Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 09, 2023 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2023 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Transition Report | false | ||
Entity File Number | 001-36632 | ||
Entity Registrant Name | EMCORE Corporation | ||
Entity Incorporation, State or Country Code | NJ | ||
Entity Tax Identification Number | 22-2746503 | ||
Entity Address, Address Line One | 2015 W. Chestnut Street | ||
Entity Address, City or Town | Alhambra | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 91803 | ||
City Area Code | 626 | ||
Local Phone Number | 293-3400 | ||
Title of 12(b) Security | Common stock, no par value | ||
Trading Symbol | EMKR | ||
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 | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 60.9 | ||
Entity Common Stock, Shares Outstanding | 77,172,167 | ||
Documents Incorporated by Reference | In accordance with General Instruction G(3) of Form 10-K, certain information required by Part III hereof will either be incorporated into this Annual Report on Form 10-K by reference to the Definitive Proxy Statement for the Annual Meeting of Shareholders filed within 120 days of the fiscal year ended September 30, 2023 (the “2024 Proxy Statement”), or will be included in an amendment to this Annual Report on Form 10-K filed within 120 days of September 30, 2023. | ||
Entity Central Index Key | 0000808326 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Sep. 30, 2023 | |
Auditor Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Irvine, California |
Auditor Firm ID | 185 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 26,211 | $ 25,099 |
Restricted cash | 495 | 520 |
Accounts receivable, net of credit loss of $356 and $337, respectively | 15,575 | 13,823 |
Contract assets | 8,402 | 3,803 |
Inventory | 28,905 | 26,282 |
Prepaid expenses | 4,612 | 4,061 |
Other current assets | 922 | 1,335 |
Assets held for sale - current | 7,264 | 0 |
Total current assets | 92,386 | 74,923 |
Property, plant, and equipment, net | 15,517 | 24,576 |
Goodwill | 0 | 17,894 |
Operating lease right-of-use assets | 21,564 | 23,144 |
Other intangible assets, net | 12,245 | 14,790 |
Other non-current assets | 2,201 | 2,351 |
Assets held for sale - non-current | 0 | 31,404 |
Total assets | 143,913 | 189,082 |
Current liabilities: | ||
Accounts payable | 9,683 | 10,379 |
Accrued expenses and other current liabilities | 8,471 | 6,697 |
Contract liabilities | 1,630 | 5,271 |
Loan payable - current | 852 | 852 |
Financing payable | 460 | 0 |
Operating lease liabilities - current | 3,033 | 2,171 |
Liabilities held for sale - current | 4,662 | 0 |
Total current liabilities | 28,791 | 25,370 |
Line of credit | 6,418 | 9,599 |
Operating lease liabilities - non-current | 3,330 | 5,042 |
Loan payable - non-current | 20,882 | 21,568 |
Asset retirement obligations | 4,194 | 4,664 |
Other long-term liabilities | 8 | 106 |
Liabilities held for sale - non-current | 0 | 4,765 |
Total liabilities | 63,623 | 71,114 |
Commitments and contingencies (Note 13) | ||
Shareholders’ equity: | ||
Common stock, no par value, 100,000 shares authorized; 84,014 shares issued and 77,108 shares outstanding as of September 30, 2023; 44,497 shares issued and 37,591 shares outstanding as of September 30, 2022 | 825,119 | 787,347 |
Treasury stock at cost; 6,906 shares as of September 30, 2023 and September 30, 2022 | (47,721) | (47,721) |
Accumulated other comprehensive income | 350 | 441 |
Accumulated deficit | (697,458) | (622,099) |
Total shareholders’ equity | 80,290 | 117,968 |
Total liabilities and shareholders’ equity | $ 143,913 | $ 189,082 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 356 | $ 337 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 84,014,000 | 44,497,000 |
Common stock, shares outstanding (in shares) | 77,108,000 | 37,591,000 |
Treasury stock at cost (in shares) | 6,906,000 | 6,906,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 97,716 | $ 45,318 |
Cost of revenue | 74,323 | 41,252 |
Gross profit | 23,393 | 4,066 |
Operating expense: | ||
Selling, general, and administrative | 32,731 | 28,224 |
Research and development | 17,910 | 13,782 |
Impairment | 22,612 | 2,956 |
Severance | 27 | 140 |
Gain on sale of assets | (1,147) | 0 |
Total operating expense | 72,133 | 45,102 |
Operating loss | (48,740) | (41,036) |
Other (expense) income: | ||
Interest expense, net | (751) | (35) |
Foreign exchange loss | (1) | 0 |
Other income | 121 | 171 |
Total other (expense) income | (631) | 136 |
Loss from continuing operations before income tax (expense) benefit | (49,371) | (40,900) |
Income tax (expense) benefit from continuing operations | (42) | 139 |
Net loss from continuing operations | (49,413) | (40,761) |
(Loss) income from discontinued operations including loss on disposal of $9.6 million, net of tax benefit of $0 | (25,946) | 16,428 |
Net loss | (75,359) | (24,333) |
Pension adjustment | (91) | 441 |
Comprehensive loss | $ (75,450) | $ (23,892) |
Per share data: | ||
Net loss on continuing operations per basic share (in dollars per share) | $ (0.96) | $ (1.09) |
Net loss on continuing operations per diluted share (in dollars per share) | (0.96) | (1.09) |
Net (loss) income on discontinued operations per basic share (in dollars per share) | (0.50) | 0.44 |
Net (loss) income on discontinued operations per diluted share (in dollars per share) | (0.50) | 0.44 |
Net loss per basic share (in dollars per share) | (1.46) | (0.65) |
Net loss per diluted share (in dollars per share) | $ (1.46) | $ (0.65) |
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Income | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Sep. 30, 2021 | 36,984,000 | ||||
Shares of common stock | |||||
Stock-based compensation (in shares) | 601,000 | ||||
Stock option exercises (in shares) | 6,000 | ||||
Sale of common stock (in shares) | 0 | ||||
Ending balance (in shares) at Sep. 30, 2022 | 37,591,000 | 37,591,000 | |||
Balance, beginning of period at Sep. 30, 2021 | $ 782,266 | $ 0 | $ (597,766) | $ (47,721) | |
Shares of common stock | |||||
Stock-based compensation | 5,374 | ||||
Stock option exercises | 29 | ||||
Tax withholding paid on behalf of employees for stock-based awards | (322) | ||||
Sale of common stock, net of offering costs | 0 | ||||
Pension adjustment | 441 | ||||
Net loss | $ (24,333) | (24,333) | |||
Balance, end of period at Sep. 30, 2022 | $ 117,968 | $ 787,347 | 441 | (622,099) | (47,721) |
Shares of common stock | |||||
Stock-based compensation (in shares) | 1,463,000 | ||||
Stock option exercises (in shares) | 0 | 0 | |||
Sale of common stock (in shares) | 38,054,000 | ||||
Ending balance (in shares) at Sep. 30, 2023 | 77,108,000 | 77,108,000 | |||
Shares of common stock | |||||
Stock-based compensation | $ 6,888 | ||||
Stock option exercises | 0 | ||||
Tax withholding paid on behalf of employees for stock-based awards | (164) | ||||
Sale of common stock, net of offering costs | 31,048 | ||||
Pension adjustment | (91) | ||||
Net loss | $ (75,359) | (75,359) | |||
Balance, end of period at Sep. 30, 2023 | $ 80,290 | $ 825,119 | $ 350 | $ (697,458) | $ (47,721) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (75,359) | $ (24,333) |
Less: (Loss) income from discontinued operations, net of tax | (25,946) | 16,428 |
Net loss from continuing operations | (49,413) | (40,761) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization expense | 4,848 | 1,728 |
Stock-based compensation expense | 5,438 | 4,569 |
Provision adjustments related to credit loss | 193 | 171 |
Provision adjustments related to product warranty | 120 | 17 |
Loss on disposal of property, plant, and equipment | (1,147) | 0 |
Impairment charge | 22,612 | 2,956 |
Total non-cash adjustments | 32,064 | 9,441 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,946) | 1,563 |
Contract assets | (4,599) | (3,393) |
Inventory | (5,989) | 2,380 |
Other assets | 3,197 | 131 |
Accounts payable | (522) | 1,097 |
Contract liabilities | (3,670) | 2,650 |
Operating lease liabilities - current | 862 | (381) |
Accrued expenses and other current liabilities | (254) | 3,015 |
Total change in operating assets and liabilities | (12,921) | 7,062 |
Net cash used in operating activities - continuing operations | (30,270) | (24,258) |
Net cash (used in) provided by operating activities - discontinued operations | (3,367) | 28,483 |
Net cash used in operating activities - continuing operations | (33,637) | 4,225 |
Cash flows from investing activities: | ||
Purchase of equipment | (1,856) | (3,079) |
Acquisition of business, net of cash acquired | 96 | (59,861) |
Proceeds from disposal of property, plant, and equipment | 10,915 | 0 |
Net cash provided by (used in) investing activities - continuing operations | 9,155 | (62,940) |
Net cash provided by investing activities - discontinued operations | 315 | 243 |
Net cash provided by (used in) investing activities - continuing operations | 9,470 | (62,697) |
Cash flows from financing activities: | ||
Proceeds from borrowings of credit facilities | 393 | 22,715 |
Payments towards credit facilities | (3,507) | (7,222) |
Payments towards borrowings from financing payable | (2,731) | 0 |
Payments to Notes Payable Borrowing | (639) | 0 |
Proceeds from sale of common stock | 34,249 | 29 |
Issuance cost associated with sale of common stock | (3,201) | 0 |
Taxes paid related to net share settlement of equity awards | (164) | (322) |
Net cash provided by financing activities | 24,400 | 15,200 |
Effect of exchange rate changes provided by foreign currency | 854 | (317) |
Net (decrease) increase in cash, cash equivalents and restricted cash | 1,087 | (43,589) |
Cash, cash equivalents, and restricted cash at beginning of period | 25,619 | 69,208 |
Cash, cash equivalents, and restricted cash at end of period | 26,706 | 25,619 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid during the period for interest | 1,230 | 280 |
Cash paid during the period for income taxes | 146 | 574 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Changes in accounts payable related to purchases of equipment | (373) | (352) |
Changes in accounts payable related to financing | $ 460 | $ 0 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Income from discontinued operations on disposal before income tax | $ 9.6 | $ 9.6 |
Income from discontinued operations on disposal | $ 0 | $ 0 |
Description of Business
Description of Business | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business We are a leading provider of sensors and navigation systems for the aerospace and defense market. Over the last five years, EMCORE has expanded its scale and portfolio of inertial sensor products through the acquisitions of Systron Donner Inertial, Inc. (“SDI”) in June 2019, the Space and Navigation business of L3Harris Technologies, Inc. (“S&N”) in April 2022, and the FOG and Inertial Navigation Systems business of KVH Industries, Inc. (“EMCORE Chicago”) in August 2022. Our multi-year transition from a broadband company to an inertial navigation company has now been completed following the sale of our cable TV, wireless, sensing and defense optoelectronics business lines and the shutdown of our chips product line and indium phosphide wafer fabrication operations. We have fully vertically-integrated manufacturing capability at our headquarters in Alhambra, CA, and at our facilities in Budd Lake, NJ, Concord, CA, and Tinley Park, IL. These facilities support our manufacturing strategy for Fiber Optic Gyroscope (“FOG”), Ring Laser Gyro (“RLG”), Photonic Integrated Chip (“PIC”), and Quartz Micro Electro-Mechanical System (“QMEMS”) products for inertial navigation. Our manufacturing facilities maintain ISO 9001 quality management certification, and we are AS9100 aerospace quality certified at our facilities in Alhambra, CA, Concord, CA, and Budd Lake, NJ. Our best-in-class components and systems support a broad array of inertial navigation applications. Our operations include wafer fabrication (lithium niobate and quartz), device design and production, fiber optic module and subsystem design and manufacture, and PIC-based and QMEMS-based component design and manufacture. Many of our manufacturing operations are computer-monitored or controlled to enhance production output and statistical control. Our manufacturing processes involve extensive quality assurance systems and performance testing. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the assets, liabilities, shareholders’ equity, and operating results of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company is not the primary beneficiary of, nor do we hold a significant variable interest in, any variable interest entity. Discontinued Operations In April 2023, we initiated a restructuring program that included the strategic shutdown of our Broadband business segment (including our cable TV, wireless, sensing and chips product lines) and the discontinuance of our defense optoelectronics product line. During the quarter ended September 30, 2023, the Broadband business segment and defense optoelectronics product line were considered as held for sale based upon (i) the existence of an executed non-binding letter of intent to sell our Broadband business segment (other than our chips product line) and our defense optoelectronics product line and (ii) in consideration of ongoing negotiations for the sale of the chips business. Given the prospective sale of the Broadband business segment and defense optoelectronics product line, we identified these asset groups as discontinued operations during the quarter ended September 30, 2023. We ceased operations of our chips business and indium phosphide wafer fabrication facility during the quarter ended September 30, 2023. In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that these business lines met held-for sale and discontinued operations accounting criteria during the quarter ended September 30, 2023. Accordingly, the Company classified the results of these business lines as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with these business lines were classified as held for sale in the consolidated balance sheets for all periods presented. See Note 16 — Discontinued Operations for additional information. On October 11, 2023, the Company entered into an Asset Purchase Agreement to transfer substantially all of the assets and liabilities primarily related to the Company’s cable TV, wireless, sensing and defense optoelectronics business lines to Photonics Foundries, Inc. On October 24, 2023, the Company entered into a non-binding letter of intent with a buyer to sell substantially all of the assets and liabilities related to the Company’s chips business, including assets related to the Company’s indium phosphide wafer fabrication operations. Going Concern Basis The consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles assuming we will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about our ability to continue as a going concern exists. We have recently experienced significant losses from our operations and used a significant amount of cash, amounting to a net loss of $75.4 million and net cash outflows from operations of $30.3 million for the fiscal year ended September 30, 2023, and we expect to continue to incur losses and use cash in our operations as we continue to restructure our business. As a result of our recent cash outflows, we have taken actions to manage our liquidity and will need to continue to manage our liquidity as we continue to restructure our operations to focus on our Inertial Navigation business. As of September 30, 2023, our cash and cash equivalents totaled $26.7 million and we had $9.9 million available under our Credit Agreement (as defined in Note 11 - Credit Agreement in the Notes to Consolidated Financial Statements). We are evaluating the sufficiency of our existing balances of cash and cash equivalents, cash flows from operations, and amounts expected to be available under our Credit Agreement, together with additional actions we could take (including those made in connection with our restructuring program announced in April 2023) to further reduce our expenses and/or potentially raising capital through additional debt or equity issuances, or from the potential monetization of certain assets. However, we may not be successful in executing on our plans to manage our liquidity, including recognizing the expected benefits from our previously announced restructuring program, or raising additional funds if we elect to do so, and as a result substantial doubt about our ability to continue as a going concern exists. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Such estimates include accounts receivable, inventories, goodwill, long-lived assets, product warranty liabilities, legal contingencies, income taxes, asset retirement obligations, and pension obligation, as well as the evaluation associated with the going concern determination. We develop estimates based on historical experience and on various assumptions about the future that are believed to be reasonable based on the best information available to us. Our reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. Concentration of Credit Risk Financial instruments that may subject us to concentrations of credit risk consist primarily of accounts receivable. When necessary, we perform credit evaluations on customers’ financial condition and occasionally we request deposits in advance of shipping product to customers. These financial evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, historical payment patterns, bad debt write off experience, and financial review of the particular customer. Cash and Cash Equivalents Cash and cash equivalents consists primarily of bank deposits and highly liquid short-term investments with a maturity of three months or less at the time of purchase. Accounts Receivable We regularly evaluate the collectability of accounts receivable and maintain allowances for doubtful accounts for estimated losses resulting from the inability of customers to meet their financial obligations to us. The allowance is based on the age of receivables and a specific identification of receivables considered at risk of collection. We classify charges associated with the allowance for doubtful accounts as selling, general, and administrative expense. Inventory Inventory is stated at the lower of cost or net realizable value (first-in, first-out). Inventory that is expected to be used within the next 12 months is classified as current inventory. We write down inventory once it has been determined that conditions exist that may not allow the inventory to be sold for its intended purpose or the inventory is determined to be excess or obsolete based on assumptions about future demand and market conditions. The charge related to inventory write-downs is recorded as cost of revenue. We evaluate inventory levels at least quarterly against an estimate of future demand on a significant part-by-part basis, in addition to determining its overall inventory risk. We have incurred, and may in the future incur, charges to write-down of inventory. See Note 6 - Inventory in the Notes to Consolidated Financial Statements for additional information related to inventory. Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets. We depreciate equipment over three three Note 7 - Property, Plant, and Equipment, net in the Notes to Consolidated Financial Statements for additional information related to the impairment charge during the fiscal year ended September 30, 2023. Goodwill and Intangible Assets Intangible assets of the Company that are considered to have an indefinite life include goodwill and a certain Company trademark. Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. We follow the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles-Goodwill and Other (“ASC 350”). ASC 350 requires the completion of a goodwill impairment test and test of other indefinite lived intangible assets at least annually based on either an optional qualitative assessment (Step 0) or a quantitative analysis (Step 1) comparing the estimated fair value of a reporting unit or indefinite lived intangible asset to its carrying value as of the test date. Valuation of Long-lived Assets Long-lived assets consist primarily of intangible assets, net and property, plant, and equipment, net. Since long-lived assets are subject to amortization and depreciation/amortization, we review these assets for impairment in accordance with the provisions of ASC 360, Property, Plant, and Equipment. Intangible assets that not considered to have an indefinite useful life are itemized in Note 8 - Intangible Assets and Goodwill and are amortized over their useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment testing of long-lived assets consists of determining whether the carrying amount of the long-lived asset or asset group is recoverable, in other words, whether the sum of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group exceeds the carrying amount. The determination of the existence of impairment involves judgments that are subjective in nature and may require the use of estimates in forecasting future results and cash flows related to an asset or group of assets. In making this determination, we use certain assumptions, including estimates of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, the length of service that assets will be used in operations, and estimated salvage values. Leases The Company determines if an arrangement is a lease at its inception. Right of use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, current operating lease liabilities, and non-current operating lease liabilities in the Company’s consolidated balance sheet. Asset Retirement and Environmental Obligations Pursuant to ASC 410, Asset Retirement and Environmental Obligations , an ARO is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an ARO, a company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, and/or amortization. If the fair value of the estimated ARO changes, an adjustment is recorded to both the ARO and the asset retirement cost. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling ARO liabilities. Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the EMCORE Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. As of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. Fair Value of Financial Instruments We determine the fair value of financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC Topic 820 (“ASC 820”), Fair Value Measurements, establishes a valuation hierarchy for disclosure of the inputs to valuation techniques used to measure fair value. This standard 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: • Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly, through market corroboration, for substantially the full term of the financial instrument. • Level 3 inputs are unobservable inputs based on assumptions used to measure assets or liabilities at fair value. Classification of an asset or liability within this hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. Cash and cash equivalents consists primarily of bank deposits or highly liquid short-term investments with a maturity of three months or less at the time of purchase. Restricted cash represents cash temporarily reserved by the Company. Cash, cash equivalents, and restricted cash are based on Level 1 measurements. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, contract assets, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities, and contract liabilities approximate fair value because of the short maturity of these instruments. Revenue Recognition To determine the proper revenue recognition, we perform the following five steps: (a) identify the contract(s) with a customer; (b) identify the performance obligations in the contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in the contract; and (e) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. The majority of revenues are from product sales to customers pursuant to purchase orders. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. When we perform shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less. We also enter into non-recurring engineering contracts. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. For contracts that include multiple performance obligations, we allocate revenue to each performance obligation based on estimates of the relative standalone selling price that we would charge the customer for each promised product or service. In addition, we follow the percentage of completion method of revenue recognition for the majority of our S&N revenue, as these contracts typically are for products specific to the customer and there is no alternative use for the product. We recognize revenue progressively as the customer takes control of the manufactured products built to customer specifications. Under these S&N manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. In certain instances, inventory is maintained by customers at consigned locations. Revenues from consigned sales are recognized when the customer obtains control of our product, which occurs at a point in time. This is typically when the customer pulls product for use. We use a number of wholesale distributors around the world and recognize revenue when the wholesale distributor obtains control of our product, which occurs at a point in time, typically upon shipment. Wholesale distributors are contractually obligated to pay us on standard commercial terms, consistent with our end-use customers. We do not sell to wholesale distributors on consignment and do not give wholesale distributors a right-of-return. Receivables, Net Receivables, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Payments are generally due within 90 days or less of invoicing and do not include a significant financing component. We maintain an allowance for credit loss to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables, and collateral to the extent applicable. Contract Assets A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice for payment. Contract assets are classified as current assets and transferred to receivables when the entitlement to payment becomes unconditional. The Company’s contract assets are generally converted to trade account receivables within 90 days, at which time the Company is entitled to payment of the fixed price upon delivery of the finished product subject to customer payment terms. Contract Liabilities A contract liability is recognized when the Company has billed and received payment from a customer, but has not yet earned revenue. Contract liabilities are classified as current liabilities and transferred to revenue when revenue recognition standards have been met. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for long-term contracts which control has not transferred to the customer. As of September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $11.8 million. The Company expects to recognize revenue on the remaining performance obligations by fiscal year 2025. Product Warranty Reserves We provide customers with warranty claims for certain products and warranty-related services are not considered a separate performance obligation. Pursuant to ASC 450, Contingencies , we make estimates of product warranty expense using historical experience rates and accrue estimated warranty expense as a cost of revenue. We estimate the costs of warranty obligations based on historical experience of known product failure rates and anticipated rates of warranty claims, use of materials to repair or replace defective products, and service delivery costs incurred in correcting the product issues. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Disaggregation of Revenue For additional information on the disaggregated revenues by geographical region and major product category, see Note 15 – Revenue Information in the Notes to Consolidated Financial Statements. Income Taxes In accordance with the authoritative guidance on accounting for income taxes, we recognize income taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of the enacted tax law. The effects of future changes in tax laws or rates are not anticipated. The authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur based on an evaluation of all available evidence, both positive and negative, and the relative weight of the evidence. We have determined that at this time it is more likely than not that deferred tax assets attributable to all other items will not be realized, primarily due to uncertainties related to the ability to utilize net operating loss carryforwards before they expire. Accordingly, we have established a valuation allowance for such deferred tax assets which we do not expect to realize. If there is a change in the ability to realize deferred tax assets for which a valuation allowance has been established, then the tax valuation allowance may decrease in the period in which we determine that realization is more likely than not. Likewise, if we determine that it is not more likely than not that deferred tax assets will be realized, then a valuation allowance may be established for such deferred tax assets and the tax provision may increase in the period in which we make the determination. See Note 12 - Income and Other Taxes in the Notes to Consolidated Financial Statements for additional information related to income taxes. Purchase Accounting The Company accounts for acquisitions of businesses under the acquisition method of accounting. Under the acquisition method of accounting, the Company records assets acquired and liabilities assumed at their estimated fair value on the date of acquisition. Goodwill is measured as the excess of the fair value of the consideration transferred over the fair value of the identifiable net assets. Estimated fair values of acquired assets and liabilities are provisional and could change as additional information is received. When appropriate, our estimates of the fair values of assets and liabilities acquired include assistance from independent third-party valuation firms. Valuations are finalized as soon as practicable, but not later than one year from the acquisition date. Any subsequent changes to purchase price allocations result in a corresponding adjustment to goodwill. Inventory, long-lived assets, goodwill, and other intangible assets generally represent the largest components of our acquisitions. Inventory is valued utilizing net realizable value method. Property, plant, and equipment is valued utilizing a cost and market approach. Intangible assets are recognized at their estimated fair values as of the date of acquisition and generally consist of customer relationships, technology, IPR&D, and trademarks. Determination of the estimated fair value of intangible assets requires judgment. The estimated fair value of technology, IPR&D, and trademarks, is determined utilizing the relief from royalty method. Under this form of income approach, a royalty rate based on observed market royalties is applied to projected revenue supporting the technology, IPR&D, and trademarks and discounted to present value. The estimated fair value of customer relationships is determined using the multiple period excess earnings method. Under this form of income approach, net cash flows attributable to the subject asset are typically calculated net of fair returns on and of all assets that are necessary to realize the cash flows. Cash flows of the subject intangible asset are charged amounts representing a return of and a return on these contributory assets (based on the fair values of the contributory assets). Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements The were no recently adopted accounting pronouncements. Recent Accounting Standards or Updates Not Yet Effective In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. This accounting standard is effective in the first quarter of the Company's fiscal year ended September 30, 2026. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On April 29, 2022, we completed the acquisition of the L3H S&N business for a total purchase price of approximately $5.0 million in cash, exclusive of transaction costs and expenses and subject to certain post-closing working capital adjustments, resulting in a final adjusted purchase consideration transferred of $4.9 million. Following the closing, S&N results are included in our consolidated financial statements beginning on the acquisition date. Revenue and net income of S&N of $31.1 million and $4.2 million, respectively, is included in our consolidated statements of operations and comprehensive loss for the fiscal year ended September 30, 2023. Revenue and net income of S&N from the acquisition date of $10.1 million and $0.5 million, respectively, is included in our consolidated statements of operations and comprehensive loss for the fiscal year ended September 30, 2022. On August 9, 2022, we completed the acquisition of EMCORE Chicago, pursuant to which we acquired substantially all of KVH’s assets and liabilities primarily related to its FOG and Inertial Navigation Systems business, including property interests in the Tinley Park facility located at 8412 West 185th St., Tinley Park, Illinois (the “Tinley Park Facility”), for aggregate consideration of approximately $55.0 million, exclusive of transaction costs and expenses and subject to certain post-closing working capital adjustments. Following the closing, EMCORE Chicago results are included in our consolidated financial statements beginning on the acquisition date. Revenue and net loss of EMCORE Chicago of $35.9 million and $14.8 million, respectively, is included in our consolidated statements of operations and comprehensive loss for the fiscal year ended September 30, 2023. The loss was primarily attributable to the impairment and write off of goodwill of $15.9 million. Revenue and net income of EMCORE Chicago from the acquisition date of $6.1 million and $0.7 million, respectively, is included in our consolidated statements of operations and comprehensive loss for the fiscal year ended September 30, 2022. Final Purchase Price Allocation The total purchase price for the S&N acquisition was allocated to the assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. Since the acquisition, the purchase price allocation for S&N changed by a $2.3 million reduction to contract assets and a $0.6 million reduction to the asset retirement obligation, resulting in a corresponding increase to intangible assets and goodwill acquired. Goodwill is measured as the excess of the fair value of the purchase consideration transferred over the fair value of the identifiable net assets. The table below represents the final purchase price allocation to the assets acquired and liabilities assumed of S&N based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions: (in thousands) Amount Tangible assets acquired: Accounts receivable $ 803 Inventory 370 Contract assets 3,920 Operating lease right-of-use assets 1,529 Property, plant, and equipment 1,996 Net pension benefit assets 1,727 Intangible assets acquired 2,740 Goodwill 3,108 Liabilities assumed: Accounts payable (1,226) Accrued expenses (622) Contract liabilities (6,024) Operating lease liabilities (1,565) Asset retirement obligations (1,895) Total purchase consideration $ 4,861 The total purchase price for the EMCORE Chicago acquisition was allocated to the assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. Since the acquisition, the purchase price allocation for EMCORE Chicago changed by a $3.3 million reduction to inventory resulting in a corresponding increase to intangible assets and goodwill acquired. Goodwill is measured as the excess of the fair value of the purchase consideration transferred over the fair value of the identifiable net assets. The table below represents the final purchase price allocation to the assets acquired and liabilities assumed of EMCORE Chicago based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions: (in thousands) Amount Tangible assets acquired: Accounts receivable $ 4,977 Inventory 7,479 Prepaid expenses and other current assets 1,483 Property, plant, and equipment 14,442 Intangible assets acquired 13,470 Goodwill 15,867 Liabilities assumed: Accounts payable (1,699) Accrued expenses (485) Contract liabilities (637) Other long-term liabilities (8) Total purchase consideration $ 54,889 Included in intangible assets acquired as of September 30, 2023 are customer relationships of $3.0 million, technology of $2.4 million, IPR&D of $5.9 million, and trademarks of $2.2 million. For the fiscal years ended September 30, 2023 and 2022, the Company incurred transitional and transaction costs of approximately $4.3 million and $6.1 million, respectively, in connection with the S&N and EMCORE Chicago acquisitions, which were expensed as incurred and included in SG&A within the accompanying consolidated statements of operations and comprehensive loss. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information presented for the fiscal year ended September 30, 2022 does not purport to be indicative of the results of operations that would have been achieved had the acquisition been consummated on October 1, 2021, nor of the results which may occur in the future. The pro forma amounts are based upon available information and certain assumptions that the Company believes are reasonable. Year Ended September 30, 2022 (in thousands, except per share data) EMCORE EMCORE Chicago Pro Forma Pro Forma Combined Revenue $ 118,029 $ 31,757 $ — $ 149,786 Cost of revenue 89,486 24,347 683 (a) 114,516 Gross profit 28,543 7,410 (683) 35,270 Operating expense: Selling, general, and administrative 33,294 9,670 (4,102) (a)(b) 38,862 Research and development 18,401 4,946 (1,057) (a)(b) 22,290 Severance 1,357 (4) — 1,353 Gain on sale of assets (2,685) — — (2,685) Impairment charge 2,956 — — 2,956 Total operating expense 53,323 14,612 (5,159) 62,776 Operating loss (24,780) (7,202) 4,476 (27,506) Other (expense) income: Interest expense, net (139) — (1,060) (c) (1,199) Foreign exchange gain (352) — — (352) Pension income 148 — — 148 Other income — 137 — 137 Total other expense (343) 137 (1,060) (1,266) Loss before income tax benefit (25,123) (7,065) 3,416 (28,772) Income tax benefit (expense) 139 (42) (19) (d)(e) 78 Net loss (24,984) (7,107) 3,397 (28,694) Foreign exchange translation adjustment 172 — — 172 Pension adjustment 441 — — 441 Comprehensive loss $ (24,371) $ (7,107) $ 3,397 $ (28,081) Per share data: Net loss per basic share: $ (0.67) $ — $ (0.77) Weighted-average number of basic and diluted shares outstanding 37,269 $ — 37,269 (a) Reflects the impact to depreciation expense and amortization expense as a result of the change in fair value of property, plant, and equipment and intangible assets acquired. Adjustment was made to the unaudited pro forma combined statements of operations for the nine months ended September 30, 2022. (b) Reflects the deduction of various sales, general, and administrative and research and development expenses allocated from corporate overhead to EMCORE Chicago during the periods presented that will not be incurred on an ongoing basis as a result of existing EMCORE management structures in place, which will provide the same support to EMCORE Chicago upon completion of the transition services agreement entered into between EMCORE and KVH in connection with the EMCORE Chicago acquisition. Amounts were estimated based on historical allocation included in the stand-alone financial statements of EMCORE Chicago. However, actual costs to be incurred associated with corporate support may vary under the EMCORE structure. (c) Reflects the impact of interest expense related to cash from borrowing facility for funding of the transaction. (d) Reflects the current tax expense due to additional income and deferred income tax expense related to deferred tax liability generated from annual tax amortization of indefinite-lived assets that were acquired for the periods presented. Such amounts were determined based on the effective tax rate of EMCORE rather than statutory tax rates as a result of a tax valuation allowance covering substantially all deferred tax assets and the existence of tax loss carryforwards present at both entities. (e) Reflects the deduction of the income tax expense related to the FIN 48 liability of EMCORE Chicago that is not assumed by EMCORE. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 12 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: September 30, (in thousands) 2023 2022 Cash $ 4,332 $ 19,485 Cash equivalents 21,879 5,614 Restricted cash 495 520 Total cash, cash equivalents, and restricted cash $ 26,706 $ 25,619 |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net The components of accounts receivable, net consisted of the following: September 30, (in thousands) 2023 2022 Accounts receivable, gross $ 15,931 $ 14,160 Allowance for credit loss (356) (337) Accounts receivable, net $ 15,575 $ 13,823 The following table summarizes changes in the allowance for credit loss: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 337 $ 260 Additions from acquisitions — 106 Provision adjustment - expense, net of recoveries 193 229 Write-offs and other deductions (174) (258) Balance at end of period $ 356 $ 337 Certain of our customers are billed based on fee schedules that are agreed upon in each customer contract. Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time and were $8.4 million and $3.8 million as of September 30, 2023 and 2022, respectively. Contract liabilities represent payments received in advance of providing services under certain contract and were $1.6 million and $5.3 million as of September 30, 2023 and 2022, respectively. Revenue recognized in the fiscal years ended September 30, 2023 and 2022 relating to contract liabilities as of the beginning of the respective fiscal year was $5.3 million and $0.4 million, respectively. |
Inventory
Inventory | 12 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of inventory consisted of the following: September 30, (in thousands) 2023 2022 Raw materials $ 14,503 $ 6,257 Work in-process 9,766 18,251 Finished goods 4,636 1,774 Inventory $ 28,905 $ 26,282 |
Property, Plant, and Equipment,
Property, Plant, and Equipment, net | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment, net | Property, Plant, and Equipment, net The components of property, plant, and equipment, net consisted of the following: September 30, (in thousands) 2023 2022 Land $ — $ 995 Building — 8,805 Equipment 31,658 29,224 Furniture and fixtures 1,576 1,394 Computer hardware and software 3,220 3,230 Leasehold improvements 9,442 6,851 Construction in progress 2,508 4,130 Property, plant, and equipment, gross $ 48,404 $ 54,629 Accumulated depreciation (32,887) (30,053) Property, plant, and equipment, net $ 15,517 $ 24,576 Depreciation expense totaled $2.7 million and $1.4 million during the fiscal years ended September 30, 2023 and 2022, respectively. During the fiscal year ended September 30, 2023, the Company sold certain equipment and recognized a gain on sale of assets of $1.1 million. During the fiscal year ended September 30, 2023, for the reporting unit formerly known as Aerospace & Defense, an indication of goodwill impairment (after electing to quantitatively test goodwill) was a trigger to test long-lived assets. Recoverability of the long-lived assets was measured by comparing the carrying amount of the asset groups to the future net undiscounted cash flows expected to be generated by the asset groups. The comparison indicated that the assets were recoverable. During the fiscal year ended September 30, 2022, there was a triggering event of negative cash flows and operating losses at the FOG asset group level within the Inertial Navigation product line that indicated the carrying amounts of our long-lived assets may not be recoverable. In accordance with ASC 360, with regard to our long-lived assets, we performed an undiscounted cash flow analysis and concluded that the carrying value of the asset group was not recoverable. Accordingly, we then performed an analysis to estimate the fair value of the other long -lived assets and recognized an impairment charge within operating expenses of $3.0 million against the FOG property, plant, and equipment by the amount by which the carrying value of the asset group’s other long-lived assets exceeded their estimated fair value for the fiscal year ended September 30, 2022. Key assumptions utilized in the determination of fair value include expected future cash flows and working capital requirements. While we believe the expectations and assumptions about the future are reasonable, they are inherently uncertain. On December 13, 2022, EMCORE Chicago consummated the sale of the real property interests in the Tinley Park Facility to 8400 W 185TH STREET INVESTORS, LLC (the “Tinley Park Buyer”), resulting in net proceeds of approximately $10.3 million, pursuant to the terms of that certain Purchase and Sale Agreement (the “Tinley Park Purchase Agreement”) dated as of November 1, 2022, by and between EMCORE Chicago and HSRE Fund VII Holding Company, LLC, an affiliate of the Tinley Park Buyer. In connection with the sale of the real property interests in the Tinley Park Facility, we entered into a long-term Single-Tenant Triple Net Lease (the “Lease Agreement”) with the Tinley Park Buyer pursuant to which we leased back the Tinley Park Facility for a 12 year term commencing on December 13, 2022, unless earlier terminated or extended in accordance with the terms of the Lease Agreement. Geographical Concentrations Long-lived assets consist of land, building, property, plant, and equipment. As of September 30, 2023 and 2022, approximately all of our long-lived assets were located in the United States. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible assets arose from the acquisition of SDI in the fiscal year ended September 30, 2019 and the acquisitions of S&N and EMCORE Chicago in the fiscal year ended September 30, 2022. Intangible assets are amortized on a straight-line basis over the estimated useful life of: (a) 7.0 years for patents (b) 8.0 years for customer relationships, and (c) 2.0-8.0 years for technology. IPR&D is indefinite-lived until completion of the related development project, at which point amortization of the carrying value of the technology will commence. If it is determined that the IPR&D will not come to completion, it is impaired at that time. A certain Company trademark is indefinite-lived. The following table summarizes changes in intangible assets, net: September 30, (in thousands) 2023 2022 Balance at beginning of period $ 14,790 $ 167 Additions from acquisition 1,470 14,740 Write off due to impairment (2,125) — Amortization (1,890) (117) Balance at end of period $ 12,245 $ 14,790 During the fiscal year ended September 31, 2023, in accordance with ASC 350, the Company performed a quantitative (Step 1) analysis to determine the fair value of a certain Company trademark. The Company utilized the relief from royalty method and concluded that the carrying value of such trademark of $2.2 million exceeded the fair value and impairment expense of $1.3 million was recorded. Key assumptions utilized in the determination of fair value include expected future revenues and estimated royalty rates. While we believe the expectations and assumptions about the future are reasonable, they are inherently uncertain. With respect to EMCORE Chicago's acquired IPR&D, those projects were completed in the quarter ended December 31, 2022 and were classified as technology assets and assigned an eight The weighted average remaining useful lives by definite-lived intangible asset category are as follows: (in thousands, except weighted average remaining life) September 30, 2023 Weighted Average Remaining Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Technology 13.0 $ 16,901 $ (9,527) $ 7,374 Customer relationships 4.0 4,690 (674) 4,016 Definite-lived intangible assets total $ 21,591 $ (10,201) $ 11,390 As of September 30, 2023 trademarks were approximately $0.9 million. (in thousands, except weighted average remaining life) September 30, 2022 Weighted Average Remaining Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Technology 5.4 $ 10,991 $ (8,261) $ 2,730 Customer relationships 4.6 3,260 (50) 3,210 Definite-lived intangible assets total $ 14,251 $ (8,311) $ 5,940 As of September 30, 2022 IPR&D and trademarks was approximately $6.7 million and $2.2 million, respectively. Estimated future amortization expense for intangible assets recorded by the Company at September 30, 2023 is as follows: (in thousands) Amount 2024 $ 1,956 2025 1,930 2026 1,527 2027 1,504 2028 1,491 Thereafter 2,982 Total amortization expense $ 11,390 Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. As of September 30, 2022, $17.8 million of the Company’s goodwill of $17.9 million related to the S&N and EMCORE Chicago acquisitions. For the fiscal year ended September 30, 2023, we recognized an additional $1.2 million due to a change in purchase price valuation. None of the Company’s goodwill is deductible for tax purposes. The following table summarizes changes in goodwill: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 17,894 $ 69 Additions from acquisition 1,150 17,825 Write off from impairment (19,044) — Balance at end of period $ — $ 17,894 During the fiscal year ended September 30, 2023, in accordance with ASC 350, the Company performed a quantitative (Step 1) analysis of goodwill utilizing a weighted income and market approach and concluded that the carrying value of the reporting unit that carried the goodwill (adjusted for trademark impairment) was greater than the fair value of equity of the reporting unit, and impairment expense of $19.0 million was recorded. Key assumptions utilized in the determination of fair value include forecasted financial performance of the Company. While we believe the expectations and assumptions about the future are reasonable, they are inherently uncertain. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans We assumed the Pension Plan on April 29, 2022 as a result of the acquisition of S&N. The Pension Plan was frozen to new hires as of March 31, 2007 and employees hired on or after April 1, 2007 are not eligible to participate in the Pension Plan. On July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. As a result of the freeze, a curtailment was triggered and a restatement of the benefit obligation and plan assets occurred, although no gain or loss resulted. The annual measurement date for the Pension Plan is September 30. Benefits are based on years of credited service at retirement. Annual contributions to the Pension Plan are not less than the minimum funding standards outlined in the Employee Retirement Income Security Act of 1974, as amended. We maintain the Pension Plan with the goal of ensuring that it is adequately funded to meet its future obligations. We did not make any contributions to the Pension Plan during the period from April 29, 2022 to September 30, 2022 or for the fiscal year ended September 30, 2023. The following table presents the benefit obligation, fair value of the plan assets, and funded status of the plan: September 30, (in thousands) 2023 2022 Change in Benefit Obligation Benefit obligation at beginning of period $ 7,332 $ 8,203 Service cost 105 49 Interest cost 372 130 Participant contributions — — Amendments — — Actuarial losses (gains) (461) (901) Benefits paid (634) (149) Business combinations and (divestitures) — — Curtailments, settlements and/or special/contractual termination benefits — — Benefit obligation at end of year $ 6,714 $ 7,332 Change in Plan Assets Fair value at beginning of period $ 9,469 $ 9,930 Actual return on plan assets (214) (312) Company contributions — — Participant contributions — — Benefits paid (634) (149) Expenses paid — — Business combinations and (divestitures) — — Curtailments, settlements and/or special/contractual termination benefits — — Fair value at end of year $ 8,621 $ 9,469 Funded Status Funded status at end of year $ 1,907 $ 2,137 Amounts Recognized in Balance Sheets Non-current assets $ 1,907 $ 2,137 Current liabilities $ — $ — Non-current liabilities $ — $ — Amounts Recognized in Accumulated Other Comprehensive Income Transition obligation (asset) $ — $ — Prior service cost (credit) $ — $ — Net loss (gain) $ (350) $ (441) Net periodic pension cost Service cost $ 105 $ 49 Interest cost 372 130 Expected return on plan assets (337) (148) Amortization of transition obligation (asset) — — Amortization of prior service cost (credit) — — Amortization of net loss (gain) — — Recognition due to settlement, curtailment, and special/contractual termination benefits — — Net periodic pension cost $ 140 $ 31 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss Net loss (gain) $ 91 $ (441) Prior service cost (credit) — — Amortization of net (loss) gain — — Amortization of prior service cost (credit) — — Amortization of initial asset — — Total recognized in other comprehensive (loss) income $ 91 $ (441) Actuarial (Gain) Loss by Source Updated census $ (255) $ (55) Updated discount rate (206) (846) Total $ (461) $ (901) Estimated Future Benefit Payments 2024 $ 613 $ 600 2025 575 579 2026 555 562 2027 567 575 2028 558 573 Thereafter 2,668 2,748 Total $ 5,536 $ 5,637 Weighted Average Assumptions to Determine Benefit Obligations at Year End Discount rate 5.9% 5.6% Rate of compensation increase N/A N/A Weighted Average Assumptions to Determine Net Periodic Pension Cost Discount rate 5.6% 4.4% Rate of compensation increase N/A N/A Expected long-term return on plan assets 3.7% 3.7% Net pension asset is included as a component of other non-current assets on the consolidated balance sheets as of September 30, 2023 and September 30, 2022. As of September 30, 2023 and September 30, 2022 the Pension Plan assets consisted primarily of cash and cash equivalents, we manage a liability driven investment strategy intended to maintain fully-funded status. 401(k) Plan We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. Our matching contribution in cash for each of the fiscal years ended September 30, 2023 and 2022 was approximately $1.3 million and $1.2 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities The components of accrued expenses and other current liabilities consisted of the following: September 30, (in thousands) 2023 2022 Compensation $ 5,980 $ 3,855 Warranty 864 911 Commissions 468 228 Consulting 68 241 Legal expenses and other professional fees 262 275 Auditor fees 163 186 Litigation settlement accrual — 341 Other 666 660 Accrued expenses and other current liabilities $ 8,471 $ 6,697 The following table summarizes the changes in product warranty accrual accounts: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 911 $ 569 Additions from acquisitions — 437 Provision for product warranty expense 120 124 Adjustments and utilization of warranty accrual (167) (219) Balance at end of period $ 864 $ 911 |
Credit Agreement
Credit Agreement | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement Wingspire Credit Agreement On August 9, 2022, EMCORE and EMCORE Space & Navigation Corporation, our wholly-owned subsidiary, entered into that certain Credit Agreement with the lenders party thereto and Wingspire Capital LLC (“Wingspire”), as administrative agent for the lenders, as amended pursuant to that First Amendment to Credit Agreement, dated as of October 25, 2022, among EMCORE and EMCORE Space & Navigation Corporation, EMCORE Chicago Inertial Corporation, our wholly-owned subsidiary (together with the Company and S&N, the “Borrowers”), the lenders party thereto and Wingspire to add EMCORE Chicago as a Borrower and include certain of its assets in the borrowing base (as amended, the “Credit Agreement”). The Credit Agreement provides for two credit facilities: (a) an asset-based revolving credit facility in an aggregate principal amount of up to $40.0 million, subject to a borrowing base consisting of eligible accounts receivable and eligible inventory (subject to certain reserves), and (b) a term loan facility in an aggregate principal amount of approximately $6.0 million. The proceeds of the loans made under the Credit Agreement may be used for general corporate purposes. Borrowings under the Credit Agreement will mature on August 8, 2026, and will bear interest, at a rate per annum equal to term SOFR plus a margin of (i) 3.75% or 5.50% in the case of revolving loans, depending on the applicable assets corresponding to the borrowing base pursuant to which the applicable loans are made and (ii) 5.50% in the case of the term loans. In addition, the Borrowers are responsible for Wingspire’s annual collateral monitoring fees as well as the lenders’ fees and expenses, including a closing fee of 1.0% of the aggregate principal amount of the commitments as of the closing with respect to revolving loans and 1.50% of the aggregate principal amount of the term loans. The Borrowers may also be required to pay an unused line fee of 0.50% in respect to the undrawn portion of the revolving commitments, which is generally based on average daily usage of the revolving facility during the immediately preceding month. The Credit Agreement contains representations and warranties, affirmative and negative covenants that are generally customary for credit facilities of this type. Among others, the Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit the Borrowers’ and their respective subsidiaries’ ability to incur indebtedness, grant liens, enter into sale and leaseback transactions, enter into swap agreements, make loans, acquisitions and investments, change the nature of their business, acquire or sell assets or consolidate or merge with or into other persons or entities, declare or pay dividends or make other restricted payments, enter into transactions with affiliates, enter into burdensome agreements, change fiscal year, amend organizational documents, and use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions. In addition, the Credit Agreement requires that, for any period commencing upon the occurrence of an event of default or excess availability under the Credit Agreement being less than the greater of $5.0 million and 15% of the revolving commitments until such time as no event of default shall be continuing and excess availability under the Credit Agreement shall be at least the greater of $5.0 million and 15% of the revolving commitments for a period of 60 consecutive days, the Borrowers satisfy a consolidated fixed charge coverage ratio of not less than 1.10:1.00. The Credit Agreement also includes customary events of default, the occurrence of which, following any applicable grace period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Borrowers under the Credit Agreement to be immediately due and payable, and exercise rights and remedies available to the lenders under the Credit Agreement or applicable law or equity. In connection with the Credit Agreement, the Borrowers entered into a pledge and security agreement pursuant to which the obligations under the Credit Agreement are secured on a senior secured basis (subject to permitted liens) by substantially all assets of the Borrowers and substantially all assets of any future guarantors. As of September 30, 2023, an aggregate principal amount of $6.4 million was outstanding pursuant to the revolving credit facility and an aggregate principal amount of $4.2 million was outstanding pursuant to the term loan facility. Also, as of September 30, 2023, the revolving credit facility had approximately $9.9 million available for borrowing. Provided that no event of default has occurred, and subject to availability limitations, loans under the revolving credit facility can continue to be drawn/redrawn/outstanding until expiration in 2026. Our future term loan repayments is as follows: (in thousands) Amount 2024 $ 852 2025 852 2026 2,478 Total loan payments $ 4,182 |
Income and Other Taxes
Income and Other Taxes | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income and Other Taxes | Income and Other Taxes The Company’s loss from continuing operations before income taxes consisted of the following: Year Ended September 30, (in thousands) 2023 2022 Domestic $ (49,371) $ (40,608) Foreign — (292) Loss before income taxes $ (49,371) $ (40,900) The Company’s income tax expense (benefit) consisted of the following: Year Ended September 30, (in thousands) 2023 2022 Federal: Current $ — $ (125) Deferred (12) 12 (12) (113) State: Current 65 (37) Deferred (11) 11 54 (26) Foreign: Current — — Deferred — — Total income tax expense (benefit) $ 42 $ (139) A reconciliation of the provision for income taxes, with the amount computed by applying the statutory U.S. federal and state income tax rates to continuing operations loss before provision for income taxes is as follows: Year Ended September 30, (in thousands) 2023 2022 Income tax benefit computed at U.S. federal statutory rate $ (10,368) $ (8,589) State tax expense (benefit), net of U.S. federal effect 54 (27) Foreign tax rate differential 355 (7) Shortfall from stock based compensation 1,204 141 Other 20 85 Federal benefit on PPP loan forgiveness 15 — Net operating loss carryforward expiration 12,839 11,705 Change in valuation allowance (4,077) (3,447) Income tax expense (benefit) $ 42 $ (139) Effective tax rate 0.1 % (0.3) % Significant components of deferred tax assets (liabilities) are as follows: September 30, (in thousands) 2023 2022 Federal net operating loss carryforwards $ 78,872 $ 94,691 Foreign net operating loss carryforwards — 1,135 Income tax credit carryforwards 355 592 Inventory reserves 1,666 735 Accounts receivable reserves 60 57 Accrued warranty reserve 103 115 State net operating loss carryforwards 7,547 7,888 Stock compensation 1,203 1,352 Deferred compensation 1,022 465 Fixed assets and intangibles 5,276 1,212 ROU lease liability 5,751 5,862 ROU lease assets (5,195) (5,724) Capitalized Research expense 3,385 — Other 2,935 2,443 Total deferred tax assets 102,981 110,823 Valuation allowance (102,981) (110,846) Net deferred tax liabilities $ — $ (23) For the fiscal years ended September 30, 2023 and 2022, the Company recorded income tax expense of approximately $42.0 thousand and income tax benefit of approximately $0.1 million, respectively. Income tax expense for the fiscal year ended September 30, 2023 is comprised primarily of state minimum tax expense. Income tax benefit for the fiscal year ended September 30, 2022 is comprised primarily federal refund of AMT credit and state minimum tax expense. For the fiscal years ended September 30, 2023 and 2022, the effective tax rate on operations was 0.1%, and (0.3)%, respectively. The lower tax rate for the fiscal year ended September 30, 2023 is primarily due to the reversal of tax expense related to the change on indefinite-lived intangible assets. The Company uses some estimates to forecast permanent differences between book and tax accounting. We have not provided for income taxes on non-U.S. subsidiaries’ undistributed earnings as of September 30, 2023 because we plan to indefinitely reinvest the unremitted earnings of the non-U.S. subsidiaries and all of the non-U.S. subsidiaries historically have negative earnings and profits. All deferred tax assets have a full valuation allowance at September 30, 2023. On a quarterly basis, the Company evaluates the positive and negative evidence to assess whether the more likely than not criteria, has been satisfied in determining whether there will be further adjustments to the valuation allowance. As of September 30, 2023, the Company had net operating loss carryforwards for U.S. federal income tax purposes of approximately $391.5 million which begin to expire in 2024. As of September 30, 2023, the Company had state net operating loss carryforwards of approximately $95.0 million which begin to expire in 2024. As of September 30, 2023, the Company also had tax credits (primarily foreign income and U.S. research and development tax credits) of approximately $0.3 million. The research credits begin to expire in 2024. Utilization of net operating loss and tax credit carryforwards are subject to a substantial annual limitation due to the ownership change limitations set forth in Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”) and similar state provisions. The Company prepared an Internal Revenue Code 382 analysis to determine the annual limitations on the Company’s consolidated net operating loss carryforwards. As a result of the $391.5 million of U.S. net operating loss carryforwards, approximately $111.6 million is subject to an annual limitation and $279.9 million of the net operating losses are not subject to an annual limitation. Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before utilization. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease certain facilities and equipment under non-cancelable operating leases. Operating lease amounts exclude property taxes, insurance, and maintenance expenses on leased properties. As of September 30, 2023, our operating leases had remaining lease terms of approximately 1 year to 12 years, some of which included options to extend 5 additional years. During the fiscal years ended September 30, 2023 and 2022, the Company recorded $3.7 million and $2.0 million of operating lease expense, respectively. The Company’s finance leases and short term leases are immaterial. During the fiscal year ended September 30, 2023, there was a change in circumstances surrounding the use of our leased facilities and related right-of-use (ROU) assets due to the restructuring of our business and active pursuit of selling the discontinued operations and the indium phosphide wafer fabrication facility assets. Recoverability of the long-lived assets was measured by comparing the carrying amount of the asset groups to the future net undiscounted cash flows expected to be generated by the asset groups. The comparison indicated that certain of the asset groups was not recoverable, and an impairment of $1.4 million was recorded as this was the amount by which the carrying value of the asset group exceeded the related estimated fair value, which was based on discounted future operating cash flows. Maturities of operating lease liabilities as of September 30, 2023 were as follows: (in thousands) Amount 2024 $ 4,614 2025 4,137 2026 3,072 2027 2,757 2028 2,830 Thereafter 22,179 Total lease payments $ 39,589 Less imputed interest (15,674) Total operating lease liabilities $ 23,915 Weighted-average remaining lease term and discount rate related to operating leases are as follows: September 30, 2023 2022 Weighted average remaining lease term (years) 10.0 9.8 Weighted average discount rate 9.5 % 5.4 % Supplemental cash information and non-cash activities related to operating leases are as follows: September 30, (in thousands) 2023 2022 Operating cash outflows from operating leases $ 3,749 $ 2,011 Right-of-use assets obtained in exchange for operating lease liabilities $ 2,577 $ 1,529 Asset Retirement Obligations ARO consists of legal requirements to decommission assets, restore the existing leased facilities to their original state, and perform certain environmental work due to the presence of a manufacturing fabrication operation. ARO includes assumptions related to renewal option periods for those facilities where we expect to extend lease terms. The Company recognizes its estimate of the fair value of its ARO in the period incurred in long-term liabilities and is also capitalized as property, plant and equipment. The fair value of ARO was estimated by discounting projected cash flows over the estimated life of the related assets using credit adjusted risk-free rates which ranged from 1.73% to 4.03%. The following table summarizes ARO activity: September 30, (in thousands) 2023 2022 Balance at beginning of period $ 4,664 $ 2,049 Acquisition-related adjustment (604) 2,500 Accretion expense 134 90 Revision in estimated cash flows — 25 Balance at end of period $ 4,194 $ 4,664 Indemnifications We have agreed to indemnify certain customers against claims of infringement of intellectual property rights of others in our sales contracts with these customers. Historically, we have not paid any claims under these customer indemnification obligations. We enter into indemnification agreements with each of our directors and executive officers pursuant to which we agree to indemnify them for certain potential expenses and liabilities arising from their status as a director or executive officer of the Company. We maintain director and officer insurance, which covers certain liabilities relating to our obligation to indemnify our directors and executive officers in certain circumstances. It is not possible to determine the aggregate maximum potential loss under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular claim. Legal Proceedings We are subject to various legal proceedings, claims, and litigation, either asserted or unasserted, that arise in the ordinary course of business. The outcome of these matters is currently not determinable and we are unable to estimate a range of loss, should a loss occur, from these proceedings. The ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and the results of these matters cannot be predicted with certainty. Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. Should we fail to prevail in any legal matter, or should several legal matters be resolved against the Company in the same reporting period, then the financial results of that particular reporting period could be materially affected. Intellectual Property Lawsuits We protect our proprietary technology by applying for patents where appropriate and, in other cases, by preserving the technology, related know-how, and information as trade secrets. The success and competitive position of our product lines are impacted by the ability to obtain intellectual property protection for research and development efforts. We have, from time to time, exchanged correspondence with third parties regarding the assertion of patent or other intellectual property rights in connection with certain of our products and processes. Resilience Litigation In February 2021, Resilience Capital (“Resilience”) filed a complaint against us with the Delaware Chancery Court containing claims arising from the February 2020 sale of SDI’s real property (the “Concord Property Sale”) located in Concord, California (the “Concord Real Property”) to Eagle Rock Holdings, LP (“Buyer”) and that certain Single-Tenant Triple Net Lease, dated as of February 10, 2020, entered into by and between SDI and the Buyer, pursuant to which SDI leased from the Buyer the Concord Real Property for a 15 year term. The Resilience complaint seeks, among other items, (a) a declaration that the Concord Property Sale included a non-cash component, (b) a decree requiring us and Resilience to follow the appraisal requirements set forth in that certain Purchase and Sale Agreement (the “SDI Purchase Agreement”), dated as of June 7, 2019, by and among the Company, The Resilience Fund IV, L.P., The Resilience Fund IV-A, L.P., Aerospace Newco Holdings, Inc. and Ember Acquisition Sub, Inc., (c) recovery of Resilience’s costs and expenses, and (d) pre- and post-judgment interest. In April 2021, we filed with the Delaware Chancery Court our answer to the Resilience complaint and counterclaims against Resilience, in which we are seeking, among other items, (a) dismissal of the Resilience complaint and/or granting of judgment in favor of EMCORE with respect to the Resilience complaint, (b) entering final judgment against Resilience awarding damages to us for Resilience’s fraud and breaches of the SDI Purchase Agreement in an amount to be proven at trial and not less than $1,565,000, (c) a judicial determination of the respective rights and duties of us and Resilience under the SDI Purchase Agreement, (d) an award to us of costs and expenses, and (e) pre- and post-judgment interest. In April 2023, we and Resilience entered into a Settlement and Release Agreement (the “Resilience Settlement Agreement”). The material financial terms of the Resilience Settlement Agreement required (i) a payment of $0.5 million by us to Resilience, which payment was made by us during the three months ended June 30, 2023, (ii) appraisals of the Concord Real Property, conducted in 2023 with a date of value as of January 2, 2020, which resulted in a further payment obligation by us in an amount equal to approximately $1.3 million, which payment was made by us in October 2023, and (iii) a mutual release of all claims, including claims arising under the SDI Purchase Agreement, and a dismissal of the litigation by all parties. On October 10, 2023, the Delaware Chancery Court granted the parties' stipulation of dismissal with prejudice to the Delaware Chancery Court of all claims made by each party. In April 2023, the underwriters of the representation and warranty insurance policies the Company acquired in connection with the SDI Purchase Agreement agreed to pay the Company $1.15 million within 15 business days in exchange for a release of any and all claims under the policies. We received payment during the three months ended June 30, 2023. |
Equity
Equity | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Equity Tax Preservation Plan On September 28, 2023, our Board of Directors approved and adopted a Section 382 Tax Benefits Preservation Plan, dated as of September 28, 2023, by and between the Company and Equiniti Trust Company, LLC, as rights agent (the “Rights Agent”) (the “Section 382 Tax Benefits Preservation Plan”). Pursuant to the Section 382 Tax Benefits Preservation Plan, the Board of Directors declared a dividend of one preferred share purchase right (each, a “Right”) for each outstanding share of common stock. The dividend is distributable on October 12, 2023 to shareholders of record as of the close of business on October 12, 2023. The Board of Directors adopted the Section 382 Tax Benefits Preservation Plan to diminish the risk that the Company could experience an “ownership change” as defined in Section 382 of the Code, which could substantially limit or permanently eliminate the Company’s ability to utilize its net operating loss carryovers (collectively, the “NOLs”) to reduce potential future income tax obligations. Under the Code and the regulations promulgated thereunder by the U.S. Treasury Department, these NOLs may be “carried forward” in certain circumstances to offset any current and future taxable income and thus reduce federal income tax liability, subject to certain requirements and restrictions. While the amount and timing of the Company’s future taxable income cannot be predicted with any certainty and, accordingly, the Company cannot predict the amount of these NOLs that will ultimately be used to reduce its income tax liability, to the extent that the NOLs do not otherwise become limited, these NOLs could be a potentially valuable asset to the Company. As of September 30, 2023 and 2022, the Company had federal net operating loss carryforwards of approximately $391.5 million and $424.9 million, respectively. In general, under Section 382, an “ownership change” occurs if a shareholder or a group of shareholders who are deemed to own at least 5% of the common stock individually or collectively increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. If an ownership change occurs, Section 382 would impose an annual limit on the amount of the Company’s NOLs that can be used to offset the Company’s federal taxable income equal to the product of the total value of the Company’s outstanding equity immediately prior to the ownership change (reduced by certain items specified in Section 382) and the federal long-term tax-exempt interest rate in effect for the month of the ownership change. A number of complex rules apply to calculating this annual limit and there are several special rules that, depending on the rule involved, may apply to reduce or increase such limit. If an ownership change were to occur, the limitations imposed by Section 382 could result in a substantial delay in the timing of the usage of the NOLs or in a material amount or all of the NOLs expiring unused and, therefore, significantly impair or eliminate the value of such NOLs. While the Company periodically monitors its NOLs and currently believes that an ownership change that would impair the value of its NOLs has not occurred, the complexity of Section 382’s provisions and the limited knowledge any public company has about the ownership of its publicly traded stock make it difficult to determine whether an ownership change has in fact occurred. The Section 382 Tax Benefits Preservation Plan is intended to act as a deterrent to any person or group acquiring beneficial ownership of 4.99% or more of the outstanding common stock without the approval of the Board of Directors. A person who acquires, without the approval of the Board of Directors, beneficial ownership (other than as a result of repurchases of stock by the Company, dividends or distributions by the Company or certain inadvertent actions by shareholders) of 4.99% or more of the outstanding common stock (including any ownership interest held by that person’s Affiliates and Associates as defined under the Section 382 Tax Benefits Preservation Plan) could be subject to significant dilution. Shareholders who beneficially own 4.99% or more of the outstanding common stock prior to the first public announcement by the Company of the Board of Directors’ adoption of the Section 382 Tax Benefits Preservation Plan will not trigger the Section 382 Tax Benefits Preservation Plan so long as they do not acquire beneficial ownership of additional shares of the common stock (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of common stock or pursuant to a split or subdivision of the outstanding shares of common stock) at a time when they still beneficially own 4.99% or more of such stock. In addition, the Board of Directors retains the sole discretion to exempt any person or group from the penalties imposed by the Section 382 Tax Benefits Preservation Plan. Equity Plans We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain four equity incentive compensation plans, collectively described as our “Equity Plans”: (a) the 2010 Equity Incentive Plan (the “2010 Plan”), (b) the 2012 Equity Incentive Plan (the “2012 Plan”), (c) the Amended and Restated 2019 Equity Incentive Plan (the “2019 Plan”), and (d) the 2022 New Employee Inducement Plan. We issue new shares of common stock to satisfy awards granted under our Equity Plans. In December 2022, our Board of Directors approved an amendment to the 2019 Plan, which, following shareholder approval at our 2023 annual meeting of shareholders, increased the maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2019 Plan by an additional 1.549 million shares. Stock Options Most stock options vest and become exercisable over four The Company has estimated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model. The expected volatility assumption is based on the historical daily price data of the Company’s common stock over a period equivalent to the weighted average expected life of the Company’s options. The expected term of options granted is derived using assumed exercise rates based on historical exercise patterns and represents the period of time the options granted are expected to be outstanding. The risk-free interest rate is based on the actual U.S. Treasury zero-coupon rates for bonds matching the expected term of the option as of the option grant date. The dividend yield of zero is based upon the fact that the Company has not historically declared or paid cash dividends, and does not expect to declare or pay dividends in the foreseeable future. The following table summarizes stock option activity under the Equity Plans for the fiscal year ended September 30, 2023: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (*) (in thousands) Outstanding as of September 30, 2022 9,981 $ 4.52 Granted — — Exercised — — Forfeited — — Expired 976 3.84 Outstanding as of September 30, 2023 9,005 $ 4.59 1.30 $ — Exercisable as of September 30, 2023 9,005 $ 4.59 1.30 $ — Vested and expected to vest as of September 30, 2023 9,005 $ 4.59 1.30 $ — ___________________________________________ (*) Intrinsic value for stock options represents the “in-the-money” portion or the positive variance between a stock option’s exercise price and the underlying stock price. For the fiscal year ended September 30, 2022, the intrinsic value of options exercised was $0. As of September 30, 2023, there was no unrecognized stock-based compensation expense related to non-vested stock options granted under the Equity Plans. Valuation Assumptions There were no stock option grants for the fiscal years ended September 30, 2023 and 2022. Time-Based Restricted Stock Time-based restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) granted to employees under the 2010 Plan, 2012 Plan, the 2019 Plan, or the 2022 New Employee Inducement Plan typically vest over 3 to 4 years and are subject to forfeiture if employment terminates prior to the vesting or lapse of the restrictions, as applicable. RSUs are not considered issued or outstanding common stock until they vest. RSAs are considered issued and outstanding on the grant date and are subject to forfeiture if specified vesting conditions are not satisfied. The value of RSUs is determined by the stock price on the grant date. The following table summarizes the activity related to RSUs subject to time-based vesting requirements for the fiscal year ended September 30, 2023: RSUs Number of Shares Weighted Average Grant Date Fair Value Non-vested as of September 30, 2022 2,947,130 $ 3.90 Granted 2,896,650 1.00 Vested (1,314,313) 3.72 Forfeited (499,391) 2.55 Non-vested as of September 30, 2023 4,030,076 $ 2.04 As of September 30, 2023, there was approximately $6.5 million of remaining unamortized stock-based compensation expense associated with RSUs, which will be expensed over a weighted average remaining service period of approximately 3.1 years. The 4.0 million outstanding non-vested and expected to vest RSUs have an aggregate intrinsic value of $1.9 million and a weighted average remaining contractual term of 1.8 years. For the fiscal years ended September 30, 2023 and 2022, the intrinsic value of RSUs vested was approximately $1.3 million and $3.0 million, respectively. The weighted average grant date fair value of RSUs granted during the fiscal years ended September 30, 2023 and 2022 was $1.00 and $3.46 per share, respectively. For the fiscal year ended September 30, 2022, $27.3 thousand of RSAs vested. As of September 30, 2022, there was no remaining unamortized stock-based compensation expense associated with RSAs. Performance-Based Restricted Stock Performance based restricted stock units (“PSUs”) granted to employees under the 2012 Plan or 2019 Plan typically vest over 1 to 3 years and are subject to forfeiture in whole, if employment terminates, or in whole or in part, if specified vesting conditions are not satisfied in each case prior to vesting. PSUs are not considered issued or outstanding common stock until they vest. PSUs that are granted to executive officers and key employees are provided as long-term incentive compensation that is based on relative total shareholder return, which measures performance against the Russell Microcap Index. PSUs are valued based on a Monte Carlo simulation model to reflect the impact of the PSUs market condition. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for PSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. The following table summarizes the activity related to PSUs for the fiscal year ended September 30, 2023: PSUs Number of Shares (at target) Weighted Average Grant Date Fair Value Non-vested as of September 30, 2022 1,809,053 $ 4.37 Granted 634,650 0.97 Vested (291,285) 2.47 Forfeited (448,000) 3.81 Non-vested as of September 30, 2023 1,704,418 $ 3.57 As of September 30, 2023, there was approximately $2.7 million of remaining unamortized stock-based compensation expense associated with PSUs, which will be expensed over a weighted average remaining service period of approximately 1.3 years. The 1.7 million outstanding non-vested and expected to vest PSUs have an aggregate intrinsic value of approximately $0.8 million and a weighted average remaining contractual term of 1.3 years. For each of the fiscal years ended September 30, 2023 and 2022, the intrinsic value of PSUs vested was $0.3 million. The weighted average grant date fair value of PSUs granted during the fiscal years ended September 30, 2023 and 2022 was $0.97 and $4.51 per share, respectively. Stock-Based Compensation The following table sets forth stock-based compensation expense by award type: Year Ended September 30, (in thousands) 2023 2022 RSUs and RSAs $ 4,203 $ 2,576 PSUs 2,306 2,314 Outside director equity awards and fees in common stock 378 484 Total stock-based compensation expense $ 6,888 $ 5,374 The following table sets forth stock-based compensation expense by expense type: Year Ended September 30, (in thousands) 2023 2022 Cost of revenue $ 1,742 $ 952 Selling, general, and administrative 1,324 3,591 Research and development 3,823 831 Total stock-based compensation expense $ 6,888 $ 5,374 Capital Stock Authorized capital stock consists of 100 million shares of common stock, no par value, and 5,882,352 shares of preferred stock, $0.0001 par value. No shares of preferred stock were outstanding as of September 30, 2023. On August 23, 2023, we closed our offering of 22,600,000 shares of our common stock at a price of $0.50 per share, and, to certain investors, pre-funded warrants (each, a “Pre-Funded Warrant”) to purchase 11,900,000 shares of our common stock at a price of $0.49999999 for each pre-funded warrant (which represents the per share public offering price for our common stock in such offering less the $0.00000001 per share exercise price for each such Pre-Funded Warrant), resulting in net proceeds to us from the offering, after deducting the placement agent commissions and other offering expenses, of approximately $15.6 million. The shares were sold by us pursuant to an Underwriting Agreement, dated as of August 17, 2023, between us and the Craig-Hallum Capital Group LLC as the sole managing underwriter. On February 17, 2023, we closed our offering of 15,454,546 shares of our common stock at a price of $1.10 per share, resulting in net proceeds to us from the offering, after deducting the placement agent commissions and other offering expenses, of $15.4 million. The shares were sold by us pursuant to a Securities Purchase Agreement, dated as of February 17, 2023, between the Company and each purchaser named in the signature pages thereto and a Placement Agency Agreement, dated as of February 15, 2023, by and between the Company and A.G.P./Alliance Global Partners. As of September 30, 2023 and 2022, we had 84.0 million and 44.5 million shares of common stock issued and outstanding, respectively. There were no shares of preferred stock issued and outstanding as of September 30, 2023 and 2022. Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Year Ended September 30, (in thousands, except per share data) 2023 2022 Numerator Net loss from continuing operations $ (49,413) $ (40,761) (Loss) income from discontinued operations including loss on disposal of $9.6 million, net of tax benefit of $0 $ (25,946) $ 16,428 Net loss $ (75,359) $ (24,333) Denominator Weighted average number of shares and preferred warrants outstanding - basic 51,510 37,269 Effect of dilutive securities Stock options — — PSUs, RSUs, and restricted stock — — Weighted average number of shares and preferred warrants outstanding - diluted 51,510 37,269 Loss from continuing operations per share - basic and diluted $ (0.96) $ (1.09) Loss from discontinued operations per share - basic and diluted $ (0.50) $ 0.44 Net loss per share - basic and diluted $ (1.46) $ (0.65) Weighted average antidilutive options, unvested RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation 3,305 858 Basic earnings per share (“EPS”) is computed by dividing net loss for the period by the weighted-average number of common stock and pre-funded warrants outstanding during the period. Diluted EPS is computed by dividing net loss for the period by the weighted average number of common stock and pre-funded warrants outstanding during the period, plus the dilutive effect of outstanding RSUs, PSUs, and stock options, as applicable pursuant to the treasury stock method. Basic and diluted shares outstanding includes the weighted average of the effect of the Company's outstanding pre-funded warrants as the exercise price of such pre-funded warrants requires nominal consideration to be given for the delivery of the corresponding shares of common stock. Certain of the Company's outstanding share-based awards, noted in the table above, were excluded because they were anti-dilutive, but they could become dilutive in the future. The anti-dilutive stock options and shares of outstanding and unvested restricted stock were excluded from the computation of earnings per share for the fiscal years ended September 30, 2023 and 2022 due to the Company incurring a net loss for such periods. Future Issuances Common stock reserved for future issuances as of September 30, 2023 was as follows: Amount Exercise of outstanding stock options 9,005 Unvested RSUs 4,030,076 Unvested PSUs (at 100% maximum payout) 1,704,418 Issuance of stock-based awards under the Equity Plans 513,561 Purchases under the officer and director share purchase plan 88,741 Total reserved 6,345,801 |
Revenue Information
Revenue Information | 12 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Revenue Information | Revenue Information During the fiscal year ended September 30, 2023, the Company recognized revenue related to a certain multi-year repair and support contract. Repairs pricing is definitized and revenue is recognized as performed/completed. Support pricing is undefinitized until receipt of annual purchase order and revenue is variable consideration and subject to constraint. Variable consideration and constraints are reassessed at each reporting date as uncertainties are resolved or new information arises regarding remaining uncertainties For the fiscal year ended September 30, 2023, the Company recognized $4.2 million in support revenue related to (i) the definitized amount for calendar year 2022 as all revenue was constrained in previous periods due to lack of history with the customer until finalization of pricing, and receipt of payment, during the quarter ended September 30, 2023 of approximately $2.5 million and (ii) $1.7 million associated with proposed support pricing for calendar year 2023 reflecting a change in estimate with respect to constraint of calendar year 2023 revenue. Constraint was reduced for the calendar year 2023 support pricing due to added experience with the customer. Reportable Segment Concurrent with the discontinuance of the Broadband business segment and defense optoelectronics product line during the quarter ended September 30, 2023, the Company only has one reportable segment, Inertial Navigation, for which financial information is available and upon which operating results are evaluated by the chief operating decision maker, the Chief Executive Officer, to assess performance and to allocate resources. Geographical Concentration The following table sets forth revenue by geographic area based on customers’ billing addresses: Year Ended September 30, (in thousands) 2023 2022 United States and Canada $ 75,143 $ 42,177 Asia 8,714 710 Europe 10,444 1,242 Other 3,415 1,189 Total revenue $ 97,716 $ 45,318 Customer Concentration Portions of the Company’s sales are concentrated among a limited number of customers. Significant customers are defined as customers representing greater than 10% of consolidated revenue. There were two significant customers representing an aggregate of 40.4% and 39.7% of consolidated revenue for the fiscal years ended September 30, 2023 and 2022, respectively. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In April 2023, we initiated a restructuring program that includes the strategic shutdown of our Broadband business segment (including our cable TV, wireless, sensing and chips product lines) and the discontinuance of our defense optoelectronics product line. During the quarter ended September 30, 2023, the Broadband business segment and defense optoelectronics product line were considered as held for sale based upon (i) the existence of an executed non-binding letter of intent to sell our Broadband business segment (other than our chips product line) and our defense optoelectronics product line and (ii) in consideration of ongoing negotiations for the sale of the chips product line business. Given the prospective sale of the Broadband business segment and defense optoelectronics product line, we identified these asset groups as discontinued operations during the quarter ended September 30, 2023. We ceased operations of our chips business and indium phosphide wafer fabrication facility during the quarter ended September 30, 2023. In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that these business lines met held-for sale and discontinued operations accounting criteria during the quarter ended September 30, 2023. Accordingly, the Company classified the results of these business lines as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with these business lines were classified as held for sale in the consolidated balance sheets for all periods presented. In connection with (i) certain cash reduction actions approved by the Board in November 2022 and (ii) the restructuring program, the Board approved modifications to RSUs and PSUs previously granted to 36 employees under the 2019 Plan whose service with the Company was terminated. The modifications accelerated the vesting of 429 thousand RSUs and 291 thousand PSUs that had been scheduled to vest subsequent to each such employee’s termination of employment with EMCORE. The modifications resulted in incremental stock-based compensation expense of $0.6 million during the fiscal year ended September 30, 2023. The following table presents key components of assets and liabilities that were classified as held for sale on the consolidated balance sheets: September 30, (in thousands) 2023 2022 Cash $ 81 $ 526 Accounts receivable, net of credit loss of $0 974 4,250 Contract assets — 757 Inventory 10,063 10,753 Other current assets 1,154 1,728 Property, plant, and equipment, net 4,131 13,291 Operating lease right-of-use assets 56 99 Total assets 16,459 31,404 Remeasurement of assets 9,195 — Assets held for sale 7,264 31,404 Accounts payable 1,854 2,350 Accrued expenses and other current liabilities 1,697 1,427 Contract liabilities — 29 Operating lease liabilities - current 22 42 Operating lease liabilities - non-current 36 57 Other comprehensive income 1,053 860 Total liabilities $ 4,662 $ 4,765 During the quarter ended September 30, 2023, the Company recorded a loss related to the remeasurement of the discontinued business lines to fair value less cost to sell of $9.6 million. The selling costs were approximately $0.4 million. The following table presents key components of net (loss) income that were classified as discontinued operations on the consolidated statements of operations: Year Ended September 30, (in thousands) 2023 2022 Revenue $ 9,674 $ 78,808 Cost of Revenue (16,723) (53,156) Gross Profit (7,049) 25,652 Selling, general, and administrative 2,810 5,486 Research and development 3,459 4,754 Severance 2,597 1,213 Loss (gain) on sale of assets 10,407 (2,685) Other (income) expense (376) 456 (Loss) income from discontinued operations $ (25,946) $ 16,428 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Divestiture to Photonics Foundries On October 11, 2023, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and among the Company, Photonics Foundries, Inc., a Delaware corporation (“PF”), and Ortel LLC a Delaware limited liability company and wholly owned subsidiary of PF (the “Buyer”), pursuant to which (i) the Company agreed to transfer to the Buyer, and Buyer agreed to assume, substantially all of the assets and liabilities primarily related to the Company’s cable TV, wireless, sensing and defense optoelectronics business lines (the “Businesses”), including with respect to employees, contracts, intellectual property and inventory, and (ii) Buyer agreed to provide a limited license back to the Company of patents being sold to the Buyer (the “Transaction”). The Transaction excludes the Company’s chip business, indium phosphide wafer fabrication facilities and all assets not primarily related to the Businesses. The signing and closing of the Transaction occurred simultaneously, except with respect to the assets of the Company located in China. On November 30, 2023, the Company transferred to the Buyer, and the Buyer assumed, substantially all of the assets and liabilities of each of the Company’s subsidiaries in China. In connection with the Transaction, the parties entered a transition services agreement pursuant to which the Company will provide certain migration and transition services to facilitate an orderly transaction of the operation of the Businesses to the Buyer in the 12-month period following consummation of the Transaction, and the Company and the Buyer entered into a sublease pursuant to which the Company will sublease to the Buyer one of the Company’s buildings (occupying approximately 12,500 square feet) at its Alhambra, California facility for the 12-month period immediately following the closing of the Transaction without payment of rent. With respect to the Buyer’s assumption of our manufacturing agreement with our electronics manufacturing services (“EMS”) provider for our cable TV products, the Company (i) made a payment to the EMS provider in the amount of approximately $0.4 million immediately prior to the closing of the transaction and (ii) provided a guaranty of PF’s and the Buyer’s obligations with respect to payment of certain long-term liabilities that were originally agreed to and set forth in the manufacturing agreement and assigned to PF and the Buyer in the Transaction, in an aggregate amount expected to equal up to approximately $5.5 million, approximately $4.3 million of which will not become payable, if at all, until January 2026, provided that if such guaranty is exercised by the EMS provider, the Company will have the right to require the Buyer to reassign to the Company all intellectual property assigned to the Buyer in the Transaction and the Company will have the right to recover damages from PF and the Buyer. Chips Business Divestiture LOI On October 24, 2023, the Company entered into a non-binding letter of intent with a buyer to sell substantially all of the assets and liabilities related to the Company’s chips business line, including assets related to the Company’s indium phosphide wafer fabrication operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the assets, liabilities, shareholders’ equity, and operating results of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company is not the primary beneficiary of, nor do we hold a significant variable interest in, any variable interest entity. |
Discontinued Operations | Discontinued Operations In April 2023, we initiated a restructuring program that included the strategic shutdown of our Broadband business segment (including our cable TV, wireless, sensing and chips product lines) and the discontinuance of our defense optoelectronics product line. During the quarter ended September 30, 2023, the Broadband business segment and defense optoelectronics product line were considered as held for sale based upon (i) the existence of an executed non-binding letter of intent to sell our Broadband business segment (other than our chips product line) and our defense optoelectronics product line and (ii) in consideration of ongoing negotiations for the sale of the chips business. Given the prospective sale of the Broadband business segment and defense optoelectronics product line, we identified these asset groups as discontinued operations during the quarter ended September 30, 2023. We ceased operations of our chips business and indium phosphide wafer fabrication facility during the quarter ended September 30, 2023. In accordance with the authoritative guidance for discontinued operations (Accounting Standards Codification (ASC) 205-20), the Company determined that these business lines met held-for sale and discontinued operations accounting criteria during the quarter ended September 30, 2023. Accordingly, the Company classified the results of these business lines as discontinued operations in its consolidated statements of operations for all periods presented. Additionally, the related assets and liabilities associated with these business lines were classified as held for sale in the consolidated balance sheets for all periods presented. See Note 16 — Discontinued Operations for additional information. On October 11, 2023, the Company entered into an Asset Purchase Agreement to transfer substantially all of the assets and liabilities primarily related to the Company’s cable TV, wireless, sensing and defense optoelectronics business lines to Photonics Foundries, Inc. On October 24, 2023, the Company entered into a non-binding letter of intent with a buyer to sell substantially all of the assets and liabilities related to the Company’s chips business, including assets related to the Company’s indium phosphide wafer fabrication operations. |
Going Concern Basis | Going Concern Basis The consolidated financial statements included herein have been prepared in accordance with U.S. generally accepted accounting principles assuming we will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about our ability to continue as a going concern exists. We have recently experienced significant losses from our operations and used a significant amount of cash, amounting to a net loss of $75.4 million and net cash outflows from operations of $30.3 million for the fiscal year ended September 30, 2023, and we expect to continue to incur losses and use cash in our operations as we continue to restructure our business. As a result of our recent cash outflows, we have taken actions to manage our liquidity and will need to continue to manage our liquidity as we continue to restructure our operations to focus on our Inertial Navigation business. As of September 30, 2023, our cash and cash equivalents totaled $26.7 million and we had $9.9 million available under our Credit Agreement (as defined in Note 11 - Credit Agreement in the Notes to Consolidated Financial Statements). We are evaluating the sufficiency of our existing balances of cash and cash equivalents, cash flows from operations, and amounts expected to be available under our Credit Agreement, together with additional actions we could take (including those made in connection with our restructuring program announced in April 2023) to further reduce our expenses and/or potentially raising capital through additional debt or equity issuances, or from the potential monetization of certain assets. However, we may not be successful in executing on our plans to manage our liquidity, including recognizing the expected benefits from our previously announced restructuring program, or raising additional funds if we elect to do so, and as a result substantial doubt about our ability to continue as a going concern exists. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. Such estimates include accounts receivable, inventories, goodwill, long-lived assets, product warranty liabilities, legal contingencies, income taxes, asset retirement obligations, and pension obligation, as well as the evaluation associated with the going concern determination. We develop estimates based on historical experience and on various assumptions about the future that are believed to be reasonable based on the best information available to us. Our reported financial position or results of operations may be materially different under changed conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies. In the event that estimates or assumptions prove to differ from actual results, adjustments are made in subsequent periods to reflect more current information. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that may subject us to concentrations of credit risk consist primarily of accounts receivable. When necessary, we perform credit evaluations on customers’ financial condition and occasionally we request deposits in advance of shipping product to customers. These financial evaluations require significant judgment and are based on a variety of factors including, but not limited to, current economic trends, historical payment patterns, bad debt write off experience, and financial review of the particular customer. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consists primarily of bank deposits and highly liquid short-term investments with a maturity of three months or less at the time of purchase. |
Accounts Receivable | Accounts Receivable We regularly evaluate the collectability of accounts receivable and maintain allowances for doubtful accounts for estimated losses resulting from the inability of customers to meet their financial obligations to us. The allowance is based on the age of receivables and a specific identification of receivables considered at risk of collection. We classify charges associated with the allowance for doubtful accounts as selling, general, and administrative expense. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value (first-in, first-out). Inventory that is expected to be used within the next 12 months is classified as current inventory. We write down inventory once it has been determined that conditions exist that may not allow the inventory to be sold for its intended purpose or the inventory is determined to be excess or obsolete based on assumptions about future demand and market conditions. The charge related to inventory write-downs is recorded as cost of revenue. We evaluate inventory levels at least quarterly against an estimate of future demand on a significant part-by-part basis, in addition to determining its overall inventory risk. We have incurred, and may in the future incur, charges to write-down of inventory. See Note 6 - Inventory in the Notes to Consolidated Financial Statements for additional information related to inventory. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets. We depreciate equipment over three three Note 7 - Property, Plant, and Equipment, net in the Notes to Consolidated Financial Statements for additional information related to the impairment charge during the fiscal year ended September 30, 2023. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets |
Valuation of Long-lived Assets | Valuation of Long-lived Assets Long-lived assets consist primarily of intangible assets, net and property, plant, and equipment, net. Since long-lived assets are subject to amortization and depreciation/amortization, we review these assets for impairment in accordance with the provisions of ASC 360, Property, Plant, and Equipment. Intangible assets that not considered to have an indefinite useful life are itemized in Note 8 - Intangible Assets and Goodwill and are amortized over their useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Impairment testing of long-lived assets consists of determining whether the carrying amount of the long-lived asset or asset group is recoverable, in other words, whether the sum of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group exceeds the carrying amount. The determination of the existence of impairment involves judgments that are subjective in nature and may require the use of estimates in forecasting future results and cash flows related to an asset or group of assets. In making this determination, we use certain assumptions, including estimates of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, the length of service that assets will be used in operations, and estimated salvage values. |
Leases | Leases The Company determines if an arrangement is a lease at its inception. Right of use (ROU) assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate in determining the present value of lease payments considering the term of the lease, which is derived from information available at the lease commencement date. The lease term includes renewal options when it is reasonably certain that the option will be exercised, and excludes termination options. To the extent that the Company’s agreements have variable lease payments, the Company includes variable lease payments that depend on an index or a rate and excludes those that depend on facts or circumstances occurring after the commencement date, other than the passage of time. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company has elected not to recognize ROU assets and lease liabilities that arise from short-term (12 months or less) leases for any class of underlying asset. Operating leases are included in operating lease ROU assets, current operating lease liabilities, and non-current operating lease liabilities in the Company’s consolidated balance sheet. |
Asset Retirement and Environmental Obligations | Asset Retirement and Environmental Obligations Pursuant to ASC 410, Asset Retirement and Environmental Obligations , an ARO is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the fair value of the liability can reasonably be estimated. Upon initial recognition of an ARO, a company increases the carrying amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value through charges to operations costs. The initial capitalized costs are depleted over the useful lives of the related assets through charges to depreciation, and/or amortization. If the fair value of the estimated ARO changes, an adjustment is recorded to both the ARO and the asset retirement cost. Revisions in estimated liabilities can result from revisions of estimated inflation rates, escalating retirement costs, and changes in the estimated timing of settling ARO liabilities. Asset Retirement Obligations |
Pension Plan | Pension Plan With the acquisition of S&N, we acquired the assets and assumed the liabilities associated with a pension plan, now named the EMCORE Space & Navigation Corporation Pension Plan (the “Pension Plan”), which is a defined benefit pension plan providing postretirement benefits to certain employees. As of July 1, 2022, the Pension Plan was amended to freeze benefit plan accruals for participants. The investments in the Pension Plan are measured at fair value using quoted market prices or the net asset value per share as a practical expedient. The projected benefit obligations associated with the Pension Plan are determined based on actuarial models utilizing mortality tables and discount rates applied to the expected benefit term. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We determine the fair value of financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC Topic 820 (“ASC 820”), Fair Value Measurements, establishes a valuation hierarchy for disclosure of the inputs to valuation techniques used to measure fair value. This standard 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: • Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly, through market corroboration, for substantially the full term of the financial instrument. • Level 3 inputs are unobservable inputs based on assumptions used to measure assets or liabilities at fair value. Classification of an asset or liability within this hierarchy is determined based on the lowest level input that is significant to the fair value measurement. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. Cash and cash equivalents consists primarily of bank deposits or highly liquid short-term investments with a maturity of three months or less at the time of purchase. Restricted cash represents cash temporarily reserved by the Company. Cash, cash equivalents, and restricted cash are based on Level 1 measurements. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, contract assets, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities, and contract liabilities approximate fair value because of the short maturity of these instruments. |
Revenue Recognition, Remaining Performance Obligations, and Disaggregation of Revenue | Revenue Recognition To determine the proper revenue recognition, we perform the following five steps: (a) identify the contract(s) with a customer; (b) identify the performance obligations in the contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in the contract; and (e) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. The majority of revenues are from product sales to customers pursuant to purchase orders. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time. The Company has elected to account for shipping and handling activities as a fulfillment cost as permitted by the standard. When we perform shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities, and accordingly, the costs are accrued when the related revenue is recognized. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less. We also enter into non-recurring engineering contracts. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. For contracts that include multiple performance obligations, we allocate revenue to each performance obligation based on estimates of the relative standalone selling price that we would charge the customer for each promised product or service. In addition, we follow the percentage of completion method of revenue recognition for the majority of our S&N revenue, as these contracts typically are for products specific to the customer and there is no alternative use for the product. We recognize revenue progressively as the customer takes control of the manufactured products built to customer specifications. Under these S&N manufacturing contracts with customers, the customer controls all of the work-in-progress as products are being built. In certain instances, inventory is maintained by customers at consigned locations. Revenues from consigned sales are recognized when the customer obtains control of our product, which occurs at a point in time. This is typically when the customer pulls product for use. We use a number of wholesale distributors around the world and recognize revenue when the wholesale distributor obtains control of our product, which occurs at a point in time, typically upon shipment. Wholesale distributors are contractually obligated to pay us on standard commercial terms, consistent with our end-use customers. We do not sell to wholesale distributors on consignment and do not give wholesale distributors a right-of-return. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm orders for long-term contracts which control has not transferred to the customer. As of September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $11.8 million. The Company expects to recognize revenue on the remaining performance obligations by fiscal year 2025. Disaggregation of Revenue For additional information on the disaggregated revenues by geographical region and major product category, see Note 15 – Revenue Information in the Notes to Consolidated Financial Statements. |
Receivables, Net | Receivables, Net Receivables, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. Payments are generally due within 90 days or less of invoicing and do not include a significant financing component. We maintain an allowance for credit loss to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables, and collateral to the extent applicable. Contract Assets A contract asset is recognized when the Company has recognized revenue, but has not issued an invoice for payment. Contract assets are classified as current assets and transferred to receivables when the entitlement to payment becomes unconditional. The Company’s contract assets are generally converted to trade account receivables within 90 days, at which time the Company is entitled to payment of the fixed price upon delivery of the finished product subject to customer payment terms. Contract Liabilities A contract liability is recognized when the Company has billed and received payment from a customer, but has not yet earned revenue. Contract liabilities are classified as current liabilities and transferred to revenue when revenue recognition standards have been met. |
Product Warranty Reserves | Product Warranty Reserves We provide customers with warranty claims for certain products and warranty-related services are not considered a separate performance obligation. Pursuant to ASC 450, Contingencies , we make estimates of product warranty expense using historical experience rates and accrue estimated warranty expense as a cost of revenue. We estimate the costs of warranty obligations based on historical experience of known product failure rates and anticipated rates of warranty claims, use of materials to repair or replace defective products, and service delivery costs incurred in correcting the product issues. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. |
Income Taxes | Income Taxes In accordance with the authoritative guidance on accounting for income taxes, we recognize income taxes using an asset and liability approach. This approach requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. The measurement of current and deferred taxes is based on provisions of the enacted tax law. The effects of future changes in tax laws or rates are not anticipated. The authoritative guidance provides for recognition of deferred tax assets if the realization of such deferred tax assets is more likely than not to occur based on an evaluation of all available evidence, both positive and negative, and the relative weight of the evidence. We have determined that at this time it is more likely than not that deferred tax assets attributable to all other items will not be realized, primarily due to uncertainties related to the ability to utilize net operating loss carryforwards before they expire. Accordingly, we have established a valuation allowance for such deferred tax assets which we do not expect to realize. If there is a change in the ability to realize deferred tax assets for which a valuation allowance has been established, then the tax valuation allowance may decrease in the period in which we determine that realization is more likely than not. Likewise, if we determine that it is not more likely than not that deferred tax assets will be realized, then a valuation allowance may be established for such deferred tax assets and the tax provision may increase in the period in which we make the determination. See Note 12 - Income and Other Taxes in the Notes to Consolidated Financial Statements for additional information related to income taxes. |
Purchase Accounting | Purchase Accounting The Company accounts for acquisitions of businesses under the acquisition method of accounting. Under the acquisition method of accounting, the Company records assets acquired and liabilities assumed at their estimated fair value on the date of acquisition. Goodwill is measured as the excess of the fair value of the consideration transferred over the fair value of the identifiable net assets. Estimated fair values of acquired assets and liabilities are provisional and could change as additional information is received. When appropriate, our estimates of the fair values of assets and liabilities acquired include assistance from independent third-party valuation firms. Valuations are finalized as soon as practicable, but not later than one year from the acquisition date. Any subsequent changes to purchase price allocations result in a corresponding adjustment to goodwill. Inventory, long-lived assets, goodwill, and other intangible assets generally represent the largest components of our acquisitions. Inventory is valued utilizing net realizable value method. Property, plant, and equipment is valued utilizing a cost and market approach. Intangible assets are recognized at their estimated fair values as of the date of acquisition and generally consist of customer relationships, technology, IPR&D, and trademarks. Determination of the estimated fair value of intangible assets requires judgment. The estimated fair value of technology, IPR&D, and trademarks, is determined utilizing the relief from royalty method. Under this form of income approach, a royalty rate based on observed market royalties is applied to projected revenue supporting the technology, IPR&D, and trademarks and discounted to present value. The estimated fair value of customer relationships is determined using the multiple period excess earnings method. Under this form of income approach, net cash flows attributable to the subject asset are typically calculated net of fair returns on and of all assets that are necessary to realize the cash flows. Cash flows of the subject intangible asset are charged amounts representing a return of and a return on these contributory assets (based on the fair values of the contributory assets). |
Recently Adopted Accounting Pronouncements and Recent Accounting Standards or Updates Not Yet Effective | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements The were no recently adopted accounting pronouncements. Recent Accounting Standards or Updates Not Yet Effective In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The new standard is effective for annual periods beginning after December 15, 2024. This accounting standard is effective in the first quarter of the Company's fiscal year ended September 30, 2026. The Company does not expect the adoption of this new guidance to have a material impact on the consolidated financial statements. |
Legal Costs | Professional legal fees are expensed when incurred. We accrue for contingent losses when such losses are probable and reasonably estimable. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The table below represents the final purchase price allocation to the assets acquired and liabilities assumed of S&N based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions: (in thousands) Amount Tangible assets acquired: Accounts receivable $ 803 Inventory 370 Contract assets 3,920 Operating lease right-of-use assets 1,529 Property, plant, and equipment 1,996 Net pension benefit assets 1,727 Intangible assets acquired 2,740 Goodwill 3,108 Liabilities assumed: Accounts payable (1,226) Accrued expenses (622) Contract liabilities (6,024) Operating lease liabilities (1,565) Asset retirement obligations (1,895) Total purchase consideration $ 4,861 The total purchase price for the EMCORE Chicago acquisition was allocated to the assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date. Since the acquisition, the purchase price allocation for EMCORE Chicago changed by a $3.3 million reduction to inventory resulting in a corresponding increase to intangible assets and goodwill acquired. Goodwill is measured as the excess of the fair value of the purchase consideration transferred over the fair value of the identifiable net assets. The table below represents the final purchase price allocation to the assets acquired and liabilities assumed of EMCORE Chicago based on their estimated fair values as of the acquisition date based on management’s best estimates and assumptions: (in thousands) Amount Tangible assets acquired: Accounts receivable $ 4,977 Inventory 7,479 Prepaid expenses and other current assets 1,483 Property, plant, and equipment 14,442 Intangible assets acquired 13,470 Goodwill 15,867 Liabilities assumed: Accounts payable (1,699) Accrued expenses (485) Contract liabilities (637) Other long-term liabilities (8) Total purchase consideration $ 54,889 |
Schedule of Unaudited Pro Forma Information | The following unaudited pro forma financial information presented for the fiscal year ended September 30, 2022 does not purport to be indicative of the results of operations that would have been achieved had the acquisition been consummated on October 1, 2021, nor of the results which may occur in the future. The pro forma amounts are based upon available information and certain assumptions that the Company believes are reasonable. Year Ended September 30, 2022 (in thousands, except per share data) EMCORE EMCORE Chicago Pro Forma Pro Forma Combined Revenue $ 118,029 $ 31,757 $ — $ 149,786 Cost of revenue 89,486 24,347 683 (a) 114,516 Gross profit 28,543 7,410 (683) 35,270 Operating expense: Selling, general, and administrative 33,294 9,670 (4,102) (a)(b) 38,862 Research and development 18,401 4,946 (1,057) (a)(b) 22,290 Severance 1,357 (4) — 1,353 Gain on sale of assets (2,685) — — (2,685) Impairment charge 2,956 — — 2,956 Total operating expense 53,323 14,612 (5,159) 62,776 Operating loss (24,780) (7,202) 4,476 (27,506) Other (expense) income: Interest expense, net (139) — (1,060) (c) (1,199) Foreign exchange gain (352) — — (352) Pension income 148 — — 148 Other income — 137 — 137 Total other expense (343) 137 (1,060) (1,266) Loss before income tax benefit (25,123) (7,065) 3,416 (28,772) Income tax benefit (expense) 139 (42) (19) (d)(e) 78 Net loss (24,984) (7,107) 3,397 (28,694) Foreign exchange translation adjustment 172 — — 172 Pension adjustment 441 — — 441 Comprehensive loss $ (24,371) $ (7,107) $ 3,397 $ (28,081) Per share data: Net loss per basic share: $ (0.67) $ — $ (0.77) Weighted-average number of basic and diluted shares outstanding 37,269 $ — 37,269 (a) Reflects the impact to depreciation expense and amortization expense as a result of the change in fair value of property, plant, and equipment and intangible assets acquired. Adjustment was made to the unaudited pro forma combined statements of operations for the nine months ended September 30, 2022. (b) Reflects the deduction of various sales, general, and administrative and research and development expenses allocated from corporate overhead to EMCORE Chicago during the periods presented that will not be incurred on an ongoing basis as a result of existing EMCORE management structures in place, which will provide the same support to EMCORE Chicago upon completion of the transition services agreement entered into between EMCORE and KVH in connection with the EMCORE Chicago acquisition. Amounts were estimated based on historical allocation included in the stand-alone financial statements of EMCORE Chicago. However, actual costs to be incurred associated with corporate support may vary under the EMCORE structure. (c) Reflects the impact of interest expense related to cash from borrowing facility for funding of the transaction. (d) Reflects the current tax expense due to additional income and deferred income tax expense related to deferred tax liability generated from annual tax amortization of indefinite-lived assets that were acquired for the periods presented. Such amounts were determined based on the effective tax rate of EMCORE rather than statutory tax rates as a result of a tax valuation allowance covering substantially all deferred tax assets and the existence of tax loss carryforwards present at both entities. (e) Reflects the deduction of the income tax expense related to the FIN 48 liability of EMCORE Chicago that is not assumed by EMCORE. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: September 30, (in thousands) 2023 2022 Cash $ 4,332 $ 19,485 Cash equivalents 21,879 5,614 Restricted cash 495 520 Total cash, cash equivalents, and restricted cash $ 26,706 $ 25,619 |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: September 30, (in thousands) 2023 2022 Cash $ 4,332 $ 19,485 Cash equivalents 21,879 5,614 Restricted cash 495 520 Total cash, cash equivalents, and restricted cash $ 26,706 $ 25,619 |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | The components of accounts receivable, net consisted of the following: September 30, (in thousands) 2023 2022 Accounts receivable, gross $ 15,931 $ 14,160 Allowance for credit loss (356) (337) Accounts receivable, net $ 15,575 $ 13,823 The following table summarizes changes in the allowance for credit loss: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 337 $ 260 Additions from acquisitions — 106 Provision adjustment - expense, net of recoveries 193 229 Write-offs and other deductions (174) (258) Balance at end of period $ 356 $ 337 Certain of our customers are billed based on fee schedules that are agreed upon in each customer contract. Contract assets represent accrued revenues that have not yet been billed to the customers due to certain contractual terms other than the passage of time and were $8.4 million and $3.8 million as of September 30, 2023 and 2022, respectively. Contract liabilities represent payments received in advance of providing services under certain contract and were $1.6 million and $5.3 million as of September 30, 2023 and 2022, respectively. Revenue recognized in the fiscal years ended September 30, 2023 and 2022 relating to contract liabilities as of the beginning of the respective fiscal year was $5.3 million and $0.4 million, respectively. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventory consisted of the following: September 30, (in thousands) 2023 2022 Raw materials $ 14,503 $ 6,257 Work in-process 9,766 18,251 Finished goods 4,636 1,774 Inventory $ 28,905 $ 26,282 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment, net (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The components of property, plant, and equipment, net consisted of the following: September 30, (in thousands) 2023 2022 Land $ — $ 995 Building — 8,805 Equipment 31,658 29,224 Furniture and fixtures 1,576 1,394 Computer hardware and software 3,220 3,230 Leasehold improvements 9,442 6,851 Construction in progress 2,508 4,130 Property, plant, and equipment, gross $ 48,404 $ 54,629 Accumulated depreciation (32,887) (30,053) Property, plant, and equipment, net $ 15,517 $ 24,576 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Intangible Assets | The following table summarizes changes in intangible assets, net: September 30, (in thousands) 2023 2022 Balance at beginning of period $ 14,790 $ 167 Additions from acquisition 1,470 14,740 Write off due to impairment (2,125) — Amortization (1,890) (117) Balance at end of period $ 12,245 $ 14,790 |
Schedule of Weighted Average Remaining Useful Lives by Definite-lived Intangible Asset | The weighted average remaining useful lives by definite-lived intangible asset category are as follows: (in thousands, except weighted average remaining life) September 30, 2023 Weighted Average Remaining Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Technology 13.0 $ 16,901 $ (9,527) $ 7,374 Customer relationships 4.0 4,690 (674) 4,016 Definite-lived intangible assets total $ 21,591 $ (10,201) $ 11,390 (in thousands, except weighted average remaining life) September 30, 2022 Weighted Average Remaining Life (in years) Gross Carrying Amount Accumulated Amortization Net Book Value Technology 5.4 $ 10,991 $ (8,261) $ 2,730 Customer relationships 4.6 3,260 (50) 3,210 Definite-lived intangible assets total $ 14,251 $ (8,311) $ 5,940 |
Schedule of Future Amortization Expense for Intangible Assets | Estimated future amortization expense for intangible assets recorded by the Company at September 30, 2023 is as follows: (in thousands) Amount 2024 $ 1,956 2025 1,930 2026 1,527 2027 1,504 2028 1,491 Thereafter 2,982 Total amortization expense $ 11,390 |
Schedule of Goodwill | The following table summarizes changes in goodwill: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 17,894 $ 69 Additions from acquisition 1,150 17,825 Write off from impairment (19,044) — Balance at end of period $ — $ 17,894 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plan, Fair Value of the Plan Assets and Funded Status | The following table presents the benefit obligation, fair value of the plan assets, and funded status of the plan: September 30, (in thousands) 2023 2022 Change in Benefit Obligation Benefit obligation at beginning of period $ 7,332 $ 8,203 Service cost 105 49 Interest cost 372 130 Participant contributions — — Amendments — — Actuarial losses (gains) (461) (901) Benefits paid (634) (149) Business combinations and (divestitures) — — Curtailments, settlements and/or special/contractual termination benefits — — Benefit obligation at end of year $ 6,714 $ 7,332 Change in Plan Assets Fair value at beginning of period $ 9,469 $ 9,930 Actual return on plan assets (214) (312) Company contributions — — Participant contributions — — Benefits paid (634) (149) Expenses paid — — Business combinations and (divestitures) — — Curtailments, settlements and/or special/contractual termination benefits — — Fair value at end of year $ 8,621 $ 9,469 Funded Status Funded status at end of year $ 1,907 $ 2,137 Amounts Recognized in Balance Sheets Non-current assets $ 1,907 $ 2,137 Current liabilities $ — $ — Non-current liabilities $ — $ — Amounts Recognized in Accumulated Other Comprehensive Income Transition obligation (asset) $ — $ — Prior service cost (credit) $ — $ — Net loss (gain) $ (350) $ (441) Net periodic pension cost Service cost $ 105 $ 49 Interest cost 372 130 Expected return on plan assets (337) (148) Amortization of transition obligation (asset) — — Amortization of prior service cost (credit) — — Amortization of net loss (gain) — — Recognition due to settlement, curtailment, and special/contractual termination benefits — — Net periodic pension cost $ 140 $ 31 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss Net loss (gain) $ 91 $ (441) Prior service cost (credit) — — Amortization of net (loss) gain — — Amortization of prior service cost (credit) — — Amortization of initial asset — — Total recognized in other comprehensive (loss) income $ 91 $ (441) Actuarial (Gain) Loss by Source Updated census $ (255) $ (55) Updated discount rate (206) (846) Total $ (461) $ (901) Estimated Future Benefit Payments 2024 $ 613 $ 600 2025 575 579 2026 555 562 2027 567 575 2028 558 573 Thereafter 2,668 2,748 Total $ 5,536 $ 5,637 Weighted Average Assumptions to Determine Benefit Obligations at Year End Discount rate 5.9% 5.6% Rate of compensation increase N/A N/A Weighted Average Assumptions to Determine Net Periodic Pension Cost Discount rate 5.6% 4.4% Rate of compensation increase N/A N/A Expected long-term return on plan assets 3.7% 3.7% |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Components of Accrued Expenses and Other Current Liabilities | The components of accrued expenses and other current liabilities consisted of the following: September 30, (in thousands) 2023 2022 Compensation $ 5,980 $ 3,855 Warranty 864 911 Commissions 468 228 Consulting 68 241 Legal expenses and other professional fees 262 275 Auditor fees 163 186 Litigation settlement accrual — 341 Other 666 660 Accrued expenses and other current liabilities $ 8,471 $ 6,697 |
Schedule of Product Warranty Accruals | The following table summarizes the changes in product warranty accrual accounts: Year Ended September 30, (in thousands) 2023 2022 Balance at beginning of period $ 911 $ 569 Additions from acquisitions — 437 Provision for product warranty expense 120 124 Adjustments and utilization of warranty accrual (167) (219) Balance at end of period $ 864 $ 911 |
Credit Agreement (Tables)
Credit Agreement (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Future Loan Repayments | Our future term loan repayments is as follows: (in thousands) Amount 2024 $ 852 2025 852 2026 2,478 Total loan payments $ 4,182 |
Income and Other Taxes (Tables)
Income and Other Taxes (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Loss) Income from Operations before Income Taxes | The Company’s loss from continuing operations before income taxes consisted of the following: Year Ended September 30, (in thousands) 2023 2022 Domestic $ (49,371) $ (40,608) Foreign — (292) Loss before income taxes $ (49,371) $ (40,900) |
Schedule of Income Tax Expense (Benefit) | The Company’s income tax expense (benefit) consisted of the following: Year Ended September 30, (in thousands) 2023 2022 Federal: Current $ — $ (125) Deferred (12) 12 (12) (113) State: Current 65 (37) Deferred (11) 11 54 (26) Foreign: Current — — Deferred — — Total income tax expense (benefit) $ 42 $ (139) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes, with the amount computed by applying the statutory U.S. federal and state income tax rates to continuing operations loss before provision for income taxes is as follows: Year Ended September 30, (in thousands) 2023 2022 Income tax benefit computed at U.S. federal statutory rate $ (10,368) $ (8,589) State tax expense (benefit), net of U.S. federal effect 54 (27) Foreign tax rate differential 355 (7) Shortfall from stock based compensation 1,204 141 Other 20 85 Federal benefit on PPP loan forgiveness 15 — Net operating loss carryforward expiration 12,839 11,705 Change in valuation allowance (4,077) (3,447) Income tax expense (benefit) $ 42 $ (139) Effective tax rate 0.1 % (0.3) % |
Schedule of Deferred Tax Assets and (Liabilities) | Significant components of deferred tax assets (liabilities) are as follows: September 30, (in thousands) 2023 2022 Federal net operating loss carryforwards $ 78,872 $ 94,691 Foreign net operating loss carryforwards — 1,135 Income tax credit carryforwards 355 592 Inventory reserves 1,666 735 Accounts receivable reserves 60 57 Accrued warranty reserve 103 115 State net operating loss carryforwards 7,547 7,888 Stock compensation 1,203 1,352 Deferred compensation 1,022 465 Fixed assets and intangibles 5,276 1,212 ROU lease liability 5,751 5,862 ROU lease assets (5,195) (5,724) Capitalized Research expense 3,385 — Other 2,935 2,443 Total deferred tax assets 102,981 110,823 Valuation allowance (102,981) (110,846) Net deferred tax liabilities $ — $ (23) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of September 30, 2023 were as follows: (in thousands) Amount 2024 $ 4,614 2025 4,137 2026 3,072 2027 2,757 2028 2,830 Thereafter 22,179 Total lease payments $ 39,589 Less imputed interest (15,674) Total operating lease liabilities $ 23,915 |
Schedule of Operating Lease Information | Weighted-average remaining lease term and discount rate related to operating leases are as follows: September 30, 2023 2022 Weighted average remaining lease term (years) 10.0 9.8 Weighted average discount rate 9.5 % 5.4 % Supplemental cash information and non-cash activities related to operating leases are as follows: September 30, (in thousands) 2023 2022 Operating cash outflows from operating leases $ 3,749 $ 2,011 Right-of-use assets obtained in exchange for operating lease liabilities $ 2,577 $ 1,529 |
Schedule of Change in Asset Retirement Obligation | The following table summarizes ARO activity: September 30, (in thousands) 2023 2022 Balance at beginning of period $ 4,664 $ 2,049 Acquisition-related adjustment (604) 2,500 Accretion expense 134 90 Revision in estimated cash flows — 25 Balance at end of period $ 4,194 $ 4,664 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes stock option activity under the Equity Plans for the fiscal year ended September 30, 2023: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (*) (in thousands) Outstanding as of September 30, 2022 9,981 $ 4.52 Granted — — Exercised — — Forfeited — — Expired 976 3.84 Outstanding as of September 30, 2023 9,005 $ 4.59 1.30 $ — Exercisable as of September 30, 2023 9,005 $ 4.59 1.30 $ — Vested and expected to vest as of September 30, 2023 9,005 $ 4.59 1.30 $ — ___________________________________________ (*) Intrinsic value for stock options represents the “in-the-money” portion or the positive variance between a stock option’s exercise price and the underlying stock price. For the fiscal year ended September 30, 2022, the intrinsic value of options exercised was $0. |
Schedule of Restricted Stock Activity | The following table summarizes the activity related to RSUs subject to time-based vesting requirements for the fiscal year ended September 30, 2023: RSUs Number of Shares Weighted Average Grant Date Fair Value Non-vested as of September 30, 2022 2,947,130 $ 3.90 Granted 2,896,650 1.00 Vested (1,314,313) 3.72 Forfeited (499,391) 2.55 Non-vested as of September 30, 2023 4,030,076 $ 2.04 |
Schedule of Performance Share Activity | The following table summarizes the activity related to PSUs for the fiscal year ended September 30, 2023: PSUs Number of Shares (at target) Weighted Average Grant Date Fair Value Non-vested as of September 30, 2022 1,809,053 $ 4.37 Granted 634,650 0.97 Vested (291,285) 2.47 Forfeited (448,000) 3.81 Non-vested as of September 30, 2023 1,704,418 $ 3.57 |
Schedule of Stock-based Compensation Expense - By Award Type | The following table sets forth stock-based compensation expense by award type: Year Ended September 30, (in thousands) 2023 2022 RSUs and RSAs $ 4,203 $ 2,576 PSUs 2,306 2,314 Outside director equity awards and fees in common stock 378 484 Total stock-based compensation expense $ 6,888 $ 5,374 |
Schedule of Stock-based Compensation Expense - By Expense Type | The following table sets forth stock-based compensation expense by expense type: Year Ended September 30, (in thousands) 2023 2022 Cost of revenue $ 1,742 $ 952 Selling, general, and administrative 1,324 3,591 Research and development 3,823 831 Total stock-based compensation expense $ 6,888 $ 5,374 |
Schedule of (Loss) Income Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net loss per share: Year Ended September 30, (in thousands, except per share data) 2023 2022 Numerator Net loss from continuing operations $ (49,413) $ (40,761) (Loss) income from discontinued operations including loss on disposal of $9.6 million, net of tax benefit of $0 $ (25,946) $ 16,428 Net loss $ (75,359) $ (24,333) Denominator Weighted average number of shares and preferred warrants outstanding - basic 51,510 37,269 Effect of dilutive securities Stock options — — PSUs, RSUs, and restricted stock — — Weighted average number of shares and preferred warrants outstanding - diluted 51,510 37,269 Loss from continuing operations per share - basic and diluted $ (0.96) $ (1.09) Loss from discontinued operations per share - basic and diluted $ (0.50) $ 0.44 Net loss per share - basic and diluted $ (1.46) $ (0.65) Weighted average antidilutive options, unvested RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation 3,305 858 |
Schedule of Common Stock Reserved for Future Issuances | Common stock reserved for future issuances as of September 30, 2023 was as follows: Amount Exercise of outstanding stock options 9,005 Unvested RSUs 4,030,076 Unvested PSUs (at 100% maximum payout) 1,704,418 Issuance of stock-based awards under the Equity Plans 513,561 Purchases under the officer and director share purchase plan 88,741 Total reserved 6,345,801 |
Revenue Information (Tables)
Revenue Information (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Region | The following table sets forth revenue by geographic area based on customers’ billing addresses: Year Ended September 30, (in thousands) 2023 2022 United States and Canada $ 75,143 $ 42,177 Asia 8,714 710 Europe 10,444 1,242 Other 3,415 1,189 Total revenue $ 97,716 $ 45,318 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations | The following table presents key components of assets and liabilities that were classified as held for sale on the consolidated balance sheets: September 30, (in thousands) 2023 2022 Cash $ 81 $ 526 Accounts receivable, net of credit loss of $0 974 4,250 Contract assets — 757 Inventory 10,063 10,753 Other current assets 1,154 1,728 Property, plant, and equipment, net 4,131 13,291 Operating lease right-of-use assets 56 99 Total assets 16,459 31,404 Remeasurement of assets 9,195 — Assets held for sale 7,264 31,404 Accounts payable 1,854 2,350 Accrued expenses and other current liabilities 1,697 1,427 Contract liabilities — 29 Operating lease liabilities - current 22 42 Operating lease liabilities - non-current 36 57 Other comprehensive income 1,053 860 Total liabilities $ 4,662 $ 4,765 During the quarter ended September 30, 2023, the Company recorded a loss related to the remeasurement of the discontinued business lines to fair value less cost to sell of $9.6 million. The selling costs were approximately $0.4 million. The following table presents key components of net (loss) income that were classified as discontinued operations on the consolidated statements of operations: Year Ended September 30, (in thousands) 2023 2022 Revenue $ 9,674 $ 78,808 Cost of Revenue (16,723) (53,156) Gross Profit (7,049) 25,652 Selling, general, and administrative 2,810 5,486 Research and development 3,459 4,754 Severance 2,597 1,213 Loss (gain) on sale of assets 10,407 (2,685) Other (income) expense (376) 456 (Loss) income from discontinued operations $ (25,946) $ 16,428 |
Description of Business (Detail
Description of Business (Details) | Sep. 30, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Portfolio acquisition years | 5 years |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Going Concern Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Net loss | $ (75,359) | $ (24,333) |
Cash and cash equivalents | 26,706 | 25,619 |
Net cash used in operating activities - continuing operations | (30,270) | $ (24,258) |
Revolving Credit Facility | New A B L Credit Agreement [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Remaining borrowing capacity | $ 9,900 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property, Plant, and Equipment (Details) | Sep. 30, 2023 |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Performance Obligations (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Accounting Policies [Abstract] | |
Transaction price allocated to performance obligation | $ 11.8 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Aug. 09, 2022 | Apr. 29, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Transaction costs | $ 4,300 | $ 6,100 | ||
L3Harris Technologies, Inc. | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 5,000 | |||
Payments to acquire business | $ 4,900 | |||
Revenue | 31,100 | 10,100 | ||
Net loss | 4,200 | 500 | ||
Adjustment, intangibles | 2,300 | |||
Reduction to contract assets | 600 | |||
Intangible assets acquired | 2,740 | |||
KVH Industries, Inc | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business | $ 55,000 | |||
Revenue | 35,900 | 6,100 | ||
Net loss | 14,800 | $ 700 | ||
Impairment and write off of goodwill | $ 15,900 | |||
Adjustments to preliminary purchase price allocation | 3,300 | |||
Inventory reduction | 3,300 | |||
Intangible assets acquired | 13,470 | |||
KVH Industries, Inc | In Process Research and Development | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | 5,900 | |||
KVH Industries, Inc | Trademarks | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | 2,200 | |||
KVH Industries, Inc | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | 3,000 | |||
KVH Industries, Inc | Technology | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 2,400 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed of S&N (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 |
Tangible assets acquired: | |||
Goodwill | $ 0 | $ 17,894 | $ 69 |
L3Harris Technologies, Inc. | |||
Tangible assets acquired: | |||
Accounts receivable | 803 | ||
Inventory | 370 | ||
Contract assets | 3,920 | ||
Operating lease right-of-use assets | 1,529 | ||
Property, plant, and equipment | 1,996 | ||
Net pension benefit assets | 1,727 | ||
Intangible assets acquired | 2,740 | ||
Goodwill | 3,108 | ||
Liabilities assumed: | |||
Accounts payable | (1,226) | ||
Accrued expenses | (622) | ||
Contract liabilities | (6,024) | ||
Operating lease liabilities | (1,565) | ||
Asset retirement obligations | (1,895) | ||
Total purchase consideration | $ 4,861 |
Acquisitions - Assets Acquire_2
Acquisitions - Assets Acquired and Liabilities Assumed of IN (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 |
Tangible assets acquired: | |||
Goodwill | $ 0 | $ 17,894 | $ 69 |
KVH Industries, Inc | |||
Tangible assets acquired: | |||
Accounts receivable | 4,977 | ||
Inventory | 7,479 | ||
Prepaid expenses and other current assets | 1,483 | ||
Property, plant, and equipment | 14,442 | ||
Intangible assets acquired | 13,470 | ||
Goodwill | 15,867 | ||
Liabilities assumed: | |||
Accounts payable | (1,699) | ||
Accrued expenses | (485) | ||
Contract liabilities | (637) | ||
Other long-term liabilities | (8) | ||
Total purchase consideration | $ 54,889 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Revenue | $ 97,716 | $ 45,318 |
Cost of revenue | 74,323 | 41,252 |
Gross profit | 23,393 | 4,066 |
Operating expense: | ||
Selling, general, and administrative | 32,731 | 28,224 |
Research and development | 17,910 | 13,782 |
Severance | 27 | 140 |
Gain on sale of assets | (1,147) | 0 |
Impairment charge | 22,612 | 2,956 |
Total operating expense | 72,133 | 45,102 |
Operating loss | (48,740) | (41,036) |
Other (expense) income: | ||
Interest expense, net | 751 | 35 |
Foreign exchange loss | (1) | 0 |
Total other (expense) income | (631) | 136 |
Loss from continuing operations before income tax (expense) benefit | (49,371) | (40,900) |
Income tax (expense) benefit from continuing operations | (42) | 139 |
Net loss | (75,359) | (24,333) |
Comprehensive loss | $ (75,450) | $ (23,892) |
Net loss per basic share (in dollars per share) | $ (1.46) | $ (0.65) |
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
Pro Forma | ||
Business Acquisition [Line Items] | ||
Revenue | $ 149,786 | |
Cost of revenue | 114,516 | |
Gross profit | 35,270 | |
Operating expense: | ||
Selling, general, and administrative | 38,862 | |
Research and development | 22,290 | |
Severance | 1,353 | |
Gain on sale of assets | (2,685) | |
Impairment charge | 2,956 | |
Total operating expense | 62,776 | |
Operating loss | (27,506) | |
Other (expense) income: | ||
Interest expense, net | (1,199) | |
Foreign exchange loss | (352) | |
Other income | 148 | |
Other income | 137 | |
Total other (expense) income | (1,266) | |
Loss from continuing operations before income tax (expense) benefit | (28,772) | |
Income tax (expense) benefit from continuing operations | 78 | |
Net loss | (28,694) | |
Foreign exchange translation adjustment | 172 | |
Pension adjustment | 441 | |
Comprehensive loss | $ (28,081) | |
Net loss per basic share (in dollars per share) | $ (0.77) | |
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 37,269 | |
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 37,269 | |
Pro Forma | Pro Forma Adjustments | ||
Business Acquisition [Line Items] | ||
Revenue | $ 0 | |
Cost of revenue | 683 | |
Gross profit | (683) | |
Operating expense: | ||
Selling, general, and administrative | (4,102) | |
Research and development | (1,057) | |
Severance | 0 | |
Gain on sale of assets | 0 | |
Impairment charge | 0 | |
Total operating expense | (5,159) | |
Operating loss | 4,476 | |
Other (expense) income: | ||
Interest expense, net | (1,060) | |
Foreign exchange loss | 0 | |
Other income | 0 | |
Other income | 0 | |
Total other (expense) income | (1,060) | |
Loss from continuing operations before income tax (expense) benefit | 3,416 | |
Income tax (expense) benefit from continuing operations | (19) | |
Net loss | 3,397 | |
Foreign exchange translation adjustment | 0 | |
Pension adjustment | 0 | |
Comprehensive loss | $ 3,397 | |
Net loss per basic share (in dollars per share) | $ 0 | |
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 0 | |
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 0 | |
Pro Forma | EMCORE (excluding EMCORE Chicago) | ||
Business Acquisition [Line Items] | ||
Revenue | $ 118,029 | |
Cost of revenue | 89,486 | |
Gross profit | 28,543 | |
Operating expense: | ||
Selling, general, and administrative | 33,294 | |
Research and development | 18,401 | |
Severance | 1,357 | |
Gain on sale of assets | (2,685) | |
Impairment charge | 2,956 | |
Total operating expense | 53,323 | |
Operating loss | (24,780) | |
Other (expense) income: | ||
Interest expense, net | (139) | |
Foreign exchange loss | (352) | |
Other income | 148 | |
Other income | 0 | |
Total other (expense) income | (343) | |
Loss from continuing operations before income tax (expense) benefit | (25,123) | |
Income tax (expense) benefit from continuing operations | 139 | |
Net loss | (24,984) | |
Foreign exchange translation adjustment | 172 | |
Pension adjustment | 441 | |
Comprehensive loss | $ (24,371) | |
Net loss per basic share (in dollars per share) | $ (0.67) | |
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 37,269 | |
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 37,269 | |
Pro Forma | EMCORE Chicago | ||
Business Acquisition [Line Items] | ||
Revenue | $ 31,757 | |
Cost of revenue | 24,347 | |
Gross profit | 7,410 | |
Operating expense: | ||
Selling, general, and administrative | 9,670 | |
Research and development | 4,946 | |
Severance | (4) | |
Gain on sale of assets | 0 | |
Impairment charge | 0 | |
Total operating expense | 14,612 | |
Operating loss | (7,202) | |
Other (expense) income: | ||
Interest expense, net | 0 | |
Foreign exchange loss | 0 | |
Other income | 0 | |
Other income | 137 | |
Total other (expense) income | 137 | |
Loss from continuing operations before income tax (expense) benefit | (7,065) | |
Income tax (expense) benefit from continuing operations | (42) | |
Net loss | (7,107) | |
Foreign exchange translation adjustment | 0 | |
Pension adjustment | 0 | |
Comprehensive loss | $ (7,107) |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Cash and Cash Equivalents [Abstract] | ||
Cash | $ 4,332 | $ 19,485 |
Cash equivalents | 21,879 | 5,614 |
Restricted cash | 495 | 520 |
Total cash, cash equivalents, and restricted cash | $ 26,706 | $ 25,619 |
Accounts Receivable, net - Sche
Accounts Receivable, net - Schedule of Components of Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Receivables [Abstract] | ||
Accounts receivable, gross | $ 15,931 | $ 14,160 |
Allowance for credit loss | (356) | (337) |
Accounts receivable, net | $ 15,575 | $ 13,823 |
Accounts Receivable, net - Sc_2
Accounts Receivable, net - Schedule of Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 337 | $ 260 |
Additions from acquisitions | 0 | 106 |
Provision adjustment - expense, net of recoveries | 193 | 229 |
Write-offs and other deductions | (174) | (258) |
Balance at end of period | $ 356 | $ 337 |
Accounts Receivable, net - Narr
Accounts Receivable, net - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Receivables [Abstract] | ||
Contract assets | $ 8.4 | $ 3.8 |
Contract liabilities | 1.6 | 5.3 |
Contract liabilities, revenue recognized | $ 0.4 | $ 5.3 |
Inventory - Schedule of Compone
Inventory - Schedule of Components of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,503 | $ 6,257 |
Work in-process | 9,766 | 18,251 |
Finished goods | 4,636 | 1,774 |
Inventory | $ 28,905 | $ 26,282 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment, net - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 48,404 | $ 54,629 |
Accumulated depreciation | (32,887) | (30,053) |
Property, plant, and equipment, net | 15,517 | 24,576 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 0 | 995 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 0 | 8,805 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 31,658 | 29,224 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 1,576 | 1,394 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 3,220 | 3,230 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 9,442 | 6,851 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 2,508 | $ 4,130 |
Property, Plant and Equipment,
Property, Plant and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 13, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 2,700 | $ 1,400 | ||
Gain (loss) on sale of assets | 1,147 | $ 0 | ||
Impairment charges | $ 3,000 | |||
Tinely Park Facility | ||||
Property, Plant and Equipment [Line Items] | ||||
Total purchase price | $ 10,300 | |||
Term of lease (in years) | 12 years |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount | $ 21,591 | $ 14,251 | |
Fair value and impairment expense | 2,125 | 0 | |
Goodwill | 0 | 17,894 | $ 69 |
Additions from acquisition | 1,150 | 17,825 | |
In Process Research and Development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 6,700 | ||
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets acquired | 900 | 2,200 | |
S & N and Emcore Chicago Acquisitions | |||
Finite-Lived Intangible Assets [Line Items] | |||
Adjustments to preliminary purchase price allocation | 1,200 | ||
Expected tax deductible amount of goodwill | $ 0 | ||
Patents | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets useful life (in years) | 7 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount | $ 4,690 | 3,260 | |
Intangible assets useful life (in years) | 8 years | ||
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount | $ 16,901 | $ 10,991 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount | 2,200 | ||
Impairment expense | 19,000 | ||
In Process Research and Development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Carrying amount | 800 | ||
Fair value and impairment expense | $ 1,300 | ||
Intangible assets useful life (in years) | 8 years | ||
Minimum | Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets useful life (in years) | 2 years | ||
Maximum | Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets useful life (in years) | 8 years |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Changes in Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets [Roll Forward] | ||
Beginning balance, Intangible asset | $ 14,790 | $ 167 |
Additions from acquisition | 1,470 | 14,740 |
Write off due to impairment | (2,125) | 0 |
Amortization | (1,890) | (117) |
Ending balance, Intangible asset | $ 12,245 | $ 14,790 |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Impairment |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Weighted Average Remaining Useful Lives by Definite-lived Intangible Asset (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 21,591 | $ 14,251 |
Accumulated Amortization | (10,201) | (8,311) |
Total amortization expense | $ 11,390 | $ 5,940 |
Technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 13 years | 5 years 4 months 24 days |
Gross Carrying Amount | $ 16,901 | $ 10,991 |
Accumulated Amortization | (9,527) | (8,261) |
Total amortization expense | $ 7,374 | $ 2,730 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Life (in years) | 4 years | 4 years 7 months 6 days |
Gross Carrying Amount | $ 4,690 | $ 3,260 |
Accumulated Amortization | (674) | (50) |
Total amortization expense | $ 4,016 | $ 3,210 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Schedule of Future Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 1,956 | |
2025 | 1,930 | |
2026 | 1,527 | |
2027 | 1,504 | |
2028 | 1,491 | |
Thereafter | 2,982 | |
Total amortization expense | $ 11,390 | $ 5,940 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||
Beginning balance, Goodwill | $ 17,894 | $ 69 |
Additions from acquisition | $ 1,150 | 17,825 |
ImpairmentOfIntangibleAssetFiniteLivedStatementOfIncomeOrComprehensiveIncomeExtensibleEnumerationNotDisclosedFlag | Write off from impairment | |
Write off from impairment | $ (19,044) | 0 |
Ending balance, Goodwill | $ 0 | $ 17,894 |
Benefit Plans - Schedule of Def
Benefit Plans - Schedule of Defined Benefit Plan, Fair Value of the Plan Assets and Funded Status (Details) - USD ($) $ in Thousands | 5 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Sep. 30, 2023 | |
Change in Benefit Obligation | ||
Beginning balance, benefit obligation | $ 8,203 | $ 7,332 |
Service cost | 49 | 105 |
Interest cost | 130 | 372 |
Participant contributions | 0 | 0 |
Amendments | 0 | 0 |
Total | (901) | (461) |
Benefits paid | (149) | (634) |
Business combinations and (divestitures) | 0 | 0 |
Curtailments, settlements and/or special/contractual termination benefits | 0 | 0 |
Ending balance, benefit obligation | 7,332 | 6,714 |
Change in Plan Assets | ||
Beginning balance, benefited plan assets | 9,930 | 9,469 |
Actual return on plan assets | (312) | (214) |
Company contributions | 0 | 0 |
Participant contributions | 0 | 0 |
Benefits paid | (149) | (634) |
Expenses paid | 0 | 0 |
Business combinations and (divestitures) | 0 | 0 |
Curtailments, settlements and/or special/contractual termination benefits | 0 | 0 |
Ending balance, benefited plan assets | 9,469 | 8,621 |
Funded Status | ||
Funded status at end of year | 2,137 | 1,907 |
Amounts Recognized in Balance Sheets | ||
Non-current assets | 2,137 | 1,907 |
Current liabilities | 0 | 0 |
Non-current liabilities | 0 | 0 |
Amounts Recognized in Accumulated Other Comprehensive Income | ||
Transition obligation (asset) | 0 | 0 |
Prior service cost (credit) | 0 | 0 |
Net loss (gain) | (441) | (350) |
Net periodic pension cost | ||
Service cost | 49 | 105 |
Expected return on plan assets | (148) | (337) |
Amortization of transition obligation (asset) | 0 | 0 |
Amortization of prior service cost (credit) | 0 | 0 |
Amortization of net loss (gain) | 0 | 0 |
Recognition due to settlement, curtailment, and special/contractual termination benefits | 0 | 0 |
Net periodic pension cost | $ 31 | 140 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, after Tax | |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss | ||
Net loss (gain) | $ (441) | 91 |
Prior service cost (credit) | 0 | 0 |
Amortization of net (loss) gain | 0 | 0 |
Amortization of prior service cost (credit) | 0 | 0 |
Amortization of initial asset | 0 | 0 |
Total recognized in other comprehensive (loss) income | (441) | 91 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Updated census | (55) | (255) |
Updated discount rate | (846) | (206) |
Estimated Future Benefit Payments | ||
2024 | 600 | 613 |
2025 | 579 | 575 |
2026 | 562 | 555 |
2027 | 575 | 567 |
2028 | 573 | 558 |
Thereafter | 2,748 | 2,668 |
Total | $ 5,637 | $ 5,536 |
Weighted Average Assumptions to Determine Benefit Obligations at Year End | ||
Discount rate | 5.60% | 5.90% |
Weighted Average Assumptions to Determine Net Periodic Pension Cost | ||
Discount rate | 4.40% | 5.60% |
Expected long-term return on plan assets | 3.70% | 3.70% |
Benefit Plans - Narratives (Det
Benefit Plans - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||
Matching contribution | $ 1.3 | $ 1.2 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Payables and Accruals [Abstract] | ||
Compensation | $ 5,980 | $ 3,855 |
Warranty | 864 | 911 |
Commissions | 468 | 228 |
Consulting | 68 | 241 |
Legal expenses and other professional fees | 262 | 275 |
Auditor fees | 163 | 186 |
Litigation settlement accrual | 0 | 341 |
Other | 666 | 660 |
Accrued expenses and other current liabilities | $ 8,471 | $ 6,697 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Schedule of Product Warranty Accruals (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 911 | $ 569 |
Additions from acquisitions | 0 | 437 |
Provision for product warranty expense | 120 | 124 |
Adjustments and utilization of warranty accrual | (167) | (219) |
Balance at end of period | $ 864 | $ 911 |
Credit Agreement - Narrative (D
Credit Agreement - Narrative (Details) | Aug. 09, 2022 USD ($) creditFacility | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) |
Line of Credit Facility [Line Items] | |||
Consecutive days threshold | 60 days | ||
Loan payable - non-current | $ 20,882,000 | $ 21,568,000 | |
New ABL Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Excess availability term | $ 5,000,000 | ||
Excess availability term, percentage | 0.15 | ||
Fixed charge coverage ration (not less than) | 1.10 | ||
Revolving Credit Facility | New ABL Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | ||
Debt instrument, closing fee percentage | 1% | ||
Unused capacity fee percentage | 0.50% | ||
Long-term line of credit | 6,400,000 | ||
Loan payable - non-current | 4,200,000 | ||
Line of credit facility, remaining borrowing capacity | $ 9,900,000 | ||
Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | New ABL Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 3.75% | ||
Secured Debt | New ABL Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Principal amount | $ 6,000,000 | ||
Debt instrument, closing fee percentage | 1.50% | ||
Secured Debt | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | New ABL Credit Agreement | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 5.50% | ||
Secured Debt | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Number of credit facilities | creditFacility | 2 |
Credit Agreement - Schedule of
Credit Agreement - Schedule of Future Loan Repayments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 852 |
2025 | 852 |
2026 | 2,478 |
Total loan payments | $ 4,182 |
Income and Other Taxes - Schedu
Income and Other Taxes - Schedule of (Loss) Income from Operations before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (49,371) | $ (40,608) |
Foreign | 0 | (292) |
Loss from continuing operations before income tax (expense) benefit | $ (49,371) | $ (40,900) |
Income and Other Taxes - Sche_2
Income and Other Taxes - Schedule of Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current federal tax expense (benefit) | $ 0 | $ (125) |
Deferred federal income tax expense (benefit) | (12) | 12 |
Total federal income tax expense (benefit) | (12) | (113) |
Current state tax expense (benefit) | 65 | (37) |
Deferred state tax expense (benefit) | (11) | 11 |
Total state income tax expense (benefit) | 54 | (26) |
Current foreign tax expense (benefit) | 0 | 0 |
Deferred foreign tax expense (benefit) | 0 | 0 |
Total income tax expense (benefit) | $ 42 | $ (139) |
Income and Other Taxes - Sche_3
Income and Other Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit computed at U.S. federal statutory rate | $ (10,368) | $ (8,589) |
State tax expense (benefit), net of U.S. federal effect | 54 | (27) |
Foreign tax rate differential | 355 | (7) |
Shortfall from stock based compensation | 1,204 | 141 |
Other | 20 | 85 |
Federal benefit on PPP loan forgiveness | 15 | 0 |
Net operating loss carryforward expiration | 12,839 | 11,705 |
Change in valuation allowance | (4,077) | (3,447) |
Total income tax expense (benefit) | $ 42 | $ (139) |
Effective tax rate (percentage) | 0.10% | (0.30%) |
Income and Other Taxes - Sche_4
Income and Other Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Income Tax Disclosure [Abstract] | ||
Federal net operating loss carryforwards | $ 78,872 | $ 94,691 |
Foreign net operating loss carryforwards | 0 | 1,135 |
Income tax credit carryforwards | 355 | 592 |
Inventory reserves | 1,666 | 735 |
Accounts receivable reserves | 60 | 57 |
Accrued warranty reserve | 103 | 115 |
State net operating loss carryforwards | 7,547 | 7,888 |
Stock compensation | 1,203 | 1,352 |
Deferred compensation | 1,022 | 465 |
Fixed assets and intangibles | 5,276 | 1,212 |
ROU lease liability | 5,751 | 5,862 |
ROU lease assets | (5,195) | (5,724) |
Capitalized Research expense | 3,385 | 0 |
Capitalized Research expense | 355 | 592 |
Other | 2,935 | 2,443 |
Total deferred tax assets | 102,981 | 110,823 |
Valuation allowance | (102,981) | (110,846) |
Net deferred tax liabilities | $ 0 | $ (23) |
Income and Other Taxes - Narrat
Income and Other Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Income tax expense (benefit) | $ 42 | $ (139) |
Effective tax rate on continuing operations | 0.10% | (0.30%) |
Portion of operating loss carryforward subject to limitation | $ 111,600 | |
Portion of operating loss carryforward not subject to limitation | 279,900 | |
Foreign Income And Research And Development Credit | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit | 300 | |
Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 391,500 | $ 424,900 |
State and Local Jurisdiction | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 95,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases and Asset Retirement Obligations Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Loss Contingencies [Line Items] | ||
Lease option to extend length (in years) | 5 years | |
Operating lease expenses | $ 3,700 | $ 2,000 |
Impairment of Leasehold | 1,400 | |
Impairment charge | $ 22,612 | $ 2,956 |
Risk-free rate, minimum | 1.73% | |
Risk-free rate, maximum | 4.03% | |
Minimum | ||
Loss Contingencies [Line Items] | ||
Operating lease, remaining lease term | 1 year | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Operating lease, remaining lease term | 12 years |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2024 | $ 4,614 |
2025 | 4,137 |
2026 | 3,072 |
2027 | 2,757 |
2028 | 2,830 |
Thereafter | 22,179 |
Total lease payments | 39,589 |
Less imputed interest | (15,674) |
Total operating lease liabilities | $ 23,915 |
Commitments and Contingencies_3
Commitments and Contingencies - Additional Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Weighted average remaining lease term (years) | 10 years | 9 years 9 months 18 days |
Weighted average discount rate | 9.50% | 5.40% |
Operating cash outflows from operating leases | $ 3,749 | $ 2,011 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 2,577 | $ 1,529 |
Commitments and Contingencies_4
Commitments and Contingencies - ARO Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning balance | $ 4,664 | $ 2,049 |
Acquisition-related adjustment | (604) | 2,500 |
Accretion expense | 134 | 90 |
Revision in estimated cash flows | 0 | 25 |
Ending balance | $ 4,194 | $ 4,664 |
Commitments and Contingencies_5
Commitments and Contingencies - Legal Proceedings (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2023 USD ($) businessDay | Apr. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Feb. 10, 2020 | |
Resilience Litigation | |||||
Loss Contingencies [Line Items] | |||||
Payments for legal settlements | $ 500 | ||||
Resilience Litigation | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Payments for legal settlements | $ 1,300 | ||||
Resilience Litigation | Resilience Capital | |||||
Loss Contingencies [Line Items] | |||||
Total damages sought | $ 1,565 | ||||
Resilience Litigation | Concord Property | |||||
Loss Contingencies [Line Items] | |||||
Lease length in years | 15 years | ||||
Beazley Settlement Agreement | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount awarded from other party | $ 1,150 | ||||
Litigation settlement, business days, required payment | businessDay | 15 |
Equity - Narrative (Details)
Equity - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||
Aug. 23, 2023 USD ($) $ / shares shares | Feb. 17, 2023 USD ($) $ / shares shares | Dec. 31, 2022 shares | Sep. 30, 2023 USD ($) plan $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of equity incentive compensation plans maintained by the company | plan | 4 | ||||
Granted (in shares) | 0 | 0 | |||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |||
Common stock, no par value (in dollars per share) | $ / shares | $ 0 | $ 0 | |||
Preferred stock, shares authorized (in shares) | 5,882,352 | ||||
Preferred stock par value (in usd per share) | $ / shares | $ 0.0001 | ||||
Sale of stock, price per share (USD per share) | $ / shares | $ 0.00 | ||||
Common stock, shares issued (in shares) | 84,014,000 | 44,497,000 | |||
Preferred stock, shares issued (in shares) | 0 | 0 | |||
Preferred stock, outstanding (in shares) | 0 | 0 | |||
Internal Revenue Service (IRS) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Operating loss carryforwards | $ | $ 391,500,000 | $ 424,900,000 | |||
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 11,900,000 | ||||
Sale of stock, price per share (USD per share) | $ / shares | $ 0.49999999 | ||||
Common Stock | IPO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 22,600,000 | 15,454,546 | |||
Sale of stock, price per share (USD per share) | $ / shares | $ 0.50 | $ 1.10 | |||
Gross proceeds from issuance, initial public offering | $ | $ 15,600,000 | $ 15,400,000 | |||
2019 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Additional number of shares authorized for the plan (in shares) | 1,549,000 | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options, contractual life (in years) | 10 years | ||||
Employee Stock Option | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
Employee Stock Option | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 5 years | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value vested | $ | $ 27,300 | ||||
Restricted Stock | Equity Incentive Plans 2012 and 2010 | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Restricted Stock | Equity Incentive Plans 2012 and 2010 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 4 years | ||||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unamortized stock-based compensation expense | $ | $ 6,500,000 | ||||
Weighted average remaining service period (in years) | 3 years 1 month 6 days | ||||
Unvested stock units (in shares) | 4,030,076 | 2,947,130 | |||
Unvested stock units | $ | $ 1,900,000 | ||||
Unvested stock units weighted average remaining contractual term (in years) | 1 year 9 months 18 days | ||||
Intrinsic value vested | $ | $ 1,300,000 | $ 3,000,000 | |||
Weighted average fair value (in usd per share) | $ / shares | $ 1 | $ 3.46 | |||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average remaining service period (in years) | 1 year 3 months 18 days | ||||
Unvested stock units (in shares) | 1,704,418 | 1,809,053 | |||
Intrinsic value vested | $ | $ 300,000 | $ 300,000 | |||
Weighted average fair value (in usd per share) | $ / shares | $ 0.97 | $ 4.51 | |||
Unamortized stock-based compensation expense | $ | $ 2,700,000 | ||||
Intrinsic value of non-vested and expected to vest PSUs | $ | $ 800,000 | ||||
Average remaining contractual term (in years) | 1 year 3 months 18 days | ||||
PSUs | Two Thousand Twelve Equity Incentive Plan | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 1 year | ||||
PSUs | Two Thousand Twelve Equity Incentive Plan | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years |
Equity - Schedule of Stock Opti
Equity - Schedule of Stock Options Activity (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Number of Shares | ||
Outstanding, beginning of period (in shares) | 9,981 | |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Expired (in shares) | 976 | |
Outstanding, end of period (in shares) | 9,005 | 9,981 |
Exercisable (in shares) | 9,005 | |
Vested and expected to vest (in shares) | 9,005 | |
Weighted Average Exercise Price | ||
Outstanding, beginning of period (in usd per share) | $ 4.52 | |
Granted (in usd per share) | 0 | |
Exercised (in usd per share) | 0 | |
Forfeited (in usd per share) | 0 | |
Expired (in usd per share) | 3.84 | |
Outstanding, ending of period (in usd per share) | 4.59 | $ 4.52 |
Exercisable (in usd per share) | 4.59 | |
Vested and expected to vest (in usd per share) | $ 4.59 | |
Weighted Average Remaining Contractual Life (in years) | ||
Weighted average remaining contractual life, outstanding (in years) | 1 year 3 months 18 days | |
Weighted average remaining contractual life, exercisable (in years) | 1 year 3 months 18 days | |
Weighted average remaining contractual term, vested and expected to vest (in years) | 1 year 3 months 18 days | |
Aggregate Intrinsic Value | ||
Outstanding, Aggregate intrinsic value | $ 0 | |
Exercisable, Aggregate intrinsic value | 0 | |
Vested and expected to vest, Aggregate intrinsic value | $ 0 | |
Intrinsic value of options exercised | $ 0 |
Equity - Schedule of Restricted
Equity - Schedule of Restricted Stock Activity (Details) - RSUs - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Number of Shares | ||
Non-vested, beginning balance (in shares) | 2,947,130 | |
Granted (in shares) | 2,896,650 | |
Vested (in shares) | (1,314,313) | |
Forfeited (in shares) | (499,391) | |
Non-vested, ending balance (in shares) | 4,030,076 | 2,947,130 |
Weighted Average Grant Date Fair Value | ||
Non-vested, beginning balance (in usd per share) | $ 3.90 | |
Weighted average fair value (in usd per share) | 1 | $ 3.46 |
Vested (in usd per share) | 3.72 | |
Forfeited (in usd per share) | 2.55 | |
Non-vested, ending balance (in usd per share) | $ 2.04 | $ 3.90 |
Equity - Schedule of Performanc
Equity - Schedule of Performance Stock Activity (Details) - PSUs - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Number of Shares | ||
Non-vested, beginning balance (in shares) | 1,809,053 | |
Granted (in shares) | 634,650 | |
Vested (in shares) | (291,285) | |
Forfeited (in shares) | (448,000) | |
Non-vested, ending balance (in shares) | 1,704,418 | 1,809,053 |
Weighted Average Grant Date Fair Value | ||
Non-vested, beginning balance (in usd per share) | $ 4.37 | |
Granted (in usd per share) | 0.97 | $ 4.51 |
Vested (in usd per share) | 2.47 | |
Forfeited (in usd per share) | 3.81 | |
Non-vested, ending balance (in usd per share) | $ 3.57 | $ 4.37 |
Equity - Schedule of Stock-base
Equity - Schedule of Stock-based Compensation Expense - by Award Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 6,888 | $ 5,374 |
RSUs and RSAs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 4,203 | 2,576 |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | 2,306 | 2,314 |
Outside director equity awards and fees in common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense | $ 378 | $ 484 |
Equity - Schedule of Stock-Ba_2
Equity - Schedule of Stock-Based Compensation Expense - by Expense Category (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 6,888 | $ 5,374 |
Cost of revenue | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 1,742 | 952 |
Selling, general, and administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | 1,324 | 3,591 |
Research and development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total stock-based compensation expense | $ 3,823 | $ 831 |
Equity - Schedule of (Loss) Inc
Equity - Schedule of (Loss) Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||
Net loss from continuing operations | $ (49,413) | $ (40,761) |
(Loss) income from discontinued operations including loss on disposal of $9.6 million, net of tax benefit of $0 | (25,946) | 16,428 |
Income from discontinued operations on disposal before income tax | 9,600 | 9,600 |
Income from discontinued operations on disposal | 0 | 0 |
Net loss | $ (75,359) | $ (24,333) |
Denominator | ||
Weighted-average number of basic shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
Effect of dilutive securities | ||
Weighted-average number of diluted shares and preferred warrants outstanding (in shares) | 51,510 | 37,269 |
Loss on continuing operations per share - basic (in dollars per share) | $ (0.96) | $ (1.09) |
Loss on continuing operations per share - diluted (in dollars per share) | (0.96) | (1.09) |
Loss from discontinued operations per share - basic (in dollars per share) | (0.50) | 0.44 |
Loss from discontinued operations per share - diluted (in dollars per share) | (0.50) | 0.44 |
Earnings per share - basic (in dollars per share) | (1.46) | (0.65) |
Earnings per share - diluted (in dollars per share) | $ (1.46) | $ (0.65) |
Weighted average antidilutive options, unvested RSUs and RSAs, unvested PSUs and ESPP shares excluded from the computation (in shares) | 3,305 | 858 |
Employee Stock Option | ||
Effect of dilutive securities | ||
Dilutive options outstanding, unvested stock units and unvested stock awards (in shares) | 0 | 0 |
PSUs, RSUs, and restricted stock | ||
Effect of dilutive securities | ||
Dilutive options outstanding, unvested stock units and unvested stock awards (in shares) | 0 | 0 |
Equity - Schedule of Common Sto
Equity - Schedule of Common Stock Reserved for Future Issuances (Details) | Sep. 30, 2023 shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 6,345,801 |
Exercise of outstanding stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 9,005 |
RSUs and RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 4,030,076 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 1,704,418 |
Unvested award potential, percentage | 100% |
Issuance of stock-based awards under the Equity Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 513,561 |
Purchases under the officer and director share purchase plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance (in shares) | 88,741 |
Revenue Information - Narrative
Revenue Information - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue recognized from 2022 period | $ 4.2 | ||
Receipt of purchase order | $ 2.5 | ||
Proposed support pricing revenue | $ 1.7 | ||
Number of reporting segments | segment | 1 | ||
Customer Concentration Risk | Sales Revenue, Segment | Three Significant Customers | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Concentration risk percentage | 40.40% | 39.70% |
Revenue Information - Schedule
Revenue Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||
Segment revenue | $ 97,716 | $ 45,318 |
United States and Canada | ||
Segment Reporting Information [Line Items] | ||
Segment revenue | 75,143 | 42,177 |
Asia | ||
Segment Reporting Information [Line Items] | ||
Segment revenue | 8,714 | 710 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Segment revenue | 10,444 | 1,242 |
Other | ||
Segment Reporting Information [Line Items] | ||
Segment revenue | $ 3,415 | $ 1,189 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2022 employee | Nov. 30, 2022 shares | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Stock-based compensation expense, incremental cost | $ 0.6 | |||
Fair value less cost to sell | $ 9.6 | |||
Selling cost | $ 0.4 | |||
2019 Equity Incentive Plan | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of employees | employee | 36 | |||
RSUs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accelerated vesting number (in shares) | shares | 429 | |||
PSUs | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accelerated vesting number (in shares) | shares | 291 |
Discontinued Operations - Compo
Discontinued Operations - Components of Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 30, 2022 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash | $ 81 | $ 526 |
Accounts receivable, net of credit loss of $0 | 974 | 4,250 |
Contract assets | 0 | 757 |
Inventory | 10,063 | 10,753 |
Disposal Group, Including Discontinued Operation, Assets | 7,264 | 31,404 |
Other current assets | 1,154 | 1,728 |
Property, plant, and equipment, net | 4,131 | 13,291 |
Operating lease right-of-use assets | 56 | 99 |
Total assets | 16,459 | 31,404 |
Remeasurement of assets | 9,195 | 0 |
Accounts payable | 1,854 | 2,350 |
Accrued expenses and other current liabilities | 1,697 | 1,427 |
Contract liabilities | 0 | 29 |
Operating lease liabilities - current | 22 | 42 |
Operating lease liabilities - non-current | 36 | 57 |
Other comprehensive income | 1,053 | 860 |
Total liabilities | $ 4,662 | $ 4,765 |
Discontinued Operations - Com_2
Discontinued Operations - Components of Net (Loss) Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenue | $ 9,674 | $ 78,808 |
Cost of Revenue | (16,723) | (53,156) |
Gross Profit | (7,049) | 25,652 |
Selling, general, and administrative | 2,810 | 5,486 |
Research and development | 3,459 | 4,754 |
Severance | 2,597 | 1,213 |
Loss (gain) on sale of assets | 10,407 | (2,685) |
Other (income) expense | (376) | 456 |
(Loss) income from discontinued operations | $ (25,946) | $ 16,428 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Oct. 11, 2023 USD ($) ft² |
Subsequent Event [Line Items] | |
Sale lease back transaction, lease term | 12 months |
Area of land | ft² | 12,500 |
Payment prior to closing | $ 0.4 |
Aggregate amount | 5.5 |
Deferred amount | $ 4.3 |