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Variable Interest Entity

6 Months Ended

Jul. 02, 2023

Condensed Financial Information Disclosure [Abstract]

Variable Interest Entity

Variable Interest Entity

Oxbow Realty was established by Oxbow for the purpose of holding real estate and facilitating real estate transactions. This included the purchase of the land and building of SkyWater's primary operating location in Bloomington, Minnesota with proceeds from a bank loan (see Note 6 – Debt) and managing the leaseback of the land and building to SkyWater (see Note 12 – Related Party Transactions). Management determined that Oxbow Realty meets the definition of a VIE under FASB Topic 810, "Consolidation" ("Topic 810"), because it lacks sufficient equity to finance its activities. Furthermore, the Company is the primary beneficiary of Oxbow Realty as it has the power to direct operating and maintenance decisions of its Bloomington, Minnesota facility during the lease term, which would most significantly affect the VIE’s economic performance. As the primary beneficiary, the Company consolidates the assets, liabilities and results of operations of Oxbow Realty pursuant to Topic 810, eliminating any transactions between the Company and Oxbow Realty, and recording a noncontrolling interest for the economic interest in Oxbow Realty not owned by the Company because the owners of SkyWater's common stock do not legally have rights or obligations to the profits or losses of Oxbow Realty. 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 the Company as of July 2, 2023 and January 1, 2023. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation.

			July 2, 2023						January 1, 2023
Cash and cash equivalents			$	20					$	16
Accounts receivable			4,545						—
Prepaid expenses			21						860
Finance receivable			40,388						37,652
Other assets			746						256
Total assets			$	45,720					$	38,784
Accounts payable			$	4,280					$	117
Accrued expenses			243						1,581
Deferred revenue			1,386						—
Debt			36,252						36,778
Total liabilities			$	42,161					$	38,476

The following table shows the revenue and expenses of Oxbow Realty for the three and six months ended July 2, 2023 and July 3, 2022. These amounts have been included, net of eliminations, in the notes to the condensed consolidated financial statements.

			Three Months Ended												Six Months Ended
			July 2, 2023			Three Months Ended			July 3, 2022						July 2, 2023						July 3, 2022
Revenue			$	2,631					$	1,262					$	3,949					$	2,522
General and administrative expenses			252						102						545						179
Interest expense			313						334						631						658
Total expenses			565						436						1,176						837
Net income			$	2,066					$	826					$	2,773					$	1,685

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- References

No definition available.

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- Definition

The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 810
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//810/tableOfContent

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