Variable Interest Entities

3 Months Ended

Apr. 03, 2022

Condensed Financial Information Disclosure [Abstract]

Variable Interest Entities

Variable Interest Entities

Oxbow Realty was established for the purpose of holding real estate and facilitating real estate transactions. This included facilitating the purchase of our land and building with proceeds from a bank loan and managing the leaseback of the land and building to us. We determined that Oxbow Realty meets the definition of a VIE under Topic 810, Consolidation, because it lacks sufficient equity to finance its activities. We concluded that we are the primary beneficiary of Oxbow Realty as we have the power to direct operation and maintenance decisions during the lease term, which would most significantly affect the VIE’s economic performance. As the primary beneficiary, we consolidate the assets, liabilities and results of operations of Oxbow Realty, eliminate any transactions between us and Oxbow Realty, and record a non-controlling interest for the economic interest in Oxbow Realty not owned by us because the owners of our common stock do not legally have rights or obligations to those profits or losses. In addition, the assets of Oxbow Realty can only be used to settle its liabilities, and the creditors of Oxbow Realty do not have recourse to the general credit of SkyWater.

The following table shows the carrying amounts of assets and liabilities of Oxbow Realty that are consolidated by us as of April 3, 2022 and January 2, 2022. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation.

	April 3, 2022		January 2, 2022
Cash and cash equivalents	$	240	$	475
Prepaid expenses	424		192
Finance receivable	37,492		37,437
Other assets	256		200
Total assets	$38,412		$38,304
Accounts payable	$	855	$	1,232
Accrued expenses	697		479
Debt	37,538		37,793
Total liabilities	$39,090		$39,504

 The following table shows the revenue and expenses of Oxbow Realty that are consolidated by us for the three months ended April 3, 2022 and April 4, 2021. We have included these amounts, net of eliminations, in the corresponding tables in the notes to our condensed consolidated financial statements.

	Three Months Ended
	April 3, 2022		April 4, 2021
Revenue	$	1,260	$	1,345
General and administrative expenses	77		252
Interest expense	324		335
Total expenses	401		587
Net income	$	859	$	758