Important Note about Forward-Looking Statements



The following discussion and analysis should be read in conjunction with the
Company's unaudited condensed consolidated financial statements as of June 30,
2022 and notes thereto included in this document and the audited consolidated
financial statements in the Company's 10-K filing for the period ended December
31, 2021 and the notes thereto. In addition to historical information, the
following discussion and other parts of this Form 10-Q contain forward-looking
information that involves risks and uncertainties. The Company's actual results
could differ materially from those anticipated by such forward-looking
information due to factors discussed elsewhere in this Form 10-Q.



The statements that are not historical constitute "forward-looking statements."
Said forward-looking statements involve risks and uncertainties that may cause
the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements, express or
implied by such forward-looking statements. These forward-looking statements are
identified by their use of such terms and phrases as "expects," "intends,"
"goals," "estimates," "projects," "plans," "anticipates," "should," "future,"
"believes," and "scheduled."



The variables which may cause differences include, but are not limited to, the
following: general economic and business conditions; changes in regulatory
environment; extraordinary external events such as the current pandemic health
event resulting from COVID-19; competition; success of operating initiatives;
operating costs; advertising and promotional efforts; the existence or absence
of adverse publicity; changes in business strategy or development plans; the
ability to retain management; availability, terms and deployment of capital;
business abilities and judgment of personnel; availability of qualified
personnel; labor and employment benefit costs; availability and costs of raw
materials and supplies; and changes in, or failure to comply with various
government regulations. Although the Company believes that the assumptions
underlying the forward-looking statements contained herein are reasonable, any
of the assumptions could be inaccurate; therefore, there can be no assurance
that the forward-looking statements included in this Form 10-Q will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any person that the
objectives and expectations of the Company will be achieved.



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Overview

Orbital Infrastructure Group is a diversified infrastructure services company
serving customers in the electric power, telecommunications, and renewable
markets. The Company is dedicated to maximizing shareholder value through
greenfield development and the acquisition of, and investment in successful,
entrepreneurial led companies to profitably grow revenues by providing
end-to-end solutions to customers, primarily in the renewable, electric power
transmission and distribution, and telecommunications infrastructure markets.
The Company is organized in three segments. The Electric Power segment consists
of Front Line Power Construction, LLC based in Houston, Texas, Orbital Power,
Inc. based in Dallas, Texas, and Eclipse Foundation Group based in Gonzales,
Louisiana. The segment provides comprehensive infrastructure solutions to
customers in the electric power industry. Services performed by Front Line Power
and Orbital Power, Inc. generally include but are not limited to the
engineering, design, installation, upgrade, repair and maintenance of electric
power transmission and distribution infrastructure and substation facilities as
well as emergency restoration services. Eclipse Foundation Group, which began
operations in January 2021, is a drilled shaft foundation construction company
that specializes in providing services to the electric transmission and
substation, industrial, telecommunication and disaster restoration market
sectors, with expertise performing services in water, marsh and rock terrains.



The Telecommunications segment consists of Gibson Technical Services (GTS) along
with its subsidiaries IMMCO, Inc. based in Atlanta, Georgia and Full Moon
Telecom, LLC based in Florida. GTS provides engineering, design, construction,
and maintenance services to the broadband and wireless telecommunication
industries and was acquired by the Company effective April 13, 2021. IMMCO, Inc.
provides enterprise solutions to the cable and telecommunication industries and
was acquired by the Company effective July 28, 2021. Full Moon Telecom, LLC
provides telecommunication services including an extensive array of wireless
service capabilities and was acquired by the Company effective October 22, 2021.
Coax Fiber Solutions was acquired as of March 7, 2022, and is a Georgia based
GDOT Certified contractor specializing in Aerial Installation, directional
drilling, trenching, plowing, and missile crews for telecommunications, power,
gas, water, CCTV, ATMS, and traffic signal cable installation.



Orbital Solar Services, LLC (OSS), based in Raleigh, North Carolina, makes up
the Renewables segment. OSS provides engineering, procurement and construction
("EPC") services that support the development of renewable energy generation
focused on utility-scale solar construction.



The Company has experienced rapid growth through organic growth and acquisitions
as the Company benefits from its 2021 investments and acquisitions and as the
economy continues to emerge from the COVID-19 induced slowdown. Second quarter
2022 revenue was over eight times greater than the Company's total revenue from
the second quarter of 2021. Improved revenues and income were as a result of the
inclusion of operations from the November acquisition of Front Line Construction
in the Electric Power segment along with improved revenue and gross margins from
the rest of the segment and continued growth in the Telecommunications segment
that got its start in the three months ended June 30, 2021. The Company
continues to incur professional fees related to mergers and acquisitions as the
Company pursues both organic growth and growth through acquisitions. The
Company's Telecommunications segment made an additional "tuck-in" acquisition in
the first quarter of 2022 for cash and stock consideration of approximately
$0.9 million. The six-month period ended June 30, 2022 for all segments began to
see tangible benefits from the investments the Company made in 2021 through
improved revenue and gross margins. The Company's results were affected
negatively in the first  half of 2022 by the $28.2 million loss on
extinguishment of the Company's seller financed debt on the November 2021 Front
Line Construction acquisition and stock-based payments made against its investor
held debt. The loss on extinguishment on the seller financed debt was
primarily related to financial instruments included in the first quarter 2022
loan modification.



In the second quarter of 2021, the Company incurred ramp-up costs in the
Electric Power segment that put downward pressure on margins in the
second quarter of 2021.The Company also incurred professional fees related to
mergers and acquisitions as the Company finalized the acquisition for GTS. The
three-month period ended June 30, 2021 for both segments were also negatively
affected by generally lower economic activity due to the COVID-19 pandemic that
caused economic slowdowns throughout the world.



For the three and six months ended June 30, 2022, Orbital Infrastructure Group,
Inc. had a consolidated loss from continuing operations of $30.1 million and
$66.8 million, respectively, compared to a consolidated loss from continuing
operations in the three and six months ended June 30, 2021 of $8.3 million and
$24.6 million, respectively.



During the six months ended June 30, 2022, Orbital Infrastructure Group, Inc.
had a consolidated net loss of $68.6 million compared to a consolidated net loss
in the six months ended June 30, 2021 of $26.2 million. The greater net loss for
the six months ended June 30, 2022, was primarily the result of the loss on
extinguishment of debt related to the loan modification of the seller financed
debt, increased interest expense related to acquisitions financed by debt in the
second half of 2021, and ongoing merger and acquisition activity.



Revenues from continuing operations increased for the six months ended June 30,
2022 due to the continued ramp-up of the Electric Power and Renewables segments
along with the addition of the Telecommunications segment which was assembled
via acquisitions starting in the second quarter of  2021 and continuing into
2022.


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Continuing Results of Operations

The following tables set forth, for the period indicated, certain financial information regarding revenue and operating results by segment.

For the Three Months Ended June 30, 2022:





                                    Percent of                                  Percent of                         Percent of                       Percent of                     Percent of
(dollars in                           Segment                                     Segment                            Segment                         Segment                          Total
thousands)     Electric Power        Revenues          Telecommunications        Revenues         Renewables        Revenues           Other         Revenues         Total         Revenues
                      $                  %                     $                     %                $                 %                $              %               $               %
Revenues       $        41,269             100.0 %    $             20,364             100.0 %   $     32,280             100.0 %    $       -                - %   $  93,913             100.0 %
Income
(loss) from
operations     $          (304 )            (0.7 )%   $              1,075               5.3 %   $     (6,173 )           (19.1 )%   $  (2,304 )              - %   $  (7,706 )            (8.2 )%

For the Three Months Ended June 30, 2021:


                                    Percent of                                 Percent of                          Percent of                      Percent of                     Percent of
(dollars in                           Segment                                    Segment                            Segment                         Segment                         Total
thousands)     Electric Power        Revenues         Telecommunications        Revenues          Renewables        Revenues          Other         Revenues         Total         Revenues
                      $                  %                     $                    %                 $                %                $              %               $              %
Revenues       $         4,907             100.0 %    $             6,075             100.0 %    $        537            100.0 %    $       -                - %   $  11,519            100.0 %

Income


(loss) from
operations     $        (4,751 )           (96.8 )%   $              (749 )           (12.3 )%   $     (8,248 )        (1535.9 )%   $  (3,846 )              - %   $ (17,594 )         (152.7 )%

For the Six Months Ended June 30, 2022:



                                     Percent of                                  Percent of                         Percent of                       Percent of                     Percent of
(dollars in                            Segment                                     Segment                            Segment                         Segment                          Total

thousands) Electric Power Revenues Telecommunications 


      Revenues         Renewables        Revenues           Other         Revenues         Total         Revenues
                       $                  %                     $                     %                $                 %                $              %               $               %
Revenues        $        80,963             100.0 %    $             36,460             100.0 %   $     46,744             100.0 %    $       -                - %   $ 164,167             100.0 %
Income (loss)
from
operations      $        (1,017 )            (1.3 )%   $              1,552               4.3 %   $     (5,744 )           (12.3 )%   $  (4,286 )              - %   $  (9,495 )            (5.8 )%

For the Six Months Ended June 30, 2021:



                                    Percent of                                Percent of                          Percent of                      Percent of                     Percent of
(dollars in                          Segment                                    Segment                            Segment                         Segment                         Total
thousands)     Electric Power        Revenues        Telecommunications        Revenues          Renewables        Revenues          Other         Revenues         Total         Revenues
                      $                 %                     $                    %                 $                %                $              %               $              %
Revenues       $         8,097            100.0 %    $             6,075             100.0 %    $      2,908            100.0 %    $       -                - %   $  17,080            100.0 %

Income


(loss) from
operations     $        (9,015 )         (111.3 )%   $              (749 )           (12.3 )%   $    (13,574 )         (466.8 )%   $  (9,879 )              - %   $ (33,217 )         (194.5 )%




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Revenue

The revenues for the three and six months ended June 30, 2022 increased compared
to the 2021 comparable periods primarily due to the additions of the
Telecommunications segment following the acquisitions of GTS in Q2 2021, IMMCO
in Q3 2021, Full Moon in Q4 2021 and Coax Fiber Solutions, LLC in Q1 2022 along
with the acquisition of Front Line Power Construction, LLC, included in the
Company's Electric Power segment, added in Q4 2021. In addition, Orbital Power
Inc. in the Electric Power segment has continued to ramp up operations in 2022.
Renewables had significantly higher revenues in the three months ended June 30,
2022 on the strength of several large projects compared to the three months
ended June 30, 2021, which was affected by supply chain issues and a general
slow-down caused by the COVID-19 epidemic.



The Electric Power Segment held backlogs of customer orders of approximately
$217.5 million as of June 30, 2022 and $207.7 million at December 31, 2021. The
increase in backlog is generally due to timing of master service agreement
renewals. The Telecommunications segment held backlogs of customer orders of
approximately $202.8 million as of June 30, 2022, compared to a backlog of
$194.5 million at December 31, 2021. Increases to the backlog are due to the
continuous growth of Gibson Technical Services. The Renewables segment had a
backlog of $75.0 million as of June 30, 2022 compared to $121.4 million as of
December 31, 2021 which is due to further work being completed and revenue being
recognized in the quarter on projects that make up this backlog. Of the June 30,
2022 backlog totals, the amounts expected to be recognized in the twelve
months following Q2 are approximately $291.0 million. The amounts expected to be
recognized in the twelve months following Q2 consist of $140.2 million from the
Electric Power segment, $75.8 million from the Telecommunications segment and
$75.0 million from the Renewables segment.



Cost of revenues



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For the three and six months ended June 30, 2022, the cost of revenues as a
percentage of revenue decreased to 89.5% and 87.0% from 124.8% and
131.5% respectively from the prior-year period. This decrease was primarily in
the Electric Power segment and was attributable to ramp-up of revenues in the
segment both organically and the addition of Front Line Power
Construction. Margin percentages will vary based upon the mix of projects
including emergency response services, new crew onboarding costs, and the
competitive markets in which the Company competes.



The three and six months ended June 30, 2021 were affected by start-up costs at
the Company's Orbital Power Services group, lower margin projects during the
period for Orbital Solar Service and was also affected negatively by the
COVID-19 pandemic and the resulting world-wide economic slowdown. Ramp-up costs
included onboarding personnel, equipment and supplies in advance of projected
work in order to obtain the necessary resources in a competitive market as the
Company prepared for forward demand expectations. Additionally, adverse weather
negatively impacted several Electric Power fixed price jobs in the first half of
2021.



The Company expects continued improvement in margins during the remainder of
2022 as the Electric Power segment continues to gain efficiencies and increase
revenues, and the Telecommunications segment sees continued
synergistic benefits from the acquisitions of GTS, IMMCO, Full Moon, and Coax
Fiber Solutions.

Selling, General and Administrative Expenses





Selling, General and Administrative (SG&A) expenses include such items as wages,
commissions, consulting, general office expenses, business promotion expenses
and costs of being a public company, including legal and accounting fees,
insurance and investor relations. SG&A expenses are generally associated with
the ongoing activities to reach new customers, promote new product and service
lines including for the Electric Power segment, Renewables segment, and
Telecommunications segments.



During the three and six months ended June 30, 2022, SG&A decreased $0.8 million
and $4.7 million compared to the prior-year comparative periods. The decrease in
SG&A for the six month period was primarily due to decreased SG&A costs in the
Renewables segment due to the $5.2 million restricted stock forfeiture related
to a Renewables' Executive termination in Q1 2022 and higher stock-based
compensation in Q2 2021 compared to Q2 2022 due to the restricted stock vesting
expense recorded in 2021 on the restricted stock that was subsequently forfeited
in the first quarter of 2022.  Also contributing to the decreased SG&A was lower
executive bonuses in Q1 2022 and a $0.3 million positive cash settled SARS
mark-to-market fair value adjustment in 2022 compared to a $2.7 million
mark-to-market expense in the six months ended June 30, 2021. These decreases
were partially offset by increases in SG&A in the Electric Power and
Telecommunications segments primarily due to organic growth and the Company's
2021 and 2022 acquisitions.



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Depreciation and Amortization

(dollars in thousands)




                                              For the Three Months Ended
Depreciation and amortization expense by
Segment                                                June 30,
                                               2022                2021           $ Change       % Change
Electric Power                             $       7,495       $         633     $    6,862         1084.0 %
Telecommunications                                 1,176                 615            561           91.2 %
Renewables                                           608                 616             (8 )         (1.3 )%
Other                                                 16                 423           (407 )        (96.2 )%
Total depreciation and amortization        $       9,295       $       2,287     $    7,008          306.4 %




                                              For the Six Months Ended
Depreciation and amortization by Segment              June 30,
                                               2022               2021          $ Change       % Change
Electric Power                             $      14,470       $       849     $   13,621         1604.4 %
Telecommunications                                 2,267               615          1,652          268.6 %
Renewables                                         1,217             1,705           (488 )        (28.6 )%
Other                                                 31               865           (834 )        (96.4 )%
Total depreciation and amortization        $      17,985       $     4,034     $   13,951          345.8 %

Depreciation and amortization expenses are associated with depreciation on leasehold improvements, furniture, equipment, vehicles, and amortization of intangible assets over the estimated useful lives of the related assets.





Depreciation and amortization expense in the three and six months ended June 30,
2022 were up compared to the three and six months ended June 30, 2021 primarily
due to additional amortization in the Electric Power and Telecommunication
segments from acquisition intangibles that were acquired in the second, third
and fourth quarter of 2021 and depreciation of equipment used by Orbital Power
Services which had been ramping up their capital expenditures as more crews
were added.



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Gain (loss) on Extinguishment of debt



Loss on extinguishment of debt in the three and six months ended June 30,
2022 of $2.2 and $28.2 million was primarily related to loan modifications on
the Company's seller financed debt with the sellers of Front Line Power
Construction and approximately $0.8 million and $1.5 million loss on
extinguishment in the three and six months ended June 30, 2022 related to the
payment of certain loans with stock-based payments. Gain on extinguishment of
debt in the three and six months ended June 30, 2021 related to a $1.2 million
gain on extinguishment of debt due to the forgiveness by the U.S. government of
certain payroll protection loans in the three months ended June 30, 2021,
partially offset by the loss on the extinguishment of debt due to the amendment
to remove the convertible equity feature of its convertible debt during the
six months ended June 30, 2021.



Other Income (Expense), net

(dollars in thousands)



                                 For the Three Months Ended
Other Income (Expense), net               June 30,
                                    2022               2021        $ Change      % Change
Foreign exchange gain                        8       $      43     $     (35 )       (81.4 )%
Interest income                             19              82     $     (63 )       (76.8 )%
Rental income                              129             130     $      (1 )        (0.8 )%
Liquidated damages                      (1,077 )             -     $  (1,077 )      (100.0 )%
Other, net                                (131 )             5     $    (136 )     (2720.0 )%
Total Other income (expense)   $        (1,052 )     $     260     $  (1,312 )      (504.6 )%




                                  For the Six Months Ended
Other Income (Expense), net               June 30,
                                    2022               2021        $ Change      % Change
Foreign exchange gain (loss)   $           (41 )     $     138     $    (179 )      (129.7 )%
Interest income                             97             163           (66 )       (40.5 )%
Rental income                              360             243           117          48.1 %
Liquidated damages                      (1,077 )             -        (1,077 )      (100.0 )%
Other, net                                 (45 )            29           (74 )      (255.2 )%
Total Other income (expense)   $          (706 )     $     573     $  (1,279 )      (223.2 )%




Other income (expense) changes contributing to increased expenses
were liquidated damages incurred on the Company's investor held debt and less
favorable foreign currency affects in 2022 compared to 2021. Losses were offset
by greater rental income in the year-to-date period.

Interest Expense



For the three and six months ended June 30, 2022, the Company incurred interest
expense of $9.8 million and $17.9 million, respectively, compared to interest
for the three and six months ended June 30, 2021 of $1.1 million and $1.8
million, respectively. The increase in interest expense in 2022 is related to
the increase in notes payable outstanding in the three and six months ended June
30, 2022 compared to the three and six months ended June 30, 2021 primarily
related to the Front Line Power Construction acquisition.

Income Tax Expense



The Company is subject to taxation in the U.S., various state and foreign
jurisdictions. The Company continues to record a full valuation allowance
against the Company's U.S. net deferred tax assets and partial valuation
allowance against the Company's Canada net deferred tax assets, as it is not
more likely than not that the Company will realize a benefit from these assets
in a future period.



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For additional analysis, see Note 14, "Income Taxes," of the condensed consolidated financial statements in Part I - Item I, "Financial Statements."

Liquidity and Capital Resources

Company Conditions and Sources of Liquidity



The Company has experienced net losses and cash outflows from cash used in
operating activities over the past years. As of and for the six months ended
June 30, 2022, the Company had an accumulated deficit of $279.4 million, loss
from continuing operations of $66.8 million, and net cash used in operating
activities of $7.3 million.



As of June 30, 2022, the Company had cash and cash equivalents of $31.6 million
available for working capital needs and planned capital asset expenditures and a
working capital deficit of $98.9 million, including current maturities of debt.
These factors initially raise substantial doubt about our ability to continue as
a going concern, but this doubt has been alleviated by the Company's plans to
raise sufficient capital to meet our current obligations over the next twelve
months, in addition to the expected recovery of our assets to satisfy
liabilities in the normal course of business.



The Company has plans to access additional capital to meet its obligations for
the twelve months from the date these financial statements are available to be
issued. Historically, the Company has raised additional equity and debt
financing to fund its expansion; refer to Note 16 - Notes Payable and Line of
Credit. The Company has also funded some of its capital expenditures through
long-term financing with lenders and other investors as also described in
further detail in Note 16 - Notes Payable and Line of Credit and Note 20 -
Subsequent Events. Our ability to raise the additional capital is dependent on a
number of factors, including, but not limited to, the market demand for our
common stock, which itself is subject to a number of business risks and
uncertainties, our creditworthiness and the uncertainty that we would be able to
raise such additional capital at a price that is favorable to us. As of June 30,
2022, the Company has an effective S-3 shelf registration statement with $69.8
million of aggregate offering value available for the issuance of various types
of securities, including common stock, preferred stock, debt securities and/or
warrants. Management has demonstrated ability to extend its notes including its
seller notes as needed. In addition, although no formal agreements exist, the
company has solicited interest from various lenders to potentially raise
additional term debt to restructure or refinance its existing notes. While
management will look to continue funding future acquisitions, organic growth
initiatives and continuing operations by raising additional capital from sources
such as sales of its debt or equity securities or notes payable in order to meet
operating cash requirements, there is no assurance that management's plans will
be successful.



As the Company continues its progression to build a full-service infrastructure
services platform, a successful transition to attaining profitable operations is
dependent upon achieving a level of positive cash flows through generating
adequate revenue growth to support the Company's cost structure. For the six
months ended June 30, 2022, our revenues have increased by $147.1 million and
operating loss has decreased by $23.7 million resulting in an 861% increase and
71% decrease, respectively, compared to the six-month period ended June 30,
2021. The significant increase in revenues and decrease in operating loss during
the year was primarily driven by the strategic acquisitions of Front Line Power
Construction, LLC, Gibson Technical Services, IMMCO, Inc., and Full Moon
Telecom, LLC coupled with organic growth within Orbital Power, Inc. In addition,
two large utility scale solar projects were awarded to Orbital Solar
Services during the twelve-month period ended December 31, 2021. We anticipate,
based on currently proposed plans and assumptions relating to our operations,
the Company to generate sufficient revenue growth required to achieve
profitability and generate positive cash flows from operations over the next
twelve months. No assurance can be made that we will be able to obtain
profitability and positive cash flows from our continuing operations.



The Company plans to meet its obligations as they become due over the next
twelve months by raising additional capital through equity and debt financing
sources and expected positive cash flows generated from operations. Given the
considerations, we believe the mitigating effect of management's plans has
alleviated any substantial doubt about the Company's ability to continue as a
going concern.



General

As of June 30, 2022, the Company held cash and cash equivalents of $31.6 million
and restricted cash of $0.6 million. Operations, investments, and equipment have
been funded through cash on hand, the issuance of common stock authorized by its
July 2020 and February 2021 S-3 filings, seller financing, and the issuance of
debt and financing through the sale of future revenues. The Company filed an S-3
in February of 2021 which became effective in April 2021 for the issuance
of additional stock or public debt. In April, 2022, the Company issued
9,000,000 shares of common stock and pre-funded warrants to purchase up to
7,153,847 shares of Common Stock for a total raise of $21.0 million before
expenses. In August of 2021, the Company opened a $4.0 million dollar line of
credit to support additional funding. Major uses of cash in the first six months
of 2022 included the purchases of property and equipment, debt payments and
changes in working capital. The Company continues to work to improve its
short-term liquidity through management of its working capital. Long-term
liquidity is expected to benefit from revenue growth and earnings through its
existing operations. Overall volume growth in the Company's businesses both
organically and through acquisitions are expected to benefit cash flows as well.



Cash Used in Operations

Cash used in operations of $7.3 million was a $15.5 million decrease in cash used compared to the six-month period in 2021.





The decrease in uses of cash in the first six months of 2022 are primarily
related to higher merger and acquisition costs in the first quarter of 2021 as
compared to 2022 along with company growth in 2022. Due to the large increase in
revenue and associated costs both through acquisitions and organic growth, the
Company was better able to cover it's fixed costs, but increased interest costs
partially offset the benefits of much greater sales. Also with the growth of the
company's revenue comes increased accounts receivables and accounts payable,
which outside of timing, generally have offsetting cash flow effects. In the
short-term, rapid growth can have a detrimental effect on cash flows as sales on
account with positive gross margins waiting to be collected exceed accounts
payable not yet paid. As the Company's growth begins to moderate, overall cash
used in operations will continue to improve through revenue growth associated
with new customers and larger projects. The change in cash used in operating
activities since December 31, 2021, exclusive of net loss, is primarily the
result of the following line items: Timing of cash payments on accounts payable
and accrued liabilities was a combined $22.2 million increase in cash provided
by  operating activities related to larger projects at Orbital Solar
Services and Orbital Power Inc. Changes in cost in excess of billing and
accounts receivable from December 31, 2021 was a combined $15.3 million use of
cash for the period and reflects the greater revenue volumes in the first
six months of 2022 compared to the first six months of 2021.



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S-3 registration

The Company filed an S-3 registration statement on July 17, 2020 containing a
prospectus that was effective in September 2020. The Company utilized this
filing in January 2021 to issue common stock for $45 million before costs. The
Company filed a new S-3 shelf registration in January 2021, which, as amended,
became effective in April 2021. With this filing, Orbital Infrastructure Group
may from time-to-time issue various types of securities, including common stock,
preferred stock, debt securities and/or warrants, up to an aggregate amount of
$150 million. The Company utilized this S-3 registration to issue additional
common stock in July 2021 for $38 million before expenses. In May 2022, the
Company utilized the S-3 to issue shares and prefunded warrants for $21.0
million and additional warrants with a cumulative exercise value of $21.2
million. The Company has approximately $69.8 million remaining available to
issue additional securities from its shelf registration.



As the Company focuses on growing its infrastructure services market presence
both organically and through strategic acquisitions, technology development,
product and service line additions, and increasing Orbital's market presence, it
will fund these activities together with related operating, sales and marketing
efforts for its various product offerings with cash on hand, and possible
proceeds from future issuances of equity through the S-3 registration statement,
and available debt.

Orbital Infrastructure Group may raise additional capital needed to fund the further development and marketing of its products and services as well as payment of its debt obligations.

See the section entitled Recent Sales of Unregistered Securities for a complete listing of all unregistered securities transactions.

Capital Expenditures and Investments



During the first six months of 2022 and 2021, Orbital Infrastructure Group
invested $2.9 million and $4.7 million, respectively, in property and equipment.
These investments typically include additions to equipment including vehicles
and equipment for powerline service and maintenance, engineering, furniture,
computer equipment for office personnel, facilities improvements and other fixed
assets as needed for operations. In addition, during the six months ended June
30, 2022, the Company had collections from a notes receivable of $3.5 million
related to the sale of the Company's electromechanical business in 2019.

Financing Activities



In the six months ended June 30, 2022, the Company made cash payments on notes
payable of $29.8 million and had proceeds from notes payable of $23.3 million,
respectively. This compared to $19.4 million of proceeds from notes payable and
$5.6 million of payments on notes payable in the six months ended June 30, 2021.
The Company also received $3.5 million in proceeds from their line of credit and
made $2.0 million in payments on this line of credit in 2022 compared to
$0.4 million paid in the first six months of 2021 to close its line of credit
that was acquired with the Orbital Solar Services business. In the six months
ended June 30 2022 and 2021 the Company recorded payments on finance lease
obligations of $2.5 million and $0.3 million dollars, respectively.

Recap of Liquidity and Capital Resources

At June 30, 2022, the Company had unrestricted cash and cash equivalents balances of $31.6 million. At June 30, 2022 the Company had $2.8 million of cash and cash equivalents balances at domestic financial institutions (including $0.3 million of restricted cash) that were covered under the FDIC insured deposits programs and $0.3 million covered at foreign financial institutions.

The Company had a net loss of $68.6 million and cash used in operating activities of $7.3 million during the six months ended June 30, 2022. As of June 30 2022, the Company's accumulated deficit was $279.4 million.


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The Company expects the revenues from its continuing operations, and cash on
hand, to cover operating and other expenses for the next twelve months of
operations. However, in the short-term, the Company expects to continue to need
cash support as the Company's businesses increase their market positions and
revenue. The Company may issue additional debt or equity to support continuing
operations and acquisition efforts in the remaining months of 2022.



Critical Accounting Policies



The Company has adopted various accounting policies to prepare the consolidated
financial statements in accordance with Generally Accepted Accounting
Principles, ("GAAP"). Certain of the Company's accounting policies require the
application of significant judgment by management in selecting the appropriate
assumptions for calculating financial estimates. In the Company's 2021 Annual
Report on Form 10-K filed on March 31, 2022, the Company identified the critical
accounting policies that affect the Company's more significant estimates and
assumptions used in preparing the Company's consolidated financial statements.

Recent Accounting Pronouncements





See Note 11 Recent Accounting Pronouncements of the condensed consolidated
financial statements in Part I-Item I, "Financial Statements" for a description
of recent accounting pronouncements, including the expected dates of adoption
and estimated effects on financial position, results of operations and cash
flows.

Off-Balance Sheet Arrangements

See Note 19 Commitments and Contingencies of the condensed consolidated financial statements in Part I-Item I, "Financial Statements" for a description of the Company's off-balance sheet arrangements.

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