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x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware						85-4164597
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
6811 Benjamin Franklin Drive, Suite 200, Columbia, MD						21046
(Address of Principal Executive Offices)						(Zip Code)
(410) 312-0885
Registrant's telephone number, including area code

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.0001 par value

BBAI

New York Stock Exchange

Redeemable warrants, each full warrant exercisable for one share of common stock at an exercise price of $11.50 per share

BBAI.WS

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Large accelerated filer			o			Accelerated filer			o
Non-accelerated filer			x			Smaller reporting company			o
						Emerging growth company			x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

Item						Page
PART I—FINANCIAL INFORMATION						3
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021						3
Consolidated Statements of Operations for the Three And Six Months Ended June 30, 2022 and 2021						4
Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021						5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021						6
Notes to Consolidated Financial Statements (Unaudited)						7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations						28
Item 3. Quantitative and Qualitative Disclosures About Market Risk						43
Item 4. Controls and Procedures						43
PART II—OTHER INFORMATION						43
Item 1. Legal Proceedings						43
Item 1A Risk Factors						44
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.						44
Item 6. Exhibits						45
SIGNATURES						46

			June 30, 2022						December 31, 2021
Assets
Current assets:
Cash and cash equivalents			$	29,829					$	68,900
Restricted cash			—						101,021
Accounts receivable, less allowance for doubtful accounts of $87 as of June 30, 2022 and $43 as of December 31, 2021			28,546						28,605
Contract assets			1,252						628
Prepaid expenses and other current assets			8,097						7,028
Total current assets			67,724						206,182
Non-current assets:
Property and equipment, net			1,433						1,078
Goodwill			67,164						91,636
Intangible assets, net			89,456						83,646
Other non-current assets			727						780
Total assets			$	226,504					$	383,322
Liabilities and equity
Current liabilities:
Accounts payable			$	6,354					$	5,475
Short-term debt, including current portion of long-term debt			1,921						4,233
Accrued liabilities			15,978						10,735
Contract liabilities			3,714						4,207
Derivative liabilities			—						44,827
Other current liabilities			881						541
Total current liabilities			28,848						70,018
Non-current liabilities:
Long-term debt, net			191,341						190,364
Deferred tax liabilities			390						248
Other non-current liabilities			136						324
Total liabilities			220,715						260,954
Commitments and contingencies (Note K)
Stockholders’ equity:
Common stock, par value $0.0001; 500,000,000 shares authorized and 126,263,451 shares issued at June 30, 2022 and 135,566,227 at December 31, 2021			14						14
Additional paid-in capital			270,184						253,744
Treasury stock, at cost 9,952,803 shares at June 30, 2022 and — shares at December 31, 2021			(57,350)						—
Accumulated deficit			(207,059)						(131,390)
Total stockholders’ equity			5,789						122,368
Total liabilities and stockholders’ equity			$	226,504					$	383,322

			Three Months Ended June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
Revenues			$	37,613					$	36,311					$	74,003					$	71,881
Cost of revenues			28,023						27,148						54,546						52,438
Gross margin			9,590						9,163						19,457						19,443
Operating expenses:
Selling, general and administrative			26,952						10,405						48,972						20,519
Research and development			2,535						1,867						5,409						2,795
Transaction expenses			186						—						1,585						—
Goodwill impairment			35,252						—						35,252						—
Operating loss			(55,335)						(3,109)						(71,761)						(3,871)
Interest expense			3,554						1,849						7,109						3,709
Net decrease in fair value of derivatives			(199)						—						(1,462)						—
Other (income) expense			(26)						—						4						(1)
Loss before taxes			(58,664)						(4,958)						(77,412)						(7,579)
Income tax benefit			(1,820)						(1,783)						(1,743)						(1,967)
Net loss			$	(56,844)					$	(3,175)					$	(75,669)					$	(5,612)
Basic net loss per share			$	(0.45)					$	(0.03)					$	(0.59)					$	(0.05)
Diluted net loss per share			$	(0.45)					$	(0.03)					$	(0.59)					$	(0.05)
Weighted-average shares outstanding:
Basic			126,223,903						105,000,000						129,037,598						105,000,000
Diluted			126,223,903						105,000,000						129,037,598						105,000,000

			Three Months Ended June 30, 2022
			Common Stock												Additional						Treasury						Accumulated						Total stockholders’
			Shares						Amount						paid in capital						stock						deficit						equity
As of March 31, 2022			125,603,424						$	14					$	257,602					$	(57,350)					$	(150,215)					$	50,051
Net loss			—						—						—						—						(56,844)						(56,844)
Equity-based compensation expense			—						—						5,080						—						—						5,080
Issuance of common stock as consideration for the acquisition of ProModel Corporation			649,976						—						7,501						—						—						7,501
Exercise of warrants			51						—						1						—						—						1
As of June 30, 2022			126,253,451						$	14					$	270,184					$	(57,350)					$	(207,059)					$	5,789
			Three Months Ended June 30, 2021
			Common Stock												Additional						Treasury						Accumulated						Total stockholders’
			Shares						Amount						paid in capital						stock						deficit						equity
As of March 31, 2021			105,000,000						$	11					$	108,249					$	—					$	(10,275)					$	97,985
Net loss			—						—						—						—						(3,175)						(3,175)
Equity-based compensation expense			—						—						31						—						—						31
As of June 30, 2021			105,000,000						$	11					$	108,280					$	—					$	(13,450)					$	94,841
			Six Months Ended June 30, 2022
			Common Stock												Additional						Treasury						Accumulated						Total stockholders’
			Shares						Amount						paid in capital						stock						deficit						equity
As of December 31, 2021			135,556,227						$	14					$	253,744					$	—					$	(131,390)					$	122,368
Net loss			—						—						—						—						(75,669)						(75,669)
Equity-based compensation expense			—						—						8,938						—						—						8,938
Repurchase of shares as a result of Forward Share Purchase Agreements			(9,952,803)						—						—						(57,350)						—						(57,350)
Issuance of common stock as consideration for the acquisition of ProModel Corporation			649,976						—						7,501						—						—						7,501
Exercise of warrants			51						—						1						—						—						1
As of June 30, 2022			126,253,451						$	14					$	270,184					$	(57,350)					$	(207,059)					$	5,789
			Six Months Ended June 30, 2021
			Common Stock												Additional						Treasury						Accumulated						Total stockholders’
			Shares						Amount						paid in capital						stock						deficit						equity
As of December 31, 2020(1)			105,000,000						$	11					$	108,224					$	—					$	(7,838)					$	100,397
Net loss			—						—						—						—						(5,612)						(5,612)
Equity-based compensation expense			—						—						56						—						—						56
As of June 30, 2021			105,000,000						$	11					$	108,280					$	—					$	(13,450)					$	94,841

(1) The units of the Company prior to the Merger (as defined in Note A—Description of the Business) have been retroactively restated to reflect the exchange ratio established in the Merger (computed as 105,000,000 shares of Common Stock to 100 Company units).

			Successor
			Six Months Ended June 30,
			2022						2021
Cash flows from operating activities:
Net loss			$	(75,669)					$	(5,612)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization expense			3,726						3,673
Amortization of debt issuance costs			1,047						286
Equity-based compensation expense			8,938						56
Goodwill impairment			35,252						—
Provision for doubtful accounts			44						—
Deferred income tax expense (benefit)			(1,594)						(1,996)
Net decrease in fair value of derivatives			(1,462)						—
Changes in assets and liabilities:
Decrease (increase) in accounts receivable			758						(1,580)
(Increase) decrease in contract assets			(226)						1,557
Decrease (increase) in prepaid expenses and other assets			535						(4,299)
Increase in accounts payable			874						2,251
(Decrease) increase in accrued liabilities			(2,509)						5,227
(Decrease) increase in contract liabilities			(2,048)						494
Increase in other liabilities			338						275
Net cash (used in) provided by operating activities			(31,996)						332
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired			(4,376)						(224)
Purchases of property and equipment			(508)						(282)
Net cash used in investing activities			(4,884)						(506)
Cash flows from financing activities:
Repurchase of shares as a result of forward share purchase agreements			(100,896)						—
Repayment of short-term borrowings			(2,312)						—
Payments for taxes related to net share settlement of equity awards			(4)						—
Repayment of term loan			—						(550)
Net cash used in financing activities			(103,212)						(550)
Net decrease in cash and cash equivalents and restricted cash			(140,092)						(724)
Cash and cash equivalents and restricted cash at the beginning of period			169,921						9,704
Cash and cash equivalents and restricted cash at the end of the period			$	29,829					$	8,980
Supplemental schedule of non-cash investing and financing activities:
Issuance of common stock as consideration for the acquisition of ProModel Corporation			$	7,501					$	—
Reconciliation of cash and cash equivalents and restricted cash:			June 30, 2022						December 31, 2021
Cash and cash equivalents			$	29,829					$	68,900
Restricted cash			—						101,021
Cash and cash equivalents and restricted cash at end of the period			$	29,829					$	169,921

BigBear.ai Holdings, Inc. (“BigBear.ai”, “BigBear.ai Holdings”, or the “Company”) is a leader in the use of Artificial Intelligence (“AI”) and Machine Learning (“ML”) for decision support. Our products and services are widely used by government agencies in the United States to support many of the nation’s most critical defense and intelligence capabilities. We also support several commercial customers by integrating our solutions to turn data into actionable information for operational decision making. Unless otherwise indicated, references to “we”, “us” and “our” refer collectively to BigBear.ai Holdings, Inc. and its consolidated subsidiaries. We operate in two reportable segments: Cyber & Engineering and Analytics.

On December 7, 2021, the previously announced merger (“Merger”) with GigCapital4, Inc. (“GigCapital4”) was consummated pursuant to the business combination agreement (the “Agreement”) dated June 4, 2021, as amended in July 2021 and December 2021, by and between GigCapital4 Merger Sub Corporation (the “Merger Sub”), a wholly owned subsidiary of GigCapital4, BigBear.ai Holdings, and Parent. Immediately prior to the stockholder vote for the Merger, GigCapital4 executed a series of Forward Share Purchase Agreements (“FPAs”) with certain investors (the “Investors”). Included within the FPAs was a provision that each of the Investors would not redeem their shares and instead would hold the shares for a period of up to three months following the consummation of the Merger, at which time they would have the right to sell the shares to the Company for $10.15 per share. During the three months ended March 31, 2022, the Company repurchased all 9,952,803 shares of its common stock at the Investors’ request (refer to Note L—Written Put Option for detail).

Immediately prior to the closing of the Merger, but following the consummation of GigCapital4’s domestication to a Delaware corporation, the authorized capital stock of GigCapital4 consisted of 501,000,000 shares, including (i) 500,000,000 shares of common stock and (ii) 1,000,000 shares of preferred stock. 135,566,227 shares of common stock and no shares of the preferred stock were outstanding as of December 31, 2021. At the effective time of the Merger, 100 units of BigBear.ai Holdings were cancelled and automatically deemed for all purposes to represent the Parent’s right to receive, in the aggregate, $75 million in cash and shares in GigCapital4, and Parent exchanged its 100 units of BigBear.ai Holdings for 105,000,000 shares of BigBear.ai’s common stock. In addition, 8,000,000 shares of PIPE financing were issued and 1,495,320 shares were issued to certain advisors. AE Industrial Partners, LP (“AE”) became the majority stockholder of the Company, via its ownership of PCISM Ultimate Holdings, LLC (subsequently renamed to BBAI Ultimate Holdings, LLC, “Parent”), following the close of the Merger (83.5%).

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (“ASC 805”), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). Upon the issuance of ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), which provides a single comprehensive accounting model on revenue recognition for contracts with customers, stakeholders indicated that there are differing views on whether the concept of a performance obligation introduced by ASC 606 should be used to determine whether a contract liability is recognized in a business combination from revenue contracts. Before the adoption date of ASC 606, a liability for deferred revenue was generally recognized in an acquirer’s financial statements if it represented a legal obligation. The amendments in ASU 2021-08 address how to determine whether a contract liability is recognized by the acquirer in a business combination. Additionally, stakeholders raised questions about how to apply ASC 805 to contracts with a customer acquired in a business. Under current practice, the timing of payment for a revenue contract may subsequently affect the amount of post-acquisition revenue recognized by the acquirer. For example, if two revenue contracts with identical performance obligations are acquired but one contract is paid upfront before the acquisition and the other contract is paid over the contract term after the acquisition, the amount of revenue recognized by the acquirer after the business combination likely would differ between the two acquired contracts. The amendments in ASU 2021-08 resolve this inconsistency by providing specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance will be effective for the years beginning after December 15, 2022. The Company prospectively adopted ASU 2021-08 as of January 1, 2022.

			April 7, 2022
Cash paid			$	8,470
Equity issued			7,501
Purchase consideration			$	15,971
Assets:
Cash			$	4,094
Accounts receivable			743
Prepaid expenses and other current assets			1,600
Contract assets			398
Property and equipment			83
Other non-current assets			21
Intangible assets			9,300
Total assets acquired			$	16,239
Liabilities:
Accounts payable			5
Accrued liabilities			7,752
Contract liabilities			1,555
Deferred tax liabilities			1,736
Total liabilities acquired			$	11,048
Fair value of net identifiable assets acquired			5,191
Goodwill			$	10,780

The following table summarizes the intangible assets acquired by class:

			April 7, 2022
Technology			$	3,500
Customer relationships			5,800
Total intangible assets			$	9,300

The following table presents the pro forma consolidated results of operations of BigBear.ai for the three and six-month periods ended June 30, 2022 and June 30, 2021 as though the acquisition of ProModel Corporation had been completed as of January 1, 2021.

			Three Months Ended June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
Net revenue			$	37,613					$	37,819					$	75,248					$	74,783
Net loss			(56,844)						(1,479)						(78,145)						(4,950)
Transaction expenses			186						—						1,585						—

The Company incurred $186 and $1,585 of transaction expenses attributable to the acquisition of ProModel Corporation during the three and six months ended June 30, 2022.

						June 30, 2022
			Balance Sheet Caption			Level 1						Level 2						Level 3						Total
Private warrants			Other non-current liabilities			$	—					$	—					$	138					$	138
Written put options			Derivative liabilities			—						—						—						—
						December 31, 2021
			Balance Sheet Caption			Level 1						Level 2						Level 3						Total
Private warrants			Other non-current liabilities			$	—					$	—					$	319					$	319
Written put options			Derivative liabilities			—						—						44,827						44,827

			Level 3
			Private warrants						Written put options
December 31, 2021			$	319					$	44,827
Changes in fair value			(138)						(1,281)
Settlements			(43)						(43,546)
June 30, 2022			$	138					$	—

During the second quarter of the fiscal year ending December 31, 2022, the Company identified factors indicating that the fair value of both the Cyber & Engineering and Analytics reporting units may be less than their respective carrying amounts and performed a qualitative goodwill impairment assessment. These factors were related to a shift in the Federal Government’s focus to address immediate needs in Ukraine, causing a slowdown in the pace of contract awards. This resulted in lower revenues than anticipated during the current period and causing future revenue projections to be revised. As a result, the Company determined that a quantitative goodwill impairment assessment should be performed. The Company utilized a combination of the discounted cash flow (“DCF”) method of the Income Approach and the Market Approach. Under the Income Approach, the future cash flows of the Company’s reporting units were projected based on estimates of future revenues, gross margins, operating income, excess net working capital, capital expenditures, and other factors. The Company utilized estimated revenue growth rates and cash flow projections. The discount rates utilized in the DCF method were based on a weighted-average cost of capital (“WACC”) determined from relevant market comparisons and adjusted for specific reporting unit risks and capital structure. A terminal value estimated growth rate was applied to the final year of the projected period and reflected the Company’s estimate of perpetual growth. The Company then calculated the present value of the respective cash flows for each reporting unit to arrive at an estimate of fair value under the Income Approach. The Market Approach is comprised of the Guideline Public Company and the Guideline Transactions Methods. The Guideline Public Company Method focuses on comparing the Company to selected reasonably similar (or guideline) publicly traded companies. Under this method, valuation multiples are: (i) derived from the operating data of selected guideline companies; (ii) evaluated and adjusted based on the strengths and weaknesses of the Company relative to the selected guideline companies; and (iii) applied to the operating data of the Company to arrive at an indication of value. In the Guideline Transactions Method, consideration is given to prices paid in recent transactions that have occurred in the Company’s industry or in related industries. The Company then reconciled the estimated fair value of its reporting units to its total public market capitalization as of the valuation date. The carrying value of the Cyber & Engineering reporting unit exceeded its fair value and accordingly the Company recorded a non-tax-deductible goodwill impairment charge of $35,252, which was included within the consolidated statement of operations for the three and six months ended June 30, 2022. As of June 30, 2022, the estimated fair value of the Analytics reporting unit exceeded its carrying value by 8.3%. An increase in the WACC of approximately 1% or a reduction in the forecasted revenues of approximately 3% would result in an impairment of the goodwill within the Analytics reporting unit using the Income Approach.

			Cyber & Engineering						Analytics						Total
As of December 31, 2021			$	35,252					$	56,384					$	91,636
Goodwill arising from the ProModel Corporation acquisition			—						10,780						10,780
Goodwill impairment			(35,252)						—						(35,252)
As of June 30, 2022			$	—					$	67,164					$	67,164

Accumulated impairment losses to goodwill were $35,252 as of June 30, 2022 and are related to the Cyber & Engineering reporting unit.

The table below presents details on prepaid expenses and other current assets:

			June 30, 2022						December 31, 2021
Prepaid expenses			$	4,732					$	2,217
Prepaid insurance			2,099						4,265
Pre-contract costs(1)			1,266						546
Total prepaid expenses and other current assets			$	8,097					$	7,028

(1) Costs incurred to fulfill a contract in advance of the contract being awarded are included in prepaid expenses and other current assets if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs).

			June 30, 2022						December 31, 2021
Payroll accruals			$	12,876					$	9,011
Accrued interest			597						842
Other accrued expenses			2,505						882
Total accrued liabilities			$	15,978					$	10,735

			June 30, 2022						December 31, 2021
Convertible Notes			$	200,000					$	200,000
Bank of America Senior Revolver			—						—
D&O Financing Loan			1,921						4,233
Total debt			201,921						204,233
Less: unamortized issuance costs			8,659						9,636
Total debt, net			193,262						194,597
Less: current portion			1,921						4,233
Long-term debt, net			$	191,341					$	190,364

On December 7, 2021 (the “Closing Date”), the Company entered into the senior credit agreement with Bank of America, N.A. (the “Bank of America Credit Agreement”), providing the Company with a $50.0 million senior secured revolving credit facility (the “Senior Revolver”). Proceeds from the Senior Revolver will be used to fund working capital needs, capital expenditures, and other general corporate purposes. The Senior Revolver matures on December 7, 2025 (the “Maturity Date”).

(i)A Base Rate plus a Base Rate Margin of 2.00%. Base Rate is a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) Bloomberg Short-Term Yield Index (“BSBY”) Rate plus 1.00%; or

(ii)The BSBY Rate plus a BSBY Margin of 1.00%.

The Bank of America Credit Agreement requires the Company to meet certain financial and other covenants. The Company was not in compliance with the Fixed Charge Coverage ratio requirement as of June 30, 2022, and as a result is currently unable to draw on the facility. The Company notified Bank of America N.A. of the covenant violation, and on August 9, 2022, entered into the First Amendment (the “Amendment”) to the Bank of America Credit Agreement, which, among other things, waived the requirement that the Company demonstrate compliance with the minimum Fixed Charge Coverage ratio provided for in the Credit Agreement for the quarter ended June 30, 2022. See Note T—Subsequent Events of the consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding the Amendment.

Based on current forecasts, management believes that it is reasonably likely that the Company may fail to meet the covenant requirements of the Bank of America Credit Agreement in future periods and therefore, may be unable to draw on the facility. Management performed a cash flow analysis to identify the Company’s projected approximate cash flow and liquidity needs for the next 12 months. Based on the Company’s projected cash flow and liquidity needs, we believe that our cash from operating activities generated from continuing operations during the year will be adequate for the next 12 months to meet our anticipated uses of cash flow, including payroll obligations, working capital, operating lease obligations, capital expenditures and debt service costs, and it is considered unlikely that the Company would require access to draw funds on the Senior Revolver in the foreseeable future.

Upon consummation of the Merger, the Company issued $200.0 million of unsecured convertible notes (the “Convertible Notes”) to certain investors. The Convertible Notes bear interest at a rate of 6.0% per annum, payable semi-annually, and not including any interest payments that are settled with the issuance of shares, were initially convertible into 17,391,304 shares of the Company’s common stock at an initial Conversion Price of $11.50. The Conversion Price is subject to adjustments. On May 29, 2022, pursuant to the Convertible Note indenture, the conversion rate applicable to the Convertible Notes was adjusted to 94.2230 (previously 86.9565) shares of common stock per $1,000 principal amount of Convertible Notes because the average of the daily volume-weighted average price of the common stock during the preceding 30 trading days was less than $10.00 (the “Conversion Rate Reset”). After giving effect to the Conversion Rate Reset, the Conversion Price is $10.61 and the Convertible Notes are convertible into 18,844,600 shares, not including any interest payments that are settled with the issuance of shares. The Convertible Note financing matures on December 15, 2026.

As of June 30, 2022, the Company has an outstanding balance of $200.0 million related to the Convertible Notes, which is recorded on the balance sheet net of approximately $8.7 million of unamortized debt issuance costs.

On December 8, 2021, the Company entered into a $4,233 loan (the “D&O Financing Loan”) with AFCO Credit Corporation to finance the Company’s directors and officers insurance premium. The D&O Financing Loan has an interest rate of 1.50% per annum and a maturity date of December 8, 2022.

			Three Months Ended June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
Effective tax rate			3.1		%				36.0		%				2.3		%				26.0		%

The Company was taxed as a corporation for federal, state, and local income tax purposes for the three and six months ended June 30, 2022 and as a limited liability company which elected to be taxed as a corporation for federal, state, and local income tax purposes for the three and six months ended June 30, 2021. The effective tax rate for the three and six months ended June 30, 2022 differs from the U.S. federal income tax rate of 21.0% primarily due to state and local income taxes, permanent differences between book and taxable income, certain discrete items and the change in valuation allowance primarily resulting from the ProModel Corporation acquisition. The effective tax rate for the three and six months ended June 30, 2021 differs from the U.S. federal income tax rate of 21.0% primarily due to non-deductible transaction expenses, offset by state and local corporate income taxes.

			December 6, 2021
Highbridge Investors			2,453,195
Tenor			2,499,608
Glazer Investors			5,000,000
Total shares			9,952,803

During the three months ended March 31, 2022, the Company settled the derivative liability associated with the Written Put Option by repurchasing all 9,952,803 shares of its common stock at the Investors’ request. Certain of the Investors requested for their shares to be repurchased prior to the end of the three-month period at a reduced price per share. As a result, 5,000,000 shares were repurchased at $10.125 per share during the first quarter of 2022. Of the $101,021 previously presented as restricted cash on the Company’s consolidated balance sheets on December 31, 2021, $100,896 was released from the escrow account to settle the obligation to Investors and the remaining $125 was reclassified to cash and cash equivalents.

															December 31, 2021
Value of the written put options															$	4.50
Exercise price															$	10.15
Common stock price															$	5.66
Expected option term (in years)															0.18
Expected volatility															66.00%
Risk-free rate of return															0.06%
Expected annual dividend yield															—%

			June 30, 2022						December 31, 2021
Common stock:
Authorized shares of common stock			500,000,000						500,000,000
Common stock par value per share			$	0.0001					$	0.0001
Common stock outstanding at the period end			126,263,451						135,566,227

The table below presents the details of the Company’s authorized preferred stock as of the following periods:

			June 30, 2022						December 31, 2021
Preferred stock:
Authorized shares of preferred stock			1,000,000						1,000,000
Preferred stock par value per share			$	0.0001					$	0.0001
Preferred stock outstanding at the period end			—						—

The terms and provisions of the public warrants above also apply to the private warrants. If the private warrants are held by holders other than GigAcquisitions4, LLC (“Sponsor”), Oppenheimer & Co. Inc. and Nomura Securities International, Inc. (together, the “Underwriters”), or any respective permitted transferees, the private warrants will be redeemable by the Company and exercisable by the holders on the same basis as the public warrants. The Sponsor, the Underwriters, and any respective permitted transferees have the option to exercise the private warrants on a cashless basis.

															June 30, 2022						December 31, 2021
Fair value of each private warrant															$	0.43					$	0.87
Exercise price															$	11.50					$	11.50
Common stock price															$	3.68					$	5.66
Expected option term (in years)															4.40						4.94
Expected volatility															46.50%						39.50%
Risk-free rate of return															3.00%						1.25%
Expected annual dividend yield															—%						—%

As of June 30, 2022, the private warrants have a fair value of $138 and are presented on the consolidated balance sheets within other non-current liabilities. The gain of $199 and $181 recognized as a result of the change in fair value for the three and six months ended June 30, 2022, respectively, are presented in net decrease in fair value of derivatives on the consolidated statements of operations.

In February 2021, the Company’s Parent adopted a compensatory benefit plan (the “Class B Unit Incentive Plan”) to provide incentives to directors, managers, officers, employees, consultants, advisors, and/or other service providers of the Company’s Parent or its Subsidiaries in the form of the Parent’s Class B Units (“Incentive Units”). Incentive Units have a participation threshold of $1.00 and are divided into three tranches (“Tranche I,” “Tranche II,” and “Tranche III”). Tranche I Incentive Units are subject to performance-based, service-based, and market-based conditions. The grant date fair value for the Incentive Units was $5.19 per unit.

			February 16, 2021
Volatility			57.0%
Risk-free interest rate			0.1%
Expected time to exit (in years)			1.6

On July 29, 2021, the Company’s Parent amended the Class B Unit Incentive Plan so that the Tranche I and the Tranche III Incentive Units immediately became fully vested, subject to continued employment or provision of services, upon the closing of the transaction stipulated in the Agreement and Plan of Merger (the “Merger Agreement”) dated June 4, 2021. The Company’s Parent also amended the Class B Unit Incentive Plan so that the Tranche II Incentive Units will vest on any liquidation event, as defined in the Class B Unit Incentive Plan, rather than only upon the occurrence of an Exit Sale, subject to the market-based condition stipulated in the Class B Unit Incentive Plan prior to its amendment.

Equity-based compensation for awards with performance conditions is based on the probable outcome of the related performance condition. The performance conditions required to vest per the amended Incentive Plan remain improbable until they occur due to the unpredictability of the events required to meet the vesting conditions. As such events are not considered probable until they occur, recognition of equity-based compensation for the Incentive Units is deferred until the vesting conditions are met. Once the event occurs, unrecognized compensation cost associated with the performance-vesting Incentive Units (based on their modification date fair value) will be recognized based on the portion of the requisite service period that has been rendered.

			July 29, 2021
Volatility			46.0%
Risk-free interest rate			0.2%
Expected time to exit (in years)			1.2