Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investments

v3.21.2
Equity Method Investments
 9 Months Ended
Sep. 30, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments
7. Equity Method Investments
LeoStella
The Company accounts for its investment in LeoStella as an equity method investment. The Company did not make any additional capital investments in LeoStella during the nine months ended September 30, 2021 and 2020. During the nine months ended September 30, 2021 and 2020, respectively, the Company remitted $15.0 million and $8.2 million of payments to LeoStella for satellite manufacturing and satellite software development.
X-Bow
In 2017, the Company entered into a stock subscription and technology transfer agreement with X-Bow, whereby the Company assigned and transferred certain intellectual property rights owned by the Company to X-Bow in exchange for 13.5 million shares of X-Bow, a strategic investment in a space technology company specializing in additive manufacturing of solid rocket motors. As of September 30, 201, the Company's interest in X-Bow was 17.9%.
The following tables present summarized financial information for the Company’s equity method investments as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021, and September 30, 2020.
September 30, December 31,
Summarized balance sheets 2021 2020
(in thousands)
Current assets $ 73,494  $ 64,355 
Non-current assets 6,305  7,468 
Total assets $ 79,799  $ 71,823 
Current liabilities $ 59,139  $ 57,040 
Non-current liabilities 896  6,589 
Total liabilities $ 60,035  $ 63,629 
Three Months Ended September 30, Nine Months Ended September 30,
Summarized statements of operations 2021 2020 2021 2020
(in thousands) (in thousands)
Revenue $ 3,494  $ 9,604  $ 24,212  $ 12,946 
Gross margin $ 553  $ 1,381  $ 7,110  $ 1,924 
Net income/(loss) $ (1,590) $ 184  $ 570  $ (1,494)
Current assets of the Company’s equity method investees primarily consisted of inventories of $41.1 million as of September 30, 2021 and $47.3 million as of December 31, 2020. Total liabilities of the Company’s equity method investees primarily consisted of customer advances from related parties of $52.5 million as of September 30, 2021 and $51.4 million as of December 31, 2020.
The revenue related to equity method investments attributable to related parties was $3.5 million and $20.9 million for the three and nine months ended September 30, 2021, respectively. The revenue related to equity method investments attributable to related parties was $9.6 million and $12.9 million for the three and nine months ended September 30, 2020, respectively. The Company eliminates intercompany transactions;, therefore, the revenue of the equity method investees is not included in the Company's unaudited condensed consolidated financial statements. The Company has differences between the carrying value of its equity method investments and the underlying equity in the net assets of the investees of $0.6 million as of September 30, 2021 and $0.5 million as of December 31, 2020. The differences are a result of the elimination of upstream intra-entity profits from the sale of satellites, the recognition of unearned profits as the satellites are depreciated, and the elimination of bad debt expense reserves arising from intra-entity sales.