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BUSINESS ACQUISITION
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS ACQUISITION BUSINESS ACQUISITION
Innovative Signal Analysis, Inc.
Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated December 18, 2025, the Company completed the acquisition of Innovative Signal Analysis, Inc. (“ISA”) through a statutory merger involving Forrestal Merger Sub, Inc. (the “Merger Sub”), a wholly owned subsidiary of the Company (the “Merger”). Under the terms of the Merger, Merger Sub was merged with and into ISA. At the effective time of the Merger, Merger Sub ceased to exist as a separate entity, and ISA continued as the surviving corporation under Texas law. As a result, ISA became a wholly owned subsidiary of the Company, with the acquisition of 100% equity interest in ISA completed for a fair value consideration of $166.5 million consisting of cash considerations of $117.7 million which includes:
•$110.4 million in cash (subject to customary adjustments for ISA cash on hand, net working capital, unpaid transaction costs, and debt),
•$3.9 million of transaction costs incurred by ISA and paid by the Company on ISA’s behalf, and
•$3.4 million of cash placed into escrow to be released shortly after close.

In addition to these cash amounts, the consideration also includes:
•Issuance of fair value of $25.0 million of Series E preferred stock;
•$10.0 million of cash holdbacks retained by the Company at closing to address specified matters described in the Merger Agreement.
•a deferred cash payment of $15.0 million (fair valued at $13.3 million as of the acquisition date) which is due upon the earlier of (i) a “Liquidity Event” (as defined in the Merger Agreement) or (ii) the third anniversary of the closing date and
•a contingent earnout payment of up to $10.0 million (fair valued at $0.3 million as of the acquisition date) if ISA exceeds specified 2026 revenue targets.

The Company’s acquisition of ISA enhances its existing offerings by providing multi-domain, real-time automated hosted payloads, expanded ground processing, and highly trusted service support for the signals intelligence community. ISA expands our processing capabilities into classified data, enhancing its relationship with the U.S. Government and the U.S. intelligence community. The upgraded platform integrates HawkEye 360 data with third-party sources including national systems, AIS feeds, and optical imagery. This creates a unified environment for correlation, geolocation, and our unique signal recognition. In parallel to this acquisition, the Company is also developing automated analytics software to fuse
multiple data streams for real-time alerts, cueing, and mission orchestration, while expanding third-party integrations to deliver richer mission insights and operational advantages to a broader base of U.S. Government customers.
The acquisition was accounted for as a business combination under ASC 805, Business Combinations, with the Company identified as the acquirer. In connection with the ISA acquisition, the Company spent approximately $2.1 million in costs related to the acquisition which was expensed in the consolidated statements of operations for the year ended December 31, 2025. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed become available. All values remain preliminary including, but not limited to, intangible assets, including the preliminary assumptions used in their estimates of fair values and their respective estimated useful lives, property and equipment, inventory, right-of-use assets, income taxes, and residual goodwill. The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP.
The table below sets forth the consideration paid, and the preliminary fair value of the assets acquired, and liabilities assumed at the acquisition date:
December 18,
2025
Assets acquired and liabilities assumed
Cash and cash equivalents$5,782
Contract accounts receivable2,056
Prepaid expenses and other current assets2,016
Inventory4,014
Account receivable—
Contract assets6,726
Other long-term assets215
Satellites, property and equipment6,314
Right-of-use assets - operating8,808
Intangibles35,600
Goodwill116,866
Total assets$188,397
Accounts payable1,263
Accrued expenses and other current liabilities3,825
Contract liabilities297
Current portion of operating lease liabilities537
Deferred tax liabilities7,710
Operating lease liabilities, net of current portion8,271
Total liabilities21,903
Total net assets $166,494
The fair value of the working capital items, including accounts receivable, other current assets, accounts payable, accrued liabilities, and other current liabilities approximate their respective carrying values at the date of the acquisition.
December 18,
2025
Consideration paid
Cash$117,694
Fair value of Series E Preferred Shares(1)
25,000
Other consideration 23,800
Total consideration$166,494
The following table summarizes the fair value of acquired identifiable intangible assets:
December 18,
2025
Trade name(2)
$2,200
Customer relationships(2)
Follow-on
10,800
Existing backlog
1,100
Developed technology(2)
21,500
Total acquired intangible assets$35,600
(1)As part of the Merger Agreement, the Company issued 1,325,316 shares of Series E preferred shares at $18.86343 per share. See Note 8 – Mezzanine Equity and Shareholders Deficit for more details.
(2)The amortization period for the trade name, customer relationships follow-on, customer relationships existing backlog, and developed technology are four years, ten years, one year, and five years, respectively.
Goodwill generated from this business combination is primarily attributable to expected synergies from the transaction and incremental revenue and profit to be derived from the Company’s expansion into full-service hardware and software for its space and defense customers. The goodwill is not expected to be deductible for U.S. income tax purposes.
Unaudited Pro Forma Information
The following unaudited pro forma financial information presents combined results of operations as if ISA had been acquired as of the beginning of fiscal year 2024. The unaudited pro forma results include certain pro forma adjustments to revenue and net loss that were directly attributable to the acquisition, including transaction costs. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of 2024, or of the results of future operations of the combined business.
For the three months ended
March 31, 2025
Pro forma revenue$37,119
Pro forma net loss$(423)