Note 6 - Supplemental Balance Sheet and Cash Flow Information

6 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Supplemental Balance Sheet and Cash Flow Disclosure [Text Block]

6. Supplemental Balance Sheet and Cash Flow Information

Rapidbuilt Acquisition

On May 12, 2023 (the “Option Exercise Date”), Sky exercised its option to acquire a 51% equity interest in Overflow Ltd., a Texas limited partnership (“Overflow”), and its wholly-owned operating subsidiary, Rapidbuilt, Inc., a Texas corporation (“Rapidbuilt”), for nominal consideration (the “Rapidbuilt Acquisition”). As a result of the Rapidbuilt Acquisition, Weatherford Steel Buildings Holdings LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSBH”), owns a 50% limited partnership interest in Overflow, and Weatherford Steel Buildings GP LLC, a Delaware limited liability company and wholly-owned subsidiary of Sky (“WSB GP”), owns a 1% general partnership interest in Overflow. 

Rapidbuilt is a manufacturer of pre-engineered steel buildings that previously entered into a supplier arrangement with Sky. Rapidbuilt and Sky’s strategic partnership has resulted in a standard set of proprietary prototype hangar designs, which are intended to deliver high-quality business aviation facilities, lower construction costs, minimize development risk, expedite permit issuance, and facilitate the implementation of refinements across Sky’s portfolio. The Company had pre-existing relationships with Rapidbuilt through a vendor agreement entered into in July 2022 to acquire construction materials related to the Company's development projects (the "Rapidbuilt Vendor Agreement") and a revolving line of credit loan and security agreement (the "Rapidbuilt Loan Agreement") to fund the working capital requirement of Rapidbuilt. These pre-existing relationships were effectively settled in the acquisition and the net receivable balance of $44 is included within the consideration transferred. No gain or loss was recognized in the effective settlement of the Rapidbuilt Vendor Agreement and the Rapidbuilt Loan Agreement.

The total cash purchase consideration was nominal. The Company accounted for the acquisition using the acquisition method of accounting, whereby the total purchase price was allocated to assets acquired and liabilities assumed based on respective estimated fair values. The estimated fair values of the acquired assets and assume liabilities are based on preliminary calculations and subject to further refinement and may require adjustments to arrive at the final purchase price accounting. The Company expects the final purchase price allocation to be completed in a period of time that will not exceed one year from the Option Exercise Date. There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation.

The following tables summarize the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

	May 12, 2023
Cash	$	293
Restricted Cash		1,500
Long-lived assets		10,821
Total assets		12,614
Accounts payable, accrued expenses and other liabilities		1,550
Loans payable and finance lease liabilities		11,020
Total liabilities		12,570
Total fair value of net assets acquired		44
Effective settlement of net receivable from Rapidbuilt		44
Total consideration transferred	$	44

Substantially all of Overflow and Rapidbuilt's activities relate to the manufacturing of pre-engineering hangar structures for Sky's hangar development projects. As such, the pro-forma effect of this acquisition on revenues and earnings was not material. The transaction costs associated with the acquisition were immaterial for the three and six months ended June 30, 2023.

Accounts payable, accrued expenses and other liabilities

Accounts payable, accrued expenses and other liabilities, consists of the following:

	June 30, 2023		December 31, 2022
Costs of construction	$	4,392	$	6,098
Employee compensation and benefits		1,183		2,047
Interest		3,474		3,470
Professional Fees		1,638		1,621
Other		2,702		948
	$	13,389	$	14,184

Supplemental Cash Flow Information

The following table summarizes non-cash investing and financing activities:

	Six months ended
	June 30, 2023		June 30, 2022
Accrued costs of construction, including capitalized interest	$	9,197	$	12,702
Accrued costs of long-lived assets		21		-
Accrued equity issuance costs		-		1,684
Debt issuance costs and premium amortized to cost of construction		106		153

The following table summarizes non-cash activities associated with the Company’s operating leases:

	Six months ended
	June 30, 2023			June 30, 2022
Right-of-use assets obtained in exchange for operating lease liabilities	$	1,368		$	2,838
Net decrease in right-of-use assets and operating lease liabilities due to lease remeasurement	$	(206	)	$	(12,189	)

The following table summarizes interest paid:

	Six months ended
	June 30, 2023		June 30, 2022
Interest paid	$	3,552	$	2,063

The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the total shown within the consolidated statements of cash flows:

	Six months ended
	June 30, 2023		June 30, 2022
Cash, beginning of year	$	2,174	$	6,805
Restricted cash, beginning of year		39,222		197,130
Cash and restricted cash, beginning of year	$	41,396	$	203,935
Cash, end of period	$	2,556	$	3,796
Restricted cash, end of period		16,633		38,392
Cash and restricted cash, end of period	$	19,189	$	42,188