses including liquidated damages for both projects and is currently pursuing its contractual remedies to collect on losses from Jingoli.   

Regarding all lawsuits, claims and proceedings, Orbital Infrastructure Group, Inc. records a reserve when it is probable that a liability has been incurred and the loss can be reasonably estimated. Orbital Infrastructure 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 Infrastructure 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.

Syndicated debt - subscription agreement financial instrument

To the extent that the Company issues shares of its common stock at a price less than the current reference price, the Company is obligated to issue additional shares to the syndicated lenders based on formulas included in their subscription agreements. When additional shares are issued to the lenders, the reference price is reset. The reference price was $0.15 at  December 31, 2022. The financial instrument liability had a fair value of $0.5 million at  December 31, 2022. See Note 3 for additional information on the fair value of the financial instrument as of December 31, 2022.

XML

Note 10 - Stockholders' Equity and Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

10.          STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock Dividend Restrictions

As of December 31, 2022, there are no restrictions on common stock dividends. Also, at December 31, 2022 and 2021, retained earnings were not restricted upon involuntary liquidation.

S-3 registration and share issuances

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 Infrastructure 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. The Company utilized this S-3 registration to issue additional common stock in July 2021 for $38 million before costs of approximately $2.3 million for net proceeds of approximately $35.7 million. In April 2022, the Company issued 9,000,000 shares of common stock and pre-funded warrants to purchase up to 7,153,847 shares of Common Stock for a total raise of $21.0 million before expenses. Warrants were included as warrant liabilities at December 31, 2022. In addition, the Company issued 16,153,847 warrants exercisable at $1.31 that are not prefunded but are reserved against the S-3 in the amount of $21.2 million. In the third and fourth quarters of 2022, the Company issued an additional $3.9 million in common shares against the S-3 leaving $65.9 million against the S-3 for future issuances.

Other share issuances 

The Company has debt with an institutional investor that on occasion has accepted common stock in lieu of scheduled cash payments. In 2022, the Company issued 20,297,993 shares to this investor for $15.9 million including a $2.8 million loss on extinguishment. 

In 2022, the Company issued 24,963,451 common shares as part of a subscription agreement with the lenders of the Company's syndicated debt. See Note 3 - Investments and Fair Value Measurements and Note 9 - Commitments and Contingencies for more information on the related subscription financial instrument.

Stock Appreciation Rights ("SARS")

Through  December 31, 2021, the Company had been vesting a series of stock appreciation rights (SARS) to be settled in cash to certain executives. At December 31, 2021 there were 3,126,000 of non-vested cash-settled SARS outstanding at a weighted average fair value of $1.45. The Company recorded $2.1 million of compensation related to SARs in the year ended December 31, 2021. Unamortized expense for SARS at December 31, 2021 was $4.3 million.

The SARS were considered liability-classified awards meaning their fair-values were remeasured at the end of each reporting period using a binomial lattice model and any changes in fair value for the vesting periods to-date were recorded through the income statement with a corresponding liability accrued on the balance sheet. Since  December 31, 2021, the SARS have been exchanged for restricted stock units (RSUs) on the modification date of  January 14, 2022 as approved by the Board of Directors. To account for this exchange, the company revalued the SARS as of the modification date of  January 14, 2022 using the binomial lattice model and recorded changes in the vested value since  December 31, 2021 as an adjustment to the income statement. The Company then reclassified the SARS accrued liability to APIC for new RSUs and recognized incremental expense. Shares deemed vested at the modification date were released and issued net of tax in  March 2022. The SARS that converted to RSUs, were added to the Company's existing RSU program.

The number of SARS granted to each of the executives equated to the corresponding dollar amount of a portion of the cash bonus otherwise due to them pursuant to their employment agreements. The SARS were subject to acceleration upon a change in control or termination of the executive’s employment with the Company in certain circumstances. 

Month Issued	April 2021
Number Issued		3,770,960
Interest Rate		0.34	%
Estimated Volatility		156	%
Stock Price at Issuance	$	4.17
Years to Maturity		1.5
Grant date Value per Right	$	3.56

The 2021 grant was issued with a $2.89 exercise price. 

The SARS were valued using a binomial lattice model. Because the SARS were to be settled in cash, the obligation for them was accounted for as a liability rather than equity. Quarterly, the SARS were revalued and the new value was amortized. Information on the 2021 grant date value of the SARS and weighted average inputs to the binomial lattice model are as follows:

	2021
Weighted average expected term at December 31 (years)		1.55
Total fair value of all awards at December 31	$	6,979,824
Total fair value of all vested awards at December 31	$	2,701,802
Total intrinsic value at December 31	$	1,255,078

Restricted Stock Units:

In 2022, the Company granted Restricted stock units to certain key employees of the Company from the Company's 2020 Incentive Award Plan. RSUs generally vest over 3 years. In 2022, there were four grants totaling 823,883 units that immediately vested. New common shares are issued for vested RSUs. RSU activity in 2022 and 2021 was as follows:

	Number of restricted stock units			Weighted-average grant date fair value
Non-vested shares, December 31, 2020		—		$	—
Granted		4,386,107			4.64
Vested		(1,367,319	)		4.76
Forfeited		—			—
Non-vested shares, December 31, 2021		3,018,788			4.58
Granted		6,090,765			1.32
Vested		(2,760,687	)		1.67
Forfeited		(2,185,104	)		5.26
Non-vested shares, December 31, 2022		4,163,762		$	1.38

The Company recorded $4.6 million of expense related to vested RSUs in 2022 offset by forfeitures of $5.4 million for a net credit to expense of $0.8 million in 2022. This compares to $10.6 million of expense related to vested RSUs in 2021. Unamortized expense on unvested RSUs was $3.8 million and $9.7 million at December 31, 2022 and December 31, 2021, respectively. Unvested RSUs have a weighted average remaining life of 1.96 years and 1.80 years as of December 31, 2022, and December 31, 2021.

Employee Stock Options and other share-based compensation

At the 2020 Annual Meeting of Shareholders, the Company’s shareholders approved the Orbital Infrastructure Group 2020 Incentive Award Plan and authorized a share limit of 2,000,000 shares. In 2021, the Company's shareholders approved an increase in shares available for the 2020 Incentive Award Plan from a total of 2 million shares to a total of 5 million shares. In 2022, the Company's shareholders approved an additional 5,000,000 shares. As of December 31, 2022 there are 3,039,900 remaining shares available to grant under the 2020 Incentive Award Plan. This Plan replaced the 2008 and 2009 Equity Incentive Plan, which had expired. 

The purpose of the Orbital Infrastructure Group 2020 Incentive Award Plan is to enhance our ability to attract, retain and motivate persons who make (or are expected to make) important contributions to Orbital Infrastructure Group by providing these individuals with equity ownership opportunities. Equity awards are intended to motivate high levels of performance and align the interests of our directors, employees and consultants with those of our stockholders by giving directors, employees and consultants the perspective of an owner with an equity stake in Orbital Infrastructure Group and providing a means of recognizing their contributions to the success of Orbital Infrastructure Group. Our board of directors and management believe that equity awards are necessary to remain competitive in its industry and are essential to recruiting and retaining the highly qualified employees who help Orbital Infrastructure Group meet its goals. A primary purpose of the plan is to provide OIG with appropriate capacity to issue equity compensation in anticipation of future acquisitions.

The Orbital Infrastructure Group 2020 Incentive Award Plan provides for the grant of stock options, including ISOs and nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted stock, dividend equivalents, restricted stock units (“RSUs”) and other stock or cash-based awards. Certain awards under the Orbital Infrastructure Group 2020 Incentive Award Plan may constitute or provide for payment of “nonqualified deferred compensation” under Section 409A of the Code. All awards under the Orbital Infrastructure Group 2020 Incentive Award Plan will be set forth in the award agreement, which will detail the terms and conditions of awards, including any applicable vesting and payment terms and post termination exercise limitations. Most awards shall be subject to a minimum vesting of one year from the Grant Date. A brief description of each award type follows.

● Stock Options and SARs. Stock options provide for the purchase of shares of common stock of Orbital Infrastructure Group in the future at an exercise price set on the grant date. ISOs, in contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. SARs entitle their holder, upon exercise, to receive from Orbital Infrastructure Group an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date. The plan administrator will determine the number of shares covered by each option and SAR, the exercise price of each option and SAR and the conditions and limitations applicable to the exercise of each option and SAR. The exercise price of a stock option or SAR will not be less than 100% of the fair market value of the underlying share on the grant date (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute awards granted in connection with a corporate transaction. The term of a stock option or SAR may not be longer than five years.

● Restricted Stock. Restricted stock is an award of nontransferable shares of common stock of Orbital Infrastructure Group that remain forfeitable unless and until specified conditions are met and which may be subject to a purchase price. Upon issuance of restricted stock, recipients generally have the rights of a stockholder with respect to such shares, which generally include the right to receive dividends and other distributions in relation to the award. The terms and conditions applicable to restricted stock will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan.

● RSUs. RSUs are contractual promises to deliver shares of common stock of Orbital Energy Group in the future, which may also remain forfeitable unless and until specified conditions are met and may be accompanied by the right to receive the equivalent value of dividends paid on shares of common stock of Orbital Infrastructure Group prior to the delivery of the underlying shares (i.e., dividend equivalent rights). The Company accounts for forfeitures of employee awards as they occur. The plan administrator may provide that the delivery of the shares underlying RSUs will be deferred on a mandatory basis or at the election of the participant. The terms and conditions applicable to RSUs will be determined by the plan administrator, subject to the conditions and limitations contained in the Orbital Infrastructure Group 2020 Incentive Award Plan.

● Other Stock or Cash Based Awards. Other stock or cash-based awards are awards of cash, shares of common stock of Orbital Infrastructure Group and other awards valued wholly or partially by referring to, or otherwise based on, shares of common stock of Orbital Infrastructure Group or other property. Other stock or cash-based awards may be granted to participants and may also be available as a payment form in the settlement of other awards, as standalone payments and as payment in lieu of compensation to which a participant is otherwise entitled. The plan administrator will determine the terms and conditions of other stock or cash-based awards, which may include any purchase price, performance goal, transfer restrictions and vesting conditions, subject to the conditions and limitations in the Orbital Infrastructure Group 2020 Incentive Award Plan.

The Orbital Infrastructure Group 2020 Incentive Award Plan provides that the plan administrator may establish compensation for non-employee directors from time to time subject to the Orbital Infrastructure Group 2020 Incentive Award Plan’s limitations. The plan administrator will from time to time determine the terms, conditions and amounts of all non-employee director compensation in its discretion and pursuant to the exercise of its business judgment, taking into account such factors, circumstances and considerations as it shall deem relevant from time to time, provided that, the sum of any cash compensation or other compensation and the grant date fair value of any equity awards granted under the Orbital Infrastructure Group 2020 Incentive Award Plan as compensation for services as a non-employee director during any fiscal year may not exceed $250,000 per year of a non-employee director’s service as a non-employee director. The non-employee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving the non-employee Director.

A summary of the stock options granted to employees and directors and changes during the year are presented below:

	For the Year Ended December 31, 2022
	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contract Life (years)		Aggregate Intrinsic Value ($ '000)
Balance at beginning of year		237,985		$	6.14		1.41	$	—
Exercised		—			—		—		—
Expired		(40,098	)		4.56		—		—
Balance at end of year		197,887		$	6.46		0.63		—
Exercisable		197,887		$	6.46		0.63		—

As of  December 31, 2022 and 2021 all issued and outstanding stock options were fully vested. There was no unamortized expense related to unvested stock options at December 31, 2022 and 2021. There were no options granted during 2022 and 2021.

XML

Note 11 - Related Party Transactions

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

11.          RELATED PARTY TRANSACTIONS

Executive Chairman of the Board of Directors, Chief Legal Counsel, and former Chief Executive Officer, William J. Clough’s son Nicholas J. Clough, serves as Vice President of Greenfield Operations, Orbital Infrastructure Group. In 2022 and 2021, Mr. Clough received an aggregate salary of $375 thousand and $360 thousand, respectively, and received a cash bonus of zero and $309 thousand in fiscal 2022 and 2021, respectively. In 2021, Mr. Clough was granted 235,876 stock appreciation rights with a grant date fair value of $840 thousand. These SARS were to vest and be payable on the first, second and third anniversaries of the grant date. He also received other benefits valued at $33 thousand and $43 thousand in 2022 and 2021, respectively. Nicholas J. Clough does not report to William J. Clough nor does William J. Clough have input regarding Nicholas J. Clough’s salary, bonus, or performance. Mr. Clough’s salary and bonus is set by his direct supervisor and relevant market conditions, while his performance is evaluated and monitored by his direct supervisor. In addition, pursuant to Company policy, any related-party bonus and/or salary change in excess of $50,000 is independently reviewed and approved by the Company’s Compensation Committee, comprised of Independent Board Members from the Company’s Board of Directors.

XML

Note 12 - Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

12.     ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows:

(In thousands)	As of December 31,
	2022			2021
Foreign currency translation adjustment	$	(691	)	$	(3,995	)
Accumulated other comprehensive loss	$	(691	)	$	(3,995	)

XML

Note 13 - Restructuring and Impairment Charges

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

13.     RESTRUCTURING AND IMPAIRMENT CHARGES

Restructuring Charges

In  September 2022, the Company fully impaired its finance lease equipment related to the Eclipse Foundation Group in the Electric Power segment. These pieces of equipment are drilling specific and at this time, the Company does not plan to use the equipment for the remaining term of the leases. As these leases are non-cancelable and do not include a sub-leasing option, the full finance lease assets related to Eclipse in the Electric Power segment have been removed from the balance sheet and an equal impairment was recognized in the amount of $4.5 million. Future payments at the time of impairment related to these leases was approximately $5.2 million to be paid through  June 2026.

During the fourth quarter of 2019, the Company completed the sale of its largest group within the Power and Electromechanical segment. 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 and the lease for the CUI-Canada facility expired in the fourth quarter of 2020. This termination accrual was adjusted down by $0.3 million Canadian dollars ($0.2 million US dollars) based on updated estimates in 2020. 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. Final amounts were paid in 2021 (see table below). All restructuring costs related to CUI-Canada are included in the statement of operations on the line labeled Income from operations of discontinued operations.

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

	For the Year ended December 31,
CUI-Canada termination benefits (In thousands)	2021
January 1 liability balance	$	371
Severance accrual adjustments		—
Severance payouts		(376	)
Translation		5
December 31 liability balance	$	—

XML

Note 14 - Income Taxes

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14. INCOME TAXES

(Loss) income before income taxes consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022			2021
Continuing operations	$	(277,089	)	$	(60,351	)
Discontinued operations		(2,317	)		(12,705	)
Loss before income taxes	$	(279,406	)	$	(73,056	)

Loss from continuing operations before taxes consisted of the following:    

(In thousands)	For the Years Ended December 31,
	2022			2021
U.S. operations	$	(277,904	)	$	(60,351	)
Foreign operations		815			—
Loss before income taxes	$	(277,089	)	$	(60,351	)

 

The income tax (benefit) expense allocation for the years ended  December 31, 2022 and 2021 consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022		2021
Continuing operations	$	846	$	(10,508	)
Discontinued operations		—		(1,334	)
Total income tax expense (benefit)	$	846	$	(11,842	)

The income tax (benefit) expense from continuing operations consisted of the following:

(In thousands)	For the Years Ended December 31,
	2022			2021
Current:
Federal	$	—		$	—
State and local		129			370
Foreign		1,063			—
Total current provision		1,192			370
Deferred:
Federal		(260	)		(8,714	)
State and local		—			(2,164	)
Foreign		(86	)		—
Total deferred (benefit)		(346	)		(10,878	)
Total income tax expense (benefit)	$	846		$	(10,508	)

The following table provides a reconciliation of the federal statutory tax at 21% to the recorded tax expense (benefit) from continuing operations for the years ended December 31, 2022 and 2021, respectively:

(In thousands)	For the Years Ended December 31,
	2022			2021
Computed federal income taxes at the statutory rate (benefit)	$	(58,189	)	$	(12,674	)
State taxes		(3,764	)		292
Permanent tax differences		1,662			2,140
Foreign tax rates and tax credits differing from USA		73			—
Federal true-ups and carryovers		1,106			—
Expired NOL's		—			541
Change in valuation allowance		59,958			(807	)
Total income tax (benefit)	$	846		$	(10,508	)
Effective tax rate		(0.31	)%		17.41	%

The Company accounts for income taxes under the asset-liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when it is “more likely than not” that the benefits of existing deferred tax assets will not be realized in a future period. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021, respectively, are as follows:

(In thousands)	As of December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	43,885		$	23,941
Property and equipment		257		$	—
Intangible assets		19,113			—
163(j) interest expense limitation		11,139			—
Inventory and accounts receivable reserves		952			1,826
Operating lease obligations		7,175			8,058
Debt related		1,627			—
Accrued liabilities		2,530			786
Other		11			4,371
Valuation allowance		(77,944	)		(20,129	)
Deferred tax assets after valuation allowance		8,745			18,853
Deferred tax liabilities:
Intangible assets		—			(9,426	)
Property, plant and equipment		—			(9,588	)
ROU assets		(5,825	)		—
Accounting method change		(2,742	)		—
Total deferred tax liabilities		(8,567	)		(19,014	)
Net deferred tax asset (liability)	$	178		$	(161	)

The Company adopted the provisions of ASU 2015-17 in 2015. ASU 2015-17 requires that all deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The net deferred tax asset as of  December 31, 2022 is recorded within other assets. 

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $57.8 million during 2022 and $0.3 million during 2021.

Net operating loss carryforwards as of the financial statement date are as follows:

(in thousands)
	Amount		Expiration Years
Net operating losses, federal (post- December 31, 2017)	$	158,811	Do Not Expire
Net operating losses, federal (pre-January 1, 2018)		34,110		2027-2038
Net operating losses, state		957		2033-2038

The Company files consolidated income tax returns for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Australia, Canada, India, Belgium and the United Kingdom. As of December 31, 2022, the Company is not under examination by any income tax jurisdiction. The Company is no longer subject to examination in the USA for years prior to 2019.

XML

Note 15 - Concentrations

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

15.      CONCENTRATIONS

During 2022, 75% of revenues were derived from four customers that individually had over 10% of our total revenues: Customer 1 with 27%, Customer 2 with 23%, Customer 3 with 15% and customer 4 with 10%. During 2021, 26% of revenues were derived from two customers that individually had over 10% of our total revenues: Customer 2 with 11% and Customer 3 with 15%. 

The Company’s major product lines in 2022 and 2021 were electric power transmission and distribution maintenance and service, utility-scale solar construction projects and telecommunications maintenance and services.

At December 31, 2022, of the gross trade accounts receivable totaling approximately $53.4 million, four individual customers made up approximately 72% of the Company's total trade accounts receivable: Customer 1 at 11%. Customer 2 at 26%, Customer 3 at 14% and Customer 4 at 21%. At December 31, 2021, of the gross trade accounts receivable totaling approximately $50.2 million, two individual customers made up approximately 46% of the Company's total trade accounts receivable: Customer 1 at 16% and Customer 2 at 30%.

For the 12 months ended December 31, 2022, there were no supplier concentrations. For the 12 months ended December 31, 2021, there was one supplier concentration of approximately 12%.

For the years ended December 31, 2022 and 2021, the Company had no foreign revenue concentrations or foreign trade accounts receivable concentrations outside the United States.

As of December 31, 2022 and 2021, 13% and 15%, respectively, of the Company's total labor force was subject to a collective bargaining agreement.

XML

Note 16 - Leases

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Lease Disclosure [Text Block]

16. LEASES

Effective January 1, 2019, the Company implemented the new accounting guidance on leases found in ASC 842, Leases. As part of its transition, the Company elected to utilize the transition method of adoption. Under the transition method, the Company includes the new required disclosures for the current period and provides the disclosures required by the previous guidance found in ASC 840 for the prior year comparative periods. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classifications and allowed the Company to exclude leases with an initial term of 12 months or less (after consideration of renewal options) from being recorded on the Company's consolidated balance sheet; the Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. At  December 31, 2022 the Company did not factor in any renewal options when calculating its consolidated right-of-use assets and lease obligations as the options were not considered reasonably certain to be exercised. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company reviewed outstanding service contracts to determine if any of the Company's service contracts contained an embedded lease. Determining whether a contract contains a lease requires judgement. The Company did not identify any new leases through this process. The new lease accounting guidance also changes the name of leases formerly referred to as Capital leases under ASC 840 to Financing leases under ASC 842.

The Company rents office space and warehouse space, which it uses for the Corporate Headquarters in Houston, Texas. The Houston Headquarters property lease expired in the second half of 2022 and the Company began a lease at a new facility in November 2022 that runs through August 2026. During the year ended  December 31, 2022, rent expense on this lease was approximately $33 thousand per month for the lease that expired in 2022, and approximately $7 thousand per month for the new lease entered into in late 2022. In addition, the company has two corporate leases in Portland, Oregon, one running through April 2027 and another running through December 2028. These leases when combined approximate $28 thousand monthly as of December 31, 2022.

The Company sublets office space in Irving, Texas for corporate support services and Orbital Power Inc. office personnel; the lease runs through 2023. Orbital Power Inc. also maintains an equipment yard in Sherman, Texas that houses equipment primarily for Orbital Power, Inc. for which the lease runs until 2023. During the year ended December 31, 2022, rent expense on these leases were a combined average of $7 thousand per month.

Orbital Power Inc. and Eclipse Foundation Group rent equipment as well as vehicles for use on their jobs. These vehicle leases range from 3 to 7-year terms. During the year ended December 31, 2022, rent expense on operating leases when combined approximated $0.4 million monthly. Depreciation and interest expense on finance leases at Orbital Power, Inc. and Eclipse Foundation for the year ending December 31, 2022 averaged $0.4 million monthly.

Gibson Technical Services leases six properties, one in Georgia, North Carolina, South Carolina, Virginia, Louisiana, and New York with lease terms ranging from 2-8 years. During the year ended December 31, 2022, rent expense on these leases were a combined average of $20 thousand per month. In addition, Gibson Technical Services rents multiple pieces of equipment. Rent expenses on these equipment leases combined were approximately $28 thousand per month. IMMCO, a subsidiary of Gibson Technical Services, rents four office spaces in Kochi, India. Rent expenses on these leases when combined approximate $10 thousand per month with one lease running through 2023, two leases running through 2026, and one lease running through 2036.

Front Line Power Construction rents four office spaces in Rosharon, Texas, three of which run through November 2024 and one which runs through September 2025. Rent expense on these leases when combined approximate $26 thousand per month. In addition, Front Line Power Construction has finance equipment leases at December 31, 2022, that approximate $33 thousand monthly in depreciation and interest expense.

Orbital Solar Services rents office space in Raleigh, North Carolina and Phoenix, Arizona through February 2024 as well as multiple pieces of equipment.   Rent expense on these leases were a combined approximately $34 thousand per month. Orbital Solar Services has one equipment finance lease with approximately $1 thousand in cost a year.

Consolidated rental expense on operating leases was $6.7 million and depreciation on financing leases was $5.0 million for the year ended  December 31, 2022 and is included in cost of revenue and selling, general and administrative expense, on the condensed consolidated statement of operations. Interest expense for finance leases was $0.9 million for the year ended December 31, 2022.

Future minimum operating lease obligations for continuing operations at  December 31, 2022 are as follows for the years ended December 31:

(In thousands)
2023	$	5,565
2024		4,676
2025		3,103
2026		2,584
2027		2,352
Thereafter		1,512
Less interest portion		(2,902	)
Total operating lease obligations	$	16,890

Total lease cost and other lease information is as follows:

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
(In thousands)
Operating lease cost	$	6,487		$	3,897
Short-term lease cost		83			265
Variable lease cost		666			732
Sublease income		(516	)		(501	)
Total lease cost	$	6,720		$	4,393
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in operating leases	$	(8,509	)	$	(3,515	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	4,152		$	13,707
Weighted-average remaining lease term - operating leases (in years)		4.5			4.6
Weighted-average discount rate - operating leases		7.1	%		6.9	%

Future minimum finance lease obligations are as follows:

(In thousands)
2023	$	5,977
2024		5,331
2025		1,846
2026		896
2027		48
Thereafter		—
Less interest portion		(1,109	)
Total financing lease obligations	$	12,989

Total financing lease costs are as follows:

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
Depreciation of financing lease assets	$	4,958		$	2,166
Interest on lease liabilities		889			402
Total finance lease cost	$	5,847		$	2,568
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in financing leases	$	(889	)	$	(402	)
Financing cash flows from financing leases	$	(5,073	)	$	(1,995	)
Right-of-use assets obtained in exchange for new financing lease obligations	$	1,369		$	16,868
Weighted-average remaining lease term - financing leases (in years)		2.7			2.9
Weighted-average discount rate - financing leases		6.6	%		6.5	%

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

XML

Note 17 - Business Combinations

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

17.         Business Combinations 

See Note 5 - Goodwill and Other Intangible assets for information on 2022 Goodwill impairments.

Acquisition of Coax Fiber Solutions

Effective  March 7, 2022, GTS, an OIG subsidiary included in the Telecommunications segment, entered into a share purchase agreement to acquire Coax Fiber Solutions (CFS), a Georgia based GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation. GTS paid $0.8 million and issued 125,000 shares of restricted common stock to the Seller to purchase CFS with the stock valued at $146,000. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded opening balance items of $0.4 million of current assets, $0.5 million of fixed assets, $1.5 million of goodwill, and $1.5 million of liabilities as part of this transaction. As this was a stock acquisition, goodwill is not tax deductible. 

Front Line Power Construction, LLC

On November 17, 2021, Kurt A. Johnson, Jr. (the Active Seller) and Tidal Power Group LLC, a Texas limited liability company (the Passive Seller and together with the Active Seller, collectively, the Sellers), and Orbital Infrastructure Group, Inc., a Colorado corporation (Buyer or the Company) entered into a Membership Unit Purchase Agreement (the Purchase Agreement).  Under the Purchase Agreement, the Company purchased all of the issued and outstanding membership interests of Front Line Power Construction, LLC (FLP) from the Sellers for the purpose of expanding the Company’s market opportunities and creating synergies. FLP is a Houston-based full-service electrical infrastructure service company that provides construction, maintenance, and emergency response services. The Company has included the financial results of FLP in the consolidated financial statements from the date of acquisition and recorded $9.2 million of revenues and $98 thousand loss for the period from November 17, 2021 through December 31, 2021. The transaction costs associated with the acquisition were approximately $230 thousand and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for FLP was approximately $219.2 million, which consisted of the following (in thousands):

Cash	$	101,536
Working capital adjustment payable		14,092
Fair value of unsecured promissory notes		86,001
Fair value of common stock issued to Sellers		17,612
Fair value of purchase consideration	$	219,241

The cash consideration paid by the Buyer includes cash paid to the Sellers of $101.5 million, cash paid for the Sellers indebtedness of $1.0 million, and cash paid for the Sellers transaction expenses of $4.4 million. The Company funded the FLP acquisition through the issuance of a $105 million term loan on November 17, 2021, with a maturity date of November 21, 2026 (see Note 7).

The Buyer issued two unsecured promissory notes to the Sellers of FLP, in the aggregate principal amount outstanding of $86.7 million (the Seller Notes) and an estimated fair value of $86.0 million. The Seller Notes as amended are due in full, including any accrued and unpaid interest, on May 31, 2023 and accrue interest at a rate of 6% per annum. The Sellers also received a total of 11,622,018 shares of restricted common stock of the Buyer. The fair value of the unsecured promissory notes and the Buyer equity issued to Sellers was estimated using a market approach. 

The Company accounted for the acquisition as a business combination in accordance with ASC Topic 805, Business Combinations.  The Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values of assets and preliminary purchase price allocation for assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Cash and cash equivalents	$	6,779
Trade accounts receivable		15,726
Contract assets		2,092
Prepaid expenses and other current assets		481
Property and equipment		18,730
Other long-term assets		531
Indefinite lived intangible assets		15,027
Definite lived intangible assets		93,211
Accounts payable		(620	)
Contract liabilities		(120	)
Accrued expenses		(2,747	)
Net assets acquired		149,090
Goodwill		70,151
Purchase price allocation	$	219,241

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce, synergies, and expanded market opportunities, for which there is no basis for U.S. income tax purposes.  Goodwill amounts are not amortized, but are rather tested for impairment at least annually during the second quarter.

The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (in thousands):

	Fair Value		Useful Life
Customer relationships	$	84,012	15 years
Backlog		9,186	1 year
Tradename		15,027	Indefinite
Software		13	3 years
Total intangible assets	$	108,238

Full Moon Telecom, LLC

Effective October 22, 2021, the Company's subsidiary, Gibson Technical Services, Inc. ("GTS") entered into and closed upon a Purchase Agreement by and among the Company and the owners of Full Moon Telecom, LLC (“Full Moon”). Full Moon is a Florida-based privately-owned telecommunications service provider that offers an extensive array of wireless service capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network (“RAN”) Integration, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna (“DAS”) systems. 

The acquisition adds revenues and was accretive to earnings for GTS and OIG in its first fiscal quarter with the Company. Full Moon is a wholly-owned subsidiary of GTS, expanding GTS’s service offerings to its customers.

Full Moon’s additional capabilities include providing site surveys, regulatory support, project management, continuous wave testing, scanner walks, optimization/data collection and E911 data validation and testing.  These additional skill sets combined with Full Moon’s RAN integration and DAS commissioning efforts have allowed for an expanded service offering and turnkey approach to ensuring the on time delivery and quality on end-to-end solutions to wireless customers. Factors that contribute to the Company’s goodwill in Full Moon Telecom, LLC, include the highly skilled and technically competent workforce at Full Moon. This workforce when combined with Gibson Technical Services and IMMCO provide synergies that increase the unique portfolio of services provided to their customers and further penetrate the telecommunications market.

Subject to the terms and conditions set forth in the Purchase Agreement, the purchase consideration for 100% of the ownership of Full Moon was $2.0 million, with the consideration structured as follows:

$1.2 million in cash paid at closing less the amount needed to pay certain outstanding debt of Full Moon; and plus or minus the amount needed for estimated closing working capital to equal a 2 to 1 ratio; and

227,974 shares of restricted common stock issued to the Full Moon owners with an aggregate fair value of $368 thousand based upon a per share value of $1.614. 

The Purchase Agreement provided for the adjustment of the selling price to adjust the final closing working capital at the acquisition date as a post-closing adjustment for net working capital above or below a 2-1 ratio for the closing working capital ratio estimated on the acquisition date and to be finalized within 45 days after the closing date of October 22, 2021. This was calculated to be an additional $381 thousand of cash consideration. 

The Purchase Agreement contains various customary representations, warranties and covenants.

The Company accounted for the acquisition as a business combination in accordance with ASC Topic 805, Business Combinations.  The Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The following table summarizes the fair values and preliminary purchase of assets acquired and liabilities assumed as of the date of acquisition (in thousands):

Cash and cash equivalents	$	747
Trade accounts receivable		297
Property and equipment		124
Intangible, Tradename (indefinite)		159
Intangible, Customer relationships (10-year life)		210
Accounts payable		(197	)
Accrued expenses and other liabilities		(182	)
Net assets acquired		1,158
Goodwill		826
Purchase price allocation	$	1,984

The Company has included the financial results of Full Moon Telecom, LLC in the consolidated financial statements from the date of acquisition and recorded $1.0 million of revenues and $0.3 million of earnings for the period from October 22, 2021 through December 31, 2021.

IMMCO, Inc.

Effective  July 28, 2021, the Company entered into a share purchase agreement to acquire IMMCO, Inc., an Atlanta-based telecommunications company providing enterprise solutions to the cable and telecommunications industries since 1992. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), with the shareholders of IMMCO (the "Seller"). Orbital Infrastructure Group paid $16 million and issued 874,317 shares of restricted common stock issued to the Seller ($2.5 million estimated fair value as of  July 28, 2021) plus a $0.6 million working capital adjustment for a combined total of $19.1 million. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded $11.0 million of goodwill as part of this transaction and all of this goodwill is deductible for tax purposes. Factors that contribute to the Company’s goodwill at IMMCO include the significant synergies added to the Company’s Telecommunications segment by expanding the depth and breadth of the customer solutions provided. Acquisition-related expenses incurred during the year ended December 31, 2021 for the IMMCO acquisitions were approximately $0.6 million before taxes, which were recognized within the Selling, general and administrative expense line of the Condensed Consolidated Statements of Operations.

The purchase consideration was as follows (in thousands):

Purchase Consideration
Cash payment	$	16,597
Fair value of common stock issued to Sellers		2,024
Total	$	18,621

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):

Cash and cash equivalents	$	1,634
Trade accounts receivable, net		1,254
Contract assets		1,001
Prepaid expenses and other current assets		551
Property and equipment		760
Intangible, customer relationships		3,800
Intangible, trade name		1,162
Intangible, technology know how		1,459
Other long-term assets		76
Deferred tax liability		(2,090	)
Liabilities assumed		(2,100	)
Net assets acquired		7,507
Goodwill		11,114
Purchase price allocation	$	18,621

The Company has included the financial results of IMMCO, Inc.in the consolidated financial statements from the date of acquisition and recorded $3.7 million of revenues and $2.8 million of net income for the period from July 28th, 2021 through December 31, 2021.The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in 2021 within the income tax benefit line of the Condensed Consolidated Statement of Operations and is included in the net income of IMMCO, Inc. 

Gibson Technical Services, Inc.

Effective  April 13, 2021, the Company entered into a share purchase agreement to acquire Gibson Technical Services, an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990. The acquisition was effectuated pursuant to the Share Purchase Agreement (the “Agreement”), dated as of  April 13, 2021, between Orbital Infrastructure Group and the shareholders of GTS (the "Seller"). Orbital Infrastructure Group paid $22 million and issued 5,929,267 shares of restricted common stock issued to the Seller ($16.9 million estimated fair value as of  April 13, 2021) for a combined total of $38.9 million. Goodwill reflects the excess purchase price over the fair value of net assets. The Company recorded $12.3 million of goodwill as part of this transaction and all of this goodwill is deductible for tax purposes. Factors that contributed to the Company’s goodwill in Gibson Technical Services included GTS’s sterling reputation within the telecommunications industry which when combined with the Company’s resources, provided synergies that helped OIG penetrate the telecommunications market. Acquisition-related expenses incurred during the year ended December 31, 2021 were approximately $0.9 million before tax which were recognized within the Selling, general and administrative expense line of the Condensed Consolidated Statements of Operations.

The purchase consideration was as follows (in thousands):

Cash payment	$	22,000
Fair value of common stock issued to Sellers		16,932
Total	$	38,932

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).

Cash and cash equivalents	$	610
Trade accounts receivable		7,871
Contract assets		1,686
Contingent receivable		1,424
Prepaid expenses and other current assets		408
Property and equipment		3,795
Right of use assets - Operating leases		860
Intangible, customer relationships (10-year life)		16,075
Intangible, tradename (indefinite life)		6,388
Intangible, non-compete agreements (5-year life)		385
Other long-term assets		123
Deferred tax liability		(9,048	)
Liabilities assumed		(3,984	)
Net assets acquired		26,593
Goodwill		12,339
Purchase price allocation	$	38,932

The Company has included the financial results of Gibson Technical Services, Inc.in the consolidated financial statements from the date of acquisition and recorded $23.1 million of revenues and $9.2 million of earnings for the period from April 13, 2021 through December 31, 2021. The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit 2021 within the income tax benefit line of the Condensed Consolidated Statement of Operations and is included in the total earnings of GTS. 

The table below summarizes the unaudited condensed pro forma information of the results of operations of Orbital Infrastructure Group, Inc. for the year ended December 31, 2021 as though the Company's 2021 acquisitions had been completed as of January 1, 2020 (in thousands):

	(Unaudited)
	For the Years Ended December 31,
	2021
Gross revenue	$	158,625
Loss from continuing operations, net of income taxes	$	(69,671	)

XML

Note 18 - Subsequent Events

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

18.        SUBSEQUENT EVENTS

Shares issued in Q1 2023

In the first quarter of 2023, the Company issued an additional 28,313,924 shares. These shares were issued primarily to an institutional investor as part of an exchange agreement to make payments on outstanding debt and as payment on our prepaid advance agreement with Yorkville.

Note Payable Agreement

On March 6, 2023, the Company entered into an amended and restated secured promissory note with Streeterville Capital, LLC (“Streeterville”) with a face amount of $20.9 million which will result in net proceeds of $13.8 million funded incrementally during the first half of 2023.  The documents also confirmed Streeterville’s agreement to forebear on any action regarding this and previous notes with Streeterville as relates to certain compliance matters. In addition, the agreements contain milestone events and deadlines which require the Company to pursue divestment of certain businesses in 2023. Refer to the Company's Current Report on Form 8-K dated March 13, 2023 for further details.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Use of Estimates, Policy [Policy Text Block]

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 record purchase price allocation for the Company's acquisitions, fair value measurements used in goodwill impairment tests, impairment estimations of long-lived assets, revenue recognition on cost-to-cost type contracts, allowances for uncollectible accounts, valuations of non-cash capital stock issuances, estimates of the incremental borrowing rate for long-term leases, fair value estimates and the valuation allowance on deferred tax 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 assumptions or conditions.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Orbital Infrastructure Group, Inc. and its wholly owned subsidiaries Front Line Power Construction, LLC, Orbital Power, Inc., Eclipse Foundation Group, Orbital Solar Services, Gibson Technical Services, Inc., and GTS's wholly owned subsidiaries, IMMCO, Inc., Full Moon Telecom, LLC, and Coax Fiber Solutions, LLC, hereafter referred to as the ‘‘Company.’’ Additionally, the following wholly owned subsidiaries are included in these financial statements as discontinued operations: Orbital Gas Systems, Ltd. and Orbital Gas Systems, North America, Inc. Intercompany accounts and transactions have been eliminated in consolidation.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

Variable Interest Entity

Orbital Solar Services entered into an agreement in 2021 to form OSS-JPOW Solar Services, LLC (OSS-JPOW), a partnership with Jingoli Power, LLC. Orbital Solar Services holds a controlling interest in OSS-JPOW and the portions of OSS-JPOW’s net earnings and equity not attributable to Orbital Solar Service’s controlling interest are shown separately as noncontrolling interests in the consolidated statements of operations and consolidated balance sheets. OSS-JPOW is considered a Variable Interest Entity ("VIE") to Orbital Solar Services. At 12/31/2022, OSS-JPOW had $10.6 million dollars of assets and $68.2 million dollars of liabilities on their balance sheet.  

Orbital Solar Services, through its controlling interest in OSS-JPOW, has the contractual power to direct the activities that significantly affect the economic performance of OSS-JPOW and the obligation to absorb losses or the right to receive benefits that could be significant to OSS-JPOW; therefore, Orbital Solar Services is considered the primary beneficiary and consolidates OSS-JPOW. The VIE has been jointly financed by the Company and JPOW. For the years ended December 31, 2022 and 2021, a $54.5 million loss and $0.1 million of income was attributable to OSS-JPOW with a $4.1 million dollar loss and $39 thousand of income allocated to non-controlling interest.

Company Conditions, Policy [Policy Text Block]

Company Conditions and Sources of Liquidity 

The Company has experienced net losses, cash outflows from cash used in operating activities and a decline in share value over the past years. As of and for the year ended December 31, 2022, the Company had an accumulated deficit of $487.1 million, loss from continuing operations of $277.9 million, and net cash used in operating activities of $19.6 million. Further, as of December 31, 2022, the Company had a working capital deficit of $190.5 million, including current maturities of debt, and cash and cash equivalents of $21.5 million available for working capital needs and planned capital asset expenditures.  As a result of the foregoing, the Company does not have sufficient liquidity and capital resources to meet its obligations and fund its operations for the twelve months following the issuance of these financial statements. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company has plans to access additional capital to meet its obligations for the twelve months from the date these financial statements are available to be issued. Historically, the Company has raised additional equity and debt financing to fund its expansion; refer to Note 7 — Notes Payable and Note 8 — Line of Credit. The Company has also funded some of its capital expenditures through long-term financing with lenders and other investors as also described in further detail in Note 7 — Notes Payable and Note 8 — Line of Credit. Our ability to raise the additional capital is dependent on a number of factors, including, but not limited to, the market demand for our common stock, which itself is subject to a number of business risks and uncertainties, our creditworthiness and the uncertainty that we would be able to raise such additional capital at a price that is favorable to us. As of December 31, 2022, the Company has an effective S-3 shelf registration statement for the issuance of various types of securities, including common stock, preferred stock, debt securities and/or warrants in the aggregate of up to $65.9 million. In addition, although no formal agreements exist, the company has solicited interest from various lenders to potentially raise additional term debt to restructure or refinance its existing notes.

There can be no assurance that the Company will succeed in executing these plans. If unsuccessful, the Company will not have sufficient liquidity and capital resources to repay its indebtedness when it matures, or otherwise meet its cash requirements over the next twelve months, as noted above.

Discontinued Operations, Policy [Policy Text Block]

Discontinued Operations and Sales of Businesses

As part of the Company’s stated strategy to transform Orbital Infrastructure Group into a diversified energy infrastructure services platform serving North American energy customers, the Company’s board of directors made the decision to divest of its Orbital Gas subsidiaries. The Orbital Gas subsidiaries provide proprietary gas measurement and sampling technologies and the integration of process control and measuring/sampling systems. They are legacy businesses that are not part of the Company’s strategy of building an infrastructure services company serving the electric power, telecommunications and renewable markets. The disposition of the Orbital Gas subsidiaries will facilitate the Company’s restructuring and cost savings initiatives and are intended to realign and simplify its business structure and better position the Company for future growth and improved profitability. In the fourth quarter of 2021, the Company recorded a $9.2 million impairment related to its U.K. operations to write the value of its investment in the U.K. operations to its expected realizable value of 3 million GBP ($4.1 million at December 31, 2021). The Company's U.K. operations were divested in May 2022 and most of the assets of the North American operations were divested in the third quarter of 2022. At December 31, 2022, the remaining assets held for sale were the Company's VE Technology intellectual property and certain fixed assets at Eclipse Foundation Group. Income from discontinued operations and assets and liabilities held for sale are included in the Company's statement of operations and balance sheet and are described below. 

Selected data for these discontinued businesses consisted of the following:

Reconciliation of the Major Classes of Line Items Constituting Pretax Loss from Discontinued Operations to the After-Tax Loss from Discontinued Operations That Are Presented in the Statement of Operations

(In thousands)
	For the Year
	Ended December 31,
Major classes of line items constituting pretax loss of discontinued operations	2022			2021
Revenues	$	7,617		$	19,855
Cost of revenues		(6,090	)		(14,193	)
Selling, general and administrative expense		(4,130	)		(8,550	)
Depreciation and amortization		—			(1,638	)
Research and development		—			(2	)
(Provision) credit for bad debt		(18	)		3
Impairment of assets held for sale		—			(9,185	)
Gain on extinguishment of PPP loan		—			779
Interest expense		(13	)		(2	)
Other income		18			228
Pretax loss of discontinued operations related to major classes of pretax loss		(2,616	)		(12,705	)
Pretax gain on sale of Orbital U.K.		299			—
Total pretax loss on discontinued operations		(2,317	)		(12,705	)
Income tax benefit		—			(1,334	)
Total loss from discontinued operations	$	(2,317	)	$	(11,371	)

Reconciliation of the Carrying Amounts of Major Classes of Assets and Liabilities of the Discontinued Operation to Total Assets and Liabilities of the Disposal Group Classified as Held for Sale

	As of December 31,		As of December 31,
(In thousands)	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Trade accounts receivables	$	—	$	2,996
Inventories		—		530
Prepaid expenses and other current assets		—		114
Contract assets		—		1,141
Assets held for sale, current portion		—		4,781
Property and equipment		1,385		42
Other intangible assets		1,813		1,813
Deposits and other assets		—		43
Assets held for sale, noncurrent portion		3,198		1,898
Total assets of the disposal group classified as held for sale	$	3,198	$	6,679
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	—	$	1,657
Contract liabilities		—		1,414
Operating lease obligations, current portion		—		76
Accrued expenses		—		1,126
Liabilities held for sale, current portion		—		4,273
Operating lease obligations, less current portion		—		85
Other long-term liabilities		—		9
Liabilities held for sale, noncurrent portion		—		94
Total liabilities held for sale	$	—	$	4,367

The assets and liabilities of the disposal group, which included the U.K. and North America Gas subsidiaries, and certain fixed assets of the Eclipse Foundation Group classified as held for sale are classified as current on the December 31, 2022 and December 31, 2021 balance sheets because of the expectation that the sales will occur within one year of the balance sheet date. 

Net cash used by operating activities of discontinued operations for 2022 and 2021 was $0.6 million and $3.2 million, respectively.

Net cash provided by investing activities of discontinued operations for 2022 and 2021 was $1.0 million and zero, respectively.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Accounting Standards Codification (‘‘ASC’’) 820 ‘‘Fair Value Measurements and Disclosures’’ (‘‘ASC 820’’) defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the U.S., and enhances disclosures about fair value measurements. ASC 820 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

• Level 1 – Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date.

• Level 2 – Pricing inputs are quoted for similar assets, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes assets or liabilities valued at quoted prices adjusted for legal or contractual restrictions specific to these investments.

• Level 3 – Pricing inputs are unobservable for the assets or liabilities; that is, the inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

The Company determines when a financial instrument transfers between levels based on management’s judgment of the significance of unobservable inputs used to calculate the fair value of the financial instrument.

Management believes the carrying amounts of the short-term financial instruments, including cash and cash equivalents, investment, note receivable, accounts receivable, contract assets, prepaid expense and other assets, accounts payable, accrued liabilities, contract liabilities, and other current liabilities reflected in the accompanying consolidated balance sheet approximate fair value at  December 31, 2022 and 2021 due to the relatively short-term nature of these instruments. At December 31, 2022, and 2021 the carrying value of the notes payable, including the Company's Front Line Power seller notes (Carrying value of $68.8 million  at December 31, 2022), and syndicated term note debt (carrying value of $97.1 million at December 31, 2022), net of original issue discounts, that was issued in November 2021, approximate fair value based on current market conditions. The syndicated debt and seller financed debt include financial instruments that are valued at fair value at  December 31, 2022 and 2021. See Note 3 for fair value of financial instruments.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Cash includes deposits at financial institutions with maturities of three months or less. The Company at times has cash in banks in excess of FDIC insurance limits and places its temporary cash investments with high credit quality financial institutions. The Company considers all highly liquid marketable securities with maturities of 90 days or less at the date of acquisition to be cash equivalents. Cash equivalents include money market funds, certificates of deposit and commercial paper. At December 31, 2022 and 2021, the Company had $2.6 million and $2.3 million, respectively, of cash and cash equivalents balances at domestic financial institutions that were covered under the FDIC insured deposits programs and $0.3 million and $0.4 million, respectively, at foreign financial institutions covered internationally. At December 31, 2022 and 2021, the Company held $1.6 million and $2.1 million respectively, in foreign bank accounts. In addition to the Company's unrestricted cash and cash equivalents at December 31, 2022 and 2021, the Company has $0.1 million and $0.2 million of current restricted cash and $0.5 million and $1.0 million, respectively, of long-term restricted cash on its balance sheet related to contract guarantees. Restricted cash is combined with other cash and cash equivalents in reconciling the change in cash on the Company's Consolidated Statements of Cash Flows.

(In thousands)	As of December 31,
	2022		2021
Cash and cash equivalents at beginning of year	$	26,865	$	3,046
Restricted cash at beginning of year		1,176		1,478
Cash, cash equivalents and restricted cash at beginning of year	$	28,041	$	4,524
Cash and cash equivalents at end of year	$	21,489	$	26,865
Restricted cash at end of year		609		1,176
Cash, cash equivalents and restricted cash at end of year	$	22,098	$	28,041

Financing Receivable [Policy Text Block]

Notes Receivable

At December 31, 2021, the Company had a note receivable from Back Porch International that was originated as part of the divestiture of the Company's electromechanical components business. The note had an original stated value of $5 million, and is presented on the balance sheet as of   December 31, 2021 at its present value of $3.3 million including $2.5 million of current maturities. In the first quarter of 2022, the Company received final payment on the note receivable.

Receivable [Policy Text Block]

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist of the receivables associated with revenue derived from service sales including present amounts due to contracts accounted for under fixed price, cost-to-cost, cost plus, or output method. An allowance for uncollectible accounts is recorded to allow for any amounts that may not be recoverable, based on an analysis of prior collection experience, customer credit worthiness and current economic trends. Based on management’s review of accounts receivable, an allowance for doubtful accounts of $0.8 million and $1.5 million at December 31, 2022 and 2021, respectively, is considered adequate. The reserve in both periods considers aged receivables that management believes should be specifically reserved for as well as historic experience with bad debts to determine the total reserve appropriate for each period. Receivables are determined to be past due based on the payment terms of original invoices. Payment terms and conditions vary by contract, and are within industry standards across our business lines. The Company routinely assesses the financial strength of its customers and, therefore, believes that its accounts receivable credit risk exposure is limited. 

Activity in the allowance for doubtful accounts for the years ended  December 31, 2022 and 2021 is as follows:

(In thousands)	For the Years ended December 31,
	2022			2021
Allowance for doubtful accounts, beginning of year	$	1,487		$	1,172
Bad debt expense		(26	)		346
Deductions		(694	)		(31	)
Allowance for doubtful accounts, end of year	$	767		$	1,487

Retainage Receivables [Policy Text Block]

Retainage Receivables

At December 31, 2022 and 2021, the Company had $0.9 million and $1.5 million, respectively, billed but not paid by customers under retainage provisions in contracts. These amounts are included as part of contract assets.

Inventory, Policy [Policy Text Block]

Inventories

Inventories consist of finished and unfinished products and are stated at the lower of cost or market through either the first-in, first-out (FIFO) method as a cost flow convention or through the moving average cost method.

At December 31, 2022, and 2021, inventory is presented on the balance sheet net of reserves. The Company provides reserves for inventories estimated to be excess, obsolete or unmarketable. The Company’s estimation process for assessing the net realizable value is based upon its known backlog, projected future demand, historical usage and expected market conditions. Inventory by category consists of:

(In thousands)	As of December 31,
	2022		2021
Finished goods	$	—	$	—
Raw materials		1,338		1,316
Work-in-process		353		19
Total inventories	$	1,691	$	1,335

Property, Plant and Equipment, Policy [Policy Text Block]

Property and equipment, less accumulated depreciation

Land is recorded at cost and includes expenditures made to ready it for use. Land is considered to have an infinite useful life.

Buildings and improvements are recorded at cost.

Furniture, vehicles, and equipment are recorded at cost and include major expenditures, which increase productivity or substantially increase useful lives.

Leasehold improvements are recorded at cost and are depreciated over the lesser of the lease term or estimated useful life.

The cost of buildings, improvements, furniture, vehicles, and equipment is depreciated over the estimated useful lives of the related assets.

Depreciation is computed using the straight-line method for financial reporting purposes. The estimated useful lives for buildings, improvements, furniture, vehicles, and equipment are as follows:

	Estimated
	Useful
	Life (in years)
Leasehold improvements		5 to 10
Equipment		3 to 10

Maintenance, repairs and minor replacements are charged to expenses when incurred. When buildings, improvements, furniture, equipment and vehicles are sold or otherwise disposed of, the asset and related accumulated depreciation are removed and any gain or loss is included in the statement of operations.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Long-Lived Assets Including Finite-Lived Intangible Assets

Long-lived assets including finite-lived intangible assets are periodically reviewed for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. When testing for impairment, we perform a two-step test. Step one is a test of recoverability. In performing the review for recoverability, the Company estimates the future cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the long-lived asset, an impairment loss is recognized. In step two, the impairment is calculated as the excess of the carrying amount over the fair value. Management estimates the future cash flows expected and fair value is determined by the discounted future cash flows.

In 2022, the Company did not have any material fixed asset impairments. In 2021, the Company wrote down the assets held for sale of its discontinued Orbital U.K. operations by $9.2 million based on an expected selling price of 3 million GBP ($4.1 million at December 31, 2021). In  September 2022, the Company fully impaired its finance lease equipment related to the Eclipse Foundation Group in the Electric Power segment. See Note 13 - Restructuring and Impairment Charges for more information on impairments of finance lease equipment.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Identifiable Finite-lived Intangible Assets

Intangible assets are stated at cost net of accumulated amortization and impairment. Finite-lived intangible assets includes customer relationships, technology know how, software, noncompete agreements, order backlog, and trade name. The fair value for intangible assets acquired through acquisitions is measured at the time of acquisition utilizing the following inputs, as needed:

1. Inputs used to measure fair value are unadjusted quoted prices available in active markets for the identical assets or liabilities if available.

2. Inputs used to measure fair value, other than quoted prices included in 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in inactive markets. This includes assets and liabilities valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full life of the asset.

3. Inputs used to measure fair value are unobservable inputs supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

4. Expert appraisal and fair value measurement as completed by third-party experts.

	Estimated
	Useful
	Life (in years)
Finite-lived intangible assets
Order backlog		1
Customer Relationships - Front Line Power Construction		15
Customer relationships - Reach Construction Group, LLC		5
Non-compete agreements - Reach Construction Group, LLC		5
Customer Relationships - Gibson Technical Services		10
Customer Relationships - IMMCO		10
Technology - Know How		3
Non-compete agreements - GTS		5
Software, at cost		3 to 5

The Company amortizes the intangible assets that are subject to amortization on a straight line basis, which the company believes approximates the estimated consumption of their economic benefits. Intangible assets are reviewed for impairment and tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For instance, a significant change in business climate or a loss of a significant customer, among other things, may trigger the need for impairment testing of intangible assets. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Indefinite-Lived Intangibles and Goodwill Assets

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, ‘‘Business Combinations,’’ where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed and revisions to preliminary estimates if they were known or knowable at the acquisition date. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill.  The unit of accounting for goodwill is at a level of the entity referred to as a reporting unit. Goodwill is assigned to specific reporting units for purposes of the impairment assessments. As of December 31, 2022, the Company has four operating segments that are also considered reporting units for goodwill impairment testing. The four operating segments are, Front Line Power Construction, LLC, Orbital Power Inc., Orbital Solar Services, and Gibson Technical Services.

Annual Test

The Company tests for impairment of indefinite-lived intangibles and Goodwill in the second quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value.

In performing its testing for Goodwill as of May 31, 2022, the Company completed a quantitative analysis to determine whether the carrying value, including goodwill, exceeded the fair value for each reporting unit. Fair values of the reporting units were determined based on applying a combination of the discounted cash flow method (i.e., income approach) as well as a market approach. Significant assumptions included estimates of future cash flows, discount rates, and market information for comparable companies. The review of goodwill, prepared as of  May 31, 2022, determined that the fair value of each of the reporting units exceeded the carrying value and thus no impairment was necessary during the quarter ended  June 30, 2022. 

The Company’s qualitative assessment for Indefinite-lived assets at May 31, 2022, followed the guidance in ASC 350-30-35-18A and 18B. Fair values of the Indefinite-lived intangible assets were determined using the relief from royalty method, which included assumptions related to revenue growth rates, royalty rates, and discount rates. As a result of the annual impairment test, no impairment was identified as of June 30, 2022.

Interim Tests

The Company performed a goodwill impairment analysis as of  June 30, 2022 due to a 42-percent drop in the Company's stock price between  May 31, 2022 and  June 30, 2022, that caused an overall decrease in the Company’s market capitalization. We performed the interim impairment tests consistent with our approach for annual impairment testing, including similar models, inputs, and assumptions. As a result of the interim impairment testing, no impairment was identified as of  June 30, 2022. 

During the third quarter of 2022, triggering events were identified which led to performing interim goodwill impairment testing of our reporting units as of  September 30, 2022. These events included a further decrease in the Company's market capitalization, the significant loss in the Renewables segment in the third quarter of 2022, interest rate increases and limitations on accessing capital, which raised substantial doubt regarding the Company’s ability to continue as a going concern. The fair value for our reporting units for the interim testing was valued using a market approach. The impairment assessment resulted in a conclusion that goodwill in the Front Line Power and GTS reporting units was impaired by $70.2 million and $25.8 million, respectively, during the three months ended  September 30, 2022. The impairment assessment concluded that the fair value of the Renewables reporting unit was in excess of its carrying amount, which was negative. As a result of the triggering events identified in the third quarter, an impairment assessment was also performed for the Indefinite-lived intangible assets as of September 30, 2022 and no impairment was identified.

During the fourth quarter of 2022, triggering events were again identified around stock price decline and substantial doubt regarding the Company's ability to continue as a going concern, which led to performing Indefinite-lived intangibles impairment testing.  The Company's intangible assets were valued using a relief from royalties method which resulted in impairment. The impairment assessment included significant assumptions related to revenue growth rates, royalty rates, and discount rates. For the year ended  December 31, 2022, management concluded that Indefinite-lived intangibles were impaired by $9.3 million dollars primarily attributable to the Front Line and GTS trade names.

Accrued Expenses [Policy Text Block]

Accrued expenses

Accrued expenses are liabilities that reflect expenses on the statement of operations that have not been paid or recorded in accounts payable at the end of the period. At  December 31, 2022 and December 31, 2021, accrued expenses of $39.1 million and $28.3 million, respectively included the following components:

(In thousands)	As of December 31,
	2022		2021
Accrued bonding	$	1,920	$	167
Accrued compensation		5,589		6,369
Working capital adjustment on Front Line Power Construction acquisition		4,592		14,092
Accrued interest		5,885		2,902
Accrued taxes payable		248		102
Accrued subcontractor expenses		11,299		—
Accrued union dues		937		870
Accrued vendor invoices and accrued other expenses		8,595		3,799
Total accrued expense	$	39,065	$	28,301

Derivative Liabilities [Policy Text Block]

Financial instrument liability

The Company evaluates embedded conversion features pursuant to FASB Accounting Standards Codification No. 815 (‘‘FASB ASC 815’’), ‘‘Derivatives and Hedging,’’ which requires a periodic valuation of the fair value of derivative instruments and a corresponding recognition of liabilities associated with such derivatives. The Company has limited involvement with derivative instruments and does not trade them. In November 2021, the Company identified a subscription agreement with lenders of the $105 million syndicated debt agreement as a free standing financial instrument since it is legally separate from the credit agreement. The subscription provides the lenders with shares of the Company's common stock, which was recorded by the Company as additional debt discount to be amortized over the life of the loan. The subscription agreement also provided the lenders with protection from downside risk in the event that the Company issues shares prior to paying off the Front Line seller notes at a price lower than the price when the shares were issued to the lenders. This financial instrument liability was recorded by the Company at $0.9 million and was valued at loan inception on November 17, 2021 using the Black Scholes option pricing model. The value of the liability decreased to $0.8 million as of December 31, 2021 and the difference was recorded as income in other income for the fourth quarter of 2021. At December 31, 2022, the value of the derivative was $0.5 million. See Note 3 – Investments and Fair Value Measurements.

Warrant Liabilities Policy [Policy Text Block]

Warrant liabilities 

We account for warrants for shares of the Company's common stock that are not indexed to our own stock as liabilities at fair value on the balance sheet. The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in our statement of operations. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the Warrants issued in connection with Company's offering has been measured based on the Black Scholes Option Pricing Model.

Debt, Policy [Policy Text Block]

Loan modifications and gain (losses) on extinguishments

From time to time, the Company negotiates modified loan terms. The Company evaluates the discounted future cash flows of the modified loan compared to the discounted future cash flows of the loan using its original terms. If the discounted cash flows of the new loan are more than 10% different than the original loan, the Company records the transaction as an extinguishment of the original loan and new debt on the modification date. If future discounted cash flows are less than 10%, the change is considered a modification and no extinguishment is recorded with any new fees amortized over the remaining life of the loan. The same steps are taken if a non-recourse loan is paid off via a refinancing with any remaining unamortized original issue discounts and unamortized loan fees recorded as a loss on extinguishment. In 2022, the Company recorded losses on extinguishments of $28.5 million related to loan modifications and loans refinanced of which $26.2 million was related to the seller financed notes payable with the sellers of Front Line Power Construction, LLC. See Note 7  - Notes Payable for more information on the Company's seller financed notes payable. 

The Company has debt with an institutional investor that on occasion has accepted common stock in lieu of a scheduled cash payment. Any difference above or below the Nasdaq minimum price is recorded as a gain or loss on extinguishment. In 2022, the Company recorded net losses on extinguishments of $2.8 million related to debt payments made with common stock. See Note 7 - Notes Payable for more information on the Company's notes payable with an institutional investor.

Share-Based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

The Company records its stock-based compensation expense under its stock option plans and also issues stock for services. The Company accounts for stock-based compensation using FASB Accounting Standards Codification No. 718 (‘‘FASB ASC 718’’), ‘‘Compensation – Stock Compensation.’’ FASB ASC 718 requires the fair value of all stock-based employee compensation awarded to employees to be recorded as an expense over the related service period.

Stock bonuses and restricted stock units ("RSU"s) issued to employees are recorded at fair value using the market price of the stock on the date of grant and expensed over the service period or immediately if fully vested on date of issuance. Employee stock options are recorded at fair value using the Black-Scholes or binomial option pricing model. The underlying assumptions in the Black-Scholes and binomial option pricing models used by the Company are taken from publicly available sources including: (1) volatility and grant date stock price, which are sourced from historic stock price information; (2) the appropriate discount rates are sourced from the United States Federal Reserve; and (3) other inputs are determined based on previous experience and related estimates. With regards to expected volatility, the Company utilizes an appropriate period for historical share prices for Orbital Infrastructure Group that best reflect the expected volatility for determining the fair value of its stock options.

See Note 10 Stockholders' Equity and Stock-Based Compensation for additional disclosure and discussion of the employee stock plan and activity.

Common stock and stock options are also recorded on the basis of their fair value, as required by FASB ASC 718, which is measured as of the date required by FASB ASC 718. In accordance with FASB ASC 718, the stock options or common stock warrants are valued using the Black-Scholes or binomial option pricing model on the basis of the market price of the underlying common stock on the ‘‘valuation date,’’ which for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the performance completion date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed based off an estimate of the fair value of the stock award as valued under the Black-Scholes option pricing model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock up through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.

Common stock issued to other than employees or directors subject to performance (performance based awards) require interpretation when the counterparty’s performance is complete based on delivery, or other relevant performance criteria in accordance with the relevant agreement. When performance is complete, the common stock is issued and the expense recorded on the basis of their value as required by FASB ASC 718 on the date the performance requirement is achieved.

Compensation Related Costs, Policy [Policy Text Block]

Defined Contribution Plans

The Company has a 401(k) retirement savings plan that allows employees to contribute to the plan after they have completed 60 days of service and are 18 years of age. The Company matches the employee's contribution up to 6% of total compensation. GTS, Orbital Power, Inc., Orbital Solar Services, Front Line Power Construction, LLC, Eclipse Foundation, and Corporate made total employer contributions, net of forfeitures, of $1.5 million and $0.6 million for 2022 and 2021, respectively. In addition, in 2022 and 2021, the Company made contributions of $36 thousand and $72 thousand, respectively, associated with discontinued operations.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

The Electric Power segment provides full service building, maintenance and support to the electrical power distribution, transmission, substation, and emergency response sectors of North America through Front Line Power, and Orbital Power Services. The Telecommunications segment composed of Gibson Technical Services and subsidiaries provides technical implementation, design, maintenance, emergency and repair support services in the broadband, wireless, and outside plant and building technologies.  The Renewables segment, 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.

For our construction contracts, revenue is generally recognized over time. Our fixed price and unit-price construction projects generally use a cost-to-cost input method or an output 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. Under the output method, progress towards completion is measured based on units of work completed based on the contractual pricing amounts.  We construct comprehensive revenue calculations based on quantifiable measures of actual units completed multiplied by the agreed upon contract prices per item completed. 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 certain types of over time revenue jobs, the Company utilizes the right-to-invoice practical expedient. In these instances, we have a right to invoice the customer for an amount that corresponds directly with the value transferred to the customer for our performance completed to date. When this practical expedient is used, we recognize revenue based on billing and calculate any additional revenue earned that is unbilled at the period end.  We have contracts which have payment terms dictated by daily or hourly rates where some contracts may have mixed pricing terms which include a fixed fee portion. For contracts in which we charge the customer a fixed rate based on the time or materials spent during the project, we recognize revenue in the amount to which we have the right to invoice which corresponds to the value transferred to the customer. 

For any job where the customer does not simultaneously receive and consume the benefits of our performance as we perform the service, the timing of revenue recognition also depends on the payment terms of the contract. For those contracts 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 or output 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. 

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.

For certain of our revenue streams, such as call-out repair and service work, and outage services, that are performed under time and materials contracts, our progress towards complete satisfaction of such performance obligations is measured using an input method as the customer receives and consumes the benefits of our performance completed to date.

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.

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 integration systems 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.

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 customers' 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, and are within industry standards across our business lines. 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 output method or the input cost-to-cost method 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 Consolidated Balance Sheets.

Contract liabilities from our construction contracts occur when amounts invoiced to our customers exceed revenues recognized under the input cost-to-cost or output method 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 years ended  December 31, 2022 and 2021 is as follows:

	For the Year Ended December 31,
	2022			2021
Total contract liabilities - January 1	$	6,503		$	4,873
Contract liability additions acquired through acquisition		—			100
Contract additions, net		6,710			6,371
Change in provision for Loss		4,179
Contract settlements		—			(3,140	)
Revenue recognized		(7,174	)		(1,701	)
Total contract liabilities - December 31	$	10,218		$	6,503

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 December 31, 2022, the Company's remaining performance obligations are generally expected to be filled within the next 12 months. For the contracts that are greater than 12 months the Company has approximately $164.9 million in the aggregate of remaining performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2022. T

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. 

Performance Obligations Satisfied Over Time

To determine the proper revenue recognition method for our contracts satisfied over time, 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 output method or the expected cost plus a margin approach to estimate the standalone selling price of each performance obligation.

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, the Company accounts 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 and are estimated based on the most likely amount that is deemed probable of realization.

Two large solar projects have liquidated damages included within their customer contracts. In the event of a delay in the achievement of project milestones, the contracts specify the dollar amount of delay damages owed each day past the agreed upon milestone date. These delay liquidated damages are capped at 15% of the project contract price. During Q4 2022, the estimated completion dates on these two large solar projects were pushed passed milestone due dates in which the Company is contractually obligated to meet. As a result of these delays, the Company recorded liquidated damages as variable consideration, reducing the contract price on these two projects by a total of $17.1 million in 2022. This reduction in contract price along with additional estimated costs to complete the project resulted in a catch-up adjustment to reduce revenue recorded year-to-date by $21.4 million dollars. The customer on these two solar projects has the right to invoice, but as of March 31, 2023, has not yet sent an invoice for liquidated damages. Although the Company accrued for these liquidated damages in 2022, there is a possibility that some or all of the $17.1 million in liquidated damages could be reversed in future years if the customer does not invoice for these damages or if a legal settlement is reached.

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 table presents our revenues disaggregated by type of customer:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Utilities	$	148,046	$	915	$	—	$	148,961	$	43,120	$	—	$	—	$	43,120
Telecommunications		1,792		82,901		—		84,693		479		27,799		—		28,278
Renewables		—		—		85,766		85,766		—		—		11,550		11,550
Other		2,797		—		—		2,797		—		—		—		—
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

The following table presents our revenues disaggregated by type of contract:

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Cost-plus contracts	$	49,487	$	327	$	—	$	49,814	$	12,198	$	—	$	—	$	12,198
Fixed price contracts		38,712		8,029		85,766		132,507		11,518		5,789		11,550		28,857
Unit price contracts		64,436		75,460		—		139,896		19,883		22,010		—		41,893
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

Income Tax, Policy [Policy Text Block]

Income Taxes

Income taxes are accounted for under the asset and liability method of FASB Accounting Standards Codification No. 740 (‘‘FASB ASC 740’’), ‘‘Income Taxes.’’ Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance to the extent that management believes it is more likely than not that such deferred tax assets will not be realized.

Valuation allowances have been established against all domestic based deferred tax assets due to uncertainties in the Company’s ability to generate sufficient taxable income in future periods to make realization of such assets more likely than not. In future periods, tax benefits and related domestic deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

The Company recognizes interest and penalties, if any, related to its tax positions in income tax expense.

Orbital Infrastructure Group files consolidated income tax returns with its U.S. based subsidiaries for federal and many state jurisdictions in addition to separate subsidiary income tax returns in Australia, Canada, India, Belgium and the United Kingdom. As of December 31, 2022, the Company is not under examination by any income tax jurisdiction. The Company is no longer subject to U.S. examination for years prior to 2019.

Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share

In accordance with FASB Accounting Standards Codification No. 260 (‘‘FASB ASC 260’’), ‘‘Earnings per Share,’’ basic net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net 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 net loss in 2022 and 2021, the assumed exercise of stock options using the treasury stock method would have had an antidilutive effect and therefore all options for each of the two years were excluded from the calculation of diluted net loss per share. In addition, the Company had 16.2 million and zero stock warrants and 4.2 million and 3.0 million unvested restricted stock units outstanding at December 31, 2022, and 2021, respectively that were excluded from the calculation of diluted net loss per share. Accordingly, diluted net loss per share is the same as basic net loss per share for 2022 and 2021. 

The following table summarizes the number of stock options outstanding:

	As of December 31,
	2022		2021
Options, outstanding		197,887		237,985

Any common shares issued as a result of stock options would come from newly issued common shares as granted under our equity incentive plans.

The following is the calculation of basic and diluted earnings per share:

	For the Years Ended December 31,
(In thousands, except dollars per share)	2022			2021
Continuing operations:
Loss from continuing operations, net of income taxes	$	(277,935	)	$	(49,843	)
Discontinued operations:
Income from discontinued operations, net of income taxes		(2,317	)		(11,371	)
Net loss	$	(280,252	)	$	(61,214	)
Basic and diluted weighted average number of shares outstanding		108,313,369			58,348,489
Loss from continuing operations per common share - basic and diluted	$	(2.53	)	$	(0.86	)
Earnings from discontinued operations - basic and diluted		(0.02	)		(0.19	)
Loss per common share - basic and diluted	$	(2.55	)	$	(1.05	)

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

The financial statements of the Company's foreign offices have been translated into U.S. dollars in accordance with FASB ASC 830, ‘‘Foreign Currency Matters’’ (FASB ASC 830). All balance sheet accounts have been translated using the exchange rate in effect at the balance sheet date. Statement of Operations amounts have been translated using an appropriately weighted average exchange rate for the year. The translation gains and losses resulting from the changes in exchange rates during 2022 and 2021 have been reported in accumulated other comprehensive income (loss), except for gains and losses resulting from the translation of short-term intercompany receivables and payables, which are included in earnings for the period.

Segment Reporting, Policy [Policy Text Block]

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 four 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, Telecommunications, and Renewables and an Other category. 

The Electric Power segment consists of Front Line Power Construction, LLC based in Houston, Texas, Orbital Power Services based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales, Louisiana. The segment provides comprehensive solutions to customers in the electric power industries. Front Line Power, LLC is a Houston-based full-service electrical infrastructure service company that provides construction, maintenance, and emergency response services for customers since 2010. 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, industrial, communication towers and disaster restoration market sectors, with expertise in water, marsh and rock terrains.

The Telecommunications segment is made up of Gibson Technical Services, Inc. (“GTS”) (acquired April 13, 2021) GTS is an Atlanta-based telecommunications company providing diversified telecommunications services nationally since 1990 and is the parent of the following companies:

o IMMCO, Inc. (acquired July 28, 2021), which includes two Indian subsidiaries and is an Atlanta-based, full-service telecom engineering and network design company providing diversified engineering services and customized software solutions to a global customer base since 1992.

o Full Moon Telecom, LLC (acquired October 22, 2021) a Florida-based telecommunications services provider that offers an extensive array of wireless services capabilities and experience including Layer 2/Layer 3 Transport, Radio Access Network ("RAN") Integrations, test and turn-up of Small Cell systems and Integration/Commissioning of Distributed Antenna ("DAS") systems.

o Coax Fiber Solutions, LLC (acquired  March 7, 2022), is based in Loganville, Georgia. Founded in 2016, Coax Fiber Solutions is a GDOT Certified contractor specializing in Aerial Installation, directional drilling, trenching, plowing, and missile crews for telecommunications, power, gas, water, CCTV, ATMS, and traffic signal cable installation.  

The Renewables segment consists of Orbital Solar Services based in Raleigh, North Carolina. 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.

The Other category is made up primarily of the Company's corporate activities. This category does not include any operating segments and does not generate revenue. In addition, Orbital’s integrated operations and common administrative support for its operating units require that certain allocations be made to determine segment profitability, including allocations of shared and indirect costs (e.g., insurance costs) and certain general and administrative costs. Certain corporate costs are not allocated and include Board of Director fees and costs, certain legal fees, due diligence costs related to prospective acquisitions, and regulatory costs associated with being a publicly traded company. Unallocated corporate expenses and costs associated with discontinued operations are included in the all-other category.

The following information represents segment activity as of and for the year ended December 31, 2022:

(In thousands)	Electric Power			Telecommunications			Renewables			Other			Total
Revenues from external customers	$	152,635		$	83,816		$	85,766		$	—		$	322,217
Depreciation and amortization (1)		26,911			4,863			2,001			64			33,839
Interest expense		18,158			218			10			19,427			37,813
Loss from operations		(88,045	)		(22,112	)		(68,137	)		(9,283	)		(187,577	)
Segment assets (2)		167,245			67,920			18,932			17,474			271,571
Other intangibles assets, net		85,355			24,333			1,446			—			111,134
Goodwill		—			—			7,006			—			7,006
Expenditures for segment assets (3)		3,167			1,326			19			98			4,610

The following information represents segment activity as of and for the year ended December 31, 2021:

(In thousands)	Electric Power			Telecommunications		Renewables			Other			Total
Revenues from external customers	$	43,599		$	27,799	$	11,550		$	—		$	82,948
Depreciation and amortization (1)		5,969			2,326		2,931			1,684			12,910
Interest expense		3,129			50		349			4,809			8,337
Income (loss) from operations		(13,215	)		43		(19,043	)		(20,576	)		(52,791	)
Segment assets (2)		273,726			80,800		28,324			28,459			411,309
Other intangibles assets, net		106,377			28,571		7,708			—			142,656
Goodwill		70,151			23,742		7,006			—			100,899
Expenditures for segment assets (3))		5,905			1,615		118			846			8,484

(1)  For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment. 

(2)	Other category includes assets held for sale of the discontinued Orbital Gas subsidiaries and Eclipse Foundation Group fixed assets held for sale.
(3)	Includes purchases of property and equipment and purchases of other intangible assets.

The Company's revenues and long-lived assets are primarily located in the U.S.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In  September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a roll-forward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after  December 15, 2022, including interim periods within those fiscal years, except for the disclosure of roll-forward information, which is effective for fiscal years beginning after  December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material effect on the Company's financial position or results of operations.

In  June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security should not be considered in measuring fair value. It also requires the following disclosures for equity securities subject to the contractual sale restrictions: 1) the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; 2) the nature and remaining duration of the restriction(s); and 3) the circumstances that could cause a lapse in the restriction(s). ASU 2022-03 is effective for the fiscal years and interim periods within those fiscal years, beginning after  December 15, 2023. Early adoption is permitted. The guidance should be applied prospectively. ASU 2022-03 is not expected to have a material effect on our consolidated financial statements.

On  October 28, 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This guidance will require entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. This standard was designed to provide consistent recognition and measurement guidance for revenue contracts with customers. Legacy guidance requires entities to record contract assets and contract liabilities acquired to be recorded at fair value. The amendments will be effective for the Company beginning for fiscal years beginning after  December 15, 2022. Early adoption is allowed. If an entity early adopts, the entity would be required to apply the new guidance to all acquisitions made in the year of the early adoption. The Company is still reviewing the standard and as of the reporting date of this filing has not elected to early adopt.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Disposal Groups, Including Discontinued Operations [Table Text Block]

(In thousands)
	For the Year
	Ended December 31,
Major classes of line items constituting pretax loss of discontinued operations	2022			2021
Revenues	$	7,617		$	19,855
Cost of revenues		(6,090	)		(14,193	)
Selling, general and administrative expense		(4,130	)		(8,550	)
Depreciation and amortization		—			(1,638	)
Research and development		—			(2	)
(Provision) credit for bad debt		(18	)		3
Impairment of assets held for sale		—			(9,185	)
Gain on extinguishment of PPP loan		—			779
Interest expense		(13	)		(2	)
Other income		18			228
Pretax loss of discontinued operations related to major classes of pretax loss		(2,616	)		(12,705	)
Pretax gain on sale of Orbital U.K.		299			—
Total pretax loss on discontinued operations		(2,317	)		(12,705	)
Income tax benefit		—			(1,334	)
Total loss from discontinued operations	$	(2,317	)	$	(11,371	)

	As of December 31,		As of December 31,
(In thousands)	2022		2021
Carrying amounts of the major classes of assets included in discontinued operations:
Trade accounts receivables	$	—	$	2,996
Inventories		—		530
Prepaid expenses and other current assets		—		114
Contract assets		—		1,141
Assets held for sale, current portion		—		4,781
Property and equipment		1,385		42
Other intangible assets		1,813		1,813
Deposits and other assets		—		43
Assets held for sale, noncurrent portion		3,198		1,898
Total assets of the disposal group classified as held for sale	$	3,198	$	6,679
Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable	$	—	$	1,657
Contract liabilities		—		1,414
Operating lease obligations, current portion		—		76
Accrued expenses		—		1,126
Liabilities held for sale, current portion		—		4,273
Operating lease obligations, less current portion		—		85
Other long-term liabilities		—		9
Liabilities held for sale, noncurrent portion		—		94
Total liabilities held for sale	$	—	$	4,367

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

(In thousands)	As of December 31,
	2022		2021
Cash and cash equivalents at beginning of year	$	26,865	$	3,046
Restricted cash at beginning of year		1,176		1,478
Cash, cash equivalents and restricted cash at beginning of year	$	28,041	$	4,524
Cash and cash equivalents at end of year	$	21,489	$	26,865
Restricted cash at end of year		609		1,176
Cash, cash equivalents and restricted cash at end of year	$	22,098	$	28,041

Accounts Receivable, Allowance for Credit Loss [Table Text Block]

(In thousands)	For the Years ended December 31,
	2022			2021
Allowance for doubtful accounts, beginning of year	$	1,487		$	1,172
Bad debt expense		(26	)		346
Deductions		(694	)		(31	)
Allowance for doubtful accounts, end of year	$	767		$	1,487

Schedule of Inventory, Current [Table Text Block]

(In thousands)	As of December 31,
	2022		2021
Finished goods	$	—	$	—
Raw materials		1,338		1,316
Work-in-process		353		19
Total inventories	$	1,691	$	1,335

Schedule of Useful Lives for Property Plant Equipment [Table Text Block]

	Estimated
	Useful
	Life (in years)
Leasehold improvements		5 to 10
Equipment		3 to 10

Schedule of Estimated Useful Life [Table Text Block]

	Estimated
	Useful
	Life (in years)
Finite-lived intangible assets
Order backlog		1
Customer Relationships - Front Line Power Construction		15
Customer relationships - Reach Construction Group, LLC		5
Non-compete agreements - Reach Construction Group, LLC		5
Customer Relationships - Gibson Technical Services		10
Customer Relationships - IMMCO		10
Technology - Know How		3
Non-compete agreements - GTS		5
Software, at cost		3 to 5

Schedule of Accrued Liabilities [Table Text Block]

(In thousands)	As of December 31,
	2022		2021
Accrued bonding	$	1,920	$	167
Accrued compensation		5,589		6,369
Working capital adjustment on Front Line Power Construction acquisition		4,592		14,092
Accrued interest		5,885		2,902
Accrued taxes payable		248		102
Accrued subcontractor expenses		11,299		—
Accrued union dues		937		870
Accrued vendor invoices and accrued other expenses		8,595		3,799
Total accrued expense	$	39,065	$	28,301

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

	For the Year Ended December 31,
	2022			2021
Total contract liabilities - January 1	$	6,503		$	4,873
Contract liability additions acquired through acquisition		—			100
Contract additions, net		6,710			6,371
Change in provision for Loss		4,179
Contract settlements		—			(3,140	)
Revenue recognized		(7,174	)		(1,701	)
Total contract liabilities - December 31	$	10,218		$	6,503

Disaggregation of Revenue [Table Text Block]

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Utilities	$	148,046	$	915	$	—	$	148,961	$	43,120	$	—	$	—	$	43,120
Telecommunications		1,792		82,901		—		84,693		479		27,799		—		28,278
Renewables		—		—		85,766		85,766		—		—		11,550		11,550
Other		2,797		—		—		2,797		—		—		—		—
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

	For the Year Ended December 31, 2022								For the Year Ended December 31, 2021
(in thousands)	Electric Power		Telecommunications		Renewables		Total		Electric Power		Telecommunications		Renewables		Total
Cost-plus contracts	$	49,487	$	327	$	—	$	49,814	$	12,198	$	—	$	—	$	12,198
Fixed price contracts		38,712		8,029		85,766		132,507		11,518		5,789		11,550		28,857
Unit price contracts		64,436		75,460		—		139,896		19,883		22,010		—		41,893
Total revenues	$	152,635	$	83,816	$	85,766	$	322,217	$	43,599	$	27,799	$	11,550	$	82,948

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	As of December 31,
	2022		2021
Options, outstanding		197,887		237,985

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

	For the Years Ended December 31,
(In thousands, except dollars per share)	2022			2021
Continuing operations:
Loss from continuing operations, net of income taxes	$	(277,935	)	$	(49,843	)
Discontinued operations:
Income from discontinued operations, net of income taxes		(2,317	)		(11,371	)
Net loss	$	(280,252	)	$	(61,214	)
Basic and diluted weighted average number of shares outstanding		108,313,369			58,348,489
Loss from continuing operations per common share - basic and diluted	$	(2.53	)	$	(0.86	)
Earnings from discontinued operations - basic and diluted		(0.02	)		(0.19	)
Loss per common share - basic and diluted	$	(2.55	)	$	(1.05	)

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

(In thousands)	Electric Power			Telecommunications			Renewables			Other			Total
Revenues from external customers	$	152,635		$	83,816		$	85,766		$	—		$	322,217
Depreciation and amortization (1)		26,911			4,863			2,001			64			33,839
Interest expense		18,158			218			10			19,427			37,813
Loss from operations		(88,045	)		(22,112	)		(68,137	)		(9,283	)		(187,577	)
Segment assets (2)		167,245			67,920			18,932			17,474			271,571
Other intangibles assets, net		85,355			24,333			1,446			—			111,134
Goodwill		—			—			7,006			—			7,006
Expenditures for segment assets (3)		3,167			1,326			19			98			4,610

(In thousands)	Electric Power			Telecommunications		Renewables			Other			Total
Revenues from external customers	$	43,599		$	27,799	$	11,550		$	—		$	82,948
Depreciation and amortization (1)		5,969			2,326		2,931			1,684			12,910
Interest expense		3,129			50		349			4,809			8,337
Income (loss) from operations		(13,215	)		43		(19,043	)		(20,576	)		(52,791	)
Segment assets (2)		273,726			80,800		28,324			28,459			411,309
Other intangibles assets, net		106,377			28,571		7,708			—			142,656
Goodwill		70,151			23,742		7,006			—			100,899
Expenditures for segment assets (3))		5,905			1,615		118			846			8,484

XML

Note 3 - Investments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

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

(In thousands)
December 31, 2022	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	570	$	570
Front Line Power Construction seller financed debt, net of discount		—		68,753		—		68,753
Financial instrument liability - related to Syndicated debt		—		—		536		536
Financial instrument liability - related to Front Line Power Construction seller financed debt		—		—		43,693		43,693
Prepaid advance agreement		—		1,829		—		1,829
Warrant liability		—		—		1,777		1,777
Total liabilities	$	—	$	70,582	$	46,576	$	117,158

December 31, 2021	Level 1		Level 2		Level 3		Total
Contingent Consideration	$	—	$	—	$	720	$	720
Front Line Power Construction seller financed debt, net of discount		—		86,183		—		86,183
Financial instrument liability		—		—		825		825
Total liabilities	$	—	$	86,183	$	1,545	$	87,728

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

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability -related to Front Line Power Construction Seller Financed Debt
Balance at December 31, 2021	$	—
Fair value of financial instrument liability at inception		26,782
Fair value adjustment to financial instrument liability		16,911
Balance at December 31, 2022	$	43,693

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Contingent Consideration
Balance at December 31, 2021	$	720
Fair value adjustment		(150	)
Balance at December 31, 2022	$	570

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Financial Instrument Liability - related
	to Syndicated debt
Balance at December 31, 2021	$	825
Issuance of shares upon exercise and reset of financial instrument		(7,667	)
Fair value adjustment to financial instrument liability		7,378
Balance at December 31, 2022	$	536

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3 - recurring basis)
(In thousands)	Warrant Liability
Balance at December 31, 2021	$	—
Proceeds from sale of warrants including pre-funded warrants		19,800
Exercise of pre-funded warrants, net of exercise proceeds		(6,938	)
Fair value adjustment to warrant liability		(11,085	)
Balance at December 31, 2022	$	1,777

XML

Note 4 - Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Property, Plant and Equipment [Table Text Block]

	At December 31,
(In thousands)	2022			2021
Leasehold improvements	$	292		$	272
Equipment		36,200			32,762
Property and equipment, gross		36,492			33,034
Less accumulated depreciation		(13,562	)		(3,396	)
Property and equipment, net	$	22,930		$	29,638

XML

Note 5 - Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Goodwill [Table Text Block]

(In thousands)	Electric Power			Telecommunications			Renewables		Other		Total
Balance, December 31, 2021	$	70,151		$	23,742		$	7,006	$	—	$	100,899
Acquisition of Coax Fiber Solutions		—			1,530			—		—		1,530
Working capital adjustment		—			528			—		—		528
Impairment		(70,151	)		(25,800	)		—		—		(95,951	)
Balance, December 31, 2022	$	—		$	—		$	7,006	$	—	$	7,006

Schedule of Intangible Assets and Goodwill [Table Text Block]

Finite-lived intangible assets (in thousands)			(In years)		December 31, 2022										December 31, 2021
	Estimated Useful Life (in years)		Weighted average remaining amortization period		Gross Carrying Amount		Accumulated Amortization			Impairment			Identifiable Intangible Assets, less Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization			Identifiable Intangible Assets, less Accumulated Amortization
Electric Power
Order backlog		1		—		9,186		(9,186	)		—			—		9,186		(1,148	)		8,038
Customer relationships - Front Line		15		13.89		84,012		(6,301	)		—			77,711		84,012		(700	)		83,312
Total Electric Power						93,198		(15,487	)		—			77,711		93,198		(1,848	)		91,350
Telecommunications
Customer Relationships - GTS		10		8.29	$	16,075	$	(2,760	)	$	—		$	13,315	$	16,075	$	(1,152	)	$	14,923
Customer Relationships - IMMCO		10		8.58		3,800		(547	)		—			3,253		3,800		(158	)		3,642
Customer Relationships - Full Moon		10		8.82		210		(25	)		—			185		210		(4	)		206
Technology - Know How		4		2.58		1,459		(519	)		—			940		1,459		(152	)		1,307
Software - IMMCO		3		1.23		1,126		(519	)		—			607		547		(93	)		454
Non-compete agreements - GTS		5		3.29		385		(132	)		—			253		385		(55	)		330
Total Telecommunications						23,055		(4,502	)		—			18,553		22,476		(1,614	)		20,862
Renewables
Customer Relationships		5		—		—		—			(4,323	)		—		8,647		(3,027	)		5,620
Trade name - Reach Construction Group		1		—		1,878		(1,878	)		—			—		1,878		(1,878	)		—
Non-compete agreements		5		2.25		3,212		(1,767	)		—			1,445		3,212		(1,124	)		2,088
Total Renewables						5,090		(3,645	)		(4,323	)		1,445		13,737		(6,029	)		7,708
Other category
Computer software		3		—		726		(726	)		—			—		713		(713	)		—
Product certifications		3		—		—		—			—			—		36		(36	)		—
Total Other category						726		(726	)		—			—		749		(749	)		—
Total identifiable finite-lived other intangible assets						122,069		(24,360	)		(4,323	)		97,709		130,160		(10,240	)		119,920
Identifiable indefinite-lived other intangible assets
Electric Power
Trade name - Front Line						15,027		—			(7,383	)		7,644		15,027		—			15,027
Telecommunications
Trade name - GTS						6,388		—			(1,746	)		4,642		6,388		—			6,388
Trade name - IMMCO						1,162		—			(182	)		980		1,162		—			1,162
Trade name - Full Moon						159		—			—			159		159		—			159
Total Telecommunications						7,709		—			(1,928	)		5,781		7,709		—			7,709
Total identifiable indefinite-lived other intangible assets						22,736		—			(9,311	)		13,425		22,736		—			22,736
Total identifiable other intangible assets					$	144,805	$	(24,360	)	$	(13,634	)	$	111,134	$	152,896	$	(10,240	)	$	142,656

Schedule of Finite-Lived Intangible Assets, Amortization Expense [Table Text Block]

	For the Years Ended December 31,
(In thousands)	2022		2021
Trade name	$	—	$	469
Customer relationships		8,915		3,744
Technology - Know How		368		152
Computer software		427		96
Noncompete agreements		720		697
Order Backlog		8,038		1,148
Intangibles held by discontinued operations		—		1,396
Total amortization	$	18,468	$	7,702

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	For the Years Ended December 31,
											2028 and
(In thousands)	2023		2024		2025		2026		2027		thereafter		Totals
Customer relationships	$	7,609	$	7,609	$	7,609	$	7,609	$	7,609	$	56,419	$	94,464
Technology-Know How		365		365		210		—		—		—		940
Computer software		466		141		—		—		—		—		607
Non-compete agreements		719		719		238		22		—		—		1,698
Total amortization	$	9,159	$	8,834	$	8,057	$	7,631	$	7,609	$	56,419	$	97,709

XML

Note 7 - Notes Payable (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Debt [Table Text Block]

	As of December 31,
(In thousands)	2022			2021
Syndicated debt (1)	$	114,725		$	105,000
Seller Financed notes payable - Front Line Power Construction, LLC acquisition (2)		69,168			86,730
Note payable - financing notes (3)		2,210			1,357
Seller Financed notes payable - Reach Construction Group, LLC acquisition (4)		3,480			3,480
Vehicle and equipment loans (5)		2,014			222
Non-recourse payable agreements (6)		10,400			8,269
Notes payable - Institutional investor (7)		60,780			33,922
Prepaid Advance agreement (8)		1,829			—
Conditional settlement note payable agreement (9)		2,250			3,000
Full Moon and CFS - loans to prior owners (10)		29			2
Subtotal		266,885			241,982
Unamortized prepaid financing fees and debt discounts		(21,649	)		(12,603	)
Total long-term debt		245,236			229,379
Less short term notes and current maturities of long term notes payable		(144,708	)		(72,774	)
Notes payable, less current portion	$	100,528		$	156,605

Schedule of Long-Term Debt Instruments [Table Text Block]

(In thousands)
	Face Value		Repayments			Loan Origination Fees			Discounts			Amortization of Discounts		Balance as of December 31, 2022
Non-recourse payable agreements	$	11,440	$	(1,040	)	$	(160	)	$	(3,440	)	$	555	$	7,355

Schedule of Maturities of Long-Term Debt [Table Text Block]

(In thousands)
	As of December 31,
	2022
2023	$	176,383
2024		24,835
2025		21,318
2026		131,680
2027		138
Less interest portion of payments		(109,118	)
Total	$	245,236

XML

Note 10 - Stockholders' Equity and Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Month Issued	April 2021
Number Issued		3,770,960
Interest Rate		0.34	%
Estimated Volatility		156	%
Stock Price at Issuance	$	4.17
Years to Maturity		1.5
Grant date Value per Right	$	3.56

	2021
Weighted average expected term at December 31 (years)		1.55
Total fair value of all awards at December 31	$	6,979,824
Total fair value of all vested awards at December 31	$	2,701,802
Total intrinsic value at December 31	$	1,255,078

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	Number of restricted stock units			Weighted-average grant date fair value
Non-vested shares, December 31, 2020		—		$	—
Granted		4,386,107			4.64
Vested		(1,367,319	)		4.76
Forfeited		—			—
Non-vested shares, December 31, 2021		3,018,788			4.58
Granted		6,090,765			1.32
Vested		(2,760,687	)		1.67
Forfeited		(2,185,104	)		5.26
Non-vested shares, December 31, 2022		4,163,762		$	1.38

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	For the Year Ended December 31, 2022
	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contract Life (years)		Aggregate Intrinsic Value ($ '000)
Balance at beginning of year		237,985		$	6.14		1.41	$	—
Exercised		—			—		—		—
Expired		(40,098	)		4.56		—		—
Balance at end of year		197,887		$	6.46		0.63		—
Exercisable		197,887		$	6.46		0.63		—

XML

Note 12 - Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

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

(In thousands)	As of December 31,
	2022			2021
Foreign currency translation adjustment	$	(691	)	$	(3,995	)
Accumulated other comprehensive loss	$	(691	)	$	(3,995	)

XML

Note 13 - Restructuring and Impairment Charges (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

	For the Year ended December 31,
CUI-Canada termination benefits (In thousands)	2021
January 1 liability balance	$	371
Severance accrual adjustments		—
Severance payouts		(376	)
Translation		5
December 31 liability balance	$	—

XML

Note 14 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

(In thousands)	For the Years Ended December 31,
	2022			2021
Continuing operations	$	(277,089	)	$	(60,351	)
Discontinued operations		(2,317	)		(12,705	)
Loss before income taxes	$	(279,406	)	$	(73,056	)

(In thousands)	For the Years Ended December 31,
	2022			2021
U.S. operations	$	(277,904	)	$	(60,351	)
Foreign operations		815			—
Loss before income taxes	$	(277,089	)	$	(60,351	)

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

(In thousands)	For the Years Ended December 31,
	2022		2021
Continuing operations	$	846	$	(10,508	)
Discontinued operations		—		(1,334	)
Total income tax expense (benefit)	$	846	$	(11,842	)

(In thousands)	For the Years Ended December 31,
	2022			2021
Current:
Federal	$	—		$	—
State and local		129			370
Foreign		1,063			—
Total current provision		1,192			370
Deferred:
Federal		(260	)		(8,714	)
State and local		—			(2,164	)
Foreign		(86	)		—
Total deferred (benefit)		(346	)		(10,878	)
Total income tax expense (benefit)	$	846		$	(10,508	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

(In thousands)	For the Years Ended December 31,
	2022			2021
Computed federal income taxes at the statutory rate (benefit)	$	(58,189	)	$	(12,674	)
State taxes		(3,764	)		292
Permanent tax differences		1,662			2,140
Foreign tax rates and tax credits differing from USA		73			—
Federal true-ups and carryovers		1,106			—
Expired NOL's		—			541
Change in valuation allowance		59,958			(807	)
Total income tax (benefit)	$	846		$	(10,508	)
Effective tax rate		(0.31	)%		17.41	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

(In thousands)	As of December 31,
	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	43,885		$	23,941
Property and equipment		257		$	—
Intangible assets		19,113			—
163(j) interest expense limitation		11,139			—
Inventory and accounts receivable reserves		952			1,826
Operating lease obligations		7,175			8,058
Debt related		1,627			—
Accrued liabilities		2,530			786
Other		11			4,371
Valuation allowance		(77,944	)		(20,129	)
Deferred tax assets after valuation allowance		8,745			18,853
Deferred tax liabilities:
Intangible assets		—			(9,426	)
Property, plant and equipment		—			(9,588	)
ROU assets		(5,825	)		—
Accounting method change		(2,742	)		—
Total deferred tax liabilities		(8,567	)		(19,014	)
Net deferred tax asset (liability)	$	178		$	(161	)

Summary of Operating Loss Carryforwards [Table Text Block]

(in thousands)
	Amount		Expiration Years
Net operating losses, federal (post- December 31, 2017)	$	158,811	Do Not Expire
Net operating losses, federal (pre-January 1, 2018)		34,110		2027-2038
Net operating losses, state		957		2033-2038

XML

Note 16 - Leases (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

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

(In thousands)
2023	$	5,565
2024		4,676
2025		3,103
2026		2,584
2027		2,352
Thereafter		1,512
Less interest portion		(2,902	)
Total operating lease obligations	$	16,890

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

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
(In thousands)
Operating lease cost	$	6,487		$	3,897
Short-term lease cost		83			265
Variable lease cost		666			732
Sublease income		(516	)		(501	)
Total lease cost	$	6,720		$	4,393
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in operating leases	$	(8,509	)	$	(3,515	)
Right-of-use assets obtained in exchange for new operating lease obligations	$	4,152		$	13,707
Weighted-average remaining lease term - operating leases (in years)		4.5			4.6
Weighted-average discount rate - operating leases		7.1	%		6.9	%

	For the Year			For the Year
	Ended			Ended
	December 31,			December 31,
	2022			2021
Depreciation of financing lease assets	$	4,958		$	2,166
Interest on lease liabilities		889			402
Total finance lease cost	$	5,847		$	2,568
Other information
Cash paid for amounts included in the measurement of lease obligations:
Operating cash flows used in financing leases	$	(889	)	$	(402	)
Financing cash flows from financing leases	$	(5,073	)	$	(1,995	)
Right-of-use assets obtained in exchange for new financing lease obligations	$	1,369		$	16,868
Weighted-average remaining lease term - financing leases (in years)		2.7			2.9
Weighted-average discount rate - financing leases		6.6	%		6.5	%

Finance Lease, Liability, Fiscal Year Maturity [Table Text Block]

(In thousands)
2023	$	5,977
2024		5,331
2025		1,846
2026		896
2027		48
Thereafter		—
Less interest portion		(1,109	)
Total financing lease obligations	$	12,989

XML

Note 17 - Business Combinations (Tables)

12 Months Ended

Dec. 31, 2022

Notes Tables

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

Cash	$	101,536
Working capital adjustment payable		14,092
Fair value of unsecured promissory notes		86,001
Fair value of common stock issued to Sellers		17,612
Fair value of purchase consideration	$	219,241

Purchase Consideration
Cash payment	$	16,597
Fair value of common stock issued to Sellers		2,024
Total	$	18,621

Cash payment	$	22,000
Fair value of common stock issued to Sellers		16,932
Total	$	38,932

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

Cash and cash equivalents	$	6,779
Trade accounts receivable		15,726
Contract assets		2,092
Prepaid expenses and other current assets		481
Property and equipment		18,730
Other long-term assets		531
Indefinite lived intangible assets		15,027
Definite lived intangible assets		93,211
Accounts payable		(620	)
Contract liabilities		(120	)
Accrued expenses		(2,747	)
Net assets acquired		149,090
Goodwill		70,151
Purchase price allocation	$	219,241

Cash and cash equivalents	$	747
Trade accounts receivable		297
Property and equipment		124
Intangible, Tradename (indefinite)		159
Intangible, Customer relationships (10-year life)		210
Accounts payable		(197	)
Accrued expenses and other liabilities		(182	)
Net assets acquired		1,158
Goodwill		826
Purchase price allocation	$	1,984

Cash and cash equivalents	$	1,634
Trade accounts receivable, net		1,254
Contract assets		1,001
Prepaid expenses and other current assets		551
Property and equipment		760
Intangible, customer relationships		3,800
Intangible, trade name		1,162
Intangible, technology know how		1,459
Other long-term assets		76
Deferred tax liability		(2,090	)
Liabilities assumed		(2,100	)
Net assets acquired		7,507
Goodwill		11,114
Purchase price allocation	$	18,621

Cash and cash equivalents	$	610
Trade accounts receivable		7,871
Contract assets		1,686
Contingent receivable		1,424
Prepaid expenses and other current assets		408
Property and equipment		3,795
Right of use assets - Operating leases		860
Intangible, customer relationships (10-year life)		16,075
Intangible, tradename (indefinite life)		6,388
Intangible, non-compete agreements (5-year life)		385
Other long-term assets		123
Deferred tax liability		(9,048	)
Liabilities assumed		(3,984	)
Net assets acquired		26,593
Goodwill		12,339
Purchase price allocation	$	38,932

Schedule of Acquired Intangible Assets by Major Class [Table Text Block]

	Fair Value		Useful Life
Customer relationships	$	84,012	15 years
Backlog		9,186	1 year
Tradename		15,027	Indefinite
Software		13	3 years
Total intangible assets	$	108,238

Business Acquisition, Pro Forma Information [Table Text Block]

	(Unaudited)
	For the Years Ended December 31,
	2021
Gross revenue	$	158,625
Loss from continuing operations, net of income taxes	$	(69,671	)

XML

Note 2 - Summary of Significant Accounting Policies (Details Textual) shares in Thousands, $ in Thousands, £ in Millions			1 Months Ended	3 Months Ended		12 Months Ended
		Jun. 30, 2022	Jun. 30, 2022	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2022 GBP (£)	Dec. 31, 2021 GBP (£)	Nov. 30, 2021 USD ($)	Nov. 17, 2021 USD ($)	Dec. 31, 2020 USD ($)
Assets, Total					$ 412,339	$ 271,571	$ 412,339
Liabilities, Total					316,073	416,307	316,073
Net Income (Loss) Attributable to Parent, Total						(276,187)	(61,253)
Net Income (Loss) Attributable to Noncontrolling Interest, Total						(4,065)	39
Retained Earnings (Accumulated Deficit), Total					(210,934)	(487,121)	(210,934)
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent, Total						(277,935)	(49,843)
Net Cash Provided by (Used in) Operating Activities, Total						(19,625)	(45,676)
Working Capital						(190,500)
Cash and Cash Equivalents, at Carrying Value, Total					26,865	21,489	26,865					$ 3,046
Sale of Equity, Registration, Maximum Value						65,900
Disposal Group, Including Discontinued Operation, Assets Held-for-sale Impairment						9,200
Investment, Expected Net Realizable Value						4,100		£ 3
Cash, FDIC Insured Amount					2,300	2,600	2,300
Cash and Cash Equivalents in Foreign Accounts					400	300	400
Cash, Foreign Accounts					2,100	1,600	2,100
Restricted Cash, Current					150	123	150
Restricted Cash, Noncurrent					1,026	486	1,026
Notes Receivable, Fair Value Disclosure					5,000		5,000
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Total					836	0	836
Accounts Receivable, Allowance for Credit Loss, Current					1,500	800	1,500
Accounts Receivable, after Allowance for Credit Loss, Total					1,500	$ 900	1,500
Number of Operating Segments						4
Share Price, Reduction Percentage		42.00%	42.00%
Goodwill, Impairment Loss						$ 95,951
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)				$ 0		9,311
Accrued Liabilities, Current, Total					28,301	39,065	28,301
Derivative Liability, Total					825	500	825				$ 900
Gain (Loss) on Extinguishment of Debt, Total						(31,258)	365
Revenue, Remaining Performance Obligation, Amount						$ 164,900
Delay Liquidated Damages, Capped, Percent						15.00%		15.00%
Liquidated Damages, Contract Price Reduced Amount						$ 17,100
Catch-up Adjustment, Revenue Reduced Amount						$ 21,400
Number of Reportable Segments						3
Depreciation and Amortization, Discontinued Operations						$ 0	1,600
Depreciation, Depletion and Amortization, Total	[1]					$ 33,839	$ 12,910
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares						16,200	0
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares						4,200	3,000
Loans Payable [Member]
Gain (Loss) on Extinguishment of Debt, Total						$ (28,500)
Trade Names [Member]
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)						9,300
Gibson Technical Services, Inc. [Member]
Goodwill, Impairment Loss				25,800
Telecommunications Segment [Member]
Goodwill, Impairment Loss						25,800
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)						1,928
Depreciation, Depletion and Amortization, Total	[1]					4,863	$ 2,326
Telecommunications Segment [Member] | Cost of Sales [Member]
Depreciation, Depletion and Amortization, Total						600	400
Electric Power Segment [Member]
Goodwill, Impairment Loss						70,151
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)						7,383
Depreciation, Depletion and Amortization, Total	[1]					26,911	5,969
Electric Power Segment [Member] | Cost of Sales [Member]
Depreciation, Depletion and Amortization, Total						13,200	4,000
Renewables Segment [Member]
Goodwill, Impairment Loss						(0)
Depreciation, Depletion and Amortization, Total	[1]					2,001	2,931
Renewables Segment [Member] | Cost of Sales [Member]
Depreciation, Depletion and Amortization, Total						27	54
Front Line Power Construction, LLC [Member]
Goodwill, Impairment Loss				$ 70,200
Back Porch International, Inc. [Member] | Note Receivable 2019 [Member]
Financing Receivable, after Allowance for Credit Loss, Noncurrent, Total					3,300		3,300
Note Receivable, Net, Current					2,500		2,500
Front Line Power Seller Notes [Member]
Notes Payable, Fair Value Disclosure						68,800
Syndicated Term Note [Member]
Notes Payable, Fair Value Disclosure						97,100
Debt Instrument, Face Amount										$ 105,000
Seller Financed Notes Payable [Member]
Gain (Loss) on Extinguishment of Debt, Total						(26,200)
Debt Paid With Common Stock [Member]
Gain (Loss) on Extinguishment of Debt, Total						(2,800)
Orbital Gas Systems Limited [Member] | Discontinued Operations, Disposed of by Sale [Member]
Disposal Group, Including Discontinued Operation, Assets Held-for-sale Impairment					9,200
Investment, Expected Net Realizable Value					$ 4,100		4,100		£ 3
Cash Provided by (Used in) Operating Activities, Discontinued Operations						(600)	(3,200)
Cash Provided by (Used in) Investing Activities, Discontinued Operations						1,000	0
Defined Contribution Plan, Employer Discretionary Contribution Amount						36	72
Cash and Cash Equivalent, Available for Working Capital and Planned Capital Asset Expenditures [Member]
Cash and Cash Equivalents, at Carrying Value, Total						21,500
Orbital Solar Services [Member]
Net Income (Loss) Attributable to Parent, Total						(54,500)	100
OSS-JPOW [Member]
Assets, Total						10,600
Liabilities, Total						$ 68,200
CUI Global Inc. [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Match						6.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount						$ 1,500	$ 600

[1] For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment.

XML

Note 2 - Summary of Significant Accounting Policies - Schedule of Discontinued Operations for Income Statement and Balance Sheet Disclosures (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Impairment of assets held for sale	$ 9,200
Loss from operations of discontinued businesses	(2,317)	$ (12,705)
Income tax benefit	0	(1,334)
Income from discontinued operations, net of income taxes	(2,317)	(11,371)
Assets held for sale, current portion	3,198	6,679
Liabilities held for sale, current portion	0	4,367
Liabilities held for sale, noncurrent portion	536	0
Discontinued Operations, Held-for-sale [Member]
Revenues		19,855
Cost of revenues		(14,193)
Selling, general and administrative expense		(8,550)
Depreciation and amortization		(1,638)
Research and development		(2)
(Provision) credit for bad debt		3
Impairment of assets held for sale		(9,185)
Gain on extinguishment of PPP loan		779
Interest expense		(2)
Other income		228
Pretax loss of discontinued operations related to major classes of pretax loss	(2,616)	(12,705)
Pretax gain on sale of Orbital U.K.	299	0
Loss from operations of discontinued businesses	(2,317)	(12,705)
Income tax benefit		(1,334)
Income from discontinued operations, net of income taxes	(2,317)	(11,371)
Discontinued Operations, Held-for-sale [Member] | Orbital Gas Systems Limited [Member]
Revenues	7,617
Cost of revenues	(6,090)
Selling, general and administrative expense	(4,130)
Depreciation and amortization	0
Research and development	0
(Provision) credit for bad debt	(18)
Impairment of assets held for sale	0
Gain on extinguishment of PPP loan	0
Interest expense	(13)
Other income	18
Income tax benefit	0
Trade accounts receivables	0
Inventories	0
Prepaid expenses and other current assets	0
Contract assets	0
Assets held for sale, current portion	0
Property and equipment	1,385
Other intangible assets	1,813
Deposits and other assets	0
Assets held for sale, noncurrent portion	3,198
Total assets of the disposal group classified as held for sale	3,198
Accounts payable	0
Contract liabilities	0
Operating lease obligations, current portion	0
Accrued expenses	0
Liabilities held for sale, current portion	0
Operating lease obligations, less current portion	0
Other long-term liabilities	0
Liabilities held for sale, noncurrent portion	0
Total liabilities held for sale	$ 0
Discontinued Operations, Held-for-sale [Member] | Power and Electromechanical Business [Member]
Trade accounts receivables		2,996
Inventories		530
Prepaid expenses and other current assets		114
Contract assets		1,141
Assets held for sale, current portion		4,781
Property and equipment		42
Other intangible assets		1,813
Deposits and other assets		43
Assets held for sale, noncurrent portion		1,898
Total assets of the disposal group classified as held for sale		6,679
Accounts payable		1,657
Contract liabilities		1,414
Operating lease obligations, current portion		76
Accrued expenses		1,126
Liabilities held for sale, current portion		4,273
Operating lease obligations, less current portion		85
Other long-term liabilities		9
Liabilities held for sale, noncurrent portion		94
Total liabilities held for sale		$ 4,367

XML

Note 2 - Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Cash and cash equivalents	$ 26,865	$ 3,046
Restricted cash	1,176	1,478
Cash, cash equivalents and restricted cash at beginning of year	28,041	4,524
Cash and cash equivalents	21,489	26,865
Restricted cash	609	1,176
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR	$ 22,098	$ 28,041

XML

Note 2 - Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Allowance for doubtful accounts, beginning of year	$ 1,487	$ 1,172
Provision for bad debt	(26)	346
Deductions	(694)	(31)
Allowance for doubtful accounts, end of year	$ 767	$ 1,487

XML

Note 2 - Summary of Significant Accounting Policies - Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Finished goods	$ 0	$ 0
Raw materials	1,338	1,316
Work-in-process	353	19
Total inventories	$ 1,691	$ 1,335

XML

Note 2 - Summary of Significant Accounting Policies - Estimated Useful Lives for Buildings, Improvements, Furniture, Vehicles, and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Leasehold Improvements [Member] | Minimum [Member]
Estimated useful life (Year)	5 years
Leasehold Improvements [Member] | Maximum [Member]
Estimated useful life (Year)	10 years
Equipment [Member] | Minimum [Member]
Estimated useful life (Year)	3 years
Equipment [Member] | Maximum [Member]
Estimated useful life (Year)	10 years

XML

Note 2 - Summary of Significant Accounting Policies - Estimated Useful Life for the Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2022
Order or Production Backlog [Member]
Finite-lived intangible asset, useful life (Year)	1 year
Customer Relationships - Front Line Power Construction [Member]
Finite-lived intangible asset, useful life (Year)	15 years
Customer List - Reach Construction Group, LLC [Member]
Finite-lived intangible asset, useful life (Year)	5 years
Non-Compete Agreements - Reach Construction Group, LLC [Member]
Finite-lived intangible asset, useful life (Year)	5 years
Customer Relationships - Gibson Technical Services [Member]
Finite-lived intangible asset, useful life (Year)	10 years
Customer Relationships - IMMCO [Member]
Finite-lived intangible asset, useful life (Year)	10 years
Technology - Know How [Member]
Finite-lived intangible asset, useful life (Year)	3 years
Non-compete Agreements -GTS [Member]
Finite-lived intangible asset, useful life (Year)	5 years
Computer Software, Intangible Asset [Member] | Minimum [Member]
Finite-lived intangible asset, useful life (Year)	3 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Finite-lived intangible asset, useful life (Year)	5 years

XML

Note 2 - Summary of Significant Accounting Policies - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accrued bonding	$ 1,920	$ 167
Accrued compensation	5,589	6,369
Working capital adjustment on Front Line Power Construction acquisition	4,592	14,092
Accrued interest	5,885	2,902
Accrued taxes payable	248	102
Accrued subcontractor expenses	11,299	0
Accrued union dues	937	870
Accrued vendor invoices and accrued other expenses	8,595	3,799
Total accrued expense	$ 39,065	$ 28,301

XML

Note 2 - Summary of Significant Accounting Policies - Contract Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Total contract liabilities - beginning of period	$ 6,503	$ 4,873
Contract liability additions acquired through acquisition	0	100
Contract additions, net	6,710	6,371
Change in provision for Loss	4,179
Contract settlements	0	(3,140)
Revenue recognized	(7,174)	(1,701)
Total contract liabilities - end of period	$ 10,218	$ 6,503

XML

Note 2 - Summary of Significant Accounting Policies - Revenues Disaggregated (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Revenues from external customers	$ 322,217	$ 82,948
Time-and-Materials Contract [Member]
Revenues from external customers	49,814	12,198
Fixed-Price Contract [Member]
Revenues from external customers	132,507	28,857
Unit Price Contract [Member]
Revenues from external customers	139,896	41,893
Electric Power Segment [Member]
Revenues from external customers	152,635	43,599
Electric Power Segment [Member] | Time-and-Materials Contract [Member]
Revenues from external customers	49,487	12,198
Electric Power Segment [Member] | Fixed-Price Contract [Member]
Revenues from external customers	38,712	11,518
Electric Power Segment [Member] | Unit Price Contract [Member]
Revenues from external customers	64,436	19,883
Telecommunications Segment [Member]
Revenues from external customers	83,816	27,799
Telecommunications Segment [Member] | Time-and-Materials Contract [Member]
Revenues from external customers	327	0
Telecommunications Segment [Member] | Fixed-Price Contract [Member]
Revenues from external customers	8,029	5,789
Telecommunications Segment [Member] | Unit Price Contract [Member]
Revenues from external customers	75,460	22,010
Renewables Segment [Member]
Revenues from external customers	85,766	11,550
Renewables Segment [Member] | Time-and-Materials Contract [Member]
Revenues from external customers	0	0
Renewables Segment [Member] | Fixed-Price Contract [Member]
Revenues from external customers	85,766	11,550
Renewables Segment [Member] | Unit Price Contract [Member]
Revenues from external customers	0	0
Public Utilities [Member]
Revenues from external customers	148,961	43,120
Public Utilities [Member] | Electric Power Segment [Member]
Revenues from external customers	148,046	43,120
Public Utilities [Member] | Telecommunications Segment [Member]
Revenues from external customers	915	0
Public Utilities [Member] | Renewables Segment [Member]
Revenues from external customers	0	0
Telecommunications [Member]
Revenues from external customers	84,693	28,278
Telecommunications [Member] | Electric Power Segment [Member]
Revenues from external customers	1,792	479
Telecommunications [Member] | Telecommunications Segment [Member]
Revenues from external customers	82,901	27,799
Telecommunications [Member] | Renewables Segment [Member]
Revenues from external customers	0	0
Renewables [Member]
Revenues from external customers	85,766	11,550
Renewables [Member] | Electric Power Segment [Member]
Revenues from external customers	0	0
Renewables [Member] | Telecommunications Segment [Member]
Revenues from external customers	0	0
Renewables [Member] | Renewables Segment [Member]
Revenues from external customers	85,766	11,550
Product and Service, Other [Member]
Revenues from external customers	2,797	0
Product and Service, Other [Member] | Electric Power Segment [Member]
Revenues from external customers	2,797	0
Product and Service, Other [Member] | Telecommunications Segment [Member]
Revenues from external customers	0	0
Product and Service, Other [Member] | Renewables Segment [Member]
Revenues from external customers	$ 0	$ 0

XML

Note 2 - Summary of Significant Accounting Policies - Summary of Potential Common Stock Shares (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Options, outstanding (in shares)	197,887	237,985

XML

Note 2 - Summary of Significant Accounting Policies - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Loss from continuing operations, net of income taxes	$ (277,935)	$ (49,843)
Income from discontinued operations, net of income taxes	(2,317)	(11,371)
Net loss	$ (280,252)	$ (61,214)
Basic and diluted weighted average number of shares outstanding (in shares)	108,313,369	58,348,489
Loss from continuing operations per common share - basic and diluted (in dollars per share)	$ (2.53)	$ (0.86)
Loss from discontinued operations per common share - basic and diluted (in dollars per share)	(0.02)	(0.19)
Loss per common share - basic and diluted (in dollars per share)	$ (2.55)	$ (1.05)

XML

Note 2 - Summary of Significant Accounting Policies - Summary of Segment Activity (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Revenues from external customers		$ 322,217	$ 82,948
Depreciation, Depletion and Amortization, Total	[1]	33,839	12,910
Interest expense		37,813	8,337
Loss from operations		(187,577)	(52,791)
Segment assets (2)	[2]	271,571	411,309
Other intangibles assets, net		111,134	142,656
Goodwill		7,006	100,899
Expenditures for segment assets (3)	[3]	4,610	8,484
Electric Power Segment [Member]
Revenues from external customers		152,635	43,599
Depreciation, Depletion and Amortization, Total	[1]	26,911	5,969
Interest expense		18,158	3,129
Loss from operations		(88,045)	(13,215)
Segment assets (2)	[2]	167,245	273,726
Other intangibles assets, net		85,355	106,377
Goodwill		0	70,151
Expenditures for segment assets (3)	[3]	3,167	5,905
Telecommunications Segment [Member]
Revenues from external customers		83,816	27,799
Depreciation, Depletion and Amortization, Total	[1]	4,863	2,326
Interest expense		218	50
Loss from operations		(22,112)	43
Segment assets (2)	[2]	67,920	80,800
Other intangibles assets, net		24,333	28,571
Goodwill		0	23,742
Expenditures for segment assets (3)	[3]	1,326	1,615
Renewables Segment [Member]
Revenues from external customers		85,766	11,550
Depreciation, Depletion and Amortization, Total	[1]	2,001	2,931
Interest expense		10	349
Loss from operations		(68,137)	(19,043)
Segment assets (2)	[2]	18,932	28,324
Other intangibles assets, net		1,446	7,708
Goodwill		7,006	7,006
Expenditures for segment assets (3)	[3]	19	118
Other Segments [Member]
Revenues from external customers		0	0
Depreciation, Depletion and Amortization, Total	[1]	64	1,684
Interest expense		19,427	4,809
Loss from operations		(9,283)	(20,576)
Segment assets (2)	[2]	17,474	28,459
Other intangibles assets, net		0	0
Goodwill		0	0
Expenditures for segment assets (3)	[3]	$ 98	$ 846

[1] For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment.

[2] Other category includes assets held for sale of the discontinued Orbital Gas subsidiaries and Eclipse Foundation Group fixed assets held for sale.

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

XML

Note 3 - Investments and Fair Value Measurements (Details Textual) - USD ($)					12 Months Ended
	Apr. 28, 2022	Nov. 30, 2021	Nov. 27, 2021	Nov. 17, 2021	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Business Combination, Contingent Consideration, Liability, Total					$ 570,000		$ 720,000
Common Stock, Par or Stated Value Per Share (in dollars per share)					$ 0.001		$ 0.001
Equity Method Investments					$ 1,063,000		$ 1,063,000
Virtual Power Systems [Member]
Equity Method Investments					$ 1,100,000		$ 1,100,000
Pre-funded Warrants Under Securities Purchase Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	7,153,847
Shares Issued, Price Per Share (in dollars per share)	$ 1.30
Class of Warrant or Right, Offering Price (in dollars per share)	$ 1.2999
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)						$ 0.0001
Accompanying Warrants with Securities Purchase Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	16,153,847
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 1.31
Warrants and Rights Outstanding, Term (Year)	5 years
Stock in Connection With Syndicated Debt [Member]
Stock Issued During Period, Shares, New Issues (in shares)		1,690,677			24,963,451
Stock Issued, Reference Price Per Share (in dollars per share)		$ 2.36			$ 0.15
Securities Purchase Agreement [Member]
Stock Issued During Period, Shares, New Issues (in shares)	9,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.001
Syndicated Term Note [Member]
Debt Instrument, Face Amount		$ 105,000,000
Front Line Power Construction, LLC [Member]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable				$ 17,612,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability					$ 150,000
Business Combination, Contingent Consideration, Liability, Total					$ 570,000
Front Line Power Construction, LLC [Member] | Tidal Power [Member]
Share Price (in dollars per share)			$ 4.00
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable			$ 28,852,844
Front Line Power Construction, LLC [Member] | Kurt Johnson [Member]
Share Price (in dollars per share)			$ 4.00
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable			$ 17,635,228

XML

Note 3 - Investments and Fair Value Measurements - Fair Value Hierarchy for Cash Equivalents, Marketable Securities and Derivative Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Nov. 17, 2021
Contingent Consideration	$ 570	$ 720
Warrant liability	1,777	0
Total liabilities	117,158	87,728
Financial instrument liability	500	825	$ 900
Front Line Power Seller Notes [Member]
Front Line Power Construction seller financed debt, net of discount	68,753	86,183
Financial instrument liability - related to Syndicated debt	68,753	86,183
Syndicated Term Note [Member]
Front Line Power Construction seller financed debt, net of discount	536
Financial instrument liability - related to Syndicated debt	536
Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Front Line Power Construction seller financed debt, net of discount	43,693
Financial instrument liability - related to Syndicated debt	43,693
Prepaid Advance Agreement [Member]
Front Line Power Construction seller financed debt, net of discount	1,829
Financial instrument liability - related to Syndicated debt	1,829
Fair Value, Inputs, Level 1 [Member]
Contingent Consideration	0	0
Warrant liability	0
Total liabilities	0	0
Financial instrument liability		0
Fair Value, Inputs, Level 1 [Member] | Front Line Power Seller Notes [Member]
Front Line Power Construction seller financed debt, net of discount	0	0
Financial instrument liability - related to Syndicated debt	0	0
Fair Value, Inputs, Level 1 [Member] | Syndicated Term Note [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	0
Fair Value, Inputs, Level 1 [Member] | Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	0
Fair Value, Inputs, Level 1 [Member] | Prepaid Advance Agreement [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	0
Fair Value, Inputs, Level 2 [Member]
Contingent Consideration	0	0
Warrant liability	0
Total liabilities	70,582	86,183
Financial instrument liability		0
Fair Value, Inputs, Level 2 [Member] | Front Line Power Seller Notes [Member]
Front Line Power Construction seller financed debt, net of discount	68,753	86,183
Financial instrument liability - related to Syndicated debt	68,753	86,183
Fair Value, Inputs, Level 2 [Member] | Syndicated Term Note [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	0
Fair Value, Inputs, Level 2 [Member] | Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	0
Fair Value, Inputs, Level 2 [Member] | Prepaid Advance Agreement [Member]
Front Line Power Construction seller financed debt, net of discount	1,829
Financial instrument liability - related to Syndicated debt	1,829
Fair Value, Inputs, Level 3 [Member]
Contingent Consideration	570	720
Warrant liability	1,777
Total liabilities	46,576	1,545
Financial instrument liability		825
Fair Value, Inputs, Level 3 [Member] | Front Line Power Seller Notes [Member]
Front Line Power Construction seller financed debt, net of discount	0	0
Financial instrument liability - related to Syndicated debt	0	$ 0
Fair Value, Inputs, Level 3 [Member] | Syndicated Term Note [Member]
Front Line Power Construction seller financed debt, net of discount	536
Financial instrument liability - related to Syndicated debt	536
Fair Value, Inputs, Level 3 [Member] | Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Front Line Power Construction seller financed debt, net of discount	43,693
Financial instrument liability - related to Syndicated debt	43,693
Fair Value, Inputs, Level 3 [Member] | Prepaid Advance Agreement [Member]
Front Line Power Construction seller financed debt, net of discount	0
Financial instrument liability - related to Syndicated debt	$ 0

XML

Note 3 - Investments and Fair Value Measurements - Reconciliation of Changes in Fair Value (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Contingent Consideration Liability [Member]
Balance	$ 720
Fair value of financial instrument liability at inception	150
Balance	570
Fair value adjustment	(150)
Warrant Liability [Member]
Balance	0
Fair value adjustment to financial instrument liability	(11,085)
Balance	1,777
Issuance of shares upon exercise and reset of financial instrument	(6,938)
Proceeds from sale of warrants including pre-funded warrants	19,800
Seller Financed Notes Payable - Front Line Power Acquisition [Member] | Long-Term Debt [Member]
Balance	0
Fair value of financial instrument liability at inception	26,782
Fair value adjustment to financial instrument liability	16,911
Balance	43,693
Fair value adjustment	(26,782)
Syndicated Term Note [Member] | Long-Term Debt [Member]
Balance	825
Fair value of financial instrument liability at inception	(7,378)
Balance	536
Fair value adjustment	7,378
Issuance of shares upon exercise and reset of financial instrument	$ (7,667)

XML

Note 4 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2022	Dec. 31, 2021
Depreciation and Amortization, Continuing Operations		$ 15,400	$ 5,000
Depreciation, Depletion and Amortization, Total	[1]	33,839	12,910
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property		154	26
Disposed of Property, Plant and Equipment [Member]
Property, Plant and Equipment, Disposals		2,100	200
Accumulated Depreciation, Depletion and Amortization, Sale or Disposal of Property, Plant and Equipment		1,400	39
Proceeds From Disposal of Property, Plant and Equipment, Noncash		600	200
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property		(49)	14
Telecommunications Segment [Member]
Depreciation, Depletion and Amortization, Total	[1]	4,863	2,326
Electric Power Segment [Member]
Depreciation, Depletion and Amortization, Total	[1]	26,911	5,969
Renewables Segment [Member]
Depreciation, Depletion and Amortization, Total	[1]	2,001	2,931
Cost of Sales [Member] | Telecommunications Segment [Member]
Depreciation, Depletion and Amortization, Total		600	400
Cost of Sales [Member] | Electric Power Segment [Member]
Depreciation, Depletion and Amortization, Total		13,200	4,000
Cost of Sales [Member] | Renewables Segment [Member]
Depreciation, Depletion and Amortization, Total		$ 27	$ 54

[1] For the year ended December 31, 2021, depreciation and amortization totals included $1.6 million that were classified in income from discontinued operations on the Consolidated Statements of Operations in the Other segment, with no such amounts in 2022. For the year ended December 31, 2022 depreciation and amortization totals included $0.6 million that was classified as cost of revenues in the Telecommunications segment, $13.2 million that was classified as cost of revenues in the Electric Power segment and $27 thousand that was classified as cost of revenue in the Renewables segment. For the year ended December 31, 2021 depreciation and amortization totals included $0.4 million that was classified as cost of revenues in the Telecommunications segment, $4.0 million that was classified as a cost of revenues in the Electric Power segment and $54 thousand that was classified as cost of revenue in the Renewables segment.

XML

Note 4 - Property and Equipment, Net - Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, and equipment	$ 36,492	$ 33,034
Less accumulated depreciation	(13,562)	(3,396)
Property and equipment, net	22,930	29,638
Leasehold Improvements [Member]
Property, and equipment	292	272
Equipment [Member]
Property, and equipment	$ 36,200	$ 32,762

XML

Note 5 - Goodwill and Other Intangible Assets (Details Textual) $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Number of Operating Segments				4
Number of Reportable Segments				3
Goodwill, Ending Balance				$ 7,006		$ 100,899
Share Price, Reduction Percentage	42.00%	42.00%
Goodwill, Impairment Loss				95,951
Impairment of Intangible Assets, Finite-Lived				4,323
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)			$ 0	9,311
Trade Names [Member]
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)				$ 9,300
Customer Relationships [Member]
Impairment of Intangible Assets, Finite-Lived			4,300
Front Line Power Construction, LLC [Member]
Goodwill, Impairment Loss			70,200
Gibson Technical Services, Inc. [Member]
Goodwill, Impairment Loss			25,800
Orbital Solar Services [Member]
Goodwill, Ending Balance			$ 7,000
Coax Fiber Solutions (CFS) [Member]
Goodwill, Ending Balance					$ 1,500

XML

Note 5 - Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Balance	$ 100,899
Acquisition of Coax Fiber Solutions	1,530
Working capital adjustment	528
Impairment	(95,951)
Balance	7,006
Electric Power Segment [Member]
Balance	70,151
Acquisition of Coax Fiber Solutions	0
Working capital adjustment	0
Impairment	(70,151)
Balance	0
Telecommunications Segment [Member]
Balance	23,742
Acquisition of Coax Fiber Solutions	1,530
Working capital adjustment	528
Impairment	(25,800)
Balance	0
Renewables Segment [Member]
Balance	7,006
Acquisition of Coax Fiber Solutions	0
Working capital adjustment	0
Impairment	0
Balance	7,006
Other Segments [Member]
Balance	0
Acquisition of Coax Fiber Solutions	0
Working capital adjustment	0
Impairment	0
Balance	$ 0

XML

Note 5 - Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Finite-lived intangible asset, gross		$ 122,069	$ 130,160
Finite-lived intangible asset, accumulated amortization		(24,360)	(10,240)
Impairment of Intangible Assets, Finite-Lived		(4,323)
Finite-lived intangible asset, net		97,709	119,920
Indefinite-lived Intangible Assets, gross		22,736	22,736
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)	$ 0	(9,311)
Indefinite-lived Intangible Assets		13,425	22,736
Total identifiable other intangible assets		144,805	152,896
Impairment of Intangible Assets		(13,634)
Other intangibles assets, net		111,134	142,656
Electric Power Segment [Member]
Finite-lived intangible asset, gross		93,198	93,198
Finite-lived intangible asset, accumulated amortization		(15,487)	(1,848)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		77,711	91,350
Indefinite-lived Intangible Assets, gross		15,027	15,027
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)		(7,383)
Trade name - Front Line		7,644	15,027
Other intangibles assets, net		85,355	106,377
Telecommunications Segment [Member]
Finite-lived intangible asset, gross		23,055	22,476
Finite-lived intangible asset, accumulated amortization		(4,502)	(1,614)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		18,553	20,862
Indefinite-lived Intangible Assets, gross		7,709	7,709
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)		(1,928)
Indefinite-lived Intangible Assets		5,781	7,709
Other intangibles assets, net		24,333	28,571
Telecommunications Segment [Member] | Trade Name, GTS [Member]
Indefinite-lived Intangible Assets, gross		6,388	6,388
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)		(1,746)
Indefinite-lived Intangible Assets		4,642	6,388
Telecommunications Segment [Member] | Trade Name - IMMCO [Member]
Indefinite-lived Intangible Assets, gross		1,162	1,162
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)		(182)
Indefinite-lived Intangible Assets		980	1,162
Telecommunications Segment [Member] | Trade Name - Full Moon [Member]
Indefinite-lived Intangible Assets, gross		159	159
Impairment of Intangible Assets, Indefinite-Lived (Excluding Goodwill)		0
Indefinite-lived Intangible Assets		159	159
Renewables Segment [Member]
Finite-lived intangible asset, gross		5,090	13,737
Finite-lived intangible asset, accumulated amortization		(3,645)	(6,029)
Impairment of Intangible Assets, Finite-Lived		(4,323)
Finite-lived intangible asset, net		1,445	7,708
Other intangibles assets, net		1,446	7,708
Other Segments [Member]
Finite-lived intangible asset, gross		726	749
Finite-lived intangible asset, accumulated amortization		(726)	(749)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		0	0
Other intangibles assets, net		$ 0	0
Order or Production Backlog [Member]
Finite-lived intangible asset, useful life (Year)		1 year
Order or Production Backlog [Member] | Electric Power Segment [Member]
Finite-lived intangible asset, useful life (Year)		1 year
Finite-lived intangible asset, gross		$ 9,186	9,186
Finite-lived intangible asset, accumulated amortization		(9,186)	(1,148)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 0	8,038
Customer Relationships - Front Line Power Construction [Member]
Finite-lived intangible asset, useful life (Year)		15 years
Customer Relationships - Front Line Power Construction [Member] | Electric Power Segment [Member]
Finite-lived intangible asset, useful life (Year)		15 years
Finite-lived intangible asset, gross		$ 84,012	84,012
Finite-lived intangible asset, accumulated amortization		(6,301)	(700)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 77,711	83,312
Customer Relationships - Front Line Power Construction [Member] | Electric Power Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		13 years 10 months 20 days
Customer Relationships - Gibson Technical Services [Member]
Finite-lived intangible asset, useful life (Year)		10 years
Customer Relationships - Gibson Technical Services [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		10 years
Finite-lived intangible asset, gross		$ 16,075	16,075
Finite-lived intangible asset, accumulated amortization		(2,760)	(1,152)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 13,315	14,923
Customer Relationships - Gibson Technical Services [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		8 years 3 months 14 days
Customer Relationships - IMMCO [Member]
Finite-lived intangible asset, useful life (Year)		10 years
Customer Relationships - IMMCO [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		10 years
Finite-lived intangible asset, gross		$ 3,800	3,800
Finite-lived intangible asset, accumulated amortization		(547)	(158)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 3,253	3,642
Customer Relationships - IMMCO [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		8 years 6 months 29 days
Customer Relationships - Full Moon [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		10 years
Finite-lived intangible asset, gross		$ 210	210
Finite-lived intangible asset, accumulated amortization		(25)	(4)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 185	206
Customer Relationships - Full Moon [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		8 years 9 months 25 days
Technology - Know How [Member]
Finite-lived intangible asset, useful life (Year)		3 years
Finite-lived intangible asset, net		$ 940
Technology - Know How [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		4 years
Finite-lived intangible asset, gross		$ 1,459	1,459
Finite-lived intangible asset, accumulated amortization		(519)	(152)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 940	1,307
Technology - Know How [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		2 years 6 months 29 days
Software - IMMCO [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		3 years
Finite-lived intangible asset, gross		$ 1,126	547
Finite-lived intangible asset, accumulated amortization		(519)	(93)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 607	454
Software - IMMCO [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		1 year 2 months 23 days
Non-compete Agreements -GTS [Member]
Finite-lived intangible asset, useful life (Year)		5 years
Non-compete Agreements -GTS [Member] | Telecommunications Segment [Member]
Finite-lived intangible asset, useful life (Year)		5 years
Finite-lived intangible asset, gross		$ 385	385
Finite-lived intangible asset, accumulated amortization		(132)	(55)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 253	330
Non-compete Agreements -GTS [Member] | Telecommunications Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		3 years 3 months 14 days
Customer Relationships [Member]
Impairment of Intangible Assets, Finite-Lived	$ (4,300)
Finite-lived intangible asset, net		$ 94,464
Customer Relationships [Member] | Renewables Segment [Member]
Finite-lived intangible asset, useful life (Year)		5 years
Finite-lived intangible asset, gross		$ 0	8,647
Finite-lived intangible asset, accumulated amortization		0	(3,027)
Impairment of Intangible Assets, Finite-Lived		(4,323)
Finite-lived intangible asset, net		$ 0	5,620
Trade Names [Member] | Renewables Segment [Member]
Finite-lived intangible asset, useful life (Year)		1 year
Finite-lived intangible asset, gross		$ 1,878	1,878
Finite-lived intangible asset, accumulated amortization		(1,878)	(1,878)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		0	0
Noncompete Agreements [Member]
Finite-lived intangible asset, net		$ 1,698
Noncompete Agreements [Member] | Renewables Segment [Member]
Finite-lived intangible asset, useful life (Year)		5 years
Finite-lived intangible asset, gross		$ 3,212	3,212
Finite-lived intangible asset, accumulated amortization		(1,767)	(1,124)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 1,445	2,088
Noncompete Agreements [Member] | Renewables Segment [Member] | Weighted Average [Member]
Remaining amortization period (Year)		2 years 3 months
Computer Software, Intangible Asset [Member]
Finite-lived intangible asset, net		$ 607
Computer Software, Intangible Asset [Member] | Other Segments [Member]
Finite-lived intangible asset, useful life (Year)		3 years
Finite-lived intangible asset, gross		$ 726	713
Finite-lived intangible asset, accumulated amortization		(726)	(713)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 0	0
Product Certification [Member] | Other Segments [Member]
Finite-lived intangible asset, useful life (Year)		3 years
Finite-lived intangible asset, gross		$ 0	36
Finite-lived intangible asset, accumulated amortization		0	(36)
Impairment of Intangible Assets, Finite-Lived		0
Finite-lived intangible asset, net		$ 0	$ 0

XML

Note 5 - Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Intangible asset amortization	$ 18,468	$ 7,702
Power and Electromechanical Business [Member]
Intangible asset amortization	0	1,396
Trade Names [Member]
Intangible asset amortization	0	469
Customer Relationships [Member]
Intangible asset amortization	8,915	3,744
Technology - Know How [Member]
Intangible asset amortization	368	152
Computer Software, Intangible Asset [Member]
Intangible asset amortization	427	96
Noncompete Agreements [Member]
Intangible asset amortization	720	697
Order or Production Backlog [Member]
Intangible asset amortization	$ 8,038	$ 1,148

XML

Note 5 - Goodwill and Other Intangible Assets - Estimated Future Amortization (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
2023	$ 9,159
2024	8,834
2025	8,057
2026	7,631
2027	7,609
2028 and thereafter	56,419
Finite-lived intangible assets	97,709	$ 119,920
Customer Relationships [Member]
2023	7,609
2024	7,609
2025	7,609
2026	7,609
2027	7,609
2028 and thereafter	56,419
Finite-lived intangible assets	94,464
Technology - Know How [Member]
2023	365
2024	365
2025	210
2026	0
2027	0
2028 and thereafter	0
Finite-lived intangible assets	940
Computer Software, Intangible Asset [Member]
2023	466
2024	141
2025	0
2026	0
2027	0
2028 and thereafter	0
Finite-lived intangible assets	607
Noncompete Agreements [Member]
2023	719
2024	719
2025	238
2026	22
2027	0
2028 and thereafter	0
Finite-lived intangible assets	$ 1,698

XML

Note 6 - Instruments and Risk Management (Details Textual) Pure in Thousands	Dec. 31, 2022	Dec. 31, 2021
Designated as Hedging Instrument [Member]
Derivative, Number of Instruments Held, Total	0	0

XML

Note 7 - Notes Payable (Details Textual) - USD ($)													1 Months Ended									3 Months Ended					12 Months Ended
		Dec. 31, 2022	Dec. 09, 2022	Sep. 29, 2022	Aug. 02, 2022	Jun. 09, 2022	May 06, 2022	Dec. 20, 2021	Dec. 10, 2021	Nov. 17, 2021	May 11, 2021	Apr. 01, 2020	Nov. 30, 2023	Dec. 31, 2022	Nov. 30, 2022	Jun. 30, 2022	Apr. 30, 2022	Mar. 31, 2022	Feb. 28, 2022	Nov. 30, 2021	Aug. 31, 2021	Apr. 30, 2023	Dec. 31, 2022	Aug. 31, 2022	Mar. 31, 2022	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Aug. 18, 2022	Jul. 31, 2022	Oct. 01, 2021	Sep. 30, 2021	Mar. 23, 2021	Dec. 31, 2020	Oct. 30, 2020
Payments for Working Capital Adjustment																											$ 9,500,000	$ (0)
Long-term Debt, Total		$ 245,236,000												$ 245,236,000									$ 245,236,000			$ 229,379,000	245,236,000	229,379,000
Gain (Loss) on Extinguishment of Debt, Total																											(31,258,000)	365,000
Long-Term Debt, Gross		$ 266,885,000												$ 266,885,000									$ 266,885,000			$ 241,982,000	$ 266,885,000	$ 241,982,000
Common Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.001												$ 0.001									$ 0.001			$ 0.001	$ 0.001	$ 0.001
Exchange Agreement to Reduce Principal on Seller-financed Note Payable [Member]
Debt Conversion, Converted Instrument, Shares Issued (in shares)																					155,763
Debt Conversion, Original Debt, Amount																					$ 1,000,000
Prior Promissory Note Converted The New Note [Member]
Gain (Loss) on Extinguishment of Debt, Total			$ (1,300,000)
Seller Financed Notes Payable, Two [Member]
Long-term Debt, Total																																		$ 1,500,000
Unsecured Debt [Member] | Streeterville Capital, LLC [Member]
Debt Instrument, Face Amount																																	$ 10,700,000
Debt Instrument, Interest Rate, Stated Percentage																																	9.00%
Debt Instrument, Interest Rate, Effective Percentage																																	19.60%
Debt Instrument, Unamortized Discount, Total																																	$ 1,000,000.0
Syndicated Lenders [Member]
Payments for Working Capital Adjustment															$ 9,500,000
Syndicated Term Note [Member]
Debt Instrument, Face Amount																				$ 105,000,000
Long-Term Debt, Gross	[1]	$ 114,725,000												$ 114,725,000									$ 114,725,000			$ 105,000,000	$ 114,725,000	$ 105,000,000
Syndicated Term Note [Member] | Syndicated Lenders [Member]
Paid-in-kind Amount															10,500,000
Interest Payable															1,000,000.0
Paid-in-Kind Interest															10,500,000
Unsecured Promissory Note With Kurt A Johnson [Member]
Debt Instrument, Face Amount										$ 34,256,000
Unsecured Promissory Note With Tidal Power Group [Member]
Debt Instrument, Face Amount										$ 51,384,000
Debt Instrument, Interest Rate, Stated Percentage										6.00%
Repayments of Debt							$ 20,000,000
Debt Instrument, Share Price Covenant (in dollars per share)																		$ 4.00							$ 4.00
Payments for Additional Consideration																									$ 28,852,844
Unsecured Promissory Note With Tidal Power Group [Member] | Scenario, Plan [Member]
Repayments of Debt		15,000,000
Unsecured Promissory Note With Kurt A Johnson 2 [Member]
Debt Instrument, Face Amount									$ 1,090,000
Debt Instrument, Interest Rate, Stated Percentage									6.00%
Reduction in Stock Shares in Exchange for Debt (in shares)									400,000
Debt Instrument, Share Price Covenant (in dollars per share)																		$ 4.00							$ 4.00
Payments for Additional Consideration																									$ 17,635,228
Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Extinguishment of Debt, Gain (Loss), Net of Tax																									$ (26,200,000)
Long-Term Debt, Gross	[2]	69,168,000												69,168,000									69,168,000			86,730,000	69,168,000	86,730,000
Seller Financed Notes Payable, One [Member]
Debt Instrument, Interest Rate, Stated Percentage																					6.00%
Repayments of Debt																					$ 1,000,000
Long-term Debt, Total																					$ 5,000,000													$ 5,000,000
Debt Instrument, Term (Month)																					18 months
August 2021 Seller-financed Notes Payable [Member]
Debt Instrument, Face Amount																					$ 2,000,000.0
Debt Instrument, Interest Rate, Stated Percentage																					6.00%
Estimated Market Interest Rate on Which Debt Instrument is Based																					10.00%
Debt Instrument, Unamortized Discount, Total																					$ 48,000
Seller Financed Notes Payable, Two [Member]
Debt Instrument, Term (Month)												36 months
Vehicle and Equipment loans [Member]
Long-Term Debt, Gross	[3]	$ 2,014,000												$ 2,014,000									$ 2,014,000			222,000	$ 2,014,000	222,000
Vehicle and Equipment loans [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage		0.00%												0.00%									0.00%				0.00%
Vehicle and Equipment loans [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage		9.15%												9.15%									9.15%				9.15%
Refinanced Agreement [Member]
Debt Instrument, Face Amount		$ 11,400,000												$ 11,400,000									$ 11,400,000				$ 11,400,000
Debt Instrument, Periodic Payment, Total														$ 260,000
Debt Instrument, Unamortized Discount, Total																	$ 3,600,000
Debt Instrument, Effective Interest Rate for Discount Amortization		94.00%												94.00%									94.00%				94.00%
Non-Recourse Payable Agreement [Member]
Debt Instrument, Face Amount		$ 11,440,000												$ 11,440,000									$ 11,440,000				$ 11,440,000
Long-term Debt, Total		7,355,000												7,355,000									7,355,000				7,355,000
Debt Instrument, Unamortized Discount, Total		3,440,000												3,440,000									3,440,000				3,440,000
Long-Term Debt, Gross	[4]	10,400,000												10,400,000									10,400,000			8,269,000	10,400,000	8,269,000
The Investor Note [Member]
Long-Term Debt, Gross	[5]	60,780,000												60,780,000									60,780,000			33,922,000	60,780,000	33,922,000
Unsecured Investor Note [Member]
Debt Instrument, Face Amount					$ 8,600,000
Debt Instrument, Periodic Payment, Total					$ 800,000
Debt Instrument, Interest Rate, Stated Percentage					9.00%
Debt Instrument, Interest Rate, Effective Percentage					16.40%
Debt Instrument, Term (Month)					18 months
Debt Instrument, Unamortized Discount, Total					$ 600,000
Debt Instrument, Required Monthly Payments Under Clause																							4,000,000
Debt Instrument, Periodic Payment, Failure to Pay, Percentage Increase to Principal					10.00%
Extinguishment of Debt, Amount			36,700,000
Unsecured Investor Note 2 [Member]
Debt Instrument, Face Amount				$ 5,400,000
Debt Instrument, Periodic Payment, Total				$ 500,000
Debt Instrument, Interest Rate, Stated Percentage				9.00%
Debt Instrument, Interest Rate, Effective Percentage				16.50%
Debt Instrument, Term (Month)				18 months
Debt Instrument, Unamortized Discount, Total				$ 400,000
Debt Instrument, Required Monthly Payments Under Clause																						$ 4,000,000
Debt Instrument, Periodic Payment, Failure to Pay, Percentage Increase to Principal				10.00%
Forbearance and Investment Agreement [Member]
Debt Instrument, Face Amount			42,100,000
Debt Instrument, Periodic Payment, Total			$ 2,500,000
Debt Instrument, Interest Rate, Stated Percentage			9.00%
Debt Instrument, Term (Month)			18 months
Debt Instrument, Unamortized Discount, Total			$ 350,000
Debt Instrument, Additional Funds		5,000,000.0	5,000,000											5,000,000.0									5,000,000.0				5,000,000.0
Debt Issuance Costs, Gross			$ 50,000
Debt Instrument, Prepaid Option, Percentage Paid on Elected Prepaid Amount.			115.00%
Debt Instrument, Periodic Payment, Failure to Pay, Amount Increase to Principal																											8,000,000.0
Prepaid Advance Agreement [Member]
Debt Instrument, Unamortized Discount, Total		150,000												150,000									150,000				150,000
Long-Term Debt, Gross	[6]	$ 1,829,000												1,829,000									$ 1,829,000			0	$ 1,829,000	$ 0
Common Stock, Par or Stated Value Per Share (in dollars per share)																													$ 0.001
Pre-paid Advance Offset by Issuance of Common Stock, Price per Share above the Market Price (in dollars per share)																													$ 0.01
Pre-paid Advance Offset by Issuance of Common Stock, Percentage of the Lowest Daily Volume Weighted Average Price of Our Common Stock																													96.00%
Prepaid Advance Agreement [Member] | Minimum [Member]
Share Price (in dollars per share)																													$ 0.20
Conditional Settlement Agreement [Member]
Debt Instrument, Interest Rate, Stated Percentage																																			5.00%
Repayments of Debt														$ 150,000				$ 350,000	$ 150,000							$ 500,000
Long-term Debt, Total																																			$ 3,500,000
Long-Term Debt, Without Interest, Total																																			2,600,000
Long Term Debt, With Interest, Amount																																			$ 900,000
Conditional Settlement Agreement [Member] | Forecast [Member]
Repayments of Debt													$ 1,500,000
Alter Domus and Various Lenders [Member] | Financing Acquisition Term Loan [Member]
Debt Instrument, Face Amount										$ 105,000,000
Debt Instrument, Periodic Payment, Total										$ 262,500
Debt Instrument, Initial Prepayment Premium, Percentage										5.00%
Debt Instrument, Final Prepayment Premium, Percentage										1.00%
Debt Instrument, Interest Rate, Stated Percentage		17.15%												17.15%									17.15%				17.15%
Debt Instrument, Interest Rate, Effective Percentage		23.20%												23.20%									23.20%				23.20%
Alter Domus and Various Lenders [Member] | Financing Acquisition Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate										2.50%
First Insurance Funding [Member]
Debt Instrument, Face Amount															$ 700,000															$ 3,300,000
Debt Instrument, Interest Rate, Stated Percentage															3.28%															3.28%
First Insurance Funding [Member] | First Insurance Funding [Member]
Debt Instrument, Face Amount																															$ 1,700,000
Debt Instrument, Interest Rate, Stated Percentage																										3.00%		3.00%
First Insurance Funding [Member] | Second Insurance Funding [Member]
Debt Instrument, Face Amount																															$ 54,000
Debt Instrument, Interest Rate, Stated Percentage																																4.35%
First Insurance Funding [Member] | Third Insurance Funding [Member]
Debt Instrument, Face Amount																										$ 500,000		$ 500,000
Debt Instrument, Interest Rate, Stated Percentage																										4.35%		4.35%
C6 Capital [Member] | Future Revenue Payable Two [Member]
Debt Instrument, Face Amount																	20,200,000			9,500,000
Debt Instrument, Periodic Payment, Total																				384,000
Repayments of Debt																	4,200,000
Debt Instrument, Unamortized Discount, Total																				2,600,000
Proceeds from Issuance of Long-term Debt, Total																	$ 13,300,000			$ 6,900,000
Debt Instrument, Effective Interest Rate for Discount Amortization																	88.00%			89.00%
Gain (Loss) on Extinguishment of Debt, Total														$ (500,000)		$ (100,000)	$ (400,000)
C6 Capital [Member] | Future Revenue Payable Two [Member] | Minimum [Member]
Debt Instrument, Term (Month)																	182 days
C6 Capital [Member] | Future Revenue Payable Two [Member] | Maximum [Member]
Debt Instrument, Term (Month)																	336 days
C6 Capital [Member] | Future Revenue Payable One [Member]
Debt Instrument, Periodic Payment, Total																				$ 148,000
Streeterville Capital, LLC [Member] | The Investor Note [Member]
Debt Instrument, Face Amount											$ 10,700,000
Debt Instrument, Periodic Payment, Total											$ 1,000,000
Debt Instrument, Interest Rate, Stated Percentage											9.00%
Debt Instrument, Interest Rate, Effective Percentage											19.60%
Debt Instrument, Unamortized Discount, Total											$ 1,000,000.0
Streeterville Capital, LLC [Member] | The Fourth Investor Note [Member]
Debt Instrument, Face Amount								$ 16,100,000
Debt Instrument, Periodic Payment, Total								$ 1,500,000
Debt Instrument, Interest Rate, Stated Percentage								9.00%
Debt Instrument, Interest Rate, Effective Percentage		11.80%						16.30%						11.80%									11.80%				11.80%
Debt Instrument, Term (Month)								18 months
Debt Instrument, Unamortized Discount, Total								$ 1,100,000
Long-Term Debt, Gross		$ 17,200,000												$ 17,200,000									$ 17,200,000				$ 17,200,000
Streeterville Capital, LLC [Member] | The Fifth Investor Note [Member]
Debt Instrument, Face Amount						$ 10,700,000
Debt Instrument, Periodic Payment, Total						$ 1,000,000.0
Debt Instrument, Interest Rate, Stated Percentage						9.00%
Debt Instrument, Interest Rate, Effective Percentage		14.40%				16.40%								14.40%									14.40%				14.40%
Debt Instrument, Term (Month)						18 months
Debt Instrument, Unamortized Discount, Total						$ 700,000
Debt Instrument, Required Monthly Payments Under Clause																								$ 4,000,000
Debt Instrument, Periodic Payment, Failure to Pay, Percentage Increase to Principal																								10.00%
Yorkville [Member] | Prepaid Advance Agreement [Member]
Debt Instrument, Prepaid Advances Limitation, Outstanding																													$ 5,000,000.0
Yorkville [Member] | Prepaid Advance Agreement [Member] | Minimum [Member]
Debt Instrument, Maximum Prepaid Advances																													5,000,000.0
Yorkville [Member] | Prepaid Advance Agreement [Member] | Maximum [Member]
Debt Instrument, Maximum Prepaid Advances																													$ 50,000,000.0

[1] On November 17, 2021, the Company entered into a credit agreement and associated documents (the “Credit Agreement”) with Alter Domus (US), LLC (“Alter Domus”), as administrative agent and collateral agent and various lenders (the “Lenders”) in order to enable the Company to finance the acquisition of Front Line Power Construction, LLC. The Lenders made a Term Loan to Front Line in the initial principal amount of $105,000,000 for the purposes of financing the acquisition and the associated expenses. The term loan initially bears interest at the three-month Adjusted LIBOR Rate, plus the Applicable Margin, of which 2.5% may be paid in-kind. The Term Loan shall be repaid in consecutive quarterly installments of $262,500, and commenced on June 30, 2022. The Credit Agreement provides for mandatory prepayments on the occurrence of events such as sales of assets, Consolidated Excess Cash Flow and Excess Receipts during the term. The credit agreement provides for prepayment premiums (initially 5% on prepayments made in the first 30 months of the term, declining to 1% in the final year of the term). The Term Loan matures on November 17, 2026, subject to acceleration on Events of Default. The interest rate on the term notes at December 31, 2022 was 17.15% with an effective rate of 23.2%. In November 2022, The Company resolved a dispute with the Syndicated lenders whereby the Syndicated lenders deemed the Company to be in default of its credit agreement due to the Company using proceeds from Front Line Power's operations to pay down $9.5 million of the Company's working capital adjustment with the sellers of Front Line Power. As part of a consent agreement with the lenders, the Company agreed to pay the lenders in a paid-in-kind amount of $10.5 million, which was added to the Syndicated debt balance and included $1.0 million of interest calculated from the date of the first intercompany advance that the Company made. The $10.5 million was added to the original issue discount and will be amortized to interest expense over the life of the loan. At December 31, 2022 and 2021, the Company was in compliance with all debt covenants.

[2] On November 17, 2021, the Company entered into two unsecured promissory notes, one with Kurt A Johnson, Jr, for $34,256,000 and the second for $51,384,000 with Tidal Power Group LLC. These promissory notes bear interest at a rate of 6% per annum and as modified on April 29, 2022 and December 30, 2022, $20 million was paid on May 6, 2022, $15 million is due on or before April 1, 2023 and the remaining balance is due on May 31, 2023. On December 10, 2021, Kurt A Johnson Jr. received an additional unsecured promissory note in the principal sum of $1,090,000 also with a 6% per annum interest rate in exchange for a reduction of shares issued to Kurt of 400,000. This note was paid off as part of the May 6, 2022 payment. Additionally in amendments to the note, the Company also agreed to reduce the restriction period under the Tidal Lockup letter from two years to one year and to the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period ending April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period ending April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. Any shortfall would be made up by issuing Mr. Johnson additional common shares. In 2022, the Company recorded a $26.2 million loss on extinguishment related to these loan modifications.

[3] Includes vehicle and equipment loans with interest rates ranging from 0.00% to 9.15%.

[4] The Company entered into a non-recourse agreement, which was originated in November 2021 with a face amount of $9.5 million. The Company received net cash proceeds of $6.9 million. The Company recorded a liability of $9.5 million and a debt discount of $2.6 million. Under the terms of the agreement, for the first 12 weeks, the Company made weekly payments of $148 thousand and for the final 20 weeks, the Company was to make payments of $384 thousand. The agreement had no stated interest rate, but the discount and loan origination fees were being amortized based on an 89% interest rate. In April, 2022, the Company took out three non-recourse agreements for the sale of future revenues in the combined amount of $20.2 million. The Company received approximately $13.3 million after the deduction of an original issue discount and upfront fees. In April 2022, the Company used part of the proceeds from these non-recourse agreements to pay off the non-recourse note of $4.2 million that was on the balance sheet as of March 31, 2022 and recorded a loss on extinguishment of $0.4 million. The loans vary in length from 26 to 48 weeks. The Company paid off the smallest of the three notes in June 2022 and recorded a loss on extinguishment of $0.1 million. Discounts on the remaining agreements were being amortized based on an effective interest rate of 88% and were scheduled to mature in the first quarter of 2023. In December 2022, The Company refinanced the remaining two agreements and recorded a loss on extinguishment of $0.5 million. As part of the refinancing, the Company took our three new agreements with a combined face amount of $11.4 million, which included combined original issue discounts of $3.6 million. Payments are $260 thousand per week until the agreements mature in October 2023, and the discounts are being amortized at a 94% effective interest rate. The combined carrying value of the agreements net of the approximately $3.0 million of original issue discounts at December 31, 2022 was $7.4 million.

[5] On March 23, 2021, the Company completed a note payable agreement with an 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%, and an original issue discount of $1.0 million. This note was paid off in August 2022. On May 11, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0% per annum, and estimated effective interest rate of 19.6% at inception, and a combined original issue discount and unamortized prepaid fees of $1.0 million and a carrying value of $5.3 million at September 30, 2022. The net proceeds were to be used for working capital, future acquisitions and general corporate purposes. 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 million per calendar month, by providing Company with a “Redemption Notice." This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On December 20, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $16.1 million, an original issue discount of $1.1 million, and a stated interest rate of 9.0%. The original issue discount has been amortized to interest expense starting with an estimated effective interest rate of 16.3%, which was later adjusted to 11.8% as of December 2022 due to changes in timing of payments. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1.5 million per month beginning 6 months after initial issuance. The carrying value was $17.2 million at December 31, 2022. The Company has not made any payments on this note as of December 31, 2022. On June 9, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, which was later adjusted to 14.4% due to changes in timing of payments and an original issue discount of $0.7 million. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1.0 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of June and July 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On August 2, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $8.6 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, and an original issue discount of $0.6 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.8 million per month beginning 6 months after initial issuance. This note also included a debt reduction clause whereby the Company had agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of October, November and December 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On September 29, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $5.4 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.5%, and an original issue discount of $0.4 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.5 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company has agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of February, March and April 2023. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On December 9, 2022, the Company entered into a Forbearance and Investment Agreement with an institutional investor and its successors and/or assigns, an institutional accredited investor pursuant to which the Company issued a Secured Promissory Note in the face amount of $42.1 million (the “New Note”). The New Note reflects the cancellation of $36.7 million of obligations under certain prior promissory notes issued to the institutional investor and $5,000,000 of additional funds made available to the Company. As part of the cancellation of the former debt, the Company recorded a loss on extinguishment of $1.3 million. The New Note carries an original issue discount of $350,000 and reimbursement of Investor’s transactional expenses of $50,000, which are included in the initial principal balance of the New Note. The New Note bears interests at nine percent (9%) per annum and has a maturity date of 18 months after its issuance date of December 9, 2022. We may prepay all or a portion of the outstanding obligations under the New Note at a price equal to 115% of the amount we elect to prepay. Beginning six (6) months after December 9, 2022, the Investor has the right to redeem up to $2,500,000 per month of amounts due under the New Note, as more fully described in the New Note. Subject to certain conditions, as described in the New Agreement, the Investor agreed to fund an additional $5.0 million to us on each of January 15, 2023 and February 15, 2023. As a result of the Company not meeting its debt reduction requirements in various months during 2022, the Company recorded a total of $8.0 million of liquidated damages in 2022.

[6] On August 18, 2022, the Company entered into a Prepaid Advance Agreement (the “PPA”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). In accordance with the terms of the PPA, the Company may request advances of up to $5.0 million from Yorkville (or such greater amount that the parties may mutually agree) (the “Pre-Paid Advance”), with a limitation on outstanding Pre-Paid Advances of $5.0 million and an aggregate limitation on the Pre-Paid Advances of $50.0 million. Each such Pre- Paid Advance will be offset upon the issuance of the Company’s common stock, par value $0.001 per share (“Common Stock”) to Yorkville at a price per share equal to the lower of: (a) a price per share equal to $0.01 above the market price on The Nasdaq Global Select Market (“Nasdaq”) as of the trading day immediately prior to the date of each closing (the “Fixed Price”), or (b) 96% of the lowest daily volume weighted average price of our Common Stock on Nasdaq during the five (5) trading days prior to each conversion date (the “Market Price” and the lower of the Fixed Price and the Market Price shall be referred to as the “Purchase Price”); however, in no event shall the Purchase Price be less than $0.20 per share. The Company elected the fair value option for this agreement with the debt being marked to market on a quarterly basis. The debt had an original issue discount of $150 thousand and debt's carrying value was $4.7 million at September 30, 2022. The note had an original maturity date of October 27, 2022, which was extended to February 2023 in October 2022. See note 12 for fair value information on this prepaid advance agreement.

XML

Note 7 - Notes Payable - Summary of Debt (Details) - USD ($) $ in Thousands		Dec. 31, 2022	Dec. 31, 2021
Long-term Debt, gross		$ 266,885	$ 241,982
Unamortized prepaid financing fees and debt discounts		(21,649)	(12,603)
Total long-term debt		245,236	229,379
Less short term notes and current maturities of long term notes payable		(144,708)	(72,774)
Notes payable, less current portion		100,528	156,605
Syndicated Term Note [Member]
Long-term Debt, gross	[1]	114,725	105,000
Seller Financed Notes Payable - Front Line Power Acquisition [Member]
Long-term Debt, gross	[2]	69,168	86,730
Financing Note [Member]
Long-term Debt, gross	[3]	2,210	1,357
Seller Financed Notes Payable - Reach Construction Acquisition [Member]
Long-term Debt, gross	[4]	3,480	3,480
Vehicle and Equipment loans [Member]
Long-term Debt, gross	[5]	2,014	222
Non-Recourse Payable Agreement [Member]
Long-term Debt, gross	[6]	10,400	8,269
Total long-term debt		7,355
The Investor Note [Member]
Long-term Debt, gross	[7]	60,780	33,922
Prepaid Advance Agreement [Member]
Long-term Debt, gross	[8]	1,829	0
Conditional Settlement Note Payable [Member]
Long-term Debt, gross	[9]	2,250	3,000
Full Moon - Loan to Prior Owner [Member]
Long-term Debt, gross	[10]	$ 29	$ 2

[1] On November 17, 2021, the Company entered into a credit agreement and associated documents (the “Credit Agreement”) with Alter Domus (US), LLC (“Alter Domus”), as administrative agent and collateral agent and various lenders (the “Lenders”) in order to enable the Company to finance the acquisition of Front Line Power Construction, LLC. The Lenders made a Term Loan to Front Line in the initial principal amount of $105,000,000 for the purposes of financing the acquisition and the associated expenses. The term loan initially bears interest at the three-month Adjusted LIBOR Rate, plus the Applicable Margin, of which 2.5% may be paid in-kind. The Term Loan shall be repaid in consecutive quarterly installments of $262,500, and commenced on June 30, 2022. The Credit Agreement provides for mandatory prepayments on the occurrence of events such as sales of assets, Consolidated Excess Cash Flow and Excess Receipts during the term. The credit agreement provides for prepayment premiums (initially 5% on prepayments made in the first 30 months of the term, declining to 1% in the final year of the term). The Term Loan matures on November 17, 2026, subject to acceleration on Events of Default. The interest rate on the term notes at December 31, 2022 was 17.15% with an effective rate of 23.2%. In November 2022, The Company resolved a dispute with the Syndicated lenders whereby the Syndicated lenders deemed the Company to be in default of its credit agreement due to the Company using proceeds from Front Line Power's operations to pay down $9.5 million of the Company's working capital adjustment with the sellers of Front Line Power. As part of a consent agreement with the lenders, the Company agreed to pay the lenders in a paid-in-kind amount of $10.5 million, which was added to the Syndicated debt balance and included $1.0 million of interest calculated from the date of the first intercompany advance that the Company made. The $10.5 million was added to the original issue discount and will be amortized to interest expense over the life of the loan. At December 31, 2022 and 2021, the Company was in compliance with all debt covenants.

[2] On November 17, 2021, the Company entered into two unsecured promissory notes, one with Kurt A Johnson, Jr, for $34,256,000 and the second for $51,384,000 with Tidal Power Group LLC. These promissory notes bear interest at a rate of 6% per annum and as modified on April 29, 2022 and December 30, 2022, $20 million was paid on May 6, 2022, $15 million is due on or before April 1, 2023 and the remaining balance is due on May 31, 2023. On December 10, 2021, Kurt A Johnson Jr. received an additional unsecured promissory note in the principal sum of $1,090,000 also with a 6% per annum interest rate in exchange for a reduction of shares issued to Kurt of 400,000. This note was paid off as part of the May 6, 2022 payment. Additionally in amendments to the note, the Company also agreed to reduce the restriction period under the Tidal Lockup letter from two years to one year and to the extent that if the value of the shares previously issued to Tidal Power were less than $4.00 per share upon expiration of the restriction period ending April 1, 2023, the Company has agreed to pay additional consideration to Tidal Power so that the value of Tidal Power's shares are equal to no less than $28,852,844. For the Johnson lockup letter, the Company agreed to pay additional consideration to Mr. Johnson upon expiration of the restriction period ending April 1, 2023, so that the value of his stock consideration is no less than $17,635,228, which is equal to $4.00 per common share. Any shortfall would be made up by issuing Mr. Johnson additional common shares. In 2022, the Company recorded a $26.2 million loss on extinguishment related to these loan modifications.

[3] The Company executes notes payable with First Insurance Funding for the purposes of financing a portion of the Company's insurance coverage. The Company executed two notes payable in the third quarter of 2021 for $1.7 million and $54 thousand, respectively at interest rates of 3.00% and 4.35%, respectively. In the fourth quarter of 2021, the Company executed one additional notes payable for $0.5 million at an interest rate of 4.35%. These three notes payable were paid off in 2022. The Company executed a note payable in July 2022 for $3.3 million and one in November 2022 for $0.7 million both at 3.28% interest. These two notes are scheduled to mature in May 2023.

[4] Includes two seller-financed notes payable, one for $5 million and the second for $1.5 million. In August 2021, the $5 million note was amended from its original 18-month term; the Company paid $1 million in cash and exchanged 155,763 shares of common stock in exchange for an additional $1 million reduction in principal. The new loan had a face value of $2.0 million at a rate of 6% per annum and was recorded based on an estimated market interest rate of 10% per annum with an original issue discount of $48 thousand. The second seller financed note payable is due 36-months from the April 1, 2020 acquisition date. Both notes had an original stated interest rate of 6% per annum. In 2022, the Company filed and served a Federal Civil Complaint asserting various causes-of-action against the holder of the note, including misrepresentations made during the course of negotiating this transaction. Based on that complaint, the evidence contained therein, and the conduct described, the Company reasonably believes that it owes no additional compensation as a result of this transaction.

[5] Includes vehicle and equipment loans with interest rates ranging from 0.00% to 9.15%.

[6] The Company entered into a non-recourse agreement, which was originated in November 2021 with a face amount of $9.5 million. The Company received net cash proceeds of $6.9 million. The Company recorded a liability of $9.5 million and a debt discount of $2.6 million. Under the terms of the agreement, for the first 12 weeks, the Company made weekly payments of $148 thousand and for the final 20 weeks, the Company was to make payments of $384 thousand. The agreement had no stated interest rate, but the discount and loan origination fees were being amortized based on an 89% interest rate. In April, 2022, the Company took out three non-recourse agreements for the sale of future revenues in the combined amount of $20.2 million. The Company received approximately $13.3 million after the deduction of an original issue discount and upfront fees. In April 2022, the Company used part of the proceeds from these non-recourse agreements to pay off the non-recourse note of $4.2 million that was on the balance sheet as of March 31, 2022 and recorded a loss on extinguishment of $0.4 million. The loans vary in length from 26 to 48 weeks. The Company paid off the smallest of the three notes in June 2022 and recorded a loss on extinguishment of $0.1 million. Discounts on the remaining agreements were being amortized based on an effective interest rate of 88% and were scheduled to mature in the first quarter of 2023. In December 2022, The Company refinanced the remaining two agreements and recorded a loss on extinguishment of $0.5 million. As part of the refinancing, the Company took our three new agreements with a combined face amount of $11.4 million, which included combined original issue discounts of $3.6 million. Payments are $260 thousand per week until the agreements mature in October 2023, and the discounts are being amortized at a 94% effective interest rate. The combined carrying value of the agreements net of the approximately $3.0 million of original issue discounts at December 31, 2022 was $7.4 million.

[7] On March 23, 2021, the Company completed a note payable agreement with an 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%, and an original issue discount of $1.0 million. This note was paid off in August 2022. On May 11, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0% per annum, and estimated effective interest rate of 19.6% at inception, and a combined original issue discount and unamortized prepaid fees of $1.0 million and a carrying value of $5.3 million at September 30, 2022. The net proceeds were to be used for working capital, future acquisitions and general corporate purposes. 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 million per calendar month, by providing Company with a “Redemption Notice." This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On December 20, 2021, the Company completed a note payable agreement with the institutional investor with a face amount of $16.1 million, an original issue discount of $1.1 million, and a stated interest rate of 9.0%. The original issue discount has been amortized to interest expense starting with an estimated effective interest rate of 16.3%, which was later adjusted to 11.8% as of December 2022 due to changes in timing of payments. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1.5 million per month beginning 6 months after initial issuance. The carrying value was $17.2 million at December 31, 2022. The Company has not made any payments on this note as of December 31, 2022. On June 9, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $10.7 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, which was later adjusted to 14.4% due to changes in timing of payments and an original issue discount of $0.7 million. The note payable is payable within eighteen (18) months after the purchase date and the creditor may request payment of up to $1.0 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of June and July 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On August 2, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $8.6 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.4%, and an original issue discount of $0.6 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.8 million per month beginning 6 months after initial issuance. This note also included a debt reduction clause whereby the Company had agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of October, November and December 2022. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On September 29, 2022, the Company completed a note payable agreement with the institutional investor with a face amount of $5.4 million, a stated interest rate of 9.0%, an estimated effective interest rate of 16.5%, and an original issue discount of $0.4 million. The note payable was payable within eighteen (18) months after the purchase date and the creditor could request payment of up to $0.5 million per month beginning 6 months after initial issuance. This note also includes a debt reduction clause whereby the Company has agreed to make payments on all of its outstanding agreements with the investor totaling at least $4 million for each of the months of February, March and April 2023. If the Company failed to make the required payments, the Lender’s sole and exclusive remedy was to require as liquidated damages, a ten percent (10%) increase to the outstanding balance for such month on this note. This note was refinanced in December 2022 as part of a forbearance and investment agreement with the investor - see description below. On December 9, 2022, the Company entered into a Forbearance and Investment Agreement with an institutional investor and its successors and/or assigns, an institutional accredited investor pursuant to which the Company issued a Secured Promissory Note in the face amount of $42.1 million (the “New Note”). The New Note reflects the cancellation of $36.7 million of obligations under certain prior promissory notes issued to the institutional investor and $5,000,000 of additional funds made available to the Company. As part of the cancellation of the former debt, the Company recorded a loss on extinguishment of $1.3 million. The New Note carries an original issue discount of $350,000 and reimbursement of Investor’s transactional expenses of $50,000, which are included in the initial principal balance of the New Note. The New Note bears interests at nine percent (9%) per annum and has a maturity date of 18 months after its issuance date of December 9, 2022. We may prepay all or a portion of the outstanding obligations under the New Note at a price equal to 115% of the amount we elect to prepay. Beginning six (6) months after December 9, 2022, the Investor has the right to redeem up to $2,500,000 per month of amounts due under the New Note, as more fully described in the New Note. Subject to certain conditions, as described in the New Agreement, the Investor agreed to fund an additional $5.0 million to us on each of January 15, 2023 and February 15, 2023. As a result of the Company not meeting its debt reduction requirements in various months during 2022, the Company recorded a total of $8.0 million of liquidated damages in 2022.

[8] On August 18, 2022, the Company entered into a Prepaid Advance Agreement (the “PPA”) with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“Yorkville”). In accordance with the terms of the PPA, the Company may request advances of up to $5.0 million from Yorkville (or such greater amount that the parties may mutually agree) (the “Pre-Paid Advance”), with a limitation on outstanding Pre-Paid Advances of $5.0 million and an aggregate limitation on the Pre-Paid Advances of $50.0 million. Each such Pre- Paid Advance will be offset upon the issuance of the Company’s common stock, par value $0.001 per share (“Common Stock”) to Yorkville at a price per share equal to the lower of: (a) a price per share equal to $0.01 above the market price on The Nasdaq Global Select Market (“Nasdaq”) as of the trading day immediately prior to the date of each closing (the “Fixed Price”), or (b) 96% of the lowest daily volume weighted average price of our Common Stock on Nasdaq during the five (5) trading days prior to each conversion date (the “Market Price” and the lower of the Fixed Price and the Market Price shall be referred to as the “Purchase Price”); however, in no event shall the Purchase Price be less than $0.20 per share. The Company elected the fair value option for this agreement with the debt being marked to market on a quarterly basis. The debt had an original issue discount of $150 thousand and debt's carrying value was $4.7 million at September 30, 2022. The note had an original maturity date of October 27, 2022, which was extended to February 2023 in October 2022. See note 12 for fair value information on this prepaid advance agreement.

[9] In October 2020, the Company entered into a conditional settlement agreement with a subcontractor as amended to make payments of $3.5 million, of which $2.6 million is at zero interest, $0.9 million is at 5% interest and the total term of the agreement as amended to be two and a half years. The Company made a $0.5 million payment in the fourth quarter of 2021. The Company made a $150,000 payment in February 2022, a $350,000 payment on March 31, 2022, and a $150,000 payment in December 2022. The Company is scheduled to make the final payments on the note in 2023 with the final payment of $1.5 million along with any accrued interest in April 2023.

[10] Represents Full Moon Telecom, LLC opening balance sheet loan to prior Full Moon Telecom, LLC owner.

XML

Note 7 - Notes Payable - Sale of Future Receipts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Non-recourse payable agreements, amortization of discounts	$ 11,037	$ 3,392
Total long-term debt	245,236	$ 229,379
Non-Recourse Payable Agreement [Member]
Debt	11,440
Non-recourse payable agreements, repayments	(1,040)
Non-recourse payable agreements, fees	(160)
Non-recourse agreement, discounts	(3,440)
Non-recourse payable agreements, amortization of discounts	555
Total long-term debt	$ 7,355

XML

Note 7 - Notes Payable - Maturity of Notes Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
2023	$ 176,383
2024	24,835
2025	21,318
2026	131,680
2027	138
Less interest portion of payments	(109,118)
Total	$ 245,236	$ 229,379

XML

Note 8 - Line of Credit (Details Textual) - GTS Subsidiary [Member] - Line of Credit [Member] - USD ($) $ in Thousands	Aug. 19, 2021	Dec. 31, 2022
Line of Credit Facility, Maximum Borrowing Capacity	$ 4,000
Long-Term Line of Credit, Total		$ 4,000
Line of Credit Facility, Remaining Borrowing Capacity		$ 0
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	2.05%

XML

Note 9 - Commitments and Contingencies (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2022	Nov. 30, 2021
Performance and Payment Bonds Outstanding Amount	$ 16,400
Syndicated Term Note [Member]
Debt Instrument, Fair Value Disclosure, Total	$ 536
Stock in Connection With Syndicated Debt [Member]
Stock Issued, Reference Price Per Share (in dollars per share)	$ 0.15	$ 2.36
Orbital Solar Services [Member]
Performance and Payment Bonds, Remaining Cost to Complete Jobs	$ 16,000
Front Line Power Construction, LLC [Member]
Performance and Payment Bonds Outstanding Amount	$ 400

XML

Note 10 - Stockholders' Equity and Stock-based Compensation (Details Textual) - USD ($)			1 Months Ended		3 Months Ended	12 Months Ended
	Apr. 28, 2022	Nov. 30, 2021	Jul. 31, 2021	Jan. 31, 2021	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2022	Apr. 30, 2021	Dec. 31, 2020
Proceeds from Issuance of Common Stock			$ 38,000,000	$ 45,000,000
Securities, Maximum Issuance Amount									$ 150,000,000
Payments of Stock Issuance Costs			2,300,000
Proceeds from Issuance of Common Stock, Net			$ 35,700,000
Stock Issued During Period, Value, New Issues						$ 3,955,000	$ 78,046,000
Gain (Loss) on Extinguishment of Debt, Total						(31,258,000)	$ 365,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms (Year)							1 year 6 months 18 days
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount						$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)							0
The 2020 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)							5,000,000			2,000,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares)						5,000,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)						3,039,900
The 2020 Incentive Plan [Member] | Non-Employee Director [Member]
Share Based Compensation Arrangement By Share Based Payment Award, Maximum Annual Compensation for Services						$ 250,000
The 2020 Incentive Plan [Member] | Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)						1 year
Stock Appreciation Rights (SARs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)							3,126,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance (in dollars per share)							$ 1.45
Accrued Cash Settled Stock Based Payments							$ 2,100,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total							$ 4,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Exercise Price (in dollars per share)							$ 2.89
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)						4,163,762	3,018,788			0
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance (in dollars per share)						$ 1.38	$ 4.58			$ 0
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total						$ 3,800,000	$ 9,700,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)						3 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)						6,090,765	4,386,107
Share-Based Payment Arrangement, Expense						$ 4,600,000	$ 10,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Amount						5,400,000
Share-Based Payment Arrangement, Expense, Credit						$ (800,000)
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms (Year)						1 year 11 months 15 days	1 year 9 months 18 days
Restricted Stock Units (RSUs) [Member] | Vested Immediately [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)						823,883
Incentive Stock Options [Member] | The 2020 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent						110.00%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)						5 years
Common Shares Issued For Debt With Institutional Investor [Member]
Conversion of Stock, Shares Issued (in shares)						20,297,993
Conversion of Stock, Amount Converted						$ 15,900,000
Gain (Loss) on Extinguishment of Debt, Total						(2,800,000)
Pre-funded Warrants Under Securities Purchase Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	7,153,847
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)								$ 0.0001
Accompanying Warrants with Securities Purchase Agreement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	16,153,847
Class of Warrant or Right, Issued (in shares)	16,153,847
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 1.31
Class of Warrant or Right, Reserved Against S-3, Amount	$ 21,200,000
Securities Purchase Agreement [Member]
Stock Issued During Period, Shares, New Issues (in shares)	9,000,000
Proceeds from Issuance or Sale of Equity, Total	$ 21,000,000.0
Stock Issued During Period, Value, New Issues					$ 3,900,000
Common Stock, Value of Capital Shares Reserved for Future Issuance						$ 65,900,000
Stock in Connection With Syndicated Debt [Member]
Stock Issued During Period, Shares, New Issues (in shares)		1,690,677				24,963,451

XML

Note 10 - Stockholders' Equity and Stock-based Compensation - Fair Value Assumptions (Details) - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2021	Dec. 31, 2021
Weighted average expected term at December 31 (years) (Year)		1 year 6 months 18 days
Total fair value of all awards at December 31		$ 6,979,824
Total fair value of all vested awards at December 31		2,701,802
Total intrinsic value at December 31		$ 1,255,078
Stock Appreciation Rights (SARs) [Member] | April 2021 [Member]
Number Issued (in shares)	3,770,960
Interest Rate	0.34%
Estimated Volatility	156.00%
Stock Price at Issuance (in dollars per share)	$ 4.17
Years to Maturity (Year)	1 year 6 months
Grant date Value per Right (in dollars per share)	$ 3.56

XML

Note 10 - Stockholders' Equity and Stock-based Compensation - Changes to Non-vested Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Non-vested shares, balance (in shares)	3,018,788	0
Non-vested shares, fair value price per share (in dollars per share)	$ 4.58	$ 0
Number Issued (in shares)	6,090,765	4,386,107
Grant date Value per Right (in dollars per share)	$ 1.32	$ 4.64
Vested (in shares)	(2,760,687)	(1,367,319)
Vested, fair value price per share (in dollars per share)	$ 1.67	$ 4.76
Forfeited (in shares)	(2,185,104)
Forfeited, fair value price per share (in dollars per share)	$ 5.26
Non-vested shares, balance (in shares)	4,163,762	3,018,788
Non-vested shares, fair value price per share (in dollars per share)	$ 1.38	$ 4.58

XML

Note 10 - Stockholders' Equity and Stock-based Compensation - Summary of Options Issued to Employees and Directors (Details) - Share-Based Payment Arrangement, Option [Member] - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Balance (in shares)	237,985
Balance, weighted average exercise price (in dollars per share)	$ 6.14
Balance, weighted average remaining contract life (Year)	7 months 17 days	1 year 4 months 28 days
Exercised (in shares)	0
Exercised, weighted average exercise price (in dollars per share)	$ 0
Expired (in shares)	(40,098)
Expired (in dollars per share)	$ 4.56
Balance (in shares)	197,887	237,985
Balance, weighted average exercise price (in dollars per share)	$ 6.46	$ 6.14
Exercisable (in shares)	197,887
Exercisable, weighted average exercise price (in dollars per share)	$ 6.46
Exercisable, weighted average remaining contract life (Year)	7 months 17 days

XML

Note 11 - Related Party Transactions (Details Textual) - Son of Executive Chairman [Member] - USD ($)	1 Months Ended	12 Months Ended
	Apr. 30, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Salary and Wage, Excluding Cost of Good and Service Sold, Total		$ 375,000	$ 360,000
Cash Bonus		0	309,000
Other Labor-related Expenses		$ 33,000	$ 43,000
Change in Excess of Bonus or Salary				$ 50,000
Stock Appreciation Rights (SARs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	235,876
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grant Date Fair Value, Amount	$ 840,000

XML

Note 12 - Accumulated Other Comprehensive Loss - Components of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Foreign currency translation adjustment	$ (691)	$ (3,995)
Accumulated other comprehensive loss	$ (691)	$ (3,995)

XML

Note 13 - Restructuring and Impairment Charges (Details Textual) $ in Thousands, $ in Millions	1 Months Ended	3 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CAD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 CAD ($)
Finance Lease, Impairment Loss				$ 4,467	$ 0
Finance Lease, Liability, Noncurrent				7,673	9,939
Restructuring Reserve, Ending Balance				0	$ 371
Restructuring Reserve, Accrual Adjustment				$ 0
Employee Severance [Member]
Restructuring Reserve, Ending Balance						$ 3,100	$ 4.0
Restructuring Reserve, Accrual Adjustment		$ (200)	$ (0.3)
Electric Power Segment [Member]
Finance Lease, Impairment Loss	$ 4,500
Finance Lease, Liability, Noncurrent	$ 5,200

XML

Note 13 - Restructuring and Impairment Charges - Restructuring and Related Costs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
January 1 liability balance	$ 371
Severance accrual adjustments	0
Severance payouts	(376)
Translation	5
December 31 liability balance	$ 0

XML

Note 14 - Income Taxes (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ 57.8	$ 0.3

XML

Note 14 - Income Taxes - Consolidated Income From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Continuing operations	$ (277,089)	$ (60,351)
Discontinued operations	(2,317)	(12,705)
Loss before income taxes	(279,406)	(73,056)
U.S. operations	(277,904)	(60,351)
Foreign operations	815	0
Loss from continuing operations before taxes	$ (277,089)	$ (60,351)

XML

Note 14 - Income Taxes - Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income tax expense (benefit)	$ 846	$ (10,508)
Income tax benefit	0	(1,334)
Total income tax expense (benefit)	846	(11,842)
Current:
Federal	0	0
State and local	129	370
Foreign	1,063	0
Total current provision	1,192	370
Deferred:
Federal	(260)	(8,714)
State and local	0	(2,164)
Foreign	(86)	0
Total deferred (benefit)	(346)	(10,878)
Total income tax expense (benefit)	$ 846	$ (10,508)

XML

Note 14 - Income Taxes - Reconciliation of the Federal Statutory Tax Rate to the Recorded Tax Provision (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Computed federal income taxes at the statutory rate (benefit)	$ (58,189)	$ (12,674)
State taxes	(3,764)	292
Permanent tax differences	1,662	2,140
Foreign tax rates and tax credits differing from USA	73	0
Federal true-ups and carryovers	1,106	0
Expired NOL's	0	541
Change in valuation allowance	59,958	(807)
Total income tax expense (benefit)	$ 846	$ (10,508)
Effective tax rate	(0.31%)	17.41%

XML

Note 14 - Income Taxes - Significant Portions of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Net operating loss carryforwards	$ 43,885	$ 23,941
Property and equipment	257	0
Intangible assets	19,113	0
163(j) interest expense limitation	11,139	0
Inventory and accounts receivable reserves	952	1,826
Operating lease obligations	7,175	8,058
Debt related	1,627	0
Accrued liabilities	2,530	786
Other	11	4,371
Valuation allowance	(77,944)	(20,129)
Deferred tax assets after valuation allowance	8,745	18,853
Deferred tax liabilities:
Intangible assets	0	(9,426)
Property, plant and equipment	0	(9,588)
ROU assets	(5,825)	0
Accounting method change	(2,742)	0
Total deferred tax liabilities	(8,567)	(19,014)
Net deferred tax asset	$ 178
Net deferred tax liability		$ (161)

XML

Note 14 - Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Domestic Tax Authority, Post December 31, 2017 [Member]
Net operating losses	$ 158,811
Domestic Tax Authority, Pre January 1, 2018 [Member]
Net operating losses	34,110
State and Local Jurisdiction [Member]
Net operating losses	$ 957

XML

Note 15 - Concentrations (Details Textual) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Accounts Receivable, before Allowance for Credit Loss	$ 53.4	$ 50.2
Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Number of Customers	4	2
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Four Customers [Member]
Concentration Risk, Percentage	75.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk, Percentage	27.00%	11.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member]
Concentration Risk, Percentage	23.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member]
Concentration Risk, Percentage	15.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Four [Member]
Concentration Risk, Percentage	10.00%	15.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Concentration Risk, Percentage		26.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Customers	4	2
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk, Percentage	11.00%	16.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member]
Concentration Risk, Percentage	26.00%	30.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member]
Concentration Risk, Percentage	14.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Four [Member]
Concentration Risk, Percentage	21.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Concentration Risk, Percentage		46.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member]
Concentration Risk, Percentage	72.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member]
Number of Supplier		1
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | One Supplier [Member]
Concentration Risk, Percentage		12.00%
Workforce Subject to Collective-Bargaining Arrangements [Member] | Labor Force Concentration Risk [Member]
Concentration Risk, Percentage	13.00%	15.00%

XML

Note 16 - Leases (Details Textual) - USD ($) $ in Thousands	2 Months Ended	10 Months Ended	12 Months Ended
	Dec. 31, 2022	Oct. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Finance Lease, Cost			$ 5,847	$ 2,568
Finance Lease, Right-of-Use Asset, Amortization			4,958	2,166
Finance Lease, Interest Expense			889	$ 402
Selling, General and Administrative Expenses [Member]
Operating Lease, Expense			6,700
Finance Lease, Right-of-Use Asset, Amortization			5,000
Office and Industrial Space Rentals [Member]
Operating Leases, Monthly Rent			28
Operating Leases, Combined Average Monthly Rent			34
Office Space and Warehouse in Texas [Member]
Operating Leases, Monthly Rent			7
Vehicle and Equipment loans [Member]
Operating Leases, Combined Average Monthly Rent			$ 400
Vehicle and Equipment loans [Member] | Minimum [Member]
Lessee, Operating Lease, Term of Contract (Year)	3 years		3 years
Vehicle and Equipment loans [Member] | Maximum [Member]
Lessee, Operating Lease, Term of Contract (Year)	7 years		7 years
Five Properties [Member]
Operating Leases, Monthly Rent			$ 20
Five Properties [Member] | Minimum [Member]
Lessee, Operating Lease, Term of Contract (Year)	2 years		2 years
Five Properties [Member] | Maximum [Member]
Lessee, Operating Lease, Term of Contract (Year)	8 years		8 years
Gibson Leases [Member]
Operating Leases, Monthly Rent			$ 28
IMMCO Leases [Member]
Operating Leases, Monthly Rent			10
Front Line Power Office Lease [Member]
Operating Leases, Monthly Rent			26
Front Line Power Equipment Leases [Member]
Financing Leases, Monthly Expense			33
Orbital Solar Services Equipment Leases [Member]
Finance Lease, Cost			$ 1
Office and Warehouse Space in Houston [Member]
Operating Leases, Monthly Rent	$ 7	$ 33

XML

Note 16 - Leases - Future Minimum Operating Lease Obligations (Details) $ in Thousands	Dec. 31, 2022 USD ($)
2023	$ 5,565
2024	4,676
2025	3,103
2026	2,584
2027	2,352
Thereafter	1,512
Less interest portion	(2,902)
Operating Lease Obligations [Member]
Total operating lease obligations	$ 16,890

XML

Note 16 - Leases - Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating lease cost	$ 6,487	$ 3,897
Short-term lease cost	83	265
Variable lease cost	666	732
Sublease income	(516)	(501)
Total lease cost	6,720	4,393
Operating cash flows used in operating leases	(8,509)	(3,515)
Right-of-use assets obtained in exchange for new operating lease obligations	$ 4,152	$ 13,707
Weighted-average remaining lease term - operating leases (in years) (Year)	4 years 6 months	4 years 7 months 6 days
Weighted-average discount rate - operating leases	7.10%	6.90%
Depreciation of financing lease assets	$ 4,958	$ 2,166
Interest on lease liabilities	889	402
Total finance lease cost	5,847	2,568
Operating cash flows used in financing leases	(889)	(402)
Financing cash flows from financing leases	(5,073)	(1,995)
Right-of-use assets obtained in exchange for new financing lease obligations	$ 1,369	$ 16,868
Weighted-average remaining lease term - financing leases (in years) (Year)	2 years 8 months 12 days
Weighted-average discount rate - financing leases	6.60%	6.50%

XML

Note 16 - Leases - Future Minimum Finance Lease Obligations (Details) $ in Thousands	Dec. 31, 2022 USD ($)
2023	$ 5,977
2024	5,331
2025	1,846
2026	896
2027	48
Thereafter	0
Less interest portion	(1,109)
Total financing lease obligations	$ 12,989

XML

Note 17 - Business Combinations (Details Textual) - USD ($)						1 Months Ended	2 Months Ended	5 Months Ended	9 Months Ended	12 Months Ended
	Mar. 07, 2022	Nov. 17, 2021	Oct. 22, 2021	Jul. 28, 2021	Apr. 13, 2021	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2022	Mar. 31, 2022
Goodwill, Ending Balance						$ 100,899,000	$ 100,899,000	$ 100,899,000	$ 100,899,000	$ 100,899,000	$ 7,006,000
Long-term Debt, Total						229,379,000	229,379,000	229,379,000	229,379,000	229,379,000	$ 245,236,000
Unsecured Promissory Note With Tidal Power Group [Member]
Debt Instrument, Interest Rate, Stated Percentage		6.00%
Coax Fiber Solutions (CFS) [Member]
Goodwill, Ending Balance												$ 1,500,000
Front Line Power Construction, LLC [Member]
Payments to Acquire Businesses, Gross		$ 101,536,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		17,612,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total		18,730,000
Goodwill, Ending Balance		70,151,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual						9,200,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual						$ 98,000
Business Combination, Acquisition Related Costs		230,000
Business Combination, Consideration Transferred, Total		219,241,000
Business Combination, Working Capital Adjustment		14,092,000
Front Line Power Construction, LLC [Member] | Front Line Power Seller Notes [Member]
Proceeds from Issuance of Debt		$ 105,000,000
Front Line Power Construction, LLC [Member] | Unsecured Promissory Note With Tidal Power Group [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)		11,622,018
Long-term Debt, Total		$ 86,700,000
Long-Term Debt, Fair Value		$ 86,000,000.0
Debt Instrument, Interest Rate, Stated Percentage		6.00%
Front Line Power Construction, LLC [Member] | Payments of Indebtedness [Member]
Payments to Acquire Businesses, Gross		$ 1,000,000.0
Front Line Power Construction, LLC [Member] | Transaction Expense [Member]
Payments to Acquire Businesses, Gross		$ 4,400,000
Full Moon [Member]
Payments to Acquire Businesses, Gross			$ 1,200,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)			227,974
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable			$ 368,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total			124,000
Goodwill, Ending Balance			826,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual							1,000,000.0
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual							$ 300,000
Business Combination, Consideration Transferred, Total			$ 2,000,000.0
Business Acquisition, Percentage of Voting Interests Acquired			100.00%
Business Acquisition, Share Price (in dollars per share)			$ 1.614
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Consideration Transferred			$ 381,000
IMMCO, Inc. [Member]
Payments to Acquire Businesses, Gross				$ 16,597,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)				874,317
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable				$ 2,024,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total				760,000
Goodwill, Ending Balance				11,114,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Total				2,100,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual								3,700,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual								$ 2,800,000
Business Combination, Consideration Transferred, Total				19,100,000
Payments to Acquire Businesses, Before Working Capital Adjustments				16,000,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable, Fair Value				2,500,000
Business Combination, Working Capital Adjustment				$ 600,000
IMMCO, Inc. [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs										600,000
Gibson Technical Services, Inc. [Member]
Payments to Acquire Businesses, Gross					$ 22,000,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)					5,929,267
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable					$ 16,932,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total					3,795,000
Goodwill, Ending Balance					12,339,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Total					3,984,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual									23,100,000
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual									$ 9,200,000
Business Combination, Acquisition Related Costs										$ 900,000
Business Combination, Consideration Transferred, Total					$ 38,932,000
GTS Subsidiary [Member] | Coax Fiber Solutions (CFS) [Member]
Payments to Acquire Businesses, Gross	$ 800,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)	125,000
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 146,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Total	400,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total	500,000
Goodwill, Ending Balance	1,500,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Total	$ 1,500,000

XML

Note 17 - Business Combinations - Purchase Consideration (Details) - USD ($) $ in Thousands	Nov. 17, 2021	Jul. 28, 2021	Apr. 13, 2021
Front Line Power Construction, LLC [Member]
Cash	$ 101,536
Working capital adjustment payable	14,092
Fair value of unsecured promissory notes	86,001
Fair value of common stock issued to Sellers	17,612
Fair value of purchase consideration	$ 219,241
Gibson Technical Services, Inc. [Member]
Cash			$ 22,000
Fair value of common stock issued to Sellers			16,932
Fair value of purchase consideration			$ 38,932
IMMCO, Inc. [Member]
Cash		$ 16,597
Working capital adjustment payable		600
Fair value of common stock issued to Sellers		2,024
Fair value of purchase consideration		19,100
Total		$ 18,621

XML

Note 17 - Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands		Dec. 31, 2022	Dec. 31, 2021	Nov. 17, 2021	Oct. 22, 2021	Jul. 28, 2021	Apr. 13, 2021
Goodwill, Ending Balance		$ 7,006	$ 100,899
Front Line Power Construction, LLC [Member]
Cash and cash equivalents				$ 6,779
Trade accounts receivable				15,726
Contract assets				2,092
Prepaid expenses and other current assets				481
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total				18,730
Other long-term assets				531
Indefinite lived intangible assets				15,027
Definite lived intangible assets				93,211
Accounts payable				(620)
Contract liabilities				(120)
Accrued expenses				(2,747)
Net assets acquired				149,090
Goodwill, Ending Balance				70,151
Purchase price allocation				$ 219,241
Full Moon [Member]
Cash and cash equivalents					$ 747
Trade accounts receivable					297
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total					124
Accounts payable					(197)
Net assets acquired					1,158
Goodwill, Ending Balance					826
Purchase price allocation					1,984
Accrued expenses and other liabilities					(182)
Full Moon [Member] | Customer Relationships [Member]
Definite lived intangible assets					210
Full Moon [Member] | Indefinite Trade Names [Member]
Indefinite lived intangible assets					$ 159
IMMCO, Inc. [Member]
Cash and cash equivalents						$ 1,634
Trade accounts receivable						1,254
Contract assets						1,001
Prepaid expenses and other current assets						551
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total						760
Other long-term assets						76
Net assets acquired						7,507
Goodwill, Ending Balance						11,114
Purchase price allocation						18,621
Deferred tax liability	[1]					(2,090)
Liabilities assumed						(2,100)
IMMCO, Inc. [Member] | Customer Relationships [Member]
Definite lived intangible assets						3,800
IMMCO, Inc. [Member] | Technology - Based Asset - Know How [Member]
Definite lived intangible assets						1,459
IMMCO, Inc. [Member] | Indefinite Trade Names [Member]
Indefinite lived intangible assets						$ 1,162
Gibson Technical Services, Inc. [Member]
Cash and cash equivalents							$ 610
Trade accounts receivable							7,871
Contract assets							1,686
Prepaid expenses and other current assets							408
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total							3,795
Other long-term assets							123
Net assets acquired							26,593
Goodwill, Ending Balance							12,339
Purchase price allocation							38,932
Deferred tax liability	[1]						(9,048)
Liabilities assumed							(3,984)
Contingent receivable							1,424
Right of use assets - Operating leases							860
Gibson Technical Services, Inc. [Member] | Customer Relationships [Member]
Definite lived intangible assets							16,075
Gibson Technical Services, Inc. [Member] | Noncompete Agreements [Member]
Definite lived intangible assets							385
Gibson Technical Services, Inc. [Member] | Indefinite Trade Names [Member]
Indefinite lived intangible assets							$ 6,388

[1] The deferred tax liability recorded at acquisition was offset against the Company's valuation allowance and recorded as a tax benefit in 2020.

XML

Note 17 - Business Combinations - Purchase Price Allocation (Details) (Parentheticals)	Oct. 22, 2021	Apr. 13, 2021
Full Moon [Member] | Customer Relationships [Member]
Useful life (Year)	10 years
Gibson Technical Services, Inc. [Member] | Customer Relationships [Member]
Useful life (Year)		10 years
Gibson Technical Services, Inc. [Member] | Noncompete Agreements [Member]
Useful life (Year)		5 years

XML

Note 17 - Business Combinations - Intangible Assets Acquired (Details) - USD ($) $ in Thousands	Nov. 17, 2021	Dec. 31, 2022	Dec. 31, 2021
Finite-lived intangible assets		$ 97,709	$ 119,920
Total intangible assets		111,134	$ 142,656
Customer Relationships [Member]
Finite-lived intangible assets		94,464
Computer Software, Intangible Asset [Member]
Finite-lived intangible assets		$ 607
Front Line Power Construction, LLC [Member]
Tradename	$ 15,027
Total intangible assets	108,238
Front Line Power Construction, LLC [Member] | Customer Relationships [Member]
Finite-lived intangible assets	$ 84,012
Useful life (Year)	15 years
Front Line Power Construction, LLC [Member] | Order or Production Backlog [Member]
Finite-lived intangible assets	$ 9,186
Useful life (Year)	1 year
Front Line Power Construction, LLC [Member] | Computer Software, Intangible Asset [Member]
Finite-lived intangible assets	$ 13
Useful life (Year)	3 years

XML

Note 17 - Business Combinations - Pro Forma Information (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)
Gross revenue	$ 158,625
Loss from continuing operations, net of income taxes	$ (69,671)

XML

Note 18 - Subsequent Events (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2023	Dec. 09, 2022
Excluded Unsecured Note [Member]
Debt Instrument, Face Amount		$ 2,023
Forbearance and Line of Credit Agreement [Member]
Debt Instrument, Face Amount		$ 2,023
Subsequent Event [Member] | Exchange Issuance of Stock for Payment on Outstanding Debt and Payment on Prepaid Advance Agreement With Yorkville [Member]
Debt Conversion, Converted Instrument, Shares Issued (in shares)	28,313,924