BIGBEAR.AI HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
(unaudited; in thousands of U.S. dollars unless
stated otherwise)
Note A—Description of the Business
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).
Upon the closing of the Merger, GigCapital4 was renamed to
BigBear.ai, Holdings Inc., the U.S. Securities and Exchange
Commission (“SEC”) registrant. As a result of the Merger,
the Company received aggregate gross proceeds of $101,958 from
GigCapital4’s trust account and PIPE Proceeds, and issued $200,000
of unsecured convertible notes that were convertible into
17,391,304 shares of the Company’s common stock at the initial
Conversion Price of $11.50, subject to adjustment (refer to Note
H—Debt for detail). Proceeds from the Merger were partially used to
fund the $114,393 repayment of the Antares Loan and Merger
transaction costs and other costs paid through the funds flow of
$9,802, consisting of marketing, legal and other professional
fees.
The Merger is accounted for as a reverse recapitalization in which
GigCapital4 is treated as the acquired company. For accounting
purposes, the Merger is treated as the equivalent of BigBear.ai
Holdings issuing equity for the net assets of GigCapital4 followed
by a recapitalization. A reverse recapitalization does not result
in a new basis of accounting, and the consolidated financial
statements of the combined entity (BigBear.ai) represent the
continuation of the consolidated financial statements of BigBear.ai
Holdings in many respects.
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%).
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