Note 12 Commitments and Contingencies

Litigation and Other Legal Matters

From time to time, the Company is subject to claims and lawsuits in the ordinary course of business, such as contractual disputes and employment matters. The Company is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations, and threatened legal actions and proceedings. The Company records accruals for losses that are probable and reasonably estimable. These accruals are based on a variety of factors such as judgment, probability of loss, and opinions of internal and external legal counsel. Legal costs in connection with claims and lawsuits in the ordinary course of business are expensed as incurred.

Customer Contractual Dispute

In January 2019, the Company entered into a contract (and other related agreements) with a customer to provide mission support and launch support services. During 2021, a contractual dispute arose between the Company and the customer. In April 2022, the Company entered into a confidential settlement agreement with the customer and agreed to pay the customer $833 thousand. The settlement amount was satisfied on an installment payment basis and was fully paid as of September 30, 2022. As of December 31, 2021, the Company had accrued $800 thousand for the settlement.

Commercial Agreements

The Company entered into commercial agreements to purchase an aggregate amount of $20 million of goods and services over three years from two affiliates of a PIPE investor. These commercial agreements became effective upon the closing of the Tailwind Two Merger. As of September 30, 2022, approximately $18 million of purchase obligations remained outstanding under the commercial agreements.

During the nine months ended September 30, 2022, the Company entered into a purchase commitment of $22.4 million associated with the procurement of components related to a customer program. As of September 30, 2022, approximately $17.9 million of the commitment was outstanding.