What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-07 compared with 2023-08-04 · 104 added, 96 removed, 482 unchanged (29% of the section changed)

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share data) 2023 2022 2023 2022

7 unchanged sentences

Other expense (income), net ( 1,463 ) ( 1,156 ) 1,970 ( 4,219 )

Loss before provision for income taxes and share of net income from joint venture ( 15,145 ) ( 7,935 ) ( 24,300 ) ( 11,798 )

Provision for income taxes ( 325 ) ( 1,051 ) ( 1,626 ) ( 2,582 )

Loss before benefit (provision) for income taxes and share of net income from joint venture ( 7,015 ) ( 4,707 ) ( 31,315 ) ( 16,505 )

Benefit (provision) for income taxes 245 1,068 ( 1,381 ) ( 1,514 )

Share of net income from joint venture 1,713 1,424 3,087 3,935

4 unchanged sentences

Change in fair value, net of tax — 904 ( 230 ) 2,464

Reclassification adjustment for losses (gains) included in net loss, net of tax ( 449 ) 31 ( 917 ) 65

Reclassification adjustments included in net loss, net of tax ( 449 ) ( 116 ) ( 1,366 ) ( 51 )

Other comprehensive loss $ ( 3,521 ) $ ( 6,865 ) $ ( 5,202 ) $ ( 11,130 )

4 unchanged sentences

Condensed Consolidated Balance Sheets

(in thousands, except per share data) June 30,

(in thousands, except per share data) September 30,

2023 December 31,

1 unchanged sentence

Cash and cash equivalents $ 21,790 $ 12,808

Accounts receivable, net of allowances of $ 1,495 and $ 1,469 at June 30, 2023 and December 31, 2022

Accounts receivable, net of allowances of $ 1,210 and $ 1,469 at September 30, 2023 and December 31, 2022

73,229 74,129

4 unchanged sentences

Total current assets 193,257 191,700

Property, plant and equipment, net of accumulated depreciation of $ 239,032 and $ 225,046 at June 30, 2023 and December 31, 2022

Property, plant and equipment, net of accumulated depreciation of $ 243,638 and $ 225,046 at September 30, 2023 and December 31, 2022

185,707 197,637

20 unchanged sentences

Commitments and contingencies (Note 9)

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at June 30, 2023 and December 31, 2022

Series D perpetual preferred stock - $ 0.01 par value per share, 65 shares authorized, issued and outstanding at September 30, 2023 and December 31, 2022

74,295 64,701

Stockholders’ equity:

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 47,019 and 43,856 shares issued and outstanding at June 30, 2023 and December 31, 2022

Common stock - $ 0.01 par value per share, 90,000 shares authorized, 47,311 and 43,856 shares issued and outstanding at September 30, 2023 and December 31, 2022

Additional paid-in capital 460,382 468,143

5 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended June 30, 2023 and 2022

Three Months Ended September 30, 2023 and 2022

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive income (loss) Total

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

Balance as of March 31, 2023 43,772 $ 438 $ 465,377 $ ( 255,373 ) $ ( 35,978 ) $ 174,464

Balance as of June 30, 2023 47,019 $ 470 $ 462,525 $ ( 269,750 ) $ ( 38,801 ) $ 154,444

Net loss — — — ( 5,057 ) — ( 5,057 )

2 unchanged sentences

Share-based compensation expense — — 1,207 — — 1,207

Restricted shares forgiven for taxes ( 59 ) ( 1 ) ( 72 ) — — ( 73 )

Other comprehensive loss — — — — ( 3,521 ) ( 3,521 )

Balance as of June 30, 2023 47,019 $ 470 $ 462,525 $ ( 269,750 ) $ ( 38,801 ) $ 154,444

Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ ( 274,807 ) $ ( 42,322 ) $ 143,726

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive income (loss) Total

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

Balance as of March 31, 2022 43,890 $ 439 $ 473,072 $ ( 222,402 ) $ ( 28,081 ) $ 223,028

Balance as of June 30, 2022 43,884 $ 439 $ 473,019 $ ( 230,969 ) $ ( 36,167 ) $ 206,322

Net loss — — — ( 2,215 ) — ( 2,215 )

Dividends accrued for preferred stock — — ( 2,783 ) — — ( 2,783 )

Shares issued under stock incentive plans, net of forfeitures ( 5 ) — — — — —

Shares forfeited under stock incentive plans ( 2 ) — — — — —

Share-based compensation expense — — 307 — — 307

Restricted shares forgiven for taxes ( 1 ) — ( 1 ) — — ( 1 )

Other comprehensive loss — — — — ( 6,865 ) ( 6,865 )

Balance as of June 30, 2022 43,884 $ 439 $ 473,019 $ ( 230,969 ) $ ( 36,167 ) $ 206,322

Balance as of September 30, 2022 43,882 $ 439 $ 470,543 $ ( 233,184 ) $ ( 43,032 ) $ 194,766

See notes to condensed consolidated financial statements (unaudited).

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months Ended June 30, 2023 and 2022

Nine Months Ended September 30, 2023 and 2022

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive income (loss) Total

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

6 unchanged sentences

Other comprehensive loss — — — — ( 5,202 ) ( 5,202 )

Balance as of June 30, 2023 47,019 $ 470 $ 462,525 $ ( 269,750 ) $ ( 38,801 ) $ 154,444

Balance as of September 30, 2023 47,311 $ 473 $ 460,382 $ ( 274,807 ) $ ( 42,322 ) $ 143,726

Common Stock Additional

capital Accumulated deficit Accumulated other comprehensive income (loss) Total

capital Accumulated deficit Accumulated other comprehensive loss Total

(in thousands) Number of shares Par

6 unchanged sentences

Other comprehensive loss ( 11,130 ) ( 11,130 )

Balance as of June 30, 2022 43,884 $ 439 $ 473,019 $ ( 230,969 ) $ ( 36,167 ) $ 206,322

Balance as of September 30, 2022 43,882 $ 439 $ 470,543 $ ( 233,184 ) $ ( 43,032 ) $ 194,766

See notes to condensed consolidated financial statements (unaudited).

Condensed Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

September 30,

(in thousands) 2023 2022

25 unchanged sentences

Cash paid for debt issuance costs ( 55 ) ( 136 )

Proceeds from short-term debt, net 3,648 —

Proceeds from short-term debt 3,648 —

Other ( 1,276 ) ( 2,265 )

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

June 30, 2023

September 30, 2023

Interim Financial Statements

2 unchanged sentences

As used in this Quarterly Report on Form 10-Q (this “Quarterly Report”), the terms “NN,” the “Company,” “we,” “our,” or “us” refer to NN, Inc., and its subsidiaries.

As of June 30, 2023, we had 27 facilities in North America, Europe, South America, and Asia.

As of September 30, 2023, we had 27 facilities in North America, Europe, South America, and Asia.

Basis of Presentation

2 unchanged sentences

Securities and Exchange Commission (the “SEC”) on March 10, 2023.

In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to fairly state our results of operations for the three and six months ended June 30, 2023 and 2022;

financial position as of June 30, 2023 and December 31, 2022;

and cash flows for the six months ended June 30, 2023 and 2022, on a basis consistent with our audited consolidated financial statements.

financial position as of September 30, 2023 and December 31, 2022;

and cash flows for the nine months ended September 30, 2023 and 2022, on a basis consistent with our audited consolidated financial statements.

These adjustments are of a normal recurring nature and are, in the opinion of management, necessary to state fairly the Company’s financial position and operating results for the interim periods.

3 unchanged sentences

These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the 2022 Annual Report.

The results for the three and six months ended June 30, 2023, are not necessarily indicative of results for the year ending December 31, 2023, or any other future periods.

The results for the three and nine months ended September 30, 2023, are not necessarily indicative of results for the year ending December 31, 2023, or any other future periods.

Except for per share data or as otherwise indicated, all U.S.

2 unchanged sentences

We participate in programs established by our customers which allows us to sell certain receivables from that customer on a non-recourse basis to a third-party financial institution.

During the six months ended June 30, 2023, we incurred fees of $ 0.5 million, related to the sale of receivables which is recorded in the Other expense (income), net line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

During the nine months ended September 30, 2023, we incurred fees of $ 0.8 million, related to the sale of receivables which is recorded in the Other expense (income), net line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Facility Closures

Due to ongoing efforts to optimize the Company’s manufacturing footprint, we ceased manufacturing operations at several facilities during the six months ended June 30, 2023, including at our Irvine and Taunton locations.

We sold machinery and equipment from these locations and recognized a gain (loss) on sales of $ 0.3 million and $( 0.2 ) million during the three and six months ended June 30, 2023, respectively.

The gains (losses), which are primarily reported within our Power Solutions segment, are included in the Other operating expense (income), net line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Due to ongoing efforts to optimize the Company’s manufacturing footprint, we ceased manufacturing operations at several facilities during the nine months ended September 30, 2023, including at our Irvine and Taunton locations.

We sold machinery and equipment from these locations and recognized a loss on sales of $ 0.2 million during the nine months ended September 30, 2023.

The loss, which is primarily reported within our Power Solutions segment, is included in the Other operating expense (income), net line item on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

In June 2023, we began subleasing our Irvine and Taunton facilities under subleases that terminate in 2034 and 2035, respectively.

Segment Information

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

Inventories are comprised of the following amounts:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Raw materials $ 26,780 $ 32,146

8 unchanged sentences

Amortization ( 2,515 ) ( 8,174 ) ( 10,689 )

Balance as of June 30, 2023 $ 20,679 $ 45,086 $ 65,765

Balance as of September 30, 2023 $ 19,841 $ 42,361 $ 62,202

Intangible assets are reviewed for impairment when changes in circumstances indicate the carrying value of those assets may not be recoverable.

There were no indicators of impairment at June 30, 2023.

There were no indicators of impairment at September 30, 2023.

Investment in Joint Venture

5 unchanged sentences

Share of earnings 3,087

Dividends paid by joint venture ( 3,938 )

Foreign currency translation loss ( 1,820 )

Balance as of June 30, 2023 $ 31,570

Our effective tax rate was ( 2.1 )% and ( 6.7 )% for the three and six months ended June 30, 2023, respectively, and ( 13.2 )% and ( 21.9 )% for the three and six months ended June 30, 2022, respectively.

The effective tax rates for the three and six months ended June 30, 2023 differ from the U.S.

Balance as of September 30, 2023 $ 29,131

Our effective tax rate was 3.5 % and ( 4.4 )% for the three and nine months ended September 30, 2023, respectively, and 22.7 % and ( 9.2 )% for the three and nine months ended September 30, 2022, respectively.

The effective tax rates for the three and nine months ended September 30, 2023 and September 30, 2022 differ from the U.S.

federal statutory tax rate of 21 % primarily due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by limitation on the amount of tax benefit recorded for loss carryforwards in certain jurisdictions where we believe it is more likely than not that a portion of the future tax benefit may not be realized.

In addition, the effective tax rate was unfavorably impacted by the U.S.

tax on the earnings of foreign subsidiaries under the global intangible low-taxed income regime.

In addition, the effective tax rate for the three and nine months ended September 30,

2023 was favorably impacted by a net valuation allowance release based on management’s reassessment of the amount of its deferred tax assets that are more likely than not to be realized.

On March 22, 2021, we entered into a new $ 150.0 million term loan facility (as amended from time to time, the “Term Loan Facility”) and a new $ 50.0 million asset backed credit facility (as amended from time to time, the “ABL Facility”).

1 unchanged sentence

The following table presents the outstanding debt balances.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Term Loan Facility $ 147,741 $ 147,375

7 unchanged sentences

_______________________________

(1) In addition to this amount, costs of $ 0.6 million and $ 0.6 million related to the ABL Facility were recorded in other non-current assets as of June 30, 2023 and December 31, 2022, respectively.

(1) In addition to this amount, costs of $ 0.5 million and $ 0.6 million related to the ABL Facility were recorded in other non-current assets as of September 30, 2023 and December 31, 2022, respectively.

Term Loan Facility

2 unchanged sentences

The PIK interest is payable on the loan maturity date of September 22, 2026.

At June 30, 2023, the Term Loan Facility bore interest, including PIK interest, based on one-month Adjusted SOFR, at 14.077 %.

At September 30, 2023, the Term Loan Facility bore interest, including PIK interest, based on one-month Adjusted SOFR, at 14.291 %.

The Term Loan Facility requires quarterly principal payments of $ 0.4 million with the remaining unpaid principal amount due at the loan maturity date.

2 unchanged sentences

The Term Loan Facility has a first lien on all domestic assets other than accounts receivable and inventory and has a second lien on domestic accounts receivable and inventory.

We were in compliance with all requirements under the Term Loan Facility as of June 30, 2023.

We were in compliance with all requirements under the Term Loan Facility as of September 30, 2023.

The Term Loan Facility was issued at a $ 3.8 million discount and we have capitalized an additional $ 5.3 million in debt issuance costs.

7 unchanged sentences

We may elect whether to use one-month, three-month, or six-month Adjusted SOFR.

At June 30, 2023, using one-month Adjusted SOFR plus a 2.00 % margin, the weighted average interest rate on outstanding borrowings under the ABL Facility was 7.246 %.

At September 30, 2023, using one-month Adjusted SOFR plus a 2.00 % margin, the interest rate on outstanding borrowings under the ABL Facility was 7.429 %.

We pay a commitment fee of 0.375 % for unused capacity under the ABL Facility and a 2.125 % fee on the amount of letters of credit outstanding.

The final maturity date of the ABL Facility is March 22, 2026.

As of June 30, 2023, we had $ 3.0 million of outstanding borrowings under the ABL Facility, $ 10.9 million of outstanding letters of credit, and $ 29.7 million available for future borrowings under the ABL Facility.

As of September 30, 2023, we had no outstanding borrowings under the ABL Facility, $ 10.9 million of outstanding letters of credit, and $ 28.7 million available for future borrowings under the ABL Facility.

The ABL Facility has a first lien on domestic accounts receivable and inventory.

We were in compliance with all requirements under the ABL Facility as of June 30, 2023.

We were in compliance with all requirements under the ABL Facility as of September 30, 2023.

The following table contains supplemental cash flow information related to leases.

Six Months Ended

Nine Months Ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities:

21 unchanged sentences

Management believes the indemnification would include amounts owed for the tax, interest, and penalties related to this matter.

Accordingly, we do not expect to incur a loss related to this matter even in the event of an unfavorable decision and, therefore, have not accrued an amount for the remaining matters as of June 30, 2023.

Other Legal Matters

17 unchanged sentences

Note 15 discusses the accounting for these features.

As of June 30, 2023, the carrying value of the Series D Preferred Stock shares was $ 70.9 million, which included $ 24.3 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the six months ended June 30, 2023.

As of September 30, 2023, the carrying value of the Series D Preferred Stock shares was $ 74.3 million, which included $ 27.6 million of accumulated unpaid and deemed dividends.

The following table presents the change in the Series D Preferred Stock carrying value during the nine months ended September 30, 2023.

Balance as of December 31, 2022 $ 64,701

1 unchanged sentence

Amortization 2,143

Balance as of June 30, 2023 $ 70,948

Balance as of September 30, 2023 $ 74,295

Revenue from Contracts with Customers

2 unchanged sentences

The following tables summarize revenue by customer geographical region.

Three Months Ended June 30, 2023 Mobile

Three Months Ended September 30, 2023 Mobile

Solutions Power

9 unchanged sentences

Total net sales $ 78,961 $ 45,484 $ ( 2 ) $ 124,443

Three Months Ended June 30, 2022 Mobile

Three Months Ended September 30, 2022 Mobile

Solutions Power

9 unchanged sentences

Total net sales $ 76,122 $ 51,124 $ 51 $ 127,297

Six Months Ended June 30, 2023 Mobile

Nine Months Ended September 30, 2023 Mobile

Solutions Power

9 unchanged sentences

Total net sales $ 234,132 $ 142,618 $ ( 13 ) $ 376,737

Six Months Ended June 30, 2022 Mobile

Nine Months Ended September 30, 2022 Mobile

Solutions Power

13 unchanged sentences

While many of the industries we serve include electrical components, our products in the residential/commercial electrical industry category in the following tables include components used in smart meters, charging stations, circuit breakers, transformers, electrical contact assemblies, precision stampings, welded contact assemblies, specification plating, and surface finishing.

Three Months Ended June 30, 2023 Mobile

Three Months Ended September 30, 2023 Mobile

Solutions Power

6 unchanged sentences

Total net sales $ 78,961 $ 45,484 $ ( 2 ) $ 124,443

Three Months Ended June 30, 2022 Mobile

Three Months Ended September 30, 2022 Mobile

Solutions Power

6 unchanged sentences

Total net sales $ 76,122 $ 51,124 $ 51 $ 127,297

Six Months Ended June 30, 2023 Mobile

Nine Months Ended September 30, 2023 Mobile

Solutions Power

6 unchanged sentences

Total net sales $ 234,132 $ 142,618 $ ( 13 ) $ 376,737

Six Months Ended June 30, 2022 Mobile

Nine Months Ended September 30, 2022 Mobile

Solutions Power

8 unchanged sentences

Deferred revenue relates to payments received in advance of performance under the contract and recognized as revenue as (or when) we perform under the contract.

The balance of deferred revenue was $ 1.1 million and $ 0.7 million as of June 30, 2023 and December 31, 2022, respectively.

Revenue recognized for performance obligations satisfied or partially satisfied during the six months ended June 30, 2023 included $ 0.7 million that was included in deferred revenue as of December 31, 2022.

The balance of deferred revenue was $ 1.1 million and $ 0.7 million as of September 30, 2023 and December 31, 2022, respectively.

Revenue recognized for performance obligations satisfied or partially satisfied during the nine months ended September 30, 2023 included $ 0.7 million that was included in deferred revenue as of December 31, 2022.

Transaction Price Allocated to Future Performance Obligations

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of June 30, 2023, unless our contracts meet one of the practical expedients.

We are required to disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of September 30, 2023, unless our contracts meet one of the practical expedients.

Our contracts met the practical expedient for a performance obligation that is part of a contract that has an original expected duration of one year or less.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Restricted Stock

The following table presents the status of unvested restricted stock awards as of June 30, 2023 and changes during the six months then ended.

The following table presents the status of unvested restricted stock awards as of September 30, 2023 and changes during the nine months then ended.

Shares Weighted Average Grant-Date

3 unchanged sentences

Forfeited ( 160 ) 1.51

Unvested at June 30, 2023 3,447 $ 1.28

During the six months ended June 30, 2023, we granted 1,881,000 shares of restricted stock to non-executive directors, officers and certain other employees under the NN, Inc.

Unvested at September 30, 2023 3,459 $ 1.41

During the nine months ended September 30, 2023, we granted 1,881,000 shares of restricted stock to non-executive directors, officers and certain other employees under the NN, Inc.

2022 Omnibus Incentive Plan (“2022 Omnibus Plan”).

The shares of restricted stock vest pro-rata generally over three years for employees and over one year for non-executive directors.

During the six months ended June 30, 2023, we granted 1,500,000 shares of restricted stock to our new CEO as an inducement award, which vests pro-rata over five years .

Total grant date fair value of restricted stock that vested in the six months ended June 30, 2023, was $ 3.5 million.

During the nine months ended September 30, 2023, we granted 1,830,000 shares of restricted stock to new executive officers as inducement awards, which vest pro-rata over five years .

Total grant date fair value of restricted stock that vested in the nine months ended September 30, 2023, was $ 4.1 million.

Performance Share Units

Performance Share Units (“PSUs”) are a form of long-term incentive compensation awarded to executive officers and certain other key employees designed to directly align the interests of employees to the interests of our stockholders, and to create long-term stockholder value.

The following table presents the status of unvested PSUs as of June 30, 2023 and activity during the six months then ended.

The following table presents the status of unvested PSUs as of September 30, 2023 and activity during the nine months then ended.

Nonvested PSU Awards Weighted Average Grant-Date

3 unchanged sentences

Forfeited ( 634 ) 2.47

Nonvested at June 30, 2023 3,391 $ 1.48

During the six months ended June 30, 2023, we granted 561,000 PSUs to certain executive officers.

Nonvested at September 30, 2023 3,951 $ 1.56

During the nine months ended September 30, 2023, we granted 561,000 PSUs to certain executive officers.

These units vest, if at all, upon our achieving a specified relative total shareholder return, which will be measured against the total shareholder return of a specified index during the three-year performance period that ends December 31, 2025.

During the six months ended June 30, 2023, we granted 2,500,000 PSUs to our new CEO as an inducement award.

During the nine months ended September 30, 2023, we granted 3,060,000 PSUs to new executive officers as inducement awards.

These units cliff-vest after five years and are contingent on the Company’s stock price meeting specified thresholds.

We estimated the grant date fair value of the PSU awards using the Monte Carlo simulation model, as the total shareholder return metric and changes in stock price are considered market conditions under ASC Topic 718, Compensation – stock compensation .

During the six months ended June 30, 2023, 67,000 PSUs were subject to accelerated vesting upon a participant’s termination that was a qualifying event under the terms of the PSU award agreements.

Total grant date fair value of PSUs that vested in the six months ended June 30, 2023, was $ 0.3 million.

During the nine months ended September 30, 2023, 67,000 PSUs were subject to accelerated vesting upon a participant’s termination that was a qualifying event under the terms of the PSU award agreements.

Total grant date fair value of PSUs that vested in the nine months ended September 30, 2023, was $ 0.3 million.

Accumulated Other Comprehensive Income

1 unchanged sentence

Foreign Currency Translation Interest rate swap Income taxes (1) Total

Balance as of March 31, 2023 $ ( 38,332 ) $ 2,354 $ — $ ( 35,978 )

Balance as of June 30, 2023 $ ( 40,706 ) $ 1,905 $ — $ ( 38,801 )

Other comprehensive income (loss) before reclassifications ( 3,072 ) — — ( 3,072 )

1 unchanged sentence

Net other comprehensive income (loss) ( 3,072 ) ( 449 ) — ( 3,521 )

Balance as of September 30, 2023 $ ( 43,778 ) $ 1,456 $ — $ ( 42,322 )

Balance as of June 30, 2022 $ ( 37,906 ) $ 2,207 $ ( 468 ) $ ( 36,167 )

Balance as of March 31, 2022 $ ( 29,416 ) $ 1,698 $ ( 363 ) $ ( 28,081 )

Other comprehensive income (loss) before reclassifications ( 7,653 ) 1,145 ( 241 ) ( 6,749 )

1 unchanged sentence

Net other comprehensive income (loss) ( 7,653 ) 999 ( 211 ) ( 6,865 )

Balance as of June 30, 2022 $ ( 37,906 ) $ 2,207 $ ( 468 ) $ ( 36,167 )

Balance as of September 30, 2022 $ ( 45,559 ) $ 3,206 $ ( 679 ) $ ( 43,032 )

Foreign Currency Translation Interest rate swap Income taxes (1) Total

3 unchanged sentences

Net other comprehensive income (loss) ( 3,606 ) ( 1,693 ) 97 ( 5,202 )

Balance as of June 30, 2023 $ ( 40,706 ) $ 1,905 $ — $ ( 38,801 )

Balance as of September 30, 2023 $ ( 43,778 ) $ 1,456 $ — $ ( 42,322 )

Balance as of December 31, 2021 $ ( 32,016 ) $ 151 $ ( 37 ) ( 31,902 )

2 unchanged sentences

Net other comprehensive income (loss) ( 13,543 ) 3,055 ( 642 ) ( 11,130 )

Balance as of June 30, 2022 $ ( 37,906 ) $ 2,207 $ ( 468 ) $ ( 36,167 )

Balance as of September 30, 2022 $ ( 45,559 ) $ 3,206 $ ( 679 ) $ ( 43,032 )

______________________

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

1,815 2,042 1,907 2,063

Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $ 7.93 to $ 25.16 for the three and six months ended June 30, 2023.

Stock options excluded from the calculations of diluted net loss per share had a per share exercise price ranging from $ 7.93 to $ 25.16 for the three and nine months ended September 30, 2023.

The 2019 Warrants excluded from the calculation of diluted net loss per share had a per share exercise price of $ 11.03 .

15 unchanged sentences

Due to the dilutive impact of subsequent issuances of warrants, the exercise price of the 2019 Warrants has been adjusted to $ 11.03 per share.

The following table presents the change in the liability balance of the embedded derivatives during the six months ended June 30, 2023.

The following table presents the change in the liability balance of the embedded derivatives during the nine months ended September 30, 2023.

Balance as of December 31, 2022 $ 2,959

1 unchanged sentence

Change in fair value (1) 1,642

Balance as of June 30, 2023 $ 9,416

Balance as of September 30, 2023 $ 7,313

_______________________________

1 unchanged sentence

The following tables show the fair values of the embedded derivatives within the fair value hierarchy.

June 30, 2023 Quoted Prices in Active Markets for Identical Assets

September 30, 2023 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

7 unchanged sentences

The fair value of the change-in-control put feature utilizes unobservable inputs based on the Company’s assessment of the probability of a change-in-control event occurring in a future period.

The probability of a change-in-control event ranged from 3 % to 5 % as of June 30, 2023 and from 3% to 10% as of December 31, 2022.

The probability of a change-in-control event was 3 % as of September 30, 2023 and ranged from 3 % to 10 % as of December 31, 2022.

The fair value of the 2019 Warrants is determined using a valuation model that utilizes unobservable inputs to determine the probability that the 2019 Warrants will remain outstanding for future periods.

The probabilities resulted in a weighted average term of 2.9 years as of June 30, 2023 and December 31, 2022.

The probabilities resulted in a weighted average term of 2.9 years as of September 30, 2023 and December 31, 2022.

Interest Rate Swap

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

13 unchanged sentences

Our financial instruments that are subject to fair value disclosure consist of cash and cash equivalents, accounts receivable, accounts payable, and debt.

As of June 30, 2023 and December 31, 2022, the carrying values of these financial instruments, except for debt, approximated fair value.

The fair value of our debt was $ 164.2 million and $ 155.2 million, with a carrying amount of $ 155.4 million and $ 152.7 million, as of June 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, the carrying values of these financial instruments, except for debt, approximated fair value.

The fair value of our debt was $ 167.2 million and $ 155.2 million, with a carrying amount of $ 152.6 million and $ 152.7 million, as of September 30, 2023 and December 31, 2022, respectively.

The fair value of debt was calculated by discounting the future cash flows to its present value using prevailing market interest rates for debt with similar creditworthiness, terms and maturities and is considered a Level 3 fair value measurement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements