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Item 9A. Controls and Procedures

2022-03-31 compared with 2021-03-31 · 1537 added, 1336 removed, 53 unchanged (98% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports

filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized, and reported within the time period specified in the SECs rules and forms.

Disclosure controls are also designed with the objective of ensuring that

such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the

participation of our chief executive officer and chief financial officer (our Certifying Officers), the effectiveness of our disclosure controls and procedures as of December 31, 2020, pursuant to

Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2020, our disclosure controls and procedures were effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud.

Disclosure controls and

procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Further, the design of disclosure controls and procedures must reflect

the fact that there are resource constraints, and the benefits must be considered relative to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide

absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.

The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can

be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Managements Report on Internal

Control Over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for

establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control

over financial reporting is a process designed under the supervision of the Companys Chief Executive Officer and Chief Financial Officer, and effected by the Companys board of directors, management, and other personnel, to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with GAAP.

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Annual Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.

Disclosure controls are also designed with the objective of reasonably ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2021, pursuant to Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2021, our disclosure controls and procedures were effective at a reasonable assurance level.

In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.

Management’s Report on Internal Control Over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.

Our internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of our consolidated financial statements for external purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements.

Also, projections

of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2020, our management assessed the effectiveness of our internal control over financial reporting based on the criteria

for effective internal control over financial reporting established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on the assessment, management believes

that we maintained effective internal control over financial reporting as of December 31, 2020, based on those criteria.

Attestation Report of

the Registered Public Accounting Firm

Our independent registered public accounting firm is not required to formally attest to the

effectiveness of our internal control over financial reporting for as long as we are an emerging growth company pursuant to the provisions of the JOBS Act.

Also, projections of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2021, our management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on the assessment, management believes that we maintained effective internal control over financial reporting as of December 31, 2021, based on those criteria.

Material Weakness Remediation Efforts

We identified material weaknesses in our controls over financial reporting in the year ended December 31, 2020 for Legacy BlackSky and Osprey.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected in a timely basis.

As of December 31, 2021, we have remediated these material weaknesses and we did not identify any additional material weaknesses in our controls over financial reporting as of and for the year ended December 31, 2021.

Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting for as long as we are an “emerging growth company” pursuant to the provisions of the JOBS Act.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There was no change in our internal control over financial reporting, (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

BlackSky - Executive Incentive Compensation Plan

On March 28, 2022, the compensation committee of our board of directors adopted our Executive Incentive Compensation Plan (the “Incentive Compensation Plan”).

The Incentive Compensation Plan will be administered by our board of directors or a committee appointed by our board of directors.

Unless and until our board of directors determines otherwise, our compensation committee will be the administrator of the Incentive Compensation Plan.

The Incentive Compensation Plan allows the administrator to provide cash incentive awards to selected employees, including our named executive officers, determined by the administrator, based upon attainment of performance goals established by the administrator.

The administrator, in its sole discretion, may establish a target award for each participant under the Incentive Compensation Plan, which may be expressed as a percentage of the participant’s average annual base salary for the applicable performance period, a fixed dollar amount, or such other amount or based on such other formula or factors as the administrator determines.

Under the Incentive Compensation Plan, the administrator will determine the performance goals, if any, applicable to awards or a portion thereof, which goals may include, without limitation:

attainment of research and development milestones, sales bookings, business divestitures and acquisitions, capital raising, cash flow, cash

position, contract awards or backlog, corporate transactions, customer renewals, customer retention rates from an acquired company, subsidiary, business unit or division, earnings (which may include any calculation of earnings, including but not limited to earnings before interest and taxes, earnings before taxes, earnings before interest, taxes, depreciation and amortization, and net taxes), earnings per share, expenses, financial milestones, gross margin, growth in stockholder value relative to the moving average of the S&P 500 Index or another index, internal rate of return, leadership development or succession planning, license or research collaboration arrangements, market share, net income, net profit, net sales, new product or business development, new product invention or innovation, number of customers, operating cash flow, operating expenses, operating income, operating margin, overhead or other expense reduction, patents, procurement, product defect measures, product release timelines, productivity, profit, regulatory milestones or regulatory-related goals, retained earnings, return on assets, return on capital, return on equity, return on investment, return on sales, revenue, revenue growth, sales results, sales growth, savings, stock price, time to market, total stockholder return, working capital, unadjusted or adjusted actual contract value, unadjusted or adjusted total contract value, and individual objectives such as peer reviews or other subjective or objective criteria.

As determined by the administrator, the performance goals may be based on generally accepted accounting principles, or GAAP, or non-GAAP results and any actual results may be adjusted by the administrator for one-time items or unbudgeted or unexpected items and/or payments of actual awards under the Incentive Compensation Plan when determining whether the performance goals have been met.

The goals may be on the basis of any factors the administrator determines relevant, such as on an individual, divisional, portfolio, project, business unit, segment or company-wide basis.

Any criteria used may be measured on such basis as the administrator determines.

The performance goals may differ from participant to participant and from award to award.

The administrator also may determine that a target award or a portion thereof will not have a performance goal associated with it but instead will be granted (if at all) in the compensation committee’s sole discretion.

The administrator may, in its sole discretion and at any time before payment of an award, increase, reduce or eliminate a participant’s actual award, and/or increase, reduce or eliminate the amount allocated to the bonus pool.

The actual award may be below, at or above a participant’s target award, as determined by the administrator.

The administrator may determine the amount of any increase, reduction or elimination based on such factors as it deems relevant, and it will not be required to establish any allocation or weighting with respect to the factors it considers.

Actual awards will generally be paid in cash (or its equivalent) in a single lump sum as soon as practicable after the end of the performance period to which the actual award relates and after they are approved by the administrator, but no later than the dates set forth in the Incentive Compensation Plan.

The administrator has the right, in its sole discretion, to settle an actual award with a grant of an equity award, which equity award may have such terms and conditions, including any vesting requirements, as the administrator determines in its sole discretion.

Unless otherwise determined by the administrator, to earn an actual award, a participant must be employed by us (or any parent, subsidiary, or affiliate of ours, as applicable) through the date the actual award is paid.

All awards under our Incentive Compensation Plan will be subject to reduction, cancellation, forfeiture, recoupment, reimbursement or reacquisition in accordance with any clawback policy that we (or any parent, subsidiary, or affiliate of ours, as applicable) may establish or amend from time to time to comply with applicable laws, including without limitation, the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In addition, the administrator may specify when providing for an award that the recipient’s rights, payments, and benefits with respect to such award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events.

In the event of any accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, the recipient of an award will be required to repay a portion of the proceeds received with respect to an award earned or accrued under certain circumstances.

The administrator will have the authority to amend or terminate the Incentive Compensation Plan provided such action does not materially alter or impair the existing rights or obligations of any participant with respect to any earned actual award without the participant’s consent.

The Incentive Compensation Plan will remain in effect until terminated in accordance with the terms of the Incentive Compensation Plan.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Our directors and

executive officers are as follows:

Co-Chairman and Director

David DiDomenico

Chief Executive Officer, President and Director

Chief Financial Officer, Chief Legal Officer and Secretary

William Fradin

Executive Vice President

Savneet Singh

Richard Reiss, Jr.

Cohen is the son of Edward E.

Cohen has been the Co-Chairman of our board of directors since June 2019.

the Co-Chairman of the board of directors of Osprey Technology Acquisition Corp.

II, or Osprey Tech II, a newly formed blank check company, since March 2021.

From August 2018 to May 2020, he was Vice

Chairman of Falcon Minerals Corporation (Nasdaq:

FLMN), formerly Osprey Energy Acquisition Corp., and before that was Executive Chairman of Osprey Energy Acquisition Corp.

from April 2017 to August 2018.

Cohen has served as

Chairman of HEPCO Capital Management, LLC, a private investment firm making control investments in middle market companies and real estate, since its formation in September 2016.

He has been the Vice Chairman of Broadscale Acquisition Corp.

SCLE), or Broadscale, a newly organized blank check company, since December 2020.

Cohen was Chief Executive Officer of Atlas Energy Group, LLC from February 2015 to May 2020, having also served as Chairman since

February 2012.

He was Chairman of the board of directors and Chief Executive Officer of the general partner of Atlas Growth Partners, L.P.

from its inception in 2013 until 2020.

Cohen served as Chairman of Titan Energy, LLC from 2016

to 2020, and from August 2015 to September 2016, was Executive Chairman of Atlas Resource Partners, L.P., which filed a voluntary pre-packaged plan under Chapter 11 in July 2016, emerging

from Chapter 11 as Titan Energy, LLC in September 2016 after confirmation of its plan.

In addition, Mr.

a director of Resource America, Inc.

(formerly a publicly traded specialized asset management company) from 1988 until

September 2016 and Chairman of its board of directors from 1990 until September 2016;

and Chairman of the board of Resource Capital Corp., now known as Exantas Capital Corp.

XAN) (a real estate investment trust) from its formation

in 2005 until November 2009 and served on its board until September 2016.

Cohen is also the father of Jonathan Z.

We believe that Mr.

Cohens extensive experience enables him to provide valuable perspective and

provides us with decisive and effective leadership.

Cohens experience in founding, operating and managing public and private companies of varying size and complexity, and his extensive experience in the areas of finance, strategy and

mergers and acquisitions enable him to provide valuable expertise to us.

Cohen has been the Co-Chairman of our board of directors since June 2019, and before that was our Chief Executive Officer from September 2018 to June 2019.

He has been a member of the board of directors of Osprey Tech II since

September 2020.

He was the Chairman of Falcon Minerals Corporation (Nasdaq:

FLMN), formerly Osprey Energy Acquisition Corp., from August 2018 to May 2020, and before that was a Director and Chief Executive Officer of Osprey Energy Acquisition Corp.

from April 2017 to August 2018.

Cohen also serves as CEO and Founder of HEPCO Capital Management, LLC, a private investment firm making control investments in middle market companies and real estate, since its formation in September 2016.

Since December 2019, he has served as a director of Marathon Petroleum Corporation (NYSE:

MPC), a petroleum product refining,

marketing, retail and midstream company.

From 2017 to 2018, Mr.

Cohen has served as a director of Energen Corporation.

Previously, Mr.

Cohen was CEO (from 2004 to September 2016) and

President (from 2003 to September 2016) of Resource America, Inc., an asset manager investing in real estate, financial services and credit until its sale to C-III Capital Partners.

Cohen also co-founded both Atlas Pipeline Partners, L.P., a midstream energy company that was sold to Targa Resources, Inc.

in 2015, and Atlas Energy, Inc., an exploration and production company that was sold to Chevron

Corporation in 2011.

Cohen was co-founder of the general partner of Arc Logistics Partners LP, and served as Chairman from 2006 until it was sold in December 2017 to Zenith Energy;

and founder of

Resource Capital Corp., now known as Exantas Capital Corp., a commercial mortgage REIT.

Cohen currently serves as Executive Chairman of Atlas Energy Group, LLC and in connection therewith serves as Executive Vice Chairman and a Class A

director of the board of Titan Energy, LLC and Executive Vice Chairman of Atlas Growth Partners, L.P., both affiliates of ATLS.

From August 2015 to September 2016, Mr.

Cohen was also Executive Vice Chairman of Titan Energys predecessor,

Atlas Resource Partners, L.P.

Atlas Resource Partners and subsidiaries filed a voluntary pre-packaged plan under Chapter 11 in July 2016, which was confirmed and the companies emerged from Chapter 11

in September 2016.

Cohens philanthropic endeavors include his role as Chairman of the Executive Committee of Lincoln Center Theater, a Trustee of The American School of Classical Studies in Athens, Greece and Trustee of Arete

Foundation, a private family foundation.

Cohen is the son of Edward E.

Cohens involvement with public and private entities of varying size, complexity and focus, including in technology-related

industries, and raising debt and equity for such entities, provides him with extensive experience and contacts that will be valuable to us.

Additionally, among the reasons for his appointment as a director, Mr.

Cohens financial, business

and operational experience, as well as the experience that he has accumulated through his activities as a financier and investor, add strategic vision to the board of directors to assist with our ultimate business combination transaction.

David DiDomenico has been our Chief Executive Officer and President since June 2019 and a member of our board of directors since July

He has been the Chief Executive Officer and President since September 2020 and a member of the board of directors since March 2021 of Osprey Tech II, Since 2010, Mr.

DiDomenico has been a Partner of JANA Partners, an investment advisor

based in New York City.

As the Head of JANAs SPAC strategy, Mr.

DiDomenico leads JANAs SPAC efforts and has served as Chief Executive Officer, President and Director of Osprey Tech I (NYSE:

SFTW), a special purpose acquisition

corporation co-sponsored by JANA, since June 2019.

He previously served as a Co-Portfolio Manager of JANAs hedge fund strategies.

Prior to joining JANA Partners

LLC in 2010, Mr.

DiDomenico was a Managing Director of New Mountain Capital and the Portfolio Manager of the New Mountain Vantage Fund (2005-2010).

He was previously an Associate Portfolio Manager at Neuberger Berman (2002-2005).

1999-2002, Mr.

DiDomenico was a member of the Acquisitions Team at Starwood Capital Group where he focused on corporate and real estate transactions.

From 1998-1999, he was an Analyst at Tiger Management.

Since October 2019, Mr.

has served on the board of directors of KAR Auction Services, Inc.

KAR), a provider of car auction services in North America and the United Kingdom.

He holds an MBA from the Stanford University Graduate School of Business and an AB from

Harvard College.

We believe that Mr.

DiDomenicos experience investing in and analyzing technology and technology-related companies for over 20 years provides us with access to his extensive and unique expertise in fundamental business

analysis, as well as his broad professional relationships with technologists and investors.

Brotman has been our Chief

Financial Officer, Chief Legal Officer and Secretary since July 2019.

He has been the Chief Financial Officer, Chief Legal Officer and Secretary of Osprey Tech II since September 2020.

He has been the Chief Legal Officer and Secretary of Falcon

Minerals Corporation (Nasdaq:

FLMN), formerly Osprey Energy Acquisition Corp., since April 2017 and served as its Chief Financial Officer from April 2017 to June 2019.

Brotman has been Vice Chairman and Chief Operating

Officer of HEPCO since its formation in September 2016.

HEPCO is a private investment firm making control investments in middle market companies and real estate.

He has been the Chief Legal Officer and Secretary of Broadscale since

December 2020.

Brotman was Chief Operating Officer and Executive Vice President at Resource America, Inc., formerly a publicly traded asset manager investing in real estate, financial services and credit until its sale to C-III Capital Partners in September 2016.

He joined Resource America in 2007, and while at Resource America also served as Executive Vice President of Resource Capital Corp., now known as Exantas Capital Corp.,

a publicly-traded real estate investment trust, Chairman of the Board of Directors of Primary Capital Mortgage, Director of Leaf Commercial Capital and sat on various investment committees across all product lines.

Brotman was the President

Executive Officer of Access to Money, Inc.

(f/k/a TRM Corp.), a non-bank ATM operator, from March 2006 to June 2007, and served as the Chairman

of its Board of Directors from September 2006 through September 2008.

Brotman was a co-founder, and served as Managing Member, of Ledgewood, PC, a Philadelphia based business law firm, from

June 1992 to March 2006, and was of counsel until June 2007.

He was a Trustee of Resource Real Estate Diversified Income Fund from its inception in March 2013 until September 2016.

He has been an adjunct Professor of Law at

the University of Pennsylvania Law School since 1990, where he has taught courses in accounting and lending transactions.

He is also a Certified Public Accountant (currently inactive) and a licensed Real Estate Broker.

William (Bill) Fradin has been our Executive Vice President since July 2019.

He has been the Executive Vice President of Osprey Tech II

since September 2020.

Fradin has served as Managing Director and Co-Founder of HEPCO since its formation in September 2016.

He is Managing Partner and Founder of Seal Rock Partners, a

private equity firm, since its formation in February 2015.

Prior to founding Seal Rock Partners, from June 2007 to January 2015, Mr.

Fradin was an investment professional at JLL Partners, a middle market private equity firm, and, from June 2005

to June 2007, he was an investment banker at Merrill Lynch & Co.

Fradin holds an AB from Harvard College and an MBA from the Wharton School at the University of Pennsylvania.

Independent Directors

Singh has been a member of our board of directors since July 2019.

He has been a senior advisor to Osprey Tech II since March 2021.

Since 2018, he has been President and Chief Executive Officer of Par Technology Corporation (NYSE:

publicly-traded provider of restaurant point of sale technology, where he is also a member of the board of directors.

Singh is also a partner of CoVenture, LLC, a multi-asset manager with funds in venture capital, direct lending and crypto

From 2017 to 2018, Mr.

Singh served as the Managing Partner of Tera-Holdings, LLC., a holding company of niche software businesses that he co-founded.

Singh co-founded GBI, a financial software platform that allows investors to buy, trade and store physical precious metals.

Prior to GBI, Mr.

Singh was an investment analyst at Chilton

Investment Company where he covered investments in the technology, alternative energy and infrastructure space.

Singh joined the board of directors of Blockchain Power Trust (TSXV:

He is also on the board of

directors of SharpSpring (NYSE:

He received his BS in Applied Economics and Management from Cornell University.

We believe that Mr.

Singhs experience as an entrepreneur, investor and manager of software and technology

companies allows him to bring unique insight and a strategic perspective to our company.

Robert (Brad) Henske has served as a

member of our board of directors since July 2019.

He has served a Treasurer and a director of Stock Farm Inc.

since February 2021.

From 2007 to 2014, Mr.

Henske served as a Managing Director at Hellman & Friedman LLC, a private equity

firm focused on companies in the software, information services, media, professional services and financial services industries, where he also served as a Senior Advisor from 2014 to 2016.

Before that, from 2005 to 2007, Mr.

Henske served as

Senior Vice President and General Manager of the Consumer Tax Group (Turbotax) of Intuit Inc.

He also served as Intuits Chief Financial Officer from 2003 to 2005.

From 2000 to 2002, Mr.

Henske served as Chief Financial

Officer of Synopsys Inc.

SNPS), a software company.

In the past 5 years, Mr.

Henske served on the board of directors of Blackhawk Network Holdings, Inc.

HAWK) until June 2018, and VeriFone Systems, Inc.

PAY) until August

We believe that Mr.

Henskes finance background and experience investing in and analyzing companies in various industries will allow him to add depth to our board of directors and ultimately assist with our eventual business

combination transaction.

Richard (Rick) Reiss, Jr.

has served as a member of our board of directors since July 2019.

Since January

Reiss has been Chairman of Georgica Advisors and its affiliated entities, Reiss Capital Management and Value Insight Partners, an investment management company.

He is also the managing member of VIP GP LLC.

From 1978 until 1997,

Reiss was a Managing Partner of Cumberland Associates and its affiliates.

He is currently the lead independent director of the Lazard Funds.

Reiss is Chairman of the Reiss Center on Law & Security at New York University

School of Law, Chairman of the Executive Committee of The New York Historical Society and is a member of the Presidents Leadership Council at Dartmouth College.

He graduated from Dartmouth College and New York University School of Law.

believe that Mr.

Reiss is well-qualified to serve on our board of directors due to his extensive experience in finance and investment management, along with the many contacts he has made over his storied career.

Robert (Bob) Tinker has served as a member of our board of directors since July 2019.

He is a founding partner of Metamorph Partners, a startup private equity firm.

From 2008 to 2016, Mr.

Tinker was founding CEO and a director of MobileIron, a technology company focused on enterprise security.

His leadership culminated in its

initial public offering in June 2014.

Prior to founding MobileIron, from August 2002 to January 2005, Mr.

Tinker was the Vice President of Business Development at Airespace, an enterprise wireless pioneer which was acquired by Cisco in 2005,

where he continued to lead the business development team for Ciscos wireless business unit.

Before that, Mr.

Tinker was Director of Marketing at Vertical Networks from August 1998 to August 2002 and Vice President at NationsBank from 1992

to 1996, with roles in IT, sales, product management and operations.

He co-authored the book series, Survival to Thrival:

The Enterprise Startup Guide , and his second book, Change

or Be Changed, was released in July 2019.

Since 2002, he has served as a Trustee and Foundation Board Member for the recently-opened University of California at Merced.

He has a BS in Systems Engineering from the University of

Virginia and an MBA from the Stanford University Graduate School of Business.

We believe that Mr.

Tinker is well qualified to be on our board of directors based on his extensive experience with technology and business development in the

software and cloud computing industries.

Number and Terms of Office of Officers and Directors

Our board of directors is divided into three classes with only one class of directors being elected in each year and each class serving a

three-year term.

We may not hold an annual meeting of stockholders until after we consummate our initial business combination.

The term of office of the first class of directors, consisting of Messrs.

DiDomenico and Singh, will expire at our first

annual meeting of stockholders.

The term of office of the second class of directors, consisting of Messrs.

Cohen and Reiss, will expire at the second annual meeting of stockholders.

The term of office of the third class of directors, consisting

Cohen, Henske and Tinker, will expire at the third annual meeting of stockholders.

Our officers are elected by the board of

directors and serve at the discretion of the board of directors, rather than for specific terms of office.

Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of any publicly

traded class of our equity securities, to file reports of ownership and changes in ownership of equity securities of the Company with the SEC.

Officers, directors, and

greater-than-ten-percent stockholders are required by the SECs regulations to furnish the Company with copies of all Section 16(a) forms that they file.

Based solely upon a review of Forms 3 and Forms 4 furnished to the Company during the most recent fiscal year, and Forms 5 with respect to its

most recent fiscal year, we believe that all such forms required to be filed pursuant to Section 16(a) of the Exchange Act were timely filed by the officers, directors, and security holders required to file the same during the fiscal year ended

December 31, 2020.

Board Committees

Audit Committee

Subject to phase-in rules and a limited exception, the rules of the NYSE and Rule 10A of the Exchange Act require that the audit committee of a listed company consist of at least three members and be comprised solely of

independent directors.

We have established an audit committee of the board of directors, which consists of Messrs.

Reiss, Henske and Singh.

Reiss, Henske and Singh each meet the independent director standard under the NYSEs listing

standards and under Rule 10A-3(b)(1) of the Exchange Act and our board of directors has determined that Messrs.

Henske and Singh each qualify as an audit committee financial expert as defined in

applicable SEC rules.

Reiss serves as Chairman of our audit committee.

The Audit Committee Charter is available on our website, osprey-technology.com.

The audit committees duties, which are specified in our Audit Committee Charter, include, but are not limited to:

the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and

any other independent registered public accounting firm engaged by us;

pre-approving all audit and

non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and

reviewing and discussing with the independent auditors all relationships the auditors have with us in order to

evaluate their continued independence;

setting clear hiring policies for employees or former employees of the independent auditors;

setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the

independent auditors internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or

professional authorities, within, the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation

S-K promulgated by the SEC prior to us entering into such transaction;

reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal,

regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any

significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

Compensation Committee

We have established a compensation committee of the board of directors, which consists of Messrs.

Tinker and Reiss.

Under the NYSE listing

standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent.

Tinker and Reiss meet the independent director standard under the NYSE listing standards and

applicable SEC rules.

Tinker serves as Chairman of our compensation committee.

The Compensation Committee Charter is available on our website, osprey-technology.com.

The compensation committees duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive

Officers compensation, if any, evaluating our Chief Executive Officers performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officers based on such

reviewing and recommending to the board of directors the compensation, if any, of all of our other executive

reviewing our executive compensation policies and plans;

implementing and administering our incentive compensation equity-based remuneration plans;

assisting management in complying with our proxy statement and annual report disclosure requirements;

approving all special perquisites, special cash payments and other special compensation and benefit arrangements

for our executive officers and employees;

producing a report on executive compensation to be included in our annual proxy statement;

reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a

compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.

However, before engaging or receiving advice from a compensation consultant,

external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.

Nominating and Corporate Governance Committee

We have established a nominating and corporate governance committee of the board of directors, which consists of Messrs.

Henske and Tinker,

both of whom meet the independent director standard under the NYSE listing standards and applicable SEC rules.

Henske serves as Chairman of our nominating and corporate governance committee.

The Nominating and Corporate Governance Committee

Charter is available on our website, osprey-technology.com.

The nominating and corporate governance committees duties, which are

specified in our Nominating and Corporate Governance Committee Charter, include, but are not limited to:

identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of

directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors;

developing, recommending to the board of directors and overseeing implementation of our corporate governance

coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual

directors and management in the governance of the Company;

reviewing on a regular basis our overall corporate governance and recommending improvements as and when

Code of Conduct and Ethics

We have adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal

securities laws, a copy of which is attached as an exhibit to this Annual Report.

We will make a printed copy of our code of conduct and ethics available to any stockholder who so requests.

Requests for a printed copy may be directed to us as

Osprey Technology Acquisition Corp., 1845 Walnut Street, Suite 1111, Philadelphia, PA 19103, Attention:

We will provide information that is responsive to this Item 11 in our definitive proxy statement for our 2022 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2021.

Such information is incorporated into this Item 10 by reference.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

of our executive officers or directors has received any compensation (cash or non-cash) for services rendered.

We will not pay compensation of any kind, including finders and consulting fees,

to holders of founder shares, executive officers and directors, or any of their respective affiliates, for services rendered prior to or in connection with the consummation of an initial business combination other than (i) repayment of

loans made to us by our sponsor to cover initial public offering-relating and organization expenses, (ii) repayment of loans that our sponsor, members of our management team or any of their respective affiliates or other third parties may make

to finance transaction costs in connection with an intended initial business combination (provided that if we do not consummate an initial business combination, we may use working capital held outside the trust account to repay such loaned amounts,

but no proceeds from the trust account may be used for such repayment), (iii) payments to our sponsor or its affiliate of a total of $10,000 per month for office space, utilities, secretarial support and administrative services, and (iv) to

reimburse for any out-of-pocket expenses related to identifying, investigation and completing an initial business combination.

Our audit committee reviews on a quarterly

basis all payments that were made to our sponsor, officers, directors or our or any of their affiliates.

After the consummation of our

initial business combination, directors or members of our management team who remain in one of those capacities may be paid director, consulting, management or other fees from the combined company with any and all amounts being fully disclosed to

stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination.

It is unlikely the amount of such compensation will be known at

the time, as it will be up to the directors of the post-combination business to determine executive and director compensation.

compensation to be paid to our executive officers will be determined by a compensation committee constituted solely by independent directors.

We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of

our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after the initial business combination.

The existence or terms

of any such employment or consulting arrangements may influence our managements motivation in identifying or selecting a target business although we do not believe that the ability of our management to remain with us after the consummation of

an initial business combination will be a determining factor in our decision to proceed with any potential business combination.

We are not party to any agreements with our executive officers and directors that provide for benefits upon termination

of employment.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves and in the past year has not served as a member of the board of directors or compensation

committee of any entity that has one or more executive officers serving on our board of directors, except that each of Messrs.

Edward Cohen and Jonathan Cohen serve as directors and executive officers of us and have served in the past year as

executive officers and/or directors of Atlas Energy Group, LLC, Titan Energy, LLC and Atlas Growth Partners GP, LLC, and each of Messrs.

Edward Cohen, Jonathan Cohen and DiDomenico have served in the past year as executive officers and/or directors

of Osprey Tech II.

We will provide information that is responsive to this Item 12 in our definitive proxy statement for our 2022 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2021.

Such information is incorporated into this Item 11 by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of our common stock as of

March 19, 2021, by:

each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;

each of our named executive officers and directors that beneficially owns shares of our common stock;

all our executive officers and directors as a group.

The table below represents beneficial ownership of Class A common stock, Class B common stock and Class A common stock and

Class B common stock voting together as a single class, and is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting

power or investment power with respect to such security or has the right to acquire such ownership within 60 days.

The table does not reflect record or beneficial ownership of any outstanding warrants as no warrants are exercisable within 60

The beneficial ownership of the Companys voting common stock is based on 31,625,000 shares of Class A common stock

outstanding and 7,906,250 shares of Class B common stock outstanding, except as otherwise indicated.

Unless otherwise indicated, we

believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

Name and Address of Beneficial Owners

Class A Common Stock

Class B Common Stock

Combined Voting Power (2)

Directors and Executive Officers :

David DiDomenico

William Fradin

Savneet Singh

Robert Henske

Richard Reiss, Jr.

Robert Tinker

All directors and executive officers as a group (nine individuals)

5% or Greater Beneficial Owners :

Osprey Sponsor II, LLC (3)

Aristeia Capital, L.L.C.

Glazer Capital, LLC (5)

Magnetar Financial LLC (6)

HGC Investment Management Inc.

Less than 1 percent.

Unless otherwise noted, the business address of each of the persons and entities listed above is 1845 Walnut

Street, Suite 1111, Philadelphia, PA 19103.

Represents the percentage of voting power of our Class A common stock and Class B common stock voting

together as a single class.

Osprey Sponsor II, LLC, our sponsor, is the record holder of the shares reported herein.

Cohen, our Co-Chairman, is the Manager of our sponsor and is deemed to have voting and dispositive power over the shares held by it.

Shares beneficially owned are based on a Schedule 13G filed with the SEC on February 16, 2021 by Aristeia

Capital, L.L.C.

(Aristeia).

According to the Schedule 13G, Aristeia is the investment manager of, and has voting and investment control with respect to the securities described herein held by, one or more private investment funds.

address for Aristeia is One Greenwich Plaza, 3 rd Floor , Greenwich, CT 06830.

Shares beneficially owned are based on a Schedule 13G filed with the SEC on February 16, 2021 by Glazer

Capital, LLC (Glazer Capital) and Mr.

Glazer and, collectively with Glazer Capital, the Glazer Parties).

According to the Schedule 13G, Mr.

Glazer serves as the managing member of

Glazer Capital which serves as investment manager of certain funds and managed accounts (collectively, the Glazer Funds) which hold the 3,297,227 shares.

According to the Schedule 13G, each of the Glazer Parties has shared voting and

shared dispositive power over the 3,297,227 shares.

The address of each of the Glazer Parties is 250 West 55 th Street, Suite 30A, New York, New York 10019.

Shares beneficially owned are based on a Schedule 13G/A filed on behalf of each of the following person

(collectively, the Magnetar Parties):

Magnetar Financial LLC (Magnetar Financial);

Magnetar Capital Partners LP (Magnetar Capital Partners);

Supernova Management LLC (Supernova Management);

Litowitz (Mr.

Litowitz) reporting ownership of 2,028,372 of Ospreys units (Units) consisting of one share of Class A common stock and one-half of one redeemable warrant.

According to the Schedule 13G/A, it relates to the Units held for Magnetar Constellation Master Fund, Ltd (Constellation Master Fund), Magnetar Constellation Fund II, Ltd (Constellation Fund), Magnetar Xing He Master Fund Ltd

(Xing He Master Fund), Magnetar SC Fund Ltd (SC Fund), Magnetar Systematic Multi-Strategy Master Fund Ltd (Systematic Master Fund), Magnetar Capital Master Fund Ltd, (Master Fund) and Magnetar

Structured Credit Fund, LP (Structured Credit Fund) (collectively the Magnetar Funds).

Magnetar Financial serves as the investment adviser to the Magnetar Funds, and as such, Magnetar Financial exercises voting and investment

power over the Units held for the Magnetar Funds accounts.

Magnetar Capital Partners serves as the sole member and parent holding company of Magnetar Financial.

Supernova Management is the general partner of Magnetar Capital Partners.

manager of Supernova Management is Mr.

According to the Schedule 13G/A, each of the Magnetar Parties has shared voting and shared dispositive power over the 2,028,372 Units.

The address of each of the Magnetar Parties is 1603

Orrington Avenue, 13 th Floor, Evanston, Illinois 60201.

Based on information contained in a Schedule 13G filed on February 14, 2020 by HGC Investment Management

(HGC Management).

HGC Management serves as the investment manager of HGC Arbitrage Fund LP (HGC Fund) with respect to the shares of Class A common stock held by HGC Management on behalf of the HGC Fund.

address of HGC Management is 366 Adelaide, Suite 601, Toronto, Ontario, M5V 1R9 Canada.

We will provide information that is responsive to this Item 10 in our definitive proxy statement for our 2022 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2021.

Such information is incorporated into this Item 12 by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Founder Shares

In June 2018, our sponsor

purchased 125,000 founder shares for an aggregate purchase price of $25,000.

We effectuated a 69-for-1 forward stock split in September 2018.

In April 2019, our sponsor

contributed back to us for no consideration 1,437,500 shares of common stock.

In October 2019, we effected a 1.1 for 1 stock dividend for each share of Class B common stock outstanding, and, as a result, our sponsor holds 7,906,250 founder

shares as of the date of this Annual Report.

The number of founder shares was determined based on the expectation that the founder shares would represent 20% of our issued and outstanding shares after the initial public offering.

The founder shares

represent 100% of our issued and outstanding shares of Class B common stock.

The founder shares will automatically convert into Class A common stock upon the consummation of a business combination on a one-for-one basis, subject to adjustments.

Our sponsor is collectively owned by our officers and directors.

The sponsor has agreed not to transfer, assign or sell any of the founder shares until the earlier of (i) one year after the completion

of our initial business combination, (ii) the last sales price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20

trading days within any 30-trading day period commencing at least 150 days after our initial business combination, and (iii) the date following the completion of our initial business combination on which

we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Private Placement

Simultaneously

with the initial public offering, our sponsor purchased an aggregate of 7,500,000 private placement warrants at $1.00 per private placement warrant for an aggregate purchase price of $7,500,000.

On November 13, 2019, we consummated the sale of

an additional 825,000 private placement warrants at a price of $1.00 per private placement warrant, which were purchased by our sponsor, generating gross proceeds of $825,000.

Each private placement warrant is exercisable to purchase one share of

Class A common stock at an exercise price of $11.50 per share.

The proceeds from the private placement warrants were added to the proceeds from the initial public offering held in the trust account.

If we do not complete a business combination

within the combination period, the proceeds of the sale of the private placement warrants will be used to fund the redemption of the public shares (subject to the requirements of applicable law) and the private placement warrants will expire

There will be no redemption rights or liquidating distributions from the trust account with respect to the private placement warrants.

The private placement warrants (including the Class A common stock issuable upon exercise of the

private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold until 30 days after the completion of our initial business combination.

Advances from Related Party

officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such

as identifying potential target businesses and performing due diligence on suitable business combinations.

Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or any of their

affiliates and will determine which expenses and the amount of expenses that will be reimbursed.

There is no cap or ceiling on the reimbursement of out-of-pocket

expenses incurred by such persons in connection with activities on our behalf.

Promissory Note Related Party

Prior to the closing of the initial public offering, our sponsor loaned us a total of $224,992 under a promissory note to be used for the

payment of costs related to the initial public offering.

The promissory note was non-interest bearing, unsecured and due on the earlier of December 31, 2019 or the completion of the initial public

The promissory note was repaid in full upon the consummation of the initial public offering on November 5, 2019.

Related Party Loans

In order to finance transaction costs in connection with an intended initial business combination, our sponsor, an affiliate of our

sponsor or certain of our officers and directors may, but are not obligated to, loan us funds from time to time, as may be required.

If we complete our initial business combination, we would repay such loaned amounts.

In the event that our initial

business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.

If such funds are insufficient to

repay the loan amounts, the unpaid amounts would be forgiven.

Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender.

The warrants would be

identical to the private placement warrants issued to our sponsor.

The terms of such loans by our sponsor, an affiliate of our sponsor or certain of our officers and directors, if any, have not been determined and no written agreements exist with

respect to such loans.

There were no working capital loans outstanding as of December 31, 2020.

Registration Rights

Pursuant to a registration rights agreement entered into on October 31, 2019, the sponsor and holders of warrants (and their underlying

securities) issued upon conversion of working capital loans, if any, are entitled to registration rights (in the case of the founder shares, only after conversion to Class A common stock).

The holders will be entitled to make up to three

demands, excluding short form demands, that we register such securities.

In addition, the holders will have certain piggy-back registration rights with respect to registration statements filed subsequent to the completion of a business

combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights agreement provides that we will not permit any registration statement filed under the

Securities Act to become effective until termination of the applicable lock-up period.

We will bear the expenses incurred in connection with the filing of any such registration statements.

Administrative Services

Commencing on

November 1, 2019, we pay an amount equal to $10,000 per month to our sponsor or its affiliate for office space, utilities, secretarial support and administrative services provided to us.

Trust Account Indemnification

Jonathan Cohen has agreed that he will be liable to us if and to the extent any claims by a vendor for services rendered or products

sold to us, or a prospective target business with which we have discussed entering into a definitive agreement for a business combination, reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser

amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay our franchise and income

taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of the initial public offering against certain

liabilities, including liabilities under the Securities Act.

Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr.

Cohen will not be responsible to the extent of any liability for such third

party claims.

We have not independently verified whether Mr.

Cohen has sufficient funds to satisfy his indemnity obligation.

We have not asked Mr.

Cohen to reserve for such eventuality.

We believe the likelihood of Mr.

Cohen having to

indemnify the trust account is limited because we endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the

trust account.

Conflicts of Interest

Our sponsor, officers and directors may become involved with subsequent special purpose acquisition companies similar to our company, although

our sponsor, officers and non-independent directors have agreed not to participate in the formation of, or become an officer or director of, any special purpose acquisition company formed for the purpose of

effecting a business combination with one or more businesses in the technology industry with a class of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business combination or we

have failed to complete our initial business combination by November 5, 2021.

Potential investors should also be aware of the following other potential conflicts of interest:

None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may

have conflicts of interest in allocating his or her time among various business activities.

In the course of their other business activities, our officers and directors may become aware of investment and

business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated.

Our management may have conflicts of interest in determining to which entity a particular business opportunity

should be presented.

Our sponsor has agreed to waive its redemption rights with respect to its founder shares and any public shares in

connection with the consummation of our initial business combination.

Our directors and officers have agreed to waive the redemption rights with respect to public shares acquired by them (if any) following the initial public offering.

Additionally,

our sponsor agreed to waive its redemption rights with respect to its founder shares if we fail to consummate our initial business combination by November 5, 2021.

If we do not complete our initial business combination within such applicable

time period, the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless.

With certain limited exceptions, the founder shares will not

be transferable, assignable or salable by our sponsor until the earlier of:

(i) one year after the completion of our initial business combination;

and (ii) the date on which we consummate a liquidation, merger, capital stock exchange,

reorganization, or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Notwithstanding the

foregoing, if the last sale price of our common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up.

With certain limited

exceptions, the private placement warrants and the common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination.

Due to the affiliation

of our officers and certain of our directors with our sponsor and since our sponsor owns common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate

business with which to effectuate our initial business combination.

Our key personnel may negotiate employment or consulting agreements with a target business in connection with a

particular business combination.

These agreements may provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether to proceed with a

particular business combination.

Our key personnel may have a conflict of interest with respect to evaluating a particular business combination if

the retention or resignation of any such key personnel was included by a target business as a condition to any agreement with respect to our initial business combination.

The conflicts described above may not be resolved in our favor.

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business

opportunities to a corporation if:

the corporation could financially undertake the opportunity;

the opportunity is within the corporations line of business;

it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the

attention of the corporation.

We are not prohibited from pursuing an initial business combination with a company that

is affiliated with our sponsor, officers or directors.

In the event we seek to complete our initial business combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent

investment banking firm which is a member of FINRA or from an independent accounting firm, that such an initial business combination is fair to our company from a financial point of view.

Commencing on November 1, 2019, we have paid an amount

equal to $10,000 per month to our sponsor or its affiliate for office space, utilities, secretarial support and administrative services provided to us.

We may also make payments to personnel affiliated with our sponsor, or reimburse affiliates of

our sponsor for the use of personnel, who are not our directors or executive officers, for services related to identifying, investigating and completing an initial business combination.

In addition, our sponsor or any of its affiliates may make additional investments in the

company in connection with the initial business combination, although our sponsor and its affiliates have no obligation or current intention to do so.

If our sponsor or any of its affiliates elects to make additional investments, such proposed

investments could influence our sponsors motivation to complete an initial business combination.

In the event that we submit our

initial business combination to our public stockholders for a vote, our sponsor has agreed to vote its founder shares and any public shares it may acquire during or after the initial public offering in favor of our initial business combination, and

our officers and directors have also agreed to vote public shares purchased by them (if any) during or after the initial public offering in favor of our initial business combination.

Director Independence

standards require that a majority of our board of directors be independent.

An independent director is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a

relationship which in the opinion of the companys board of directors, would interfere with the directors exercise of independent judgment in carrying out the responsibilities of a director.

We have determined that Messrs.

Singh, Henske,

Reiss and Tinker are independent directors under NYSE rules and Rule 10A-3 of the Exchange Act.

Our independent directors hold regularly scheduled meetings at which only independent directors are present.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

The firm of Marcum LLP, or Marcum, acted as our independent registered public accounting firm during the years ended December 31, 2020 and

December 31, 2019.

The following is a summary of fees paid to Marcum LLP for services rendered.

Audit fees consist of fees billed for professional services rendered for the audit of our year-end

financial statements and services that are normally provided by Marcum in connection with regulatory filings.

The aggregate fees billed by Marcum for professional services rendered for the audit of our annual financial statements, review of the

financial information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the years ended December 31, 2020 and 2019 totaled $53,560 and $52,000,

respectively.

The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.

Audit-Related Fees

Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the

audit or review of our financial statements and are not reported under Audit Fees. These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting

We did not pay Marcum for consultations concerning financial accounting and reporting standards for the years ended December 31, 2020 and 2019.

We did not pay Marcum for tax

planning and tax advice for the years ended December 31, 2020 and 2019.

All Other Fees

We did not pay Marcum for other services for the years ended December 31, 2020 and 2019.

Audit Committee Pre-Approval Policies and Procedures

Our audit committee was formed upon the consummation of the initial public offering.

As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors.

Since the formation of our audit committee, and on a

going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors,

including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of this Annual Report:

Financial Statements:

Report of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statements of Changes in Stockholders Equity

Statements of Cash Flows

Notes to Financial Statements

Financial Statements Schedule

The following exhibits are filed as part of, or incorporated by reference into, this Annual Report on Form

The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the

Copies of the exhibits which are incorporated herein by reference can be obtained on the SEC website at www.sec.gov.

Description of Exhibit

Underwriting Agreement, dated October 31, 2019, between the Company and Credit Suisse Securities (USA) LLC(2)

Agreement and Plan of Merger, dated as of February 17, 2021(1)

Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on November

Amended and Restated Bylaws (3)

Specimen Unit Certificate (2)

Specimen Class A Common Stock Certificate (2)

Specimen Warrant Certificate (included in Exhibit 4.4)

Warrant Agreement, dated October 31, 2019, between Continental Stock Transfer & Trust Company and the Company

Description of Securities of Osprey Technology Acquisition Corp.(4)

Letter Agreement, dated October 31, 2019, by and among the Company, its officers, directors and Osprey Sponsor II, LLC

Investment Management Trust Agreement, dated October 31, 2019, between Continental Stock Transfer

& Trust Company and the Company (2)

Registration Rights Agreement, dated October 31, 2019, among the Company and certain security holders (2)

Private Placement Warrants Purchase Agreement, dated October

31, 2019, by and between the Company and Osprey Sponsor II, LLC (2)

Administrative Services Agreement, dated October 31, 2019, between the Company and Osprey Sponsor II, LLC

Form of Indemnity Agreement (3)

Promissory Note for expenses prior to initial public offering from Osprey Sponsor II, LLC to the Company (3)

Code of Business Conduct and Ethics (3)

Subsidiaries of the Registrant

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant

to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer Pursuant to 18 U.S.C.

Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Labels Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

Furnished herewith.

Previously filed as an exhibit to our Current Report on Form 8-K/A filed on February 22, 2021.

Previously filed as an exhibit to our Current Report on Form 8-K filed on November 5, 2019.

Previously filed as an exhibit to our Registration Statement on Form S-1, as amended (File No.

Previously filed as an exhibit to our Annual Report on Form 10-K filed on March 6, 2020.

We will provide information that is responsive to this Item 13 in our definitive proxy statement for our 2022 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2021.

Such information is incorporated into this Item 13 by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information about aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No.

34 ) will be presented in our definitive proxy statement for our 2022 Annual Meeting of Stockholders or in an amendment to this Annual Report on Form 10-K not later than 120 days after December 31, 2021.

Such information is incorporated into this Item 14 by reference.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

Financial Statements and Financial Statement Schedules

The consolidated financial statements and financial statement schedules of BlackSky required by Part II, Item 8, are included in Part IV of this report.

See Index to Consolidated Financial Statements and Financial Statement Schedules beginning on Page F-1.

The documents listed below are incorporated by reference or are filed with this report, in each case as indicated therein.

Exhibit Description Form SEC File No.

Filing Date Filed or Furnished Herewith

2.1 Agreement and Plan of Merger, dated as of February 17, 2021, by and among Osprey Technology Acquisition Corp., Osprey Technology Merger Sub, Inc., and BlackSky Technology Inc.

424(b)(3) 333-256103 Annex A August 11, 2021

3.1 Amended and Restated Certificate of Incorporation of the Company

8-K 001-39113 3.1 September 15, 2021

3.2 Amended and Restated Bylaws of the Company

8-K 001-39113 3.2 September 15, 2021

4.1 Specimen Warrant Certificate

S-1 333-234180 4.3 October 11, 2019

4.2 Warrant Agreement, dated October 31, 2019, between Continental Stock Transfer & Trust Company and Osprey Technology Acquisition Corp.

8-K 001-39113 4.1 November 5, 2019

4.3 Description of Capital Stock X

10.1 Private Placement Warrants Purchase Agreement, dated October 31, 2019, by and between Osprey Technology Acquisition Corp.

and Osprey Sponsor II, LLC

8-K 001-39113 10.4 November 5, 2019

10.2+ BlackSky Technology Inc.

2021 Equity Incentive Plan

424(b)(3) 333-256103 Annex E August 11, 2021

10.3+ BlackSky Technology Inc.

2021 Employee Stock Purchase Plan

424(b)(3) 333-256103 Annex F August 11, 2021

10.4+ BlackSky Technology Inc.

Outside Director Compensation Policy

8-K 001-39113 10.13 September 15, 2021

10.5+ BlackSky Technology Inc.

Form of Indemnification Agreement

8-K 001-39113 10.4 September 15, 2021

10.6 Right of First Offer Agreement, dated as of October 31, 2019, by and between Spaceflight Industries, Inc.

and Intelsat Jackson Holdings, S.A.

S-4 333-256103 10.10 May 13, 2021

10.7 Sponsor Support Agreement, dated as of February 17, 2021

8-K 001-39113 10.3 February 22, 2021

10.8 Form of Stockholder Support Agreement

424(b)(3) 333-256103 Annex H August 11, 2021

10.9 Form of Registration Rights Agreement

8-K 001-39113 10.5 February 22, 2021

10.10 Form of Subscription Agreement

8-K 001-39113 10.1 February 22, 2021

10.11+ Executive Employment Agreement for Brian O’Toole

S-4/A 333-256103 10.15 June 25, 2021

10.12+ Executive Employment Agreement for Brian Daum

S-4/A 333-256103 10.16 June 25, 2021

10.13+ Offer Letter from BlackSky Holdings Inc.

to Brian O’Toole, dated August 18, 2021

8-K 001-39113 10.1 August 18, 2021

10.14+ Offer Letter from BlackSky Holdings Inc.

to Johan Broekhuysen, dated August 18, 2021

8-K 001-39113 10.2 August 18, 2021

10.15+ Offer Letter from BlackSky Holdings Inc.

to Henry Dubois, dated August 18, 2021

8-K 001-39113 10.3 August 18, 2021

10.16+ Offer Letter from BlackSky Holdings Inc.

to Chris Lin, dated August 18, 2021

8-K 001-39113 10.4 August 18, 2021

Exhibit Description Form SEC File No.

Filing Date Filed or Furnished Herewith

10.17+ Transition and Consulting Agreement from BlackSky Holdings Inc.

to Brian Daum, dated August 18, 2021

8-K 001-39113 10.5 August 18, 2021

10.18 Amended and Restated Loan and Security Agreement, dated October 31, 2019, by and between Intelsat Jackson Holdings SA, Seahawk SPV Investment LLC, Spaceflight Industries, Inc.

and its subsidiaries.

S-4/A 333-256103 10.17 June 25, 2021

10.19 Satellite Program Contract, dated March 12, 2018, by and between LeoStella LLC and BlackSky Global LLC

S-4/A 333-256103 10.18 June 25, 2021

10.20 Amendment No.

1 to Satellite Program Contract, dated February 20, 2019, by and between LeoStella LLC and BlackSky Global LLC

S-4/A 333-256103 10.19 June 25, 2021

10.21 Amendment No.

2 to Satellite Program Contract, dated May 27, 2020, by and between LeoStella LLC and BlackSky Global LLC

S-4/A 333-256103 10.20 June 25, 2021

10.22 Palantir Subscription Agreement, dated as of September 13, 2021, by and between BlackSky Holdings, Inc.

and Palantir Technologies, Inc.

8-K 001-39113 99.2 September 1, 2021

10.23 Sponsor Support Agreement, dated as of February 17, 2021, by and among BlackSky Holdings, Inc., Osprey Sponsor II, LLC, and Osprey Technology Acquisition Corp.

8-K 001-39113 10.3 February 22, 2021

10.24 First Amendment, Consent and Joinder to Amended and Restated Loan and Security Agreement, dated as of September 9, 2021, by and among BlackSky Holdings, Inc.

and the subsidiaries named therein, Intelsat Jackson Holdings SA and Seahawk SPV Investment LLC.

8-K 001-39113 10.5 September 15, 2021

10.25 BlackSky HQ Lease Agreement

S-1 333-260458 10.25 October 25, 2021

BlackSky Technology Inc.

Executive Change in Control and Severance Plan, adopted August 16, 2021, and form of participation agreement attached as appendix A.

001-39113 10.6 August 18, 2021

10.27 Form of Stock Option Agreement under the BlackSky 2021 Equity Incentive Plan S-8 333-261778 4.4 December 20, 2021

10.28 Form of Restricted Stock Unit Agreement under the BlackSky 2021 Equity Incentive Plan S-8 333-261778 4.5 December 20, 2021

10.29 Form of Stock Appreciation Right Agreement under the BlackSky 2021 Equity Incentive Plan S-8 333-261778 4.6 December 20, 2021

10.30 2014 Equity Incentive Plan and forms of agreements thereunder S-8 333-261778 4.7 December 20, 2021

10.31 Spaceflight, Inc.

Amended and Restated 2011 Equity Incentive Plan Assumed by Spaceflight Industries and forms of agreements thereunder S-8 333-261778 4.8 December 20, 2021

10.32 2014 Equity Incentive Plan and forms of agreements thereunder S-8 333-261778 4.9 December 20, 2021

10.33 Form of Restricted Stock Unit Agreement under the BlackSky 2014 Equity Incentive Plan S-8 333-261778 4.4 March 4, 2022

2022 Executive Incentive Compensation Plan

16.1 Letter from Marcum LLP to the SEC, dated September 14, 2021 8-K 001-39113 16.1 September 15, 2021

Exhibit Description Form SEC File No.

Filing Date Filed or Furnished Herewith

21.1 List of Subsidiaries S-1 333-260458 21.1 October 25, 2021

23.1 Consent of Deloitte LLP, independent registered public accounting firm of BlackSky Technology Inc.

24.1 Power of Attorney (included in signature pages hereto)

31.1 Certification of the Company’s Chief Executive Officer, Brian O’Toole, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of the Company’s Chief Financial Officer, Johan Broekhuysen, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of the Company’s Chief Executive Officer, Brian O’Toole, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of the Company’s Chief Financial Officer, Johan Broekhuysen, pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

101.INS Inline XBRL Instance Document X

101.SCH Inline XBRL Taxonomy Extension Schema Document X

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X

________________

+ Indicates management contract or compensatory plan.

FORM 10-K SUMMARY

Not applicable

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to

be signed on its behalf by the undersigned, thereunto duly authorized.

Osprey Technology Acquisition Corp.

March 30, 2021

/s/ David DiDomenico

David DiDomenico

Chief Executive Officer and

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ David DiDomenico

David DiDomenico

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 31, 2022 BlackSky Technology Inc.

Chief Executive Officer and Director

(Principal Executive Officer)

/s/ Johan Broekhuysen

Johan Broekhuysen

Chief Financial Officer

(Principal Financial and Accounting Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian O’Toole and Johan Broekhuysen, and each one of them, as his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such individual in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or the individual’s substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed by the following persons in the capacities and on the dates indicated on behalf of the registrant.

Chief Executive Officer, President and Director (Principal Executive Officer)

March 31, 2022

/s/ Jeffrey F.

Chief Financial Officer, Chief Legal Officer and Secretary (Principal Financial Officer and Principal Accounting Officer)

Brian O’Toole

/s/ Johan Broekhuysen

Chief Financial Officer (Principal Financial and Accounting Officer)

March 31, 2022

/s/ Edward E.

Co-Chairman of the Board of Directors

Johan Broekhuysen

/s/ Magid Abraham

March 31, 2022

/s/ Jonathan Z.

Co-Chairman of the Board of Directors

Magid Abraham

/s/ David DiDomenico

March 31, 2022

/s/ Savneet Singh

Savneet Singh

David DiDomenico

/s/ Susan Gordon

March 31, 2022

/s/ Robert B.

/s/ Timothy Harvey

March 31, 2022

/s/ Richard Reiss, Jr.

Richard Reiss, Jr.

Timothy Harvey

/s/ William Porteous

March 31, 2022

/s/ Robert B.

William Porteous

/s/ James Tolonen

March 31, 2022

OSPREY TECHNOLOGY ACQUISITION CORP.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Financial Statements:

Balance Sheets

Statements of Operations

Statements of Changes in Stockholders Equity

Statements of Cash Flows

Notes to Financial Statements

James Tolonen

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm F-2

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss F-4

Consolidated Statements of Changes in Stockholders' in Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) F-5

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Osprey Technology

Acquisition Corp.

To the stockholders and the Board of Directors of BlackSky Technology Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Osprey Technology Acquisition Corp.

(the Company) as of December 31, 2020

and 2019, the related statements of operations, changes in stockholders equity and cash flows for each of the two years ended December 31, 2020, and the related notes (collectively referred to as the financial statements).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the two years ended

December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

more fully described in Note 2 to the financial statements, the Companys business plan is dependent on the completion of a business combination and the Companys cash and working capital deficit as of December 31, 2020 are not

sufficient to complete its planned activities.

These conditions raise substantial doubt about the Companys ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the

financial statements.

Managements plans in regard to these matters are also described in Notes 1 and 11.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have audited the accompanying consolidated balance sheets of BlackSky Technology Inc.

(the "Company") as of December 31, 2021 and December 31, 2020, the related consolidated statements of operations and comprehensive loss, changes in redeemable convertible preferred stock and stockholders’ equity (deficit), and cash flows, for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and December 31, 2020, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial

statements are the responsibility of the Companys management.

Our responsibility is to express an opinion on the Companys financial statements based on our audit.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (the PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its

internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Companys

internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit

provides a reasonable basis for our opinion.

/ S / Marcum LLP

We have served as the Companys auditor since 2018 .

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

March 31, 2022

OSPREY TECHNOLOGY ACQUISITION CORP.

BALANCE SHEETS

We have served as the Company's auditor since 2015.

BLACKSKY TECHNOLOGY INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

December 31, December 31,

Current assets:

Prepaid expenses

Prepaid income taxes

Cash and cash equivalents $ 165,586 $ 5,098

Restricted cash 2,518 5,475

Accounts receivable, net of allowance of $ 39 and $ 0 , respectively

Prepaid expenses and other current assets 6,264 965

Contract assets 1,678 3,796

Total current assets 178,675 18,237

Deferred tax asset

Marketable securities held in Trust Account

LIABILITIES AND STOCKHOLDERS EQUITY

Property and equipment - net 70,551 20,852

Goodwill 9,393 9,393

Investment in equity method investees 4,002 3,277

Intangible assets - net 2,480 3,831

Satellite procurement work in process 40,102 62,664

Other assets 560 1,661

Total assets $ 305,763 $ 119,915

Liabilities and stockholders’ equity (deficit)

Current liabilities:

Accounts payable and accrued expenses

Income taxes payable

Accounts payable and accrued liabilities $ 10,837 $ 7,966

Amounts payable to equity method investees 5,613 8,762

Contract liabilities - current 11,266 14,537

Debt - current portion — 16,739

Other current liabilities 2,819 7,439

Total current liabilities 30,535 55,443

Deferred underwriting fee payable

Liability for estimated contract losses 6,054 6,252

Long-term contract liabilities 568 2,559

Derivative liabilities 16,925 —

Long-term debt - net of current portion 71,408 84,869

Other liabilities 653 3,605

Total liabilities 126,143 152,728

Commitments and contingencies (Note 24)

Class A common stock subject to possible redemption, 29,866,487 and 30,142,702 shares at

redemption value as of December 31, 2020 and 2019, respectively

Stockholders Equity

Stockholders’ equity (deficit):

Preferred stock, $ 0.0001 par value;

100,000 shares authorized;

none issued and

Class A common stock, $0.0001 par value;

150,000,000 shares authorized;

1,758,513 and

1,482,298 shares issued and outstanding (excluding 29,866,487 and 30,142,702 shares subject to possible redemption) as of December 31, 2020 and 2019, respectively

Class B common stock, $0.0001 par value;

25,000,000 shares authorized;

7,906,250 shares

issued and outstanding as of December 31, 2020 and 2019

none issued or outstanding.

Class A common stock, $ 0.0001 par value-authorized, 300,000 shares;

issued, 117,160 and 35,582 shares;

outstanding, 114,452 shares and 34,692 shares as of December 31, 2021 and 2020, respectively.

Additional paid-in capital 650,518 191,168

(Accumulated deficit)/retained earnings

Total Stockholders Equity

Accumulated deficit ( 470,909 ) ( 223,984 )

Total stockholders’ equity (deficit) 179,620 ( 32,813 )

Total liabilities and stockholders’ equity $ 305,763 $ 119,915

The accompanying notes are an integral part of the financial statements.

OSPREY TECHNOLOGY ACQUISITION CORP.

STATEMENTS OF OPERATIONS

See notes to consolidated financial statements

BLACKSKY TECHNOLOGY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands)

Years Ended December 31,

Imagery & software analytical services $ 25,046 $ 18,737

Engineering & systems integration 9,039 2,398

Total revenue $ 34,085 $ 21,135

Costs and expenses

Imagery & software analytical service costs, excluding depreciation and amortization 21,507 13,331

Engineering & systems integration costs, excluding depreciation and amortization 13,241 10,535

Selling, general and administrative 86,655 28,606

Research and development 112 255

Depreciation and amortization 14,306 9,803

Satellite impairment loss 18,407 —

Operating loss ( 120,143 ) ( 41,395 )

Gain on debt extinguishment 4,059 284

Gain (loss) on derivatives 23,885 ( 558 )

Income (loss) on equity method investment 1,027 ( 953 )

Interest expense ( 5,165 ) ( 5,201 )

Other (expense) income, net ( 147,656 ) 103

Loss before income taxes ( 243,993 ) ( 47,720 )

Income tax (expense) benefit — —

Loss from continuing operations ( 243,993 ) ( 47,720 )

Discontinued operations:

(Loss) gain from discontinued operations (including (loss) gain from disposal of Spaceflight Inc.

of $( 1,650 ) and $ 30,672 for the years ended December 31, 2021 and 2020, respectively)

( 1,650 ) 28,185

Income tax (expense) benefit — —

(Loss) gain from discontinued operations, net of tax ( 1,650 ) 28,185

Net loss $ ( 245,643 ) $ ( 19,535 )

Other comprehensive income — —

Total comprehensive loss $ ( 245,643 ) $ ( 19,535 )

Basic and diluted loss per share of common stock:

Loss from continuing operations $ ( 3.37 ) $ ( 1.45 )

(Loss) gain from discontinued operations, net of tax ( 0.02 ) 0.85

Net loss per share of common stock $ ( 3.39 ) $ ( 0.60 )

See notes to consolidated financial statements

BLACKSKY TECHNOLOGY INC.

CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Years Ended December 31, 2021 and 2020

(in thousands)

Year Ended December 31, 2021

Operating costs

Loss from operations

Other income:

Interest income on marketable securities held in Trust Account

Unrealized gain (loss) on marketable securities held in Trust Account

Other income, net

(Loss) income before income taxes

Provision for income taxes

Net (loss) income

Basic and diluted weighted average shares outstanding, Class A common stock subject to

possible redemption

Basic and diluted net income per share, Class A common stock subject to possible

Basic and diluted weighted average shares outstanding,

Non-redeemable common stock

Basic and diluted net loss per share, Non-redeemable

The accompanying notes are an integral part of the financial statements.

OSPREY TECHNOLOGY ACQUISITION CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

Stockholders

Balance January 1, 2019

Forfeiture of common stock by Sponsor

Sale of 31,625,000 Units, net of underwriting discounts and offering expenses

Sale of 8,325,000 Private Placement Warrants

Class A common stock subject to possible redemption

Balance December 31, 2019

Change in value of Class A common stock subject to possible redemption

Balance December 31, 2020

The accompanying notes are an integral part of the financial statements.

OSPREY TECHNOLOGY ACQUISITION CORP.

STATEMENTS OF CASH FLOWS

Redeemable Convertible Preferred Stock Class A Common Stock Class B Common Stock Common Stock Additional Paid-In Treasury Stock Accumulated Total Stockholders'

Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Equity

Balance as of January 1, 2021, as adjusted — $ — — $ — — $ — 34,692 $ 3 $ 191,168 — $ — $ ( 223,984 ) $ ( 32,813 )

Stock-based compensation — — — — — — — — 42,582 — — — 42,582

Issuance of common stock due to Bridge Notes — — — — — — 20,343 2 106,351 — — — 106,353

Issuance of common stock upon exercise of stock options — — — — — — 1,044 — 130 — — — 130

Issuance of common stock upon exercise of warrants (1)

— — — — — — 3,251 — 2,289 — — — 2,289

Issuance of common stock upon vesting of restricted stock awards — — — — — — 546 — — — — — —

Issuance of common stock upon vesting of restricted stock units — — — — — — 111 — — — — — —

Conversion of bridge notes and accrued interest into common stock — — — — — — 7,736 1 77,096 — — — 77,097

Exercise of warrants in connection with merger — — — — — — 11,187 1 38,328 — — — 38,329

Issuance of sponsor earn-out shares — — — — — — — — ( 17,659 ) — — — ( 17,659 )

Reverse recapitalization, net (Note 4) — — — — — — 34,584 4 202,195 — — ( 1,282 ) 200,917

Issuance of common stock upon settlement of promissory notes — — — — — — 958 — 8,038 — — — 8,038

Net loss — — — — — — — — — — — ( 245,643 ) ( 245,643 )

Balance as of December 31, 2021 — $ — — $ — — $ — 114,452 $ 11 $ 650,518 — $ — $ ( 470,909 ) $ 179,620

Inclusive of warrants exercised for preferred stock then exchanged into common stock in connection with merger.

Year Ended December 31, 2020

Redeemable Convertible Preferred Stock Class A Common Stock Class B Common Stock Common Stock Additional Paid-In Treasury Stock Accumulated Total Stockholders'

Shares Amount Shares Amount Shares Amount Shares Amount Capital Shares Amount Deficit Deficit

Balance as of December 31, 2019, as previously reported 76,971 $ 171,321 72,319 $ 1 83,987 $ 1 — $ — $ 26,681 11,500 $ ( 12,500 ) $ ( 203,799 ) $ ( 189,616 )

Retroactive application of the recapitalization ( 76,971 ) ( 171,321 ) ( 72,319 ) ( 1 ) ( 83,987 ) ( 1 ) 31,074 $ 3 158,820 ( 11,500 ) 12,500 — 171,321

Balance as of December 31, 2019, as adjusted — — — — — — 31,074 3 185,501 — — ( 203,799 ) ( 18,295 )

Adoption of Accounting Standards Updates "ASU", ASU 2014-09

— — — — — — — — — — — ( 650 ) ( 650 )

Balance as of January 1, 2020, as adjusted — — — — — — 31,074 3 185,501 — — ( 204,449 ) ( 18,945 )

Stock based compensation, including $ 218 thousand in the sale of Spaceflight, Inc.

— — — — — — — 2,390 — — — 2,390

Issuance of preferred stock in the sale of Spaceflight, Inc — — — — — 999 — 3,247 — — — 3,247

Issuance of common stock upon exercise of stock options — — — — — 188 — 30 — — — 30

Issuance of common stock upon vesting of restricted stock awards — — — — — 2,376 — — — — — —

Issuance of common stock as contingent consideration for the purchase of OpenWhere, Inc — — — — — 55 — — — — — —

Net loss — — — — — — — — — — ( 19,535 ) ( 19,535 )

Balance as of December 31, 2020 — $ — — $ — — $ — 34,692 $ 3 $ 191,168 — $ — $ ( 223,984 ) $ ( 32,813 )

See notes to consolidated financial statements

BLACKSKY TECHNOLOGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Cash flows from operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Interest earned on marketable securities held in Trust Account

Unrealized (gain) loss on marketable securities held in Trust Account

Deferred income tax provision (benefit)

Net loss $ ( 245,643 ) $ ( 19,535 )

(Loss) gain from discontinued operations, net of tax ( 1,650 ) 28,185

Loss from continuing operations ( 243,993 ) ( 47,720 )

Adjustments to reconcile net loss to net cash (used in) operating activities:

Depreciation and amortization expense 14,306 9,803

Gain on debt extinguishment ( 4,059 ) ( 284 )

Bad debt expense 58 —

Stock-based compensation expense 42,571 1,982

Loss on issuance of Bridge Notes 99,669 —

Issuance costs for derivative liabilities and debt carried at fair value 48,009 —

Amortization of debt discount and issuance costs 1,807 1,137

(Gain) loss on equity method investment ( 1,027 ) 953

Loss on disposal of property and equipment 24 —

(Gain) loss on derivatives ( 23,885 ) 558

Satellite impairment loss 18,407 —

Changes in operating assets and liabilities:

Prepaid expenses

Prepaid income taxes

Accounts payable and accrued expenses

Income taxes payable

Accounts receivable 216 1,425

Contract assets 2,118 ( 3,796 )

Prepaid expenses and other current assets ( 5,207 ) 400

Other assets ( 309 ) ( 1,024 )

Accounts payable and accrued liabilities 2,543 2,483

Other current liabilities ( 2,680 ) ( 340 )

Contract liabilities - current and long-term ( 5,262 ) 9,019

Liability for estimated contract losses ( 198 ) 6,252

Other liabilities 3,020 3,852

Cash flows used in operating activities - continuing operations ( 53,872 ) ( 15,300 )

Cash flows used in operating activities - discontinued operations — ( 16,374 )

Net cash used in operating activities ( 53,872 ) ( 31,674 )

Cash flows from investing activities:

Investment of cash in Trust Account

Cash withdrawn from Trust Account to pay franchise and income taxes

Net cash provided by (used in) investing activities

Purchase of property and equipment ( 1,266 ) ( 281 )

Satellite procurement work in process ( 62,643 ) ( 18,096 )

Purchase of domain name ( 7 ) —

Proceeds from equity method investment 302 —

Cash flows used in investing activities - continuing operations ( 63,614 ) ( 18,377 )

Cash flows provided by investing activities - discontinued operations — 8,607

Net cash used in investing activities ( 63,614 ) ( 9,770 )

Cash flows from financing activities:

Proceeds from sale of Units, net of underwriting discounts paid

Proceeds from sale of Private Placement Warrants

Proceeds from promissory notes related party

Repayment of promissory notes related party

Payment of offering costs

Proceeds from recapitalization transaction, net of payment of equity issuance costs 244,880 —

Payments of transaction costs related to sponsor earn-out shares ( 291 ) —

Proceeds from issuance of debt 58,573 3,600

Proceeds from options exercised 130 30

Proceeds from warrants exercised 163 —

Capital lease payments ( 2 ) ( 39 )

Debt payments ( 22,198 ) —

Payments for debt issuance costs ( 6,238 ) ( 108 )

Withholding tax payment on vesting of restricted stock awards and options exercised — ( 39 )

Cash flows provided by financing activities - continuing operations 275,017 3,444

Cash flows used in financing activities - discontinued operations — —

Net cash provided by financing activities 275,017 3,444

Net Change in Cash

Cash Beginning

Cash Ending

Supplemental cash flow information:

Cash paid for income taxes

Non-cash investing and financing

Initial classification of Class A common stock subject to redemption

Change in value of Class A common stock subject to possible redemption

Deferred underwriting fee payable

The accompanying notes are an integral part of the financial statements.

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

1DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Osprey Technology Acquisition Corp.

(the Company) was

incorporated in Delaware as a blank check company under the name Osprey Acquisition Corp.

II on June 15, 2018.

The Company changed its name to Osprey Energy Acquisition Corp.

II on September 27, 2018 and then

to Osprey Technology Acquisition Corp. on June 17, 2019.

The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with

one or more businesses (the Business Combination).

The Company has generated no revenues to date and it does not expect that

it will generate operating revenues until it consummates an initial business combination at the earliest.

Although the Company may pursue an acquisition opportunity in any business or industry, it intends to focus on opportunities in the technology

sector, particularly companies pursuing a Software-as-a-Service (SaaS) model.

The Company has one subsidiary, Osprey Technology Merger Sub, Inc., a direct wholly owned subsidiary of the Company incorporated in Delaware

on February 16, 2021.

(Merger Sub) (see Note 11).

As of December 31, 2020, the Company had not commenced

All activity through December 31, 2020 relates to the Companys formation, the initial public offering (the Initial Public Offering), which is described below which is described below, identifying a target company

for a Business Combination, activities in connection with the proposed acquisition of BlackSky Holdings, Inc., a Delaware corporation ( BlackSky ) (see Note 11).

The registration statements for the Companys Initial Public Offering were declared effective on October 31, 2019.

November 5, 2019, the Company consummated the Initial Public Offering of 27,500,000 units (the Units and, with respect to the shares of Class A common stock included in the Units sold, the Public Shares), at $10.00

per Unit, generating gross proceeds of $275,000,000, which is described in Note 4.

Simultaneously with the closing of the Initial Public

Offering, the Company consummated the sale of 7,500,000 warrants (the Private Placement Warrants) at a price of $1.00 per Private Placement Warrant in a private placement to Osprey Sponsor II, LLC (the Sponsor), generating

gross proceeds of $7,500,000, which is described in Note 5.

Following the closing of the Initial Public Offering on November 5,

2019, an amount of $275,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the Trust Account) and invested

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the

conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the Investment Company Act), as determined by the Company, until the earlier of:

(i) the completion of a Business

Combination or (ii) the distribution of the Trust Account, as described below.

On November 11, 2019, the underwriters notified

the Company of their intention to exercise their over-allotment option in full on November 13, 2019.

As such, on November 13, 2019, the Company consummated the sale of an additional 4,125,000 Units, at $10.00 per Unit, and the sale of an

additional 825,000 Private Placement Warrants, at $1.00 per Private Placement Warrant, generating total gross proceeds of $42,075,000.

A total of $41,250,000 of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds

deposited in the Trust Account to $316,250,000.

Transaction costs for the Initial Public Offering amounted to $18,047,876 consisting of

$6,325,000 of underwriting fees, $11,068,750 of deferred underwriting fees and $654,126 of other offering costs.

The Companys

management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied

generally toward consummating a Business Combination.

The Companys initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account

(excluding the deferred underwriting fees and taxes payable on income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination.

The Company will only complete a Business Combination if the

post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the

Investment Company Act.

There is no assurance that the Company will be able to complete a Business Combination successfully.

will provide its holders of the outstanding Public Shares (the public stockholders) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a

stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the

Company, solely in its discretion.

The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then on deposit in the Trust Account ($10.00 per Public Share, plus any pro rata interest earned on the

funds held in the Trust Account and not previously released to the Company to pay its franchise and income tax obligations).

There will be no redemption rights upon the completion of a Business Combination with respect to the Companys

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

The Company will proceed with a Business Combination if the Company has net tangible assets

of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.

If a stockholder vote is not required

by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, conduct the redemptions pursuant to the tender offer rules of

Securities and Exchange Commission (the SEC) and file tender offer documents with the SEC prior to completing a Business Combination.

If, however, stockholder approval of the transaction is required by law, or the Company

decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.

If the Company

seeks stockholder approval in connection with a Business Combination, the Companys Sponsor has agreed to vote its Founder Shares (as defined below in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor

of approving a Business Combination.

Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction.

Notwithstanding the foregoing, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions

pursuant to the tender offer rules, the Companys Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in

concert or as a group (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the Exchange Act)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or

more of the Public Shares, without the prior consent of the Company.

The Sponsor and the Companys officers and directors have

agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Companys Amended

and Restated Certificate of Incorporation (a) that would modify the substance or timing of the Companys obligation to allow redemption in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does

not complete a Business Combination or (b) with respect to any other provision relating to stockholders rights or pre-initial Business Combination activity, unless the Company provides the public

stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company will have until

November 5, 2021 to consummate a Business Combination (the Combination Period).

If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the

purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate

amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses),

divided by the number of then outstanding Public Shares, which redemption will completely extinguish the public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to

applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Companys remaining stockholders and the Companys board of directors, dissolve and liquidate, subject in each case

to the Companys obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

There will be no redemption rights or liquidating distributions with respect to the Companys warrants, which

will expire worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to

waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period.

However, if the Sponsor or any of the Companys officers, directors or any of their

affiliates acquires Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within

the Combination Period.

The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination

Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible that the per share value of

the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).

protect the amounts held in the Trust Account, Mr.

Jonathan Cohen, the Companys Co-Chairman, has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered

or products sold to the Company, or a prospective target business with which the Company has discussed entering into a definitive agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per share or (ii) such lesser

amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets.

This liability will not apply with respect to any claims by a third party who executed a

waiver of any and all rights to seek access to the Trust Account or to any claims under the Companys indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of

1933, as amended (the Securities Act).

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Net increase (decrease) in cash, cash equivalents, and restricted cash 157,531 ( 38,000 )

Cash, cash equivalents, and restricted cash – beginning of year 10,573 37,190

Cash reclassified to assets held for sale at beginning of period — 11,383

Cash reclassified to assets held for sale at the end of period — —

Cash, cash equivalents, and restricted cash – end of period $ 168,104 $ 10,573

See notes to consolidated financial statements

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

Cash and cash equivalents $ 165,586 $ 5,098

Restricted cash 2,518 5,475

Total cash, cash equivalents, and restricted cash $ 168,104 $ 10,573

(in thousands)

Supplemental disclosures of cash flows information:

Cash paid for interest $ 378 $ 1,113

Supplemental disclosures of non-cash financing and investing information:

Property and equipment additions accrued but not paid $ 5,222 $ 5,397

Capitalized interest 620 1,162

Capitalized stock-based compensation 11 —

Issuance of common stock due to Bridge Notes and rights offering, net of issuance 106,353 —

Issuance of common stock warrants due to Bridge Notes 18,800 —

Issuance of common stock upon settlement of promissory notes 8,038 —

Net exercise of common stock warrants 210 —

Net exercise of common stock warrants in connection with merger 1,324 —

Conversion of Bridge Notes 77,097 —

Net exercise of Bridge Note warrants 38,329 —

Contingent liability for working capital adjustment and use taxes to M&Y Space Co.

Issuance of preferred stock in the sale of Spaceflight, Inc.

Increase of debt principal for paid-in-kind interest — 2,791

Application of Secured Loan against the 2020 Share Purchase Agreement (“SPA”) purchase price — 26,182

Equipment acquired under capital lease — 9

See notes to consolidated financial statements

BLACKSKY TECHNOLOGY INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2021

Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr.

Jonathan Cohen will not be responsible to the extent of any liability for such

third-party claims.

The Company will seek to reduce the possibility that Mr.

Jonathan Cohen will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses

or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is

reasonably possible that the virus could have a negative effect on the Companys financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 2LIQUIDITY AND

GOING CONCERN

As of December 31, 2020, the Company had $399,516 in its operating bank accounts, $318,041,728 in marketable

securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its Public Shares in connection therewith and a working capital deficit of $1,627,973, which excludes franchise taxes payable of $40,050 and

prepaid income taxes of $255,364.

As of December 31, 2020, approximately $1,792,000 of the amount on deposit in the Trust Account represented interest income and unrealized gains, which is available to pay the Companys tax obligations, if

Until the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying

and evaluating target businesses, performing due diligence on prospective target businesses, traveling to and from the offices, plants or similar location of prospective target businesses or their representatives or owners, reviewing corporate

documents and material agreements of prospective target businesses and structuring, negotiating and completing a Business Combination.

The Company will need to raise additional capital through loans or additional investments from its Sponsor, an affiliate of the Sponsor, or

its officers or directors.

The Companys officers, directors and Sponsor, or their affiliates, may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole

discretion, to meet the Companys working capital needs.

Accordingly, the Company may not be able to obtain additional financing.

If the Company is unable to raise additional capital, it may be required to take additional measures to conserve

liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

The Company cannot provide any assurance that new financing will be

available to it on commercially acceptable terms, if at all.

These conditions raise substantial doubt about the Companys ability to continue as a going concern through November 5, 2021, which is the date the Company is required to cease

all operations except for the purpose of winding up if it has not completed a Business Combination.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities

that might be necessary should the Company be unable to continue as a going concern.

NOTE 3SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the SEC.

Organization and Business

On September 9, 2021, Osprey Technology Acquisition Corp.

(“Osprey”) consummated the previously announced merger (the “Merger”) with BlackSky Holdings, Inc.

(f/k/a Spaceflight Industries, Inc.), a Delaware corporation (“Legacy BlackSky”), pursuant to the agreement and plan of merger, dated February 17, 2021, by and among Osprey, Osprey Technology Merger Sub, Inc., a direct, wholly owned subsidiary of Osprey, and Legacy BlackSky.

Immediately following the Merger, Osprey changed its name to BlackSky Technology Inc.

(“BlackSky” or the “Company”).

Legacy BlackSky survived the Merger and is now a wholly owned subsidiary of BlackSky.

As a special purpose acquisition corporation, Osprey had no pre-Merger operations other than to identify and consummate a merger.

Therefore, BlackSky’s operations post-Merger are attributable to those of Legacy BlackSky and its subsidiaries, and references to “BlackSky” or the “Company” should be read to include BlackSky’s wholly owned subsidiaries.

References in this report to Company actions, assets/liabilities, or contracts may be references to actions taken, assets/liabilities held, or contracts entered into by one or more current Company subsidiaries;

however, the Company has distinguished between actions taken by Legacy BlackSky or Osprey for certain time based, historical transactions.

BlackSky, headquartered in Herndon, Virginia, is a leading provider of real-time geospatial intelligence.

The Company owns and operates one of the industry's leading high-performance low earth orbit small satellite constellations.

Our constellation is optimized to cost-efficiently capture imagery at high frequencies where and when our customers need it.

BlackSky’s Spectra AI software platform processes millions of observations a day from our proprietary satellite constellation and from multiple external data sources including imaging, radar and radio frequency satellites, environmental sensors, asset tracking sensors, Internet of Things (“IoT”) connected devices, internet-enabled narrative sources, and a variety of geotemporal data feeds.

Spectra AI employs advanced, proprietary AI and machine learning (“ML”) techniques to process, analyze, and transform these data feeds into alerts, information, and insights.

Customers can access Spectra AI’s data and analytics through easy-to-use web services or through platform application programming interfaces.

As of December 31, 2021, BlackSky had 12 satellites in commercial operation.

BlackSky has two primary operating subsidiaries, BlackSky Global LLC and BlackSky Geospatial Solutions, Inc.

The Company also owns fifty percent of LeoStella LLC (“LeoStella”), its joint venture with Thales Alenia Space US Investment LLC (“Thales”).

LeoStella is a vertically-integrated small satellite design and manufacturer based in Tukwila, Washington, from which the Company procures satellites to operate its business.

The Company accounts for LeoStella and X-Bow Launch Systems Inc.

(“X-Bow”), a space technology company specializing in additive manufacturing of solid rocket motors of which BlackSky owns approximately 17.5 %, as equity method investments (Note 7)

Prior to the Merger, Legacy BlackSky owned a division called Spaceflight, Inc.

(“Spaceflight”), a Delaware corporation based in Seattle, Washington, that provided satellite launch brokerage services to customers.

On June 12, 2020, BlackSky sold 100 % of its equity interests in Spaceflight to M&Y Space Co.

(“M&Y Space”) for a final purchase price of $ 31.6 million.

Spaceflight’s financial results were material to the Company’s financial results and, as such, are reported as discontinued operations in the consolidated statements of operations and comprehensive loss (Note 8).

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Preparation

The Company has prepared its consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”) and the instructions to Form 10-K and Article 8 of Regulation S-X of the Securities and Exchange Commission (the "SEC").

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

In addition, the consolidated financial statements include the Company’s proportionate share of the earnings or losses of its

equity method investments and a corresponding increase or decrease to its investment, with recorded losses limited to the carrying value of the Company’s investment.

All intercompany transactions and balances have been eliminated upon consolidation.

For accounting purposes, the Merger constituted a reverse recapitalization (the “Reverse Recapitalization”), with Osprey treated as the “acquired” company and Legacy BlackSky as the “acquirer”.

The Reverse Recapitalization was treated as the equivalent of Legacy BlackSky issuing equity for the net assets of Osprey, accompanied by a recapitalization, rather than a business combination, which would have included goodwill and intangible assets.

Legacy BlackSky was considered the acquirer based on the facts and circumstances, including the following factors evaluated at the time of the Merger:

• Legacy BlackSky’s former stockholders held a majority ownership interest in BlackSky;

• Legacy BlackSky’s senior management team comprise senior management of BlackSky;

• Legacy BlackSky was able to designate all but one director to BlackSky’s initial board;

• Legacy BlackSky was the larger of the companies based on historical operating activity and employee base;

• Legacy BlackSky’s operations comprise the ongoing operations of BlackSky.

Accordingly, all historical financial information presented in these consolidated financial statements represents the accounts of Legacy BlackSky and its wholly owned subsidiaries “as if” Legacy BlackSky is the predecessor and legal successor.

The historical operations of Legacy BlackSky are deemed to be those of the Company.

Thus, the financial statements included in this report reflect (i) the historical operating results of Legacy BlackSky prior to the Merger;

(ii) the combined results of Osprey and Legacy BlackSky following the Merger;

(iii) the assets and liabilities of Legacy BlackSky at their historical carrying value;

and (iv) the Company’s equity structure for all periods presented.

The Company’s consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, including derivative financial instruments, which are stated at fair value.

The Company also incurred debt, which was also stated at fair value and subsequently converted to equity in the Merger.

Unless otherwise indicated, amounts presented in the Notes pertain to the Company’s continuing operations.

Emerging Growth Company

Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from

various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation

requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on

executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective

or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and

comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means

that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

companies adopt the new or revised standard.

This may make comparison of the Companys financial statements with another public company, which is neither an emerging growth company nor an

emerging growth company, and which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

The JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies.

The Company has elected to use this extended transition period to enable it to defer the adoption of new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided for by the JOBS Act.

As a result, the Company’s financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

In addition, the Company intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set forth in the JOBS Act, if, as an EGC, the Company intends to rely on such exemptions, the Company is not required to, among other things:

(i) provide an auditor’s attestation report on its system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

(ii) provide certain of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd Frank Wall Street Reform and Consumer Protection Act;

(iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis);

and (iv) disclose certain executive

compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

Use of Estimates

The preparation

of the financial statements in conformity with GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date

of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires

management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in

formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingencies at the reporting date, and the reported amounts of revenue and expenses during the reporting period.

These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future.

Actual results could materially differ from these estimates.

Significant estimates made by the Company relate to revenue and associated cost recognition, the collectability of accounts receivable, the recoverability and useful lives of property and equipment, the valuation of equity warrants and warrant liabilities, fair value estimates, the recoverability of goodwill and intangible assets, the provision for income taxes, and stock-based compensation.

Cash and Cash Equivalents

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company did not have any cash equivalents as of December 31, 2020 and 2019.

Marketable Securities Held in Trust Account

At December 31, 2020 and 2019, the assets held in the Trust Account were substantially held in U.S.

Treasury Bills.

Class A common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards

Codification (ASC) Topic 480 Distinguishing Liabilities from Equity. Shares Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value.

Conditionally

redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control) is

classified as temporary equity.

At all other times, common stock is classified as stockholders equity.

The Companys Class A common stock features certain redemption rights that are considered to be outside of the Companys

control and subject to occurrence of uncertain future events.

Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders equity section of the

Companys balance sheets.

The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes. Deferred tax assets

and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and

liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax

rates is recognized in income in the period that included the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax

positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020 and 2019.

The Company is currently not aware of any issues under review

that could result in significant payments, accruals or material deviation from its position.

The Company may be subject to potential

examination by federal, state and city taxing authorities in the areas of income taxes.

These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with

federal, state and city tax laws.

The Company is subject to income tax examinations by major taxing authorities since inception.

The Companys management does not expect that the total amount of unrecognized tax benefits will materially change

over the next twelve months.

On March 27, 2020, the CARES Act was enacted in response to

COVID-19 pandemic.

Under ASC 740, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted.

The CARES Act made various tax law changes including among

other things (i) increasing the limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended (the IRC) for 2019 and 2020 to permit additional expensing of interest (ii) enacting a technical correction

so that qualified improvement property can be

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

immediately expensed under IRC Section 168(k), (iii) making modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019,

and 2020 to be carried back to the five preceding taxable years in order to generate a refund of previously paid income taxes and (iv) enhancing the recoverability of alternative minimum tax credits.

Given the Companys full valuation

allowance position and capitalization of all costs, the CARES Act did not have an impact on the financial statements.

Net Income (Loss) Per Common

Net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during

the period, excluding shares of common stock subject to forfeiture.

The Company has not considered the effect of the warrants sold in the Initial Public Offering and private placement to purchase an aggregate of 24,137,500 shares in the calculation

of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

The Companys statement of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner

similar to the two-class method of income (loss) per share.

Net income (loss) per common share, basic and diluted, for common stock subject to possible redemption is calculated by dividing the proportionate

share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of common stock subject to possible redemption outstanding since original issuance.

Net income (loss) per share, basic and diluted, for non-redeemable common stock is calculated by dividing the net

income (loss), adjusted for income or loss on marketable securities attributable to common stock subject to possible redemption, by the weighted average number of non-redeemable common stock outstanding for

Non-redeemable common stock includes Founder Shares and

non-redeemable shares of common stock as these shares do not have any redemption features.

Non-redeemable common stock participates in the income or loss on marketable

securities based on non-redeemable shares proportionate interest.

The following table reflects the

calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts):

Class A Common stock subject to possible redemption

Earnings allocable to Class A common stock subject to possible redemption

Interest earned on marketable securities held in Trust Account

Unrealized gain (loss) on marketable securities held in Trust Account

interest available to be withdrawn for payment of taxes

Net income attributable to Class A common stock subject to possible redemption

Weighted Average Class A Common stock subject to possible redemption

Basic and diluted weighted average shares outstanding, Class A common stock subject to

possible redemption

Basic and diluted net income per share, Class A common stock subject to possible

Non-Redeemable Common Stock

Net Loss minus Net Earnings

Net Income (loss)

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

Net income allocable to Class A Common stock subject to possible redemption

Non-Redeemable Net Loss

Weighted Average Non-Redeemable common

Basic and diluted weighted average shares outstanding,

Non-redeemable common stock

Basic and diluted net loss per share, Non-redeemable

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial

institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000.

The Company has not experienced losses on these accounts.

Cash and cash equivalents are comprised of cash in banks and highly liquid investments with original maturities of three months or less.

Restricted Cash

The Company classifies cash as restricted when the cash is unavailable for withdrawal or usage for general operations.

Restricted cash represents certificates of deposits held by a bank as a compensating balance for letters of credit that facilitate certain contracts with customers and cash collateral for leasing arrangements.

Accounts Receivable - net

Accounts receivable are customer obligations due to the Company under normal trade terms.

The majority of the Company's sales are with U.S.

federal government and agencies, which limits uncollectible accounts receivable.

The Company performs continuing credit evaluations on each customer’s financial condition and reviews accounts receivable on a periodic basis to determine if any accounts receivable will potentially be uncollectible.

The Company reserves for any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts.

After all attempts to collect an accounts receivable balance have failed, the accounts receivable balance is written off against the allowance for doubtful accounts.

The Company assessed all existing accounts receivable and recorded an allowance for doubtful accounts of $ 39 thousand and $ 0 as of December 31, 2021 and 2020, respectively.

Prepaid Expenses and Other Current Assets

Prepaid expenses are advance payments made in the ordinary course of business and are amortized on a straight-line basis over the period of benefit.

Other current assets consist primarily of non-trade receivables.

Property and Equipment - net

Property and equipment are stated at cost, less accumulated depreciation.

Depreciation expense is recognized in the consolidated statements of operations and comprehensive loss on a straight-line basis over the estimated useful life of the related asset to its residual value.

The estimated useful lives are as follows:

Estimated useful lives-years

Computer equipment and software 3

Site and other equipment 3 - 5

Ground station equipment 2

Office furniture and fixtures 5

Leasehold improvements shorter of useful life or remaining lease term

Capitalized satellite costs include material costs, labor costs incurred from the start of the pre-acquisition stage through the construction stage, insurance, and the costs incurred to launch the satellite into orbit for its intended use.

Labor costs incurred prior to and after the pre-acquisition and construction stages are charged to expense.

Once the satellite has reached orbit and makes contact with the Company's network, the Company commences depreciation.

The designated useful life of the Company's satellites is estimated to be three years , and depreciation is recognized using the straight-line method.

Subsequent to launch, the Company's satellites must meet certain performance and operational criteria to be deemed commercially viable.

If the criteria are not met, the Company assesses the satellite for impairment.

The Company capitalizes internal and external costs incurred to develop and implement software, which consist primarily of costs related to design, coding, and testing.

When the software is ready for its intended use, capitalization ceases and such costs are amortized on a straight-line basis over the estimated life to either depreciation or cost of sales depending on the nature of the software.

We regularly review our capitalized software projects for impairment.

Goodwill, Intangible Assets - net, and Other Long-Lived Assets

Goodwill represents the excess of purchase price over the fair value of the identifiable assets acquired less the liabilities assumed in the acquisition of a business.

Goodwill is tested annually for impairment at October 1, or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired.

Goodwill is tested for impairment at the reporting unit level by first taking a qualitative approach to determine whether it is more likely than not that a reporting unit's fair value is less than its carrying value.

If the Company determines that it is more likely than not that a reporting unit's fair value is less than its carrying amount, the Company compares the reporting unit’s carrying amount to the fair value of the reporting unit.

If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

In testing for goodwill impairment, the Company may utilize a mix of income and market approaches that include the use of comparable multiples of publicly traded companies whose services are comparable to ours.

The Company continuously evaluates whether indicators of impairment exist to determine whether it is necessary to perform a quantitative goodwill impairment test.

A significant amount of judgment is involved in determining if an indicator of impairment has occurred.

Such indicators may include (a) a significant decline in the Company's common stock value;

(b) a significant decline in the Company's expected future cash flows;

(d) unanticipated competition;

(e) the testing for recoverability of a significant asset group within a reporting unit;

or (f) slower growth rates.

Any adverse change in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on the consolidated financial statements.

Long-Lived Assets and Finite-Lived Intangible Assets

The Company reviews long-lived assets, including finite-lived intangible assets, property and equipment, satellite procurement work in process and other long-term assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable.

Significant judgments in this area involve determining whether a triggering event has occurred and determining the future cash flows for assets involved.

In conducting this analysis, the Company compares the undiscounted cash flows expected to be generated from the long-lived assets (or asset group) to the related net book values.

If the undiscounted cash flows exceed the net book value, the long-lived assets are considered not to be impaired.

If the net book value exceeds the undiscounted cash flows, an impairment charge is measured and recognized based upon the difference between the carrying value of long-lived assets (or asset group) and their fair value.

Intangible assets subject to amortization include customer backlog and relationships, distribution agreements, and technology.

Such intangible assets, excluding customer-related intangibles, are amortized on a straight-line basis over their estimated useful lives.

Customer-related intangible assets are amortized on either a straight-line or accelerated basis, depending upon the pattern in which the economic benefits of the intangible asset are utilized.

The estimated useful lives of the Company's finite-lived intangible assets are as follows:

Estimated useful lives-years

Distribution agreements 2

Customer backlog and relationships 1 - 10

Technology 3 - 5

Equity Method Investments

Investments where the Company has the ability to exercise significant influence, but not control, are accounted for under the equity method of accounting and are included in investment in equity method investees on the Company's consolidated balance sheets.

Significant influence typically exists if the Company has a 20% to 50% ownership interest in the investee or retains a voting seat on the investee's board of directors.

Under this method of accounting, the Company's share of the net earnings or losses of the investee are included in the Company's consolidated statements of operations and comprehensive loss.

Equity method investments are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

Intra-entity profits arising from the sale of assets from the equity method investments to the Company are eliminated and deferred if those assets are still held by the Company at the end of the reporting period.

The intra-entity profits will be recognized as the assets are consumed.

Satellite Procurement Work in Process

Satellite procurement work in process primarily represents deposits paid to (a) LeoStella for the progress payments associated with the engineering, long lead procurement of satellite components, and manufacturing of the Company's satellites and (b) launch service vendors for the costs associated with launching the Company's satellites.

Satellite procurement work in process capitalized, but not yet paid, is recognized as the Company has the rights to the in-process assets that LeoStella is engineering on the Company's behalf or a refund of amounts paid to date, less certain costs.

At launch, these costs, and other costs incurred to put a satellite into service, are aggregated and reclassified as property and equipment, subject to depreciation (Note 9).

Contingent Liabilities

The Company may become involved in litigation or other financial claims in the normal course of its business operations.

The Company periodically analyzes currently available information relating to these claims, assesses the probability of loss, and provides a range of possible outcomes when it believes that sufficient and appropriate information is available.

The Company accrues a liability for those contingencies where the occurrence of a loss is probable and the amount can be reasonably estimated.

If a loss is probable and a range of amounts can be reasonably estimated but no amount within the range is a better estimate than any other amount in the range, then the minimum of the range is accrued.

We do not accrue a liability when the likelihood that the liability has been incurred is believed to be probable but the amount cannot be reasonably estimated or when the likelihood that a liability has been incurred is believed to be only reasonably possible or remote.

For contingencies where an unfavorable outcome is reasonably possible and the impact could potentially be material, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.

Debt Issuance Costs and Debt Discount

Debt issuance costs are capitalized and amortized to interest expense using the effective interest method over the life of the related debt.

In prior years, a debt discount was recorded upon the issuance of detachable warrants, which were granted in conjunction with the issuance of debt and calculated at fair market value.

The debt discount was amortized to interest expense using the effective interest method over the life of the related debt.

Short-term and long-term debt are presented net of the unamortized debt issuance costs and debt discount in the consolidated balance sheets.

Fair Value of Financial Instruments

The fair value of the Companys assets and liabilities, which qualify as financial instruments under ASC Topic 820, Fair Value

Measurement, approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material

effect on the Companys financial statements.

NOTE 4INITIAL PUBLIC OFFERING

Pursuant to the Initial Public Offering, the Company sold 31,625,000 Units, which includes the full exercise by the underwriters of their

option to purchase an additional 4,125,000 Units, at a purchase price of $10.00 per Unit.

Each Unit consists of one share of Class A common stock and one-half of one warrant (Public Warrant).

Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a purchase price of $11.50 per share, subject to adjustment (see Note 8).

NOTE 5PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering and the exercise of underwriters over-allotment option, the Sponsor

purchased an aggregate of 8,325,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $8,325,000.

Each Private Placement Warrant is exercisable to purchase one share of Class A

common stock at an exercise price of $11.50.

The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account.

If the Company does not complete a Business Combination within the

Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and all underlying securities will expire worthless.

NOTE 6RELATED PARTY TRANSACTIONS

In June 2018, the Sponsor purchased 125,000 shares (the Founder Shares) of the Companys Class B

common stock for an aggregate price of $25,000.

In September 2018, the Company effectuated a 69-for-1 forward stock split of its Class B common stock, resulting in

an aggregate of 8,625,000 Founder Shares outstanding, of which an aggregate of up to 1,125,000 shares were subject to forfeiture to the extent the underwriters over-allotment option was not exercised in full or in part.

As adjusted for the 1.1

for 1 stock dividend in October 2019 (see below), such amounts totaled 9,487,500 Founder Shares outstanding, of which 1,237,500 shares were subject to forfeiture.

In April 2019, the Sponsor contributed back to the Company, for no consideration,

1,581,250 Founder Shares (as adjusted for the 1.1 for 1 stock dividend in October 2019), resulting in an aggregate of 7,187,500 Founder Shares outstanding, of which an aggregate of up to 937,500 shares were subject to forfeiture.

In October 2019,

the Company effected a 1.1 for 1 stock dividend for each share of Class B common stock outstanding, resulting in an aggregate of 7,906,250 Founder Shares outstanding, of which an aggregate of up to 1,031,250 shares were subject to forfeiture by

the Sponsor to the extent that the underwriters over-allotment option was not exercised in full or in part so that the Sponsor will own, on

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

an as-converted basis, 20% of the Companys issued and outstanding shares after the Initial Public Offering.

The Founder Shares will automatically

convert into Class A common stock upon the consummation of a Business Combination on a one-for-one basis, subject to adjustments as described in Note 8.

connection with the underwriters exercise of the over-allotment option in full, 1,031,250 Founder Shares are no longer subject to forfeiture.

The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to

(i) one year after the completion of a Business Combination or (ii) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Companys

stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Notwithstanding the foregoing, if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for

stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, the

Founder Shares will be released from the lock-up.

Administrative Support Agreement

The Company entered into an agreement whereby, commencing on November 5, 2019, the Company agreed to pay the Sponsor a total of $10,000

per month for office space, utilities and secretarial and administrative support.

Upon completion of the Business Combination or the Companys liquidation, the Company will cease paying these monthly fees.

For the year ended December 31,

2020 and 2019, the Company incurred and paid $120,000 and $20,000 in fees for these services, respectively.

Promissory NoteRelated Party

On September 12, 2018, the Company issued an unsecured promissory note to the Sponsor (the Promissory Note),

pursuant to which the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering.

The Promissory Note was non-interest bearing and payable on the

earlier of December 31, 2019 or the completion of the Initial Public Offering.

The outstanding balance under the Promissory Note in the amount of $224,992 was repaid in full on November 5, 2019.

Related Party Loans

finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or the Companys officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, as

may be required (Working Capital Loans).

Each Working Capital Loan would be evidenced by a promissory note.

The Working Capital Loans would either be paid upon consummation of a Business Combination, without interest, or, at the

holders discretion, up to $1,500,000 of the Working Capital Loans may be converted into warrants at a price of $1.00 per warrant.

The warrants would be identical to the Private Placement Warrants.

In the event that a Business Combination does

not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

NOTE 7COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on October 31, 2019, the Sponsor and holders of warrants issued upon

conversion of Working Capital Loans, if any, will have registration rights to require the Company to register a sale of any of its securities held by them (in the case of the Founder Shares, only after conversion to Class A common stock).

holders will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act.

In addition, these holders will have piggy-back registration

rights to include such securities in other registration statements filed by the Company and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights

agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period.

The Company will bear the

expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriters a 45-day option to purchase up to 4,125,000 additional Units to

cover over-allotments, if any, at the Initial Public Offering price, less the underwriting discounts and commissions.

On November 13, 2019, the underwriters exercised their over-allotment option in full for an additional 4,125,000 Units.

The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $6,325,000 in the aggregate.

The underwriters are entitled to a

deferred fee of $0.35 per Unit, or $11,068,750 in the aggregate.

The deferred fee will be forfeited by the underwriters solely in the event that the Company fails to complete a Business Combination, subject to the terms of the underwriting

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company accounts for certain assets and liabilities at fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The process for analyzing the fair value measurement of certain financial instruments on a recurring, or non-recurring, basis includes significant judgment and estimates of inputs including, but not limited to, share price, volatility, discount for lack of marketability, application of an appropriate discount rate, and probability of liquidating events.

The Company utilizes the market valuation methodology and specific option pricing methodology, such as the Monte Carlo simulation, method to value the more complex financial instruments and the Black-Scholes option-pricing model to value standard common stock warrants and common stock options.

The framework for measuring fair value specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's assumptions.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 Inputs.

Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 Inputs.

Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 Inputs.

Inputs are unobservable inputs which reflect the Company’s own assumptions on what assumptions market participants would use in pricing the asset or liability based on the best available information.

Revenue Recognition

The Company generates revenue from the sale of imagery and software analytical services and engineering and systems integration.

Imagery and software analytical services revenue includes imagery, data, software, and

analytics, including professional services.

This revenue is recognized from services rendered under cost-plus-fixed-fee contracts, firm fixed price contracts, or on a time and materials basis.

Engineering and systems integration revenue is from fixed price long-term construction contracts.

The Company adopted the provisions of the new revenue recognition standard, Accounting Standards Update No.

2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASC 606”), for the fiscal year beginning January 1, 2020 using the modified retrospective adoption method for the contracts that were not completed at the date of initial application.

Concurrent with the adoption of the new standard, the Company has updated its revenue recognition policy in accordance with the five-step model set forth under ASC 606.

The Company generates revenue primarily through contracts with government agencies.

Most of the fixed price contracts include multiple promises, which are generally separated as distinct performance obligations.

The Company allocates the transaction price to each performance obligation based on the relative standalone selling prices using observable sales transactions where applicable.

Identifying the performance obligations contained in a contract, determining transaction price, allocating transaction price, and determining when performance obligations are satisfied can require the application of significant judgment, as further discussed below.

Identifying the performance obligations in a contract.

The Company's contracts typically include multiple promises which are accounted for as separate performance obligations.

Significant judgment is required in determining performance obligations, and these decisions could change the amount of revenue and profit or loss recorded in each period.

Classification of Revenue.

Revenue is classified in the consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations.

Determination of and Allocation of Transaction Price.

Each customer purchase order sets forth the transaction price under the arrangement.

For contracts with multiple performance obligations, the Company evaluates whether the stated selling prices represent their standalone selling prices.

When it is necessary to allocate the transaction price to multiple performance obligations, the expected cost plus a reasonable profit margin is typically used to estimate the standalone selling price of each product or service.

The Company also sells standard products or services as a percentage markup of an underlying baseline product.

Determination of when Performance Obligations are Satisfied.

Revenue from imagery is recognized at the point-in-time the customer receives access to the imagery, or ratably over the subscription period.

In certain firm fixed price contracts that contain imagery where it is probable the Company will receive the full contract amount or the customer prepays for future services, which may expire unused, the Company’s accounting policy for unexercised performance obligations is to recognize the estimated breakage amount as revenue over time in proportion to the historical pattern of rights exercised by the customer.

The unrecognized amount is recorded within contract liabilities on the Company’s consolidated balance sheets.

Revenue from data, software, and analytics, including professional service solutions, is recognized from the rendering of services over time on a cost-plus-fixed-fee, firm fixed price, or a time and materials basis.

Engineering and systems integration revenue is primarily generated from fixed price long-term engineering and integration construction contracts.

Due to the long-term nature of these contracts, the Company generally recognizes revenue over time using a cost-to-cost measure of progress because it best depicts the transfer of control to the customer as the Company incurs costs on the contracts.

Under the percentage-of-completion cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs to complete the performance obligation(s) ("EAC").

The estimation of total estimated costs at completion is subject to many variables and requires judgment.

The Company recognizes changes in contract estimates on a cumulative catch-up basis in the period in which the changes are identified.

If at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, the total loss is recognized as and when known.

Revenue is measured at the fair value of consideration received or receivable and net of discounts.

The Company applies a policy election to exclude transaction taxes collected from customer sales when the tax is both imposed on and concurrent with a specific revenue-producing transaction.

The Company estimates any

variable consideration, and whether the transaction price is constrained, upon execution of each contract.

The Company did not have any active contracts with significant variable consideration as of December 31, 2021.

The estimation of total revenue and costs at completion for fixed price projects is subject to many variables and requires judgment.

The Company typically recognizes changes in contract estimates on a cumulative catch-up basis in the period in which the changes are identified.

Such changes in contract estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period.

Changes in contract estimates may also result in the reversal of previously recognized revenue, if the current estimate differs from the previous estimate.

If at any time, the estimate of profitability for a performance obligation indicates a probable anticipated loss, the Company recognizes the total loss for the performance obligation in the period it is identified.

Changes in estimates related to contracts accounted for using the cost-to-cost measure of progress are recognized in the period in which such changes are made for the inception-to-date effect of the changes.

For the year ended December 31, 2021, the Company recognized $ 4.6 million of unfavorable cumulative adjustments to revenue reflecting estimated cost increases on two engineering and systems integration contracts (Note 5).

During the year ended December 31, 2020, the Company’s recognized $ 4.0 million of unfavorable cumulative adjustments to revenue reflecting estimated cost increases on the same contracts.

During the years ended December 31, 2021 and 2020, there was no revenue recognized from performance obligations satisfied in previous periods.

Imagery & Software Analytical Services

Imagery services include imagery delivered from the Company’s satellites in orbit via its Spectra AI platform and in limited cases directly uploaded to certain customers.

Imagery performance obligations are recognized as revenue at the point-in-time when the Company delivers images to the Spectra AI platform or, in limited circumstances, ratably over the subscription period when the customer has a right to access the Spectra AI platform for unlimited images.

In certain firm fixed price contracts that contain imagery where it is probable the Company will receive the full contract amount or the customer prepays for future services that may not be completely satisfied, the Company’s accounting policy for unexercised performance obligations is to recognize the estimated breakage amount as revenue over time in proportion to the historical pattern of rights exercised by the customer.

We recognized $ 1.9 million and $ 0.0 million of estimate breakage in the years ended December 31, 2021 and 2020, respectively.

The unrecognized amount is recorded within contract liabilities on the Company’s consolidated balance sheets.

Data, Software, and Analytics

The Company leverages proprietary artificial intelligence ("AI") and machine learning ("ML") algorithms to analyze data coming from both the Company’s proprietary sensor network and third-party space and terrestrial sources to provide hard-to-get data, insights, and analytics for customers.

The Company continues to integrate and enhance its offerings by performing contract development, while retaining the intellectual property rights.

The Company also provides technology enabled professional service solutions to support customer-specific software development requests, integration, testing, and training.

The Company uses system engineers to support customer efforts to manage mass quantities of data.

The Company also offers professional service solutions related to object detection, site monitoring, and enhanced analytics, through which the Company can detect key objects in critical locations such as ports, airports, and construction sites;

monitor changes at, damages to or other anomalies in key infrastructure;

and analyze stockpiles or other critical inventory .

Imagery and software analytical services revenue from data, software, and analytics contracts is recognized from the rendering of services over time on a cost-plus-fixed-fee, firm fixed price, or time and materials basis as well as, at the point-in-time the customer receives access to an analytic product.

For firm fixed price contracts, the Company recognizes revenue using an EAC.

A performance obligation’s EAC includes all direct costs such as labor, materials, subcontract costs, overhead and an allocatable portion of general and administrative costs.

In addition, an EAC of a performance obligation includes future losses estimated to be incurred on contracts, as and when known.

For contracts structured as cost-plus-fixed-fee or on a time and materials basis, the Company generally recognizes revenue based on the right-to-invoice when practically expedient, as the Company is

contractually able to invoice the customer based on the control transferred to the customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

Engineering and Systems Integration

The Company develops and delivers advanced launch vehicle, satellite and payload systems for a limited number of customers that leverage the Company’s capabilities in mission systems engineering and operations, ground station operations, and software and systems development.

These systems are sold to government customers under fixed price contracts.

The Company generally recognizes revenue over time using the cost-to-cost method to measure progress, pursuant to which the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total EAC.

Imagery and Software Analytical Service and Engineering and Systems Integration Costs

Imagery and software analytical service costs primarily include internal aerospace and geospatial software development labor, third-party data and imagery, internal labor to support the ground stations and space operations, and cloud computing and hosting services.

The Company recognizes stock-based compensation expense for those employees whose work supports the imagery and software analytical service costs we provide to customers, under imagery and software analytical service costs, excluding depreciation and amortization.

For those employees who provide engineering and systems support to customers, the stock-based compensation expense will be classified under engineering and systems integration costs.

For the remaining employees who generally support the Company and its business, the stock-based compensation expense is recognized under selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.

Engineering and systems integration costs primarily include the cost of internal labor for product design, integration and engineering in support of long-term development contracts for launch vehicle, satellite and payload systems.

The Company also incurs subcontract direct materials and external labor costs to build and test specific components such as the communications system, payload demands and sensor integration.

Costs are expensed as incurred except for incremental costs to obtain or fulfill a contract, which are capitalized and amortized on a systematic basis consistent with the transfer of goods and services.

Fringe costs incurred within or allocated to the Company’s customers are classified as overhead (included in imagery and software analytical services and engineering and systems integration costs based on the nature of the contract).

The Company does not have any contracts that are subject to U.S.

Government Cost Accounting Standards.

Research and Development Costs

The Company primarily incurs research and development costs, which are expensed as incurred, for data science modeling and algorithm development related to its geospatial analytical platform.

In addition, the Company recognizes costs incurred before the technological feasibility stage for internal projects, such as aerospace and other satellite developments, as research and development costs.

Advertising Costs

Advertising costs are expenses associated with promoting the Company’s services and products.

Advertising costs are expensed as incurred and included in selling, general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss.

For the years ended December 31, 2021 and 2020, advertising costs were $ 1.1 million and $ 0.5 million, respectively.

The Company accounts for income taxes following the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

Under this method, deferred tax assets and liabilities are determined based on differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted

tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enacted date.

The Company measures deferred tax assets based on the amount that the Company believes is more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including reversals of existing taxable temporary differences, tax-planning strategies, and historical results of recent operations.

In evaluating the objective evidence that historical results provide, the Company considers three trailing years of cumulative operating income or loss.

Valuation allowances are provided, if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

A full valuation allowance was recorded against the deferred tax assets as of December 31, 2021 and 2020.

Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and the Company's effective tax rate in the future.

The Company believes that its tax positions comply with applicable tax law.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The Company's income tax expense or benefit, liability and/or receivable, deferred tax assets and liabilities, and liabilities for uncertain tax benefits reflect management’s best assessment of estimated current and future taxes to be paid or received.

Stock-Based Compensation

Restricted Stock Awards and Restricted Stock Units

The estimated fair value of RSAs and RSUs are measured based on the grant date fair value of the Company’s Class A common stock.

In order to determine the fair value of its Class A common stock on the date of grant and prior to the Merger, Legacy BlackSky historically performed a valuation analysis using a combination of market and income approaches.

Subsequent to the Merger, the Company uses the New York Stock Exchange (“NYSE”) trading price as the fair value of the Class A common stock for valuation purposes.

For all awards for which vesting is only subject to a service condition, including those subject to graded vesting, the Company has elected to use the straight-line method to recognize the fair value as compensation cost over the requisite service period.

Certain of the Company’s outstanding RSUs had performance vesting conditions that were triggered upon the consummation of the Merger.

Therefore, since the performance conditions attributable to these RSUs had been met, the Company commenced recording the associated compensation expense, inclusive of a catch-up amount for the service period between their grant date and satisfaction of the performance condition, as of the closing of the Merger.

The fair value of the RSUs that include a performance condition is recognized as compensation expense over the requisite service period using the accelerated attribution method, which accounts for RSUs with discrete vesting dates as if they were a separate award.

Expense related to stock-based payments is classified in the consolidated statements of operations and comprehensive loss based upon employees’ cash compensation.

The Company recognized stock-based compensation expense in imagery and software analytical service costs, excluding depreciation and amortization, and selling, general and administrative expense in the consolidated statements of operations and comprehensive loss.

Stock Options

The Company uses the Black-Scholes option pricing model to value all options and the straight-line method to recognize the fair value as compensation cost over the requisite service period.

The fair value of each option granted was estimated as of the date of grant.

The Company granted options to a homogenous pool of executive employees during the year ended December 31, 2021 under the 2021 Plan.

The Company did not grant options in the year ended December 31, 2020.

The Company's uses the following inputs when applying the Black-Scholes option pricing model:

Expected Dividend Yield .

The Black-Scholes valuation model requires an expected dividend yield as an input.

The dividend yield is based on historical experience and expected future changes.

The Company currently has no plans to pay dividends on its Class A common stock.

Expected Volatility .

The Company does not have enough historical share price history, therefore, the expected volatility was estimated based upon the historical share price volatility of comparable publicly traded companies.

Risk-free Interest Rate .

The yield on actively traded non-inflation indexed U.S.

Treasury notes was used to extrapolate an average risk-free interest rate based on the expected term of the underlying grants.

Expected Term.

For options granted in 2021, since there is not a history of option exercises as a public company, the Company considered the option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term.

For options granted prior to 2021, the expected term was the estimated duration to a liquidation event based on a weighted average consideration of the most likely exit prospects for that stage of development.

Legacy BlackSky was privately funded and, accordingly, the lack of marketability was factored into the expected term of options granted.

The Company will review its estimate in the future and adjust it, if necessary, due to changes in the Company’s historical exercises.

The most significant assumption used to determine the fair value of the Legacy BlackSky equity-based awards was the estimated fair value of the Class A common stock on the grant date.

Subsequent to the Merger, the Company uses the NYSE trading price as the fair value of the Class A common stock for valuation purposes.

Legacy BlackSky historically adjusted the exercise price of certain outstanding stock options.

For each award with an adjusted exercise price, Legacy BlackSky calculated the incremental fair value, which was the excess of the fair value of the modified award over the fair value of the original award immediately before the modification.

The incremental fair value was recognized as stock-based compensation expense immediately to the extent that the modified stock option already had vested, and for stock options that were not yet vested, the incremental fair value has been recognized as stock-based compensation expense over the remaining vesting period.

Segment Information

The Company’s Chief Operating Decision Maker (as defined under GAAP), who is the Company’s Chief Executive Officer, has determined the allocation of resources and assessed performance based upon the consolidated results of the Company.

Accordingly, the Company is currently deemed to be comprised of only one operating segment and one reportable segment.

This segment, which comprises the continuing operations of the Company’s single operating and reportable segment, provides geospatial intelligence, imagery and related data analytic products and services, and mission systems that include the development, integration, and operation of satellite and ground systems to government and commercial customers.

Debt - Application of the Fair Value Option

During the year ended December 31, 2021, the Company issued three tranches of subordinated, unsecured convertible promissory notes (collectively, the “Bridge Notes”) (refer to the discussion included in Note 15).

The Company elected to account for the Bridge Notes under the fair value option.

In accordance with the application of the fair value option, the Company (i) recorded the Bridge Notes at their fair values as of the dates of issuance and (ii) remeasured the fair value of the Bridge Notes at each balance sheet date and at the conversion date, which was the date of the Merger.

Both the initial and subsequent measurement of the fair value of the Bridge Notes contemplated all of their terms and all of the notes’ features.

Accordingly, when the fair value option was applied, the Company did not separately evaluate the Bridge Notes for the existence of embedded features that would require bifurcation as embedded derivatives under other accounting guidance.

Changes to the fair value of the Bridge Notes between balance sheet dates are reported within other (expense) income, net in the consolidated statements of operations and comprehensive loss if such changes are attributable

to base market risk.

Until settlement, changes to the fair value of the Bridge Notes were reported in other comprehensive loss in the consolidated statements of operations and comprehensive loss if such changes were attributable to instrument-specific credit risk.

All debt issuance costs incurred in connection with Bridge Notes accounted for pursuant to the fair value option were expensed as incurred.

The Company did not separately report interest expense attributable to the Bridge Notes accounted for pursuant to the fair value option in the consolidated statements of operations and comprehensive loss.

Accrued interest, which did not become due until maturity of the Bridge Notes, was included in the determination of the fair value of the Bridge Notes and changes thereto.

These Bridge Notes converted at the closing of the Merger (Note 15) and as of December 31, 2021, the Company did not have any Bridge Notes outstanding.

Upon conversion of the Bridge Notes, amounts previously reported in other comprehensive loss to account for changes in the fair value of the Bridge Notes were reclassified and reported in gain on debt extinguishment in the consolidated statements of operations and comprehensive loss.

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “ Distinguishing Liabilities from Equity ” (“ASC 480”) and ASC 815, “ Derivatives and Hedging ” (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments that would require classification as a liability under ASC 480, as well as whether the warrants qualify for equity classification or require liability classification after consideration of the guidance and criteria outlined in ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions that impact classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and remeasured at fair value as of each balance sheet date thereafter.

The Company accounted for the warrants issued in connection with the Bridge Notes in accordance with the guidance contained in ASC 815-40-15-7D, under which the warrants did not meet the criteria for equity treatment and were recorded as liabilities.

Accordingly, the Company classified the warrants as liabilities at their fair value and remeasured the warrants at fair value at each reporting period and at the time of exercise;

any change in fair value was recognized in gain (loss) on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

At the consummation of the Merger, all of the outstanding Legacy BlackSky class A common stock warrants issued in connection with the Bridge Notes and accounted for as liabilities were automatically net exercised into Legacy BlackSky class A common shares and then exchanged for 3.9 million BlackSky common shares based upon the Class A common stock exchange ratio.

As such, these warrants issued in connection with the Bridge Notes are no longer presented in the Company’s consolidated balance sheets as of December 31, 2021.

As of December 31, 2021, the Company’s consolidated balance sheets included certain liability classified warrants, reported as derivative liabilities, that were issued at the time of Osprey’s initial public offering (the “IPO”) and remained unexercised subsequent to the Merger.

The fair value of the redeemable warrants sold as part of the units issued upon consummation of Osprey’s IPO (the “Public Warrants”), and which the Company has recorded as a long-term liability, was estimated as of the date of the Merger and as of December 31, 2021 using the Public Warrants’ quoted market price.

The non-redeemable private placement warrants (“Private Placement Warrants”) were valued using a Black-Scholes option pricing model for initial and subsequent measurements and were also recorded as a long-term liability in the Company's consolidated balance sheets.

The liabilities associated with the Public Warrants and the Private Placement Warrants are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in gain (loss) on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

Sponsor Shares

Osprey pre-Merger class B common shares were exchanged for the Company’s class A common shares upon the consummation of the merger (“Sponsor Shares”).

A portion of these shares are subject to specific lock-up provisions and potential forfeitures depending upon the post-Merger performance of the Company's Class A common stock (“Sponsor Earn-Out Shares”).

Variable-settled equity instruments that do not meet all of the criteria for equity classification are required to be recorded at their initial fair value on the date of issuance, and remeasured at fair value as of each balance sheet date thereafter.

The Company accounted for the Sponsor Shares in accordance with the guidance contained in ASC 815-40, under which the Sponsor Shares did not meet the criteria for equity treatment and were recorded as derivative liabilities in the Company’s consolidated balance sheets as of December 31, 2021.

The Sponsor Shares are adjusted to fair value at each reporting period and the change in fair value is recognized in gain (loss) on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

The estimated fair value of the Sponsor Shares is determined by a Monte Carlo simulation using a distribution of potential outcomes.

Transaction Costs

Transaction costs consist of legal fees, accounting fees, underwriting fees, and other third-party costs related directly to the Reverse Recapitalization.

As a reverse recapitalization transaction between a private operating company and a public shell company that had cash on its balance sheet and that was accounted for as the issuance of equity by Legacy BlackSky for the cash of the shell company, the transaction costs incurred by Legacy BlackSky were permitted to be charged directly to equity.

Upon the closing of the Merger, $ 19.2 million of transaction costs that had been incurred by Legacy BlackSky, inclusive of amounts that previously had been capitalized as other assets prior to the closing of the Merger, were recorded as a reduction to additional paid-in capital in the consolidated statements of changes in redeemable convertible preferred stock and stockholders’ equity (deficit) and consolidated balance sheets, and as a reduction to proceeds from the transaction in the consolidated statements of cash flows.

The transaction costs of $ 0.3 million related to the Sponsor Earn-Out Shares were expensed.

There were no deferred transaction costs capitalized as of December 31, 2021 and 2020.

Accounting Standards Updates (“ASU”)

Accounting Standards Recently Adopted

In August 2018, the FASB issued ASU No.

2018-15, “ Intangibles—Goodwill and Other—Internal-Use Software:

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

” The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

The update requires an entity to determine which implementation costs to capitalize as an asset related to the service contract and subsequently expense over the term of the hosting arrangement, versus which costs to expense as activities are performed.

In addition, the update provides specific guidance regarding the income statement, cash flow statement, and balance sheet presentation of amounts recognized for, payments of, and prepayments attributable to capitalized implementation costs, respectively.

This ASU can be applied on a prospective or retrospective basis.

The guidance is effective for all public business entities for fiscal years beginning after December 15, 2019, including interim periods therein.

For all other entities, the guidance is effective for fiscal years beginning after December 15, 2020, and for interim periods beginning after December 15, 2021.

The update also permits early adoption, including adoption in any interim period.

The Company adopted the guidance on January 1, 2021.

Adoption of the standard did not have a material impact to the consolidated financial statements.

Accounting Standards Recently Issued But Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02 “ Leases ” .

The amendments in this update require the recognition of lease assets and lease liabilities on the balance sheet, as well as certain qualitative disclosures regarding leasing arrangements.

The guidance requires the use of the modified retrospective method, with the

cumulative effect of initially applying these updates recognized at the date of initial application.

The guidance was effective for public business entities for annual periods, including interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted.

For all other entities, the guidance is effective for fiscal years beginning after December 15, 2021, and for interim periods beginning after December 15, 2022, with early adoption permitted.

As of December 31, 2021, the Company holds emerging growth company status, as such it is permitted to present the impact of the new guidance in its annual statement as of December 31, 2022 and interim statements thereafter.

The Company is currently in the process of evaluating the adoption impact but expects the adoption of the standard to have a material impact to the consolidated balance sheets, since the Company will be required to report operating leases in the consolidated balance sheets for the first time.

The Company is in the early stages of its adoption efforts and cannot yet reasonably estimate the impact to the consolidated financial statements.

In June 2016, the FASB issued ASU No.

2016-13, “ Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ”.

The amendments in this update are primarily for entities holding financial assets and net investment leases measured under an incurred loss impairment methodology.

A new methodology must be adopted to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates, which would include losses on trade accounts receivable.

This ASU requires modified retrospective application.

The guidance is effective for public business entities that are not smaller reporting companies for fiscal years beginning after December 15, 2019, including interim periods therein.

For all other entities, the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods therein.

The Company is currently in the planning stage and will adopt the guidance on January 1, 2023.

The Company has not yet determined the potential impact, if any, that this guidance will have on its consolidated financial statements.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

“ Simplifying the Accounting for Income Taxes ”.

The amendments in this update are intended to simplify various aspects related to accounting for income taxes.

This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This ASU can be applied on a retrospective, modified retrospective or prospective basis.

The guidance is effective for all public business entities for fiscal years beginning after December 15, 2020, including interim periods therein.

For all other entities, the guidance is effective for fiscal years beginning after December 15, 2021, and for interim periods beginning after December 15, 2022.

Early adoption is also permitted.

The Company is currently in the process of evaluating the adoption impact and has not yet determined the potential impact, if any, that this guidance will have on its consolidated financial statements.

In August 2020, the FASB issued ASU No.

2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting For Convertible Instruments and Contracts in an Entity’s Own Equity ”.

The amendments in this update address issues identified as a result of the complexity associated with applying GAAP to certain financial instruments with characteristics of liabilities and equity.

This ASU can be applied on a prospective basis.

The guidance is effective for public business entities that are not smaller reporting companies for fiscal years beginning after December 15, 2021, including interim periods therein, with early adoption permitted.

For all other entities, the guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently in the planning stage and expects to adopt the guidance on January 1, 2024.

The Company has not yet determined the potential impact, if any, that adoption will have on its consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, “ Earnings per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) ” , which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified upon modification or exchange.

This ASU is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the

effective date of the amendments.

Early adoption is permitted for all entities, including adoption in an interim period.

The Company adopted this guidance as of January 1, 2022 and this guidance is not expected to impact the Company unless it modifies or exchanges freestanding financial instruments within the scope of the guidance subsequent to adoption.

Reverse Recapitalization

As described in Note 1, the Merger between Osprey and Legacy BlackSky closed on September 9, 2021.

In connection with the Merger:

• A number of parties agreed to purchase an aggregate of 18.0 million shares of Osprey class A common stock (the “PIPE Shares”), for a purchase price of $ 10.00 per share, and an aggregate purchase price of $ 180.0 million, pursuant to the subscription agreements dated February 17, 2021.

While executed pre-Merger, the sale of PIPE Shares was consummated substantially concurrently with the closing of the Merger and participants received shares of BlackSky Class A common stock.

• As part of a strategic partnership, Palantir Technologies Inc.

(“Palantir”) agreed to purchase an aggregate of 0.8 million shares of Osprey class A common stock for a purchase price of $ 10.00 per share and an aggregate purchase price of $ 8.0 million pursuant to a subscription agreement entered into on August 31, 2021, which contained substantially similar terms as the PIPE subscription agreement described above.

The Palantir subscription agreement closed on September 13, 2021, two business days subsequent to the closing of the Merger, and Palantir received 0.8 million shares of BlackSky Class A common stock.

• 79.0 million shares of Osprey class A common stock were issued for all of the issued and outstanding equity interests of Legacy BlackSky, inclusive of shares of Osprey’s class A common stock issued in exchange for Legacy BlackSky’s (1) issued and outstanding class A common stock, (2) issued and outstanding preferred stock, (3) shares of common stock issued upon the conversion of Legacy BlackSky’s convertible promissory notes (inclusive of interest accrued thereon), as if each had converted into Legacy BlackSky class A common stock immediately prior to the Merger, and (4) shares of preferred stock and common stock issued upon the manual or automatic exercise of certain warrants immediately prior to the Merger.

Both outstanding preferred stock shares and preferred stock share activity related to all of Legacy BlackSky’s redeemable convertible preferred stock have been retrospectively adjusted for the exchange and included as equity in the Company’s consolidated balance sheets and statements of changes in redeemable convertible preferred stock and stockholders’ equity (deficit) from the beginning of the earliest period presented in order to reflect the Company’s equity structure for all reporting periods.

• Outstanding Legacy BlackSky RSUs, RSAs, options, and common stock warrants that were neither exercised nor forfeited immediately prior to the Merger were exchanged, based on the exchange ratio applicable to shares of Legacy BlackSky’s class A common stock, for RSUs, RSAs, options, and warrants, respectively, that vest into or become exercisable for the Company’s Class A common stock.

Upon exchange, these awards remained subject to the same vesting and exercise terms and conditions as were applicable to the awards pre-Merger.

• 21.4 million shares of Osprey class A common stock were redeemed by Osprey pre-Merger public shareholders.

The price paid in excess of the pro-rata portion of additional paid-in capital was recorded in accumulated deficit in the consolidated balance sheets and consolidated statements of changes in redeemable convertible preferred stock and stockholders’ equity (deficit) as of and for the year ended December 31, 2021.

• 7.9 million shares of Osprey class B common stock that were outstanding immediately prior to the Merger were converted to 7.9 million shares of Osprey class A common stock, inclusive of 2.4 million shares that are subject to (1) up to a seven year lockup period, with release terms that are based upon the performance of the Company’s common stock or a change in control event and (2) potential forfeiture.

The following table reconciles the elements of the Merger to the consolidated statements of cash flows and the consolidated statement of changes in stockholder's equity (deficit) for the year ended December 31, 2021 (in thousands):

Cash – Osprey’s trust and cash (net of redemptions) $ 103,049

Cash - PIPE financings (PIPE Shares and Palantir) 188,000

Gross Merger proceeds $ 291,049

fees paid to Osprey IPO underwriters ( 11,173 )

other Osprey transaction costs ( 15,831 )

BlackSky transaction costs ( 19,165 )

Proceeds from Reverse Recapitalization, net payment of BlackSky equity issuance costs $ 244,880

non-cash assets and warrant liabilities assumed from Osprey ( 43,963 )

Net impact from Reverse Recapitalization to BlackSky's equity $ 200,917

The number of shares of Company Class A common stock originally issued by Osprey prior to Merger and the recapitalization of the Class A common stock following the Merger are as follows:

Number of Shares

(in thousands)

Osprey class A common stock, outstanding prior to Merger 31,625

redemption of Osprey class A common stock ( 21,375 )

Total Osprey class A common stock pre-Merger 10,250

Osprey Founder class A common stock 5,534

Class A common stock issued in PIPE and Palantir financing 18,800

Total Merger, PIPE, and Palantir financing class A common stock 34,584

Disaggregation of Revenue

The Company earns revenue through the sale of imagery and software analytical services and engineering and systems integration.

The Company’s management primarily disaggregates revenue as follows:

(ii) data, software and analytics;

and (iii) engineering and integration.

This disaggregation allows the Company to evaluate market trends in certain imagery and software analytical services and engineering and systems integration services.

These offerings currently have both recurring and non-recurring price attributes, particularly the engineering and systems integration offerings.

The following table disaggregates revenue by type of imagery and software analytical services and engineering and integration for the years ended December 31, 2021 and 2020:

Years Ended December 31,

(in thousands)

Imagery $ 8,648 $ 3,005

Data, software and analytics 16,398 15,732

Engineering & integration 9,039 2,398

Total revenue $ 34,085 $ 21,135

The approximate revenue based on geographic location of customers is as follows for the years ended December 31, 2021 and 2020:

Years Ended December 31,

(in thousands)

US $ 29,557 $ 17,239

Middle East 2,661 3,185

Asia 1,300 668

Total revenue $ 34,085 $ 21,135

Revenue from significant customers for the years ended December 31, 2021 and 2020 is as follows:

Years Ended December 31,

(in thousands)

federal government and agencies $ 29,382 $ 17,050

Commercial and other 4,703 4,085

Total revenue $ 34,085 $ 21,135

As of December 31, 2021 and 2020, accounts receivable consisted of the following:

December 31, December 31,

(in thousands)

federal government and agencies 2,576 $ 1,335

Commercial and other 92 1,568

Allowance for doubtful accounts ( 39 ) —

Total accounts receivable $ 2,629 $ 2,903

Remaining Performance Obligations

As of December 31, 2021, the Company had $ 31.9 million of remaining performance obligations, which represents the transaction price of executed contracts less inception to date revenue recognized.

Remaining performance obligations exclude unexercised contract options.

The Company expects to recognize revenue relating to remaining funded contractual performance obligations, of which a portion is recorded in deferred revenue in the consolidated balance sheets, of $ 29.5 million, $ 2.3 million, and $ 136 thousand in fiscal years 2022, 2023, and thereafter, respectively.

Contract Assets and Liabilities

The components of contract assets and contract liabilities consisted of the following:

December 31, December 31,

(in thousands)

Contract assets - current

Unbilled revenue $ 788 $ 749

Contract assets 890 3,047

Total contract assets - current $ 1,678 $ 3,796

Contract liabilities - current

Deferred revenue - short-term $ 11,082 $ 14,030

Other contract liabilities 184 507

Total contract liabilities - current $ 11,266 $ 14,537

Contract liabilities - long-term $ — $ —

Deferred revenue - long-term 568 2,559

Total contract liabilities - long-term $ 568 $ 2,559

Deferred revenue and other contract liabilities are reported as contract liabilities in the accompanying consolidated balance sheets.

Contract liabilities include payments received and billings made in advance of the satisfaction of performance obligations under the contract and are realized when the associated revenue is recognized under the contract.

Contract assets include (i) unbilled revenue, which is the amount of revenue recognized in excess of the amount billed to customers, where the rights to payment are not just subject to the passage of time;

and (ii) costs incurred to fulfill contract obligations.

Other contract assets and other contract liabilities primarily relate to contract commissions on customer contracts.

Changes in short-term and long-term contract assets and contract liabilities reported as of January 1, 2021 were as follows:

Contract Assets Contract Liabilities

(in thousands)

Balance on January 1, 2021 3,796 $ 17,096

Billings or revenue recognized that was included in the beginning balance ( 740 ) ( 12,641 )

Cash received in advance and not recognized as revenue — 3,060

Changes in contract assets, net of reclassification to receivables 780 —

Cumulative catch-up adjustment arising from changes in estimates to complete — 4,624

Cumulative catch-up adjustment arising from contract modification — 18

Changes in costs to fulfill and amortization of commission costs ( 2,158 ) —

Changes in contract commission costs ( 323 )

Balance on December 31, 2021 $ 1,678 $ 11,834

Equity Method Investments

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 years ended December 31, 2021 or 2020;

the Company received a distribution of $ 0.3 million during 2021.

During the years ended December 31, 2021 and 2020, respectively, the Company remitted $ 19.3 million and $ 8.2 million of payments to LeoStella for satellite manufacturing and satellite software development.

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 December 31, 2021, the Company's interest in X-Bow was 17.5 % .

The following tables present summarized financial information for the Company’s equity method investments as of December 31, 2021 and 2020 and for the years ended December 31, 2021 and 2020.

December 31, December 31,

Summarized balance sheets 2021 2020

(in thousands)

Current assets $ 60,652 $ 64,355

Non-current assets 5,798 7,468

Total assets $ 66,450 $ 71,823

Current liabilities $ 39,612 $ 57,040

Non-current liabilities 706 6,589

Total liabilities $ 40,318 $ 63,629

Years Ended December 31,

Summarized statements of operations 2021 2020

(in thousands)

Revenue $ 61,802 $ 14,917

Gross margin $ 12,410 $ 2,636

Net income (loss) $ 6,540 $ ( 1,873 )

Current assets of the Company’s equity method investees primarily consisted of inventories of $ 17.0 million and $ 47.3 million as of December 31, 2021 and 2020, respectively.

Total liabilities of the Company’s equity method investees primarily consisted of customer advances from related parties of $ 35.2 million and $ 51.4 million as of December 31, 2021 and 2020, respectively.

The revenue related to equity method investments attributable to related parties was $ 55.5 million and $ 14.9 million for the years ended December 31, 2021 and 2020, respectively.

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 $ 2.9 million as of December 31, 2021 and $ 0.5 million as of December 31, 2020.

The difference is the result of the elimination of upstream intra-entity profits from the sale of satellites.

Discontinued Operations

On June 12, 2020, the Company completed the sale of 100 % of its equity interests in Spaceflight to M&Y Space for a final purchase price of $ 31.6 million.

In connection with the sale, a bridge loan of $ 26.0 million, plus unpaid, accrued interest of $ 0.2 million, was extinguished and deducted from the net proceeds.

Accrued interest of $ 0.5 million was also forgiven in accordance with the terms of the bridge loan.

Under a transition services agreement, the Company provides, post-closing transition services to Spaceflight, including, but not limited to, the sublease of the Company’s office facility in Seattle, Washington and common area maintenance fees related to the sublease.

Settlement Arrangement for the Sale of the Spaceflight

On March 30, 2021, the Company settled certain disputes with respect to the purchase price in the total amount of $ 6.8 million, which was accrued as a liability as of December 31, 2020 (Note 12).

The Company paid the settlement amount in two tranches—(i) $ 2.0 million on April 1, 2021 and (ii) the remaining $ 4.8 million was triggered at the closing of the Merger.

In April 2021, the Company also terminated a launch arrangement with Spaceflight and, as agreed upon by the parties, offset the amount due to M&Y Space with a contractual refund of $ 3.9 million of which the net amount of $ 819 thousand was settled for cash in the year ended December 31, 2021.

As a result, the Company recorded a reduction to the accrued liability and a reduction to satellite procurement in the consolidated balance sheets.

The following summarizes the components of the (loss) gain from discontinued operations, net of income taxes, that the Company has reported in the consolidated statements of operations and comprehensive loss.

The Company recognized an unfavorable working capital adjustment of $ 1.7 millions primarily related to a potential shortfall in accounts receivable in the closing balance sheet delivered to M&Y Space.

Years Ended December 31,

(in thousands)

Major classes of line items constituting gain from discontinued operations:

Revenue - launch services $ — $ 26,925

Total operating cost and expenses — 29,393

Operating loss — ( 2,468 )

Loss from discontinued operations, before income taxes — ( 2,487 )

(Loss) gain on disposal of discontinued operations ( 1,650 ) 30,672

Total (loss) gain from discontinued operations, net of income taxes ( 1,650 ) 28,185

Property and Equipment - net

The following summarizes property and equipment - net as of:

December 31, December 31,

(in thousands)

Satellites $ 93,709 $ 32,340

Computer equipment and software 1,372 1,315

Office furniture and fixtures 744 1,388

Other equipment 682 434

Site equipment 1,393 1,311

Ground station equipment 111 1,415

Total 98,011 38,203

accumulated depreciation ( 27,460 ) ( 17,351 )

Property and equipment — net $ 70,551 $ 20,852

On May 15, 2021, a rocket carrying two of the Company's satellites suffered a failure during flight, resulting in the loss of both satellites.

This resulted in the total carrying value of $ 18.4 million being impaired in the second quarter of 2021.

The $ 18.4 million includes satellite procurement, launch, shipping, launch support and other associated costs.

Of this amount, $ 8.4 million was included in satellite procurement work in progress in the consolidated balance sheets as of December 31, 2020.

There was no impairment for the year ended December 31, 2020.

Depreciation of property and equipment from continuing operations during the years ended December 31, 2021 and 2020 was $ 12.9 million and $ 8.5 million, respectively.

During the year ended December 31, 2021, the Company disposed of $ 2.9 million of property and equipment, which consisted of site equipment, furniture and ground station equipment, for a loss of $ 24 thousand.

Goodwill and Intangible Assets

The Company performed an annual qualitative goodwill assessment of the goodwill held related to the BlackSky reporting unit as of October 1, 2021.

The Company determined that no triggering events occurred that would require the Company to quantitatively test goodwill for impairment during the year ended December 31, 2021.

As of December 31, 2021, the Company believes that the estimated fair values of the BlackSky reporting unit is still in excess of its respective carrying value and therefore is not at-risk of being impaired.

To the extent this reporting unit realizes actual operating results in the future below forecasted results, or realize decreases in forecasted results as compared to previous forecasts or, in the event the estimated fair value of the reporting unit decreases (as a result, among other things, of changes in market capitalization, including further declines in the stock price), the Company may incur goodwill impairment charges in the future.

Goodwill was as follows:

December 31, 2021 December 31, 2020

(in thousands)

Gross carrying amount $ 9,393 $ 9,393

Accumulated impairment losses — —

Net carrying value of goodwill $ 9,393 $ 9,393

Intangible Assets

Intangible assets consisted of the following:

Gross Carrying Amount Accumulated Amortization Net Carrying Amount

(in thousands)

December 31, 2021

NOTE 8STOCKHOLDERS EQUITY

Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share

with such designations, voting and other rights and preferences as may be determined from time to time by the Companys board of directors.

At December 31, 2020 and 2019 there were no shares of preferred stock issued or outstanding.

Class A Common Stock The Company is authorized to issue 150,000,000 shares of Class A

common stock with a par value of $0.0001 per share.

Holders of Class A common stock are entitled to one vote for each share.

At December 31, 2020 and 2019, there were 1,758,513 and 1,482,298 shares of Class A common stock issued or

outstanding, excluding 29,866,487 and 30,142,702 shares of Class A common stock subject to possible redemption, respectively.

Class B Common Stock The Company is authorized to issue 25,000,000 shares of Class B

common stock with a par value of $0.0001 per share.

Holders of Class B common stock are entitled to one vote for each share.

At December 31, 2020 and 2019, there were 7,906,250 shares of Class B common stock issued and outstanding.

Holders of Class B common stock will have the right to elect all of the Companys directors prior to the consummation of a

Business Combination.

Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law.

These provisions of the Companys

Amended and Restated Certificate of Incorporation may only be amended if approved by holders of a majority of at least 90% of the Companys common stock voting in a stockholder meeting.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business

Combination on a one-for-one basis, subject to adjustment.

In the case that additional shares of Class A common stock, or equity-linked securities, are issued or

deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be

adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable

upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the

completion of the Initial Public Offering (not including the shares of Class A common stock underlying the Private Placement Warrants) plus all shares of Class A common stock and equity-linked securities issued or deemed issued in

connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination, any private placement-equivalent securities issued, or to be issued, to any seller in a

Business Combination, or any private placement equivalent securities issued to the Sponsor or its affiliates upon conversion of loans made to the Company).

Holders of Founder Shares may also elect to convert their shares of Class B common stock

into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.

Warrants Public Warrants may only be exercised for a whole number of shares.

No fractional warrants will be issued upon

separation of the Units and only whole warrants will trade.

The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering;

provided in each case that the Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available.

Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under

the Securities Act, of the shares of Class A common stock issuable upon exercise of the Public Warrants.

The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration

statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement.

Notwithstanding the above, if the Companys Class A common stock is at the time of any

exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a covered security under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public

Warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a

registration statement, but the Company will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

The Public Warrants will expire five years after the

completion of a Business Combination or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may

redeem the Public Warrants:

in whole and not in part;

at a price of $0.01 per warrant;

upon not less than 30 days prior written notice of redemption;

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Customer relationships $ 6,530 $ ( 4,050 ) $ 2,480

Distribution agreements 326 ( 326 ) —

Technology and domain name 4,054 ( 4,054 ) —

Total intangible assets at December 31, 2021 $ 10,910 $ ( 8,430 ) $ 2,480

December 31, 2020

if, and only if, the reported last sale price of the Companys Class A common stock equals or exceeds

$18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders;

If, and only if, there is a current registration statement in effect with respect to the shares of Class A

common stock underlying such warrants.

The Private Placement Warrants are identical to the Public Warrants underlying

the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days

after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they

are held by the initial purchasers or their permitted transferees.

If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the

Company and exercisable by such holders on the same basis as the Public Warrants.

In addition, (x) if the Company calls the Public

Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, as described in the warrant agreement.

The exercise price and number of shares of

Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation.

Additionally, in no event will the

Company be required to net cash settle the warrants.

If the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at a newly

issued price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Companys board of directors and, in the case of any such issuance to the Sponsor or

its affiliates, without taking into account any Founder Shares held by them, as applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,

available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the market value (as defined in the warrant agreement) is below $9.20 per share, the

exercise price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the market value and the newly issued price, and the $18.00 per share redemption trigger price described above will be adjusted (to the

nearest cent) to be equal to 180% of the higher of the market value and the newly issued price.

If the Company is unable to complete a

Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the

Companys assets held outside of the Trust Account with respect to such warrants.

Accordingly, the warrants may expire worthless.

The Companys net deferred tax assets are as follows:

Customer relationships $ 6,530 $ ( 3,489 ) $ 3,041

Distribution agreements 326 ( 326 ) —

Technology and domain name 4,047 ( 3,257 ) 790

Total intangible assets at December 31, 2020 $ 10,903 $ ( 7,072 ) $ 3,831

For each of the years ended December 31, 2021 and 2020, amortization expense related to intangible assets was $ 1.4 million.

These amounts were included in depreciation and amortization expense in the consolidated statements of operations and comprehensive loss.

The Company estimates that it will have the following amortization expense for the future periods indicated below:

For the years ending December 31:

(in thousands)

Accounts Payable and Accrued Liabilities

The components of accounts payable and accrued liabilities were as follows:

December 31, December 31,

(in thousands)

Accounts payable $ 1,723 $ 4,177

Accrued payroll 4,089 2,577

Accrued professional services, legal, and other general and administrative 2,043 919

Accrued cost of goods sold and other expenses 2,982 293

Total accounts payable and accrued liabilities $ 10,837 $ 7,966

Other Current Liabilities

The components of other current liabilities were as follows:

December 31, December 31,

(in thousands)

Warrant liability $ — $ 558

Other current liabilities 324 28

Current portion of capital lease 49 48

Contingent liability 761 —

Working capital liability 1,685 6,805

Total other current liabilities $ 2,819 $ 7,439

The contingent liability represents a liability for estimated indirect taxes, previously classified as long-term.

Refer to Note 24 for more information.

The working capital liability as of December 31, 2020 was reduced by payments of $ 2.8 million and a contractual refund of $ 3.9 million for a terminated launch services agreement for which a right of setoff exists and increased by a working capital adjustment related to a potential shortfall in accounts receivable in the Spaceflight closing balance sheet of $ 1.0 million.

Refer to Note 8 for more information.

Employee Benefit Plan

The Company has a 401(k) savings plan.

Eligible employees may voluntarily contribute a percentage of their compensation to their 401(k) account.

The Company provides a 401(k) employer match of 50 % of the first 6 % of the employee’s salary contribution.

The benefit vests over a five-year period beginning 90 days after the employee’s date of hire.

For the years ended December 31, 2021 and 2020, the 401(k) employer match expense was $ 0.6 million and $ 0.5 million, respectively, for continuing operations.

The Company's consolidated effective income tax rate from continuing operations for the years ended December 31, 2021 and 2020 was 0.0 %.

The Company's provision for income taxes from continuing operations for the years ended December 31, 2021 and 2020 is as follows:

Years Ended December 31,

(in thousands)

Federal $ — $ —

Total current $ — $ —

Total deferred $ — $ —

Total provision for income taxes $ — $ —

The Company’s operations are domestically located and therefore, the Company is not subject to tax in foreign jurisdictions.

The provision (benefit) for income taxes differed from the amount computed by applying the federal statutory income tax rate of 21% to loss before income taxes due to the following items for the years ended December 31, 2021 and 2020:

Years Ended December 31,

(in thousands)

Tax benefit at federal statutory rate $ ( 51,673 ) $ ( 10,022 )

Non-deductible compensation 4,431 449

State tax, net of federal benefit ( 3,296 ) ( 499 )

Valuation allowance 25,631 9,666

Non-deductible interest 21,715 —

Non-taxable warrants ( 5,016 ) 117

Uncertain tax position 8,449 —

Other ( 241 ) 289

Income tax (benefit) expense $ — $ —

The income tax expense as of December 31, 2021 and 2020 was $ 0.0 million .

The tax benefits associated with losses generated by the consolidated group have been reduced by a full valuation allowance as the Company does not believe it is more-likely-than-not that the losses will be utilized.

Other major drivers include non-deductible interest and an uncertain tax position related to the valuation of guaranteed incentives shares issued for SVB guarantors.

Deferred tax assets and liabilities as of December 31, 2021 and 2020, consisted of the following:

(in thousands)

Deferred tax assets:

Net operating loss carryforward

Unrealized (gain) loss on marketable securities

Net operating loss carryforwards $ 45,181 $ 24,764

163(j) carryforward 6,414 4,661

Accruals and reserves 2,359 2,155

Deferred revenue 778 539

Capital loss carryforward 3,689 3,368

Other deferred tax assets 3,631 1,284

Total deferred tax assets 62,052 36,771

Valuation allowance ( 61,460 ) ( 35,874 )

Deferred tax assets, net valuation allowance

The income tax provision consists of the following:

As of December 31,

State and Local

Change in valuation allowance

Income tax provision

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

As of December 31, 2020 and 2019, the Company had $1,382,869 and $0 of U.S.

state net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets,

management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the

periods in which temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this

After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

the year ended December 31, 2020 and 2019, the change in the valuation allowance was $282,584 and $0.

A reconciliation of the

federal income tax rate to the Companys effective tax rate is as follows:

Statutory federal income tax rate

State taxes, net of federal tax benefit

Valuation allowance

Income tax provision

The Company files income tax returns in the U.S.

federal jurisdiction and is subject to examination by the

various taxing authorities.

The Companys tax returns since inception remain open to examination by the taxing authorities.

VALUE MEASUREMENTS

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and

reported at fair value at least annually.

The fair value of the Companys financial assets and liabilities reflects

managements estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal

assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and

Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide

pricing information on an ongoing basis.

Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are

Unobservable inputs based on the Companys assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents information about the Companys assets that are measured at fair value

on a recurring basis at December 31, 2020 and, 2019, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Marketable securities held in Trust Account

OSPREY TECHNOLOGY ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2020

NOTE 11SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial

statements were issued.

Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

On February 17, 2021, the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Merger Sub and

BlackSky, which provides for, among other things, the merger of Merger Sub with and into BlackSky, with BlackSky continuing as the surviving entity (the Merger and, collectively with the other transactions contemplated by the Merger

Agreement, the Transactions).

The Transactions set forth in the Merger Agreement, including the Merger, will constitute a Business Combination.

Pursuant to the Merger Agreement, the aggregate merger consideration payable to equity holders of BlackSky at closing (the Total

Consideration) will be paid in a number of shares of newly-issued Class A common stock of the Company, valued at $10.00 per share (the Company Common Stock), calculated by dividing (x) $925,000,000, plus (a) the aggregate

exercise prices that would be paid to BlackSky if all stock options and all warrants outstanding as of immediately prior to the closing were exercised in full, minus (b) any unfunded amount under BlackSkys bridge loan, minus (c) the

total consideration payable to shares of BlackSkys Class B common stock, which is equal to the product of (i) the total number of shares of BlackSkys Class B common stock, par value $0.00001 per share, issued and

outstanding as of immediately prior to the effective time of the Merger and (ii) an amount in cash equal to $0.00001 by (y) $10.00.

Effective as of the effective time of the Merger and by virtue of the Merger, each option to purchase shares of BlackSky Class A Common

Stock (each, a BlackSky Stock Option) that is outstanding and unexercised as of immediately prior to the effective time of the Merger will be converted into an option to acquire a number of shares of Company Class A Common Stock

equal to the product obtained by multiplying (x) the number of shares of BlackSky Common Stock subject to the applicable BlackSky Stock Option by (y) the Class A Common Exchange Ratio, and will be subject to the same terms and

conditions as were applicable to such BlackSky Stock Option (each an Assumed Company Stock Option).

For purposes of the Merger Agreement, the Class A Common Exchange Ratio equals the quotient of (A) the residual Total

Consideration after taking into account the preferred series preference amounts, divided by $10.00, divided by (B) the number of participating shares of BlackSky Common Stock on a fully diluted basis.

The exercise price per share of each

Assumed Company Stock Option will be equal to the quotient obtained by dividing (x) the exercise price per share applicable to such BlackSky Stock Option by (y) the Class A Common Exchange Ratio.

The Transaction will be consummated subject to the deliverables and provisions as further described in the Merger Agreement.

Total net deferred tax assets 592 897

Deferred tax liabilities

Basis difference in intangibles ( 588 ) ( 895 )

Other deferred tax liabilities ( 4 ) ( 2 )

Total deferred tax liabilities ( 592 ) ( 897 )

Net deferred tax liabilities $ — $ —

The Company continues to provide for a full valuation allowance on its net deferred tax assets as the Company does not believe it is more-likely-than-not that the losses will be utilized after evaluation of all significant positive and negative evidence including, but not limited to, historical cumulative losses over the prior three-year period, as adjusted for permanent items, insufficient sources of taxable income in prior carryback periods and unavailability of prudent and feasible tax-planning strategies.

Below is a summary of the Company's estimated loss and tax credit carryforwards.

The Company’s tax attributes are subject to limitations on utilization due to historic ownership changes and may be subject to future limitations upon subsequent change of control, as defined by the Internal Revenue Code Sections 382 and 383.

Tax Effected Expiration

(in thousands)

Federal net operating loss (“NOL”) carryforward $ 8,638 2033-2037

Federal NOL carryforward $ 36,283 Indefinite

Federal capital loss carryforward 3,689 2025

State NOL carryforwards 261 2037-2040

At December 31, 2021 and 2020 the Company had $ 213.9 million and $ 117.2 million of net operating loss (“NOL”) carryforwards for U.S.

federal tax purposes, respectively.

federal tax NOL carryforwards generated prior to 2018 of $ 41.1 million will expire, if unused, between 2033-2037.

Under the Tax Cuts and Jobs Act of 2017, as modified by the Coronavirus Aid, Relief, and Economic Security Act, federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely.

As of December 31, 2021, the Company had $ 172.8 million of NOL carryforwards generated after 2017 for U.S.

federal tax purposes, which may be used to offset 80% of its taxable income annually.

The Company files income tax returns in the United States federal jurisdiction and various state jurisdictions.

In the normal course of business, the Company is subject to examination by taxing authorities.

Tax years 2014-2020 remain open for examination.

Below is a tabular reconciliation of the total amounts of unrecognized tax benefits:

(in thousands)

Unrecognized tax benefits - January 1 $ — $ 4,840

Gross decrease - tax positions in current period — ( 4,840 )

Gross increase - tax positions in current period 8,443 —

Unrecognized tax benefits - December 31 $ 8,443 $ —

The increase in unrecognized tax benefits in the year ended December 31, 2021 is due to the valuation of guaranteed incentives shares issued for SVB guarantors.

The balance of unrecognized tax benefits as of December 31, 2021 and 2020, if recognized, would not affect our effective tax rate and would result in adjustments to other tax accounts, primarily deferred tax assets and the net operating loss carry forward.

Debt and Other Financing

The carrying value of the Company’s outstanding debt consisted of the following amounts:

December 31, December 31,

(in thousands)

Current portion of long-term debt $ — $ 16,798

Non-current portion of long-term debt 74,126 86,637

Total long-term debt 74,126 103,435

Unamortized debt issuance cost ( 2,718 ) ( 1,827 )

Outstanding balance $ 71,408 $ 101,608

Under the Company’s loan agreements, minimum required maturities are as follows:

For the years ending December 31, (in thousands)

Total outstanding $ 74,126

The ending balance of the Company’s outstanding debt as of December 31, 2021 and 2020, consisted of the following:

December 31, December 31,

Name of Loan Effective Interest Rate 2021 2020

(in thousands)

Loans from related parties 7.41 % - 8.00 %

$ 74,126 $ 83,737

Small Business Administration Loan (Paycheck Protection Program) 1.86 % — 3,600

Line of credit 3.65 % — 16,098

Total $ 74,126 $ 103,435

Bridge Notes and Related Transactions

On February 2, 2021, Legacy BlackSky amended its omnibus agreement dated June 27, 2018 (the “2021 Omnibus Amendment”).

As a result of the amendment, Legacy BlackSky was permitted to enter into additional indebtedness by issuing new subordinated, unsecured convertible promissory notes, the Bridge Notes, between February 2, 2021 and June 30, 2021, for up to an aggregate principal amount of $ 60 million.

During the period from February 2, 2021 through February 3, 2021, Legacy BlackSky completed the closing of its initial tranche of the Bridge Notes from existing stockholders.

The aggregate principal amount of the Bridge Notes issued in the initial tranche was $ 18.1 million.

All investors participating in the initial tranche also received incentive equity equal to seven shares of class A common stock of Legacy BlackSky for each dollar invested.

Certain investors participating in the initial tranche additionally received warrants exercisable for shares of Legacy BlackSky class A common stock in amounts ranging from 0.14 % of Legacy BlackSky’s fully-diluted share capital for each dollar invested divided by $ 1.0 million to 3.5 % of Legacy BlackSky’s fully-diluted share capital (Note 16).

On February 18, 2021, the Company completed the closing of a second tranche of the Bridge Notes, raising an aggregate principal amount of $ 40.0 million from an existing stockholder and from new investors.

Participants in the second tranche did not receive shares of Legacy BlackSky class A common stock or warrants to purchase Legacy BlackSky class A common stock.

Upon the closing of the two previously mentioned tranches, $ 1.9 million of Bridge Notes remained available to be offered to certain shareholders under terms similar to the initial tranche pursuant to a rights offering (“Rights Offering”).

The Company subsequently completed the Rights Offering in June 2021 with a total of $ 0.5 million additional investment, resulting in final aggregate proceeds of $ 58.6 million in principal investments pursuant to the Bridge Notes.

As the terms of the Rights Offering were substantially identical to those offered in the initial tranche of the Bridge Notes, participants received seven shares of the Legacy BlackSky's class A common stock for each dollar invested, as well as warrants.

The Bridge Notes, in all three tranches, bore interest at a rate of 10 % and had a maturity date of April 30, 2025.

There were no covenants in the Bridge Notes that were tied to financial metrics.

The Company made an irrevocable election to carry the Bridge Notes at fair value.

In connection with the Merger, all of the Company’s issued and outstanding Bridge Notes were converted into Legacy BlackSky class A common stock at a conversion price of 80 % of the deemed value of a single Legacy BlackSky class A common share and, immediately thereafter, those Legacy BlackSky class A common shares were exchanged for Osprey class A common shares based the class A common stock exchange ratio.

As of December 31, 2021, the Company had no convertible Bridge Notes outstanding.

In connection with the 2021 Omnibus Amendment, the investors guaranteeing the Silicon Valley Bank (“SVB”) line of credit further reaffirmed their guarantees and received a one-time issuance of seven shares of Legacy BlackSky class A common stock for every dollar guaranteed.

Additionally, Legacy BlackSky agreed to pay a fee to each of its senior secured lenders (“Consent Fees”).

The Consent Fees were payable in either cash or shares of Legacy BlackSky’s class A common stock at the choice of the lender.

The Consent Fees were considered variable share-settled liabilities and were recorded at fair value (Note 23).

All of the Consent Fees were settled for cash at the closing of the Merger.

The following table summarizes the additional shares of Legacy BlackSky class A common stock and warrants to purchase Legacy BlackSky class A common stock issued as a result of the Bridge Notes.

Legacy BlackSky Class A Common Stock (1)

Legacy BlackSky Class A Common Stock Warrants (1)

(in thousands)

Issued to SVB guarantors 8,485 —

Issued in connection with the initial tranche of Bridge Notes 11,544 3,873

Issued as incentive shares and as incentive warrants, in connection with the Rights Offering 314 51

Total 20,343 3,924

Issuance of class A common stock and class A common stock warrants has been retroactively restated to give effect to the reverse recapitalization.

In connection with the Merger, all issued and outstanding Legacy BlackSky Bridge Notes and class A common stock warrants granted in accordance with the Bridge Notes were automatically exercised into Legacy BlackSky class A common stock and those shares were exchanged for the Company's common shares at the exchange rate applicable to the Company’s common stock.

In connection with the Merger, the Company repaid $ 21.4 million in outstanding loans due to the settlement of the SVB line of credit of $ 16.1 million, the small business administration paycheck protection program loan of $ 3.5 million and $ 1.8 million in required payments on certain related party loans, inclusive of accrued interest.

As a result of these repayments, the Company recorded a loss on debt extinguishment of $ 12 thousand.

Loans from Related Parties

After the Merger, the Company’s primary debt (and its sole secured debt) consists of its amended and restated loan and security agreement dated October 31, 2019, as amended or modified from time to time, with Intelsat Jackson Holdings SA (“Intelsat”) and Seahawk SPV Investment LLC (“Seahawk”).

Interest accrues on the amounts outstanding under this facility at a fixed rate of 4 % until October 31, 2022, 9 % from November 1, 2022 to October 31, 2023, and 10 % from November 1, 2023 to the maturity date of October 31, 2024.

During the 4 % interest period, the amount of accrued interest is added, on a pro-rata basis, to the outstanding principal amount of each lender’s advances on October 31, 2020, October 31, 2021, and October 31, 2022.

Thereafter, interest is payable in cash semi-annually in arrears commencing on May 1, 2023.

This facility is secured by substantially all of the Company’s assets, is guaranteed by the Company’s subsidiaries, and contains customary covenants and events of default.

There are no covenants tied to financial metrics.

Subsequent to the Merger, the Company also had remaining debt in the form of unsecured notes owed to Legacy BlackSky”s founders (“Founders”) for $ 10.0 million, which accrued interest at 6 % per annum, were non-convertible and matured upon a change of control or event of default.

In the year ended December 31, 2021, the Company executed a settlement agreement with the Founders and fully extinguished the $ 10.0 million of outstanding debt, along with accrued interest of $ 2.2 million, in exchange for issuing 958,082 shares of Class A common stock.

As a result, the Company recorded a gain on debt extinguishment of $ 4.1 million.

Fair Value of Debt

The estimated fair value of all of the Company’s outstanding long-term debt, excluding the SVB line of credit that was outstanding as of December 31, 2020, was $ 76.1 million and $ 79.7 million as of December 31, 2021, and December 31, 2020, respectively, which is different than the historical costs of such long-term debt as reflected in the Company’s consolidated balance sheets.

As of December 31, 2020, the carrying value of the SVB line of credit of $ 16.1 million approximated its fair value.

The fair value of the long-term debt was

estimated using Level 3 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements and credit rating.

Compliance with Debt Covenants

As of December 31, 2021, all debt instruments contain customary covenants and events of default.

There are no covenants tied to financial metrics and the Company was in compliance with all non-financial covenants as of December 31, 2021.

Legacy BlackSky Class A Common Stock Warrant Liabilities

As part of the Bridge Notes discussed in Note 15, the Company issued warrants to purchase Legacy BlackSky class A common stock which had an exercise price of $ 0.11 (after adjustment for the common stock exchange ratio) and a contractual life of ten years .

The number of shares of Legacy BlackSky class A common stock for which the warrants were exercisable was not fixed and adjusted based on the fully diluted capitalization of the Company, as defined in the warrant agreements, at the time of exercise.

The Company analyzed the provisions of the respective warrant agreements, which requires a multi-step approach to evaluate whether an equity-linked financial instrument has features that require treatment as a derivative liability.

Based upon the fact that the number of shares of class A common stock that the warrants were exercisable for was not fixed and was subject to changes based on the Company’s capital structure, the warrants were not considered to be indexed to Legacy BlackSky’s stock.

Therefore, the warrants met the criteria for derivative liability treatment and, as such, were initially recorded as other current liabilities in the consolidated balance sheets.

In connection with the Merger, all outstanding warrants granted with the Bridge Notes were automatically exercised into Legacy BlackSky class A common stock and those shares were exchanged for Osprey class A common stock.

Therefore, the derivative liability for these financial instruments was zero as of December 31, 2021.

Public Warrants and Private Placement Warrant Liabilities

The Public Warrants and Private Placement Warrants issued by Osprey are governed by the terms of the warrant agreement, dated October 31, 2019 (the “Warrant Agreement”) and the Sponsor Support Agreement entered into on February 17, 2021.

In connection with Osprey’s IPO, Osprey issued 15,812,500 Public Warrants, each providing a right to purchase one share of common stock at an exercise price of $ 11.50 per share.

The Public Warrants were not exercisable until October 9, 2021.

Simultaneously, with the consummation of the Osprey IPO, Osprey issued 8,325,000 Private Placement Warrants to Osprey’s sponsor, of which 4,162,500 are exercisable beginning on October 9, 2021, at a price of $ 11.50 per share, and 4,162,500 became exercisable when the Company’s common stock reaches a trading price of $ 20.00 per share.

In addition to the exercise prices, once the Public Warrants become exercisable, the Company may call the warrants for redemption:

• at a price of $ 0.01 per whole warrant;

• if, and only if, the closing price of the Company’s Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalization and the like) for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

The Private Placement Warrants are identical to the Public Warrants except that the Private Placement Warrants:

(i) may be exercised for cash or on a cashless basis, (ii) may not be transferred, assigned or sold until thirty days after the closing date of the Merger and (iii) shall not be redeemable by the Company.

If the Company calls the Public Warrants for redemption, the board of directors will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the Warrant Agreement.

The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of stock splits, stock dividends, recapitalization, reorganization, merger or consolidation.

In addition, the Company had the right to issue additional common shares or securities convertible into or exercisable/exchangeable for shares of common stock in connection with the closing of the Merger at an issue or effective price of less than $ 9.20 .

In connection with the Merger, the Company did not exercise this option.

As of December 31, 2021, all of the Public Warrants and 4,162,500 of the Private Placement Warrants, that have an exercise price of $ 11.50 , are exercisable.

Subsequent Accounting for Warrant Liabilities

Derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration and are included in derivative liabilities on the consolidated balance sheets.

Any change in fair value between the respective reporting dates is recognized as an unrealized gain or loss in the accompanying consolidated statements of operations and comprehensive loss (Note 23).

The following table is a summary of the number of shares of the Company’s Class A common stock issuable upon exercise of warrants at December 31, 2021:

Number of Shares

(in thousands) Exercise Price Redemption Price Expiration Date Classification Gain (loss) in value from September 9, 2021 (close of the Merger) to December 31, 2021

(in thousands) Fair Value at December 31, 2021

(in thousands)

Public Warrants 15,813 $ 11.50 $ 18.00 9/9/2026 Liability $ 20,398 $ 8,697

Private Placement Warrants 4,163 $ 11.50 $ 18.00 9/9/2026 Liability 8,908 2,497

Private Placement Warrants 4,163 $ 20.00 $ 18.00 9/9/2026 Liability 2,498 999

In addition, the Company has 1.8 million Class A common stock warrants outstanding which have an exercise price of $ 0.11 and expiration dates from June 27, 2028 to October 31, 2029.

These warrants are equity classified and are included in additional paid-in capital in the Company’s consolidated balance sheets.

Other (Expense) Income

For The Years Ended December 31,

(in thousands)

Loss on issuance of Bridge Notes tranche one $ ( 84,291 ) $ —

Loss on issuance of Bridge Notes tranche two ( 12,185 ) —

Loss on issuance of Bridge Notes Rights Offering ( 3,193 ) —

Debt issuance costs expensed for debt carried at fair value ( 47,718 ) —

Transaction costs associated with derivative liabilities ( 291 ) —

$ ( 147,656 ) $ 103

In February 2021, Legacy BlackSky issued Bridge Notes in two tranches (Note 15).

The first tranche of the Bridge Notes were issued at par to several existing investors at a principal amount of $ 18.1 million and a fair value of $ 24.2 million.

Additionally, certain investors in the first tranche of Bridge Notes received 11.5 million shares of Legacy BlackSky class A common stock with a fair value of $ 59.8 million and warrants to purchase 3.9 million shares of Legacy BlackSky class A common stock with a fair value of $ 18.4 million.

The transaction involved investments primarily by the existing Legacy BlackSky investors at that time.

Legacy BlackSky, which had an external valuation performed on the Bridge Notes, Legacy BlackSky class A common stock, and Legacy BlackSky warrants, determined that the fair value of the financial instruments issued exceeded the cash

proceeds received.

Since no unstated rights and/or privileges were identified with the first tranche of the Bridge Notes, Legacy BlackSky recorded a loss on issuance of $ 84.3 million.

The second tranche of the Bridge Notes were issued at par to several new investors and an existing investor at a principal amount of $ 40.0 million and a fair value of $ 52.2 million, resulting in a loss on issuance of $ 12.2 million.

In June 2021, Legacy BlackSky offered eligible stockholders an opportunity to invest in a portion of the Bridge Notes as part of a rights offering on substantially the same terms as offered to investors in the initial tranche of the Bridge Notes.

The aggregate principal amount and fair value of the Bridge Notes issued to the participating shareholders in the rights offering were $ 0.5 million and $ 0.6 million, respectively.

Additionally, the investors received 0.3 million incentive shares of Legacy BlackSky class A common stock with a fair value of $ 2.6 million and 51 thousand incentive warrants exercisable for Legacy BlackSky class A common stock with a fair value of $ 0.5 million.

No unstated rights and/or privileges were identified with respect to the Bridge Notes issued in connection with the rights offering, and Legacy BlackSky recorded a loss on issuance of $ 3.2 million.

Legacy BlackSky incurred and expensed $ 47.6 million in debt issuance cost related to the Bridge Notes issued in February 2021 and the modification of existing debt arrangements at that time.

These debt issuance costs consisted of 8.5 million shares of Legacy BlackSky class A common stock valued at $ 43.9 million that were issued to certain guarantors in conjunction with modification of Legacy BlackSky’s SVB line of credit and $ 3.7 million paid to third-parties in cash.

Additionally, the Company incurred $ 0.1 million in debt issuance costs related to the rights offering, which was expensed.

The debt issuance costs were expensed because the Bridge Notes were being carried on the balance sheet at fair value.

The modification of existing debt did not qualify as a troubled debt restructuring, nor did it result in the extinguishment of the debt.

Redeemable Convertible Preferred Stock

In connection with the Merger, all shares of Legacy BlackSky issued and outstanding redeemable convertible preferred stock were exchanged for Osprey class A common stock.

For presentation purposes, the exchange for class A common stock is deemed to have occurred in 2020.

Stockholders’ Equity

Class A Common Stock

As of December 31, 2021, the Company was authorized to issue 300.0 million shares of Class A common stock and 100.0 million shares of preferred stock.

Issued and outstanding stock as of December 31, 2021 consisted of 117.2 million and 114.5 million shares of Class A common stock, respectively.

The par value of each share of the class A common stock is $ 0.0001 per share.

The Company had reserved shares of Class A common stock for issuance in connection with the following:

December 31, December 31,

(in thousands)

Common stock warrants (exercisable for class A common stock) treated as equity 1,770 12,312

Stock options outstanding 5,022 3,489

Restricted stock units outstanding 10,959 —

Public Warrants (exercisable for class A common stock) treated as liability 15,813 —

Private Placement Warrants (exercisable for class A common stock) treated as liability 8,325 —

Shares available for future grant 140,951 13,787

Total class A common stock reserved 182,840 29,588

The Company has approximately 2.4 million Sponsor Earn-Out Shares that are subject to specific lock-up provisions and potential forfeitures depending upon the post-Merger performance of the Company’s Class A common stock, and therefore, are required to be recorded as derivative liabilities at their fair value and adjusted to fair value at each reporting period.

As a result, as of December 31, 2021 and 2020, the Company's consolidated balance sheets included a derivative liability of $ 4.7 million and $ 0 , respectively.

The Company recorded $ 12.9 million in gain (loss) on derivatives in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2021 related to the fair value adjustments of these Sponsor Earn-Out Shares.

The Sponsor Earn-Out Shares have the following provisions:

Contractual Life Seven years from the closing date of the Merger

Release Provision Exactly half of the Sponsor Earn-Out Shares have a release provision ("Release") at such time that the volume weighted average price ("VWAP") is equal to, or greater than, $ 15.00 per share for ten of any twenty consecutive trading days.

The remaining Sponsor Shares Release at such time that the VWAP is equal to, or greater than, $ 17.50 per share for the of any twenty consecutive trading days.

There is an additional provision for acceleration of the Release upon a defined change in control.

Forfeiture Provision If, within the seven year period, the Sponsor Earn-Out Shares have not met the Release provisions, the Sponsor Earn-Out Shares will automatically forfeit and be cancelled.

Net (Loss) Income Per Share of Class A Common Stock

The following table includes the calculation of basic and diluted net (loss) income per share:

Years Ended December 31,

(in thousands except per share information)

Loss from continuing operations $ ( 243,993 ) $ ( 47,720 )

(Loss) gain from discontinued operation ( 1,650 ) 28,185

Net loss available to common stockholders $ ( 245,643 ) $ ( 19,535 )

Basic and diluted net loss per share - continuing operations $ ( 3.37 ) $ ( 1.45 )

Basic and diluted net (loss) income per share - discontinued operations ( 0.02 ) 0.85

Basic and diluted net loss per share $ ( 3.39 ) $ ( 0.60 )

Shares used in the computation of basic and diluted net loss per share 72,462 33,009

The potentially dilutive securities listed below were not included in the calculation of diluted weighted average common shares outstanding, as their effect would have been anti-dilutive during the years ended December 31, 2021 and 2020.

BlackSky’s Form S-1 registration statement filed with the SEC registered approximately 24.1 million shares underlying the Public Warrants and Private Placement Warrants outlined below, which equates to less than 16 % of the total fully diluted outstanding common shares of BlackSky.

While the Public Warrants and certain of the Private Placement Warrants are now exercisable, the exercise prices (of either $ 11.50 per share or $ 20 per share, depending on the class of warrant) both currently exceed the trading price for BlackSky’s common stock.

Shares issued to Legacy BlackSky stockholders as part of the Merger consideration remain locked up pursuant to BlackSky’s bylaws through at least the middle of the first quarter of 2022.

Years Ended December 31,

(in thousands)

Restricted class A common stock 335 891

Restricted stock units 10,959 —

Common Stock warrants 1,770 12,312

Public Warrants (exercisable for class A common stock) treated as liability 15,813 —

Private Placement Warrants (exercisable for class A common stock) treated as liability 8,325 —

Sponsor earn-out shares 2,372 —

Stock options 5,022 3,489

Stock-Based Compensation

The Company adopted two equity incentive plans in prior years.

Legacy BlackSky issued equity and equity-based awards under its 2014 stock incentive plan (the “2014 Plan”) and 2011 stock incentive plan (the “2011 Plan”, together with the 2014 Plan, collectively the “Plans”), which are now administered by the Company’s board of directors.

The Plans are no longer active;

however, outstanding awards granted under these Plans will not be affected.

Both Plans allowed the board of directors to grant stock options, designated as incentive or nonqualified, and stock awards to employees, officers, directors, and consultants.

Stock options

were granted with an exercise price per share equal to at least the estimated fair value of the underlying class A common stock on the date of grant.

The vesting period was determined through individual award agreements and was generally over a four-year period.

Awards generally expired 10 years from the date of grant.

As of December 31, 2021, the Company had 41 thousand and 2.2 million options outstanding, respectively, under the 2011 and 2014 Plans.

As part of the Merger, Osprey’s shareholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which are administered by the Company’s board of directors.

Under the 2021 Plan, the number of shares initially subject to issuance is 15.0 million, with automatic increases beginning in 2022.

Additionally, up to 13.1 million shares can be added to the 2021 Plan pursuant to assumed awards granted under the 2011 Plan and 2014 Plan that are subsequently forfeited or fail to vest.

Grants made under this plan generally vest over a period of 3 - 4 years and have a contractual life of 10 years.

Under the 2021 ESPP, the maximum number of shares made available for sale is 3.0 million, with automatic increases beginning in 2022.

The stock-based compensation expense attributable to continuing operations was included in imagery and software analytical service costs, excluding depreciation and amortization and selling, general and administrative expense in the consolidated statements of operations and comprehensive loss as follows:

Years Ended December 31,

(in thousands)

Imagery & software analytical service costs, excluding depreciation and amortization $ 4,121 $ —

Selling, general and administrative 38,450 1,982

Total stock-based compensation expense $ 42,571 $ 1,982

The stock-based compensation expense recorded for the RSUs during the years ended December 31, 2021 included a cumulative catch-up adjustment for service completed from the grant date to the close of the Merger.

This cumulative catch-up adjustment was required as the performance condition attributable to the RSUs was not deemed probable until occurrence of the Merger as the Merger was not within the control of Legacy BlackSky.

Additionally, as of December 31, 2021 and 2020, the Company’s consolidated balance sheets included $ 11.0 thousand and $ 0 , respectively, of stock-based compensation related to capitalized internal labor for software development activities recorded in property, plant, and equipment - net on the consolidated balance sheets.

Stock Options

Following the Merger, the outstanding stock options issued under the 2014 Plan may be exercised (subject to their original vesting, exercise and other terms and conditions) to purchase a number of shares of class A common stock equal to the number of shares of Legacy BlackSky class A common stock, as adjusted for the common stock exchange ratio, subject to the same terms and conditions as were applicable to such Legacy BlackSky stock option (each an “Assumed Company Stock Option”).

The exercise price per share of each Assumed Company Stock Option was equal to the quotient obtained by dividing the exercise price per share applicable to such Legacy BlackSky stock option by the common stock exchange ratio.

The Black-Scholes option pricing model is used to determine the fair value of options granted.

The Company utilized assumptions concerning expected term, a risk-free interest rate, and expected volatility to determine such values.

In December 2021, the Company granted an award to a homogenous pool of executive employees with an exercise price 48 % over the stated market price at the grant date.

A summary of the weighted-average assumptions is presented below:

Years Ended December 31,

Fair value per common share $ 5.40 $ 0.0121

Weighted-average risk-free interest rate 1.44 % 0.81 %

Volatility 33.40 % 65.00 %

Expected term (in years) 8.0 2.5

Dividend rate 0 % 0 %

A summary of the Company’s stock option activity under the Plans during the year ended December 31, 2021 is presented below:

For The Year Ended December 31, 2021

Options Weighted-Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value

(in thousands) (in thousands)

Outstanding - January 1, 2021 3,489 $ 0.2160

Granted 2,760 7.9700

Exercised ( 1,045 ) 0.1248

Forfeited ( 182 ) 0.1466

Outstanding - December 31, 2021 5,022 4.4914 8.74 $ 9,599

Exercisable - December 31, 2021 1,321 0.3962 7.07 5,410

The following summarizes information about the Company's option grants:

Years Ended December 31,

Number of options granted (in thousands) 2,760 2,226

Weighted-average grant-date fair value $ 1.5100 $ 0.0121

For options exercised, intrinsic value is calculated as the difference between the estimated fair value on the date of exercise and the exercise price.

The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $ 7.1 million and $ 0.7 million, respectively.

The total fair value of options vested during the years ended December 31, 2021 and 2020, was $ 0.9 million and $ 1.0 million, respectively.

As of December 31, 2021 and 2020, there was $ 4.3 million and $ 1.4 million, respectively, of total unrecognized compensation cost, which is expected to be recognized over a weighted-average period of 3.6 years and 1.9 years respectively.

Restricted Stock Awards

In the year ended December 31, 2020, the Company granted RSAs, which vest based upon the individual award agreements and generally vest over a three to four-year period.

These shares are deemed issued as of the date of grant, but not outstanding until they vest.

The Company intends to settle the RSAs in stock, and the Company has the shares available to do so.

A summary of the Company’s nonvested RSA activity during the year ended December 31, 2021 is presented below:

Year Ended December 31, 2021

Restricted Stock Awards Weighted-Average Grant-Date Fair Value

(in thousands)

Nonvested - January 1, 2021 891 $ 0.0121

Vested ( 546 ) 0.0121

Canceled ( 10 ) 0.0121

Nonvested - December 31, 2021 335 0.0121

During the year ended December 31, 2020, the Company granted 3,486 RSAs with a weighted-average grant-date fair value of $ 0.0121 .

As of December 31, 2021, there was $ 41 thousand of total unrecognized compensation cost related to nonvested RSAs granted under the Plans, which is expected to be recognized over a weighted-average period of 0.3 years.

The total grant date fair value of shares vested during the year ended December 31, 2021 was $ 7 thousand.

Restricted Stock Units

The Company granted an aggregate of 11.2 million RSUs to certain employees and service providers during the year ended December 31, 2021 under the 2014 Plan as follows:

Grant Date Number of Shares

(in thousands) First Tranche Second Tranche Third Tranche

February 2021 8,533 50 % of such RSUs will vest 180 days subsequent to consummation of the Merger

50 % of such units will vest ratably over eight consecutive quarters, on specified quarterly vesting dates with the first of such quarterly vesting dates occurring at least three months after the vesting of the initial 50 % of the RSUs

March 2021 229 50 % of such RSUs will vest 180 days subsequent to consummation of the Merger

March 2021 137 25 % vested immediately upon issuance

50 % of these RSUs vested on the date of the Merger

The remaining 25 % of the RSUs will vest ratably over 12 months, on the same day of the month that the Merger closed, commencing as of the month following satisfaction of the performance condition

June 2021 164 25 % of such RSUs will vest at the later of:

a) 180 days subsequent to consummation of Merger or b) the one year anniversary of the vesting commencement date

75 % of such units will vest ratably over twelve consecutive quarters, on specified quarterly vesting dates with the first of such quarterly vesting dates occurring at least three months after the vesting of the initial 25 % of the RSUs

July 2021 285 25 % of such RSUs will vest at the later of:

a) 180 days subsequent to consummation of the Merger or b) the one year anniversary of the vesting commencement date

December 2021 1,670 25 % of such RSUs will vest at the one -year anniversary of the vesting commencement date

December 2021 225 One-third (1/3rd) of the total number of RSUs will be scheduled to vest annually on the anniversary of the vesting commencement date N/A N/A

A summary of the Company’s nonvested RSU activity during the year ended December 31, 2021 is presented below:

Year Ended December 31, 2021

Restricted Stock Units Weighted-Average Grant-Date Fair Value

(in thousands)

Nonvested - January 1, 2021 — $ —

Granted 11,243 6.8004

Vested ( 111 ) 8.0407

Canceled ( 173 ) 8.0816

Nonvested - December 31, 2021 10,959 6.7675

Unrecognized compensation costs related to nonvested restricted stock units totaled $ 33.7 million as of December 31, 2021, which is expected to be recognized over a weighted-average period of 1.9 years.

Related Party Transactions

Amount Due to Related Party as of

December 31, December 31,

Name Nature of Relationship Description of the Transactions (in thousands)

Seahawk Debt Issuer In 2019, the Company raised and converted $ 18.4 million from prior debt into new, outstanding debt and issued 13.5 million warrants to purchase Legacy BlackSky common stock.

$ 19,977 $ 19,198

Intelsat Debt Issuer In 2019, the Company entered into a term loan facility for $ 50.0 million and issued 20.2 million warrants to purchase Legacy BlackSky common stock.

54,149 52,039

Jason and Marian Joh Andrews The former co-founders and employees of Legacy BlackSky In 2018, the Company executed the notes totaling $ 12.5 million to repurchase an aggregate of $ 11.5 million Legacy BlackSky common stock shares.

The Andrews Notes were extinguished in the year ended December 31, 2021.

The terms on the extinguishment were forgiveness on the existing principal balance of $ 10.0 million and accrued interest of $ 2.2 million in exchange for 958,082 shares.

Amount Due to Related Party as of

Total Payments in Years Ended December 31, December 31,

2021 2020 2021 2020

Name Nature of Relationship Description of the Transactions (in thousands)

LeoStella Joint Venture Design, development and manufacture of multiple satellites $ 19,257 $ 8,205 $ 8,381 $ 8,012

X-Bow Equity Method Investee In 2017, the Company received stock in X-Bow.

As of December 31, 2021, the Company had a 17.5 % investment in X-Bow and had one Board seat.

As described in Note 7, the Company has engaged X-Bow to develop a rocket for the Company.

1,865 4,079 — 750

Palantir Technologies Strategic Partner Multi-year software subscription agreement for $ 8.0 million

Ursa Space Systems Strategic Partner The chairman of the Company’s board of directors, Will Porteous, is also an investor and member of the board of directors of Ursa Space Systems.

During the years ended December 31, 2021 and 2020, the Company received $ 0.3 million and $ 1.4 million respectively from CACI International Inc.

(“CACI”), of which one of the Company's board members is also a board member of CACI.

Accounts receivable related to CACI as of December 31, 2021 and 2020 was $ 0 .

Interest on the term loan facility is accrued and compounded annually.

No significant interest payments were made in the year ended December 31, 2021 or 2020.

The Company has interest due to related parties in the amount of $ 0.5 million as of December 31, 2021, which has been recorded as accrued interest.

In February 2021, in connection with the Bridge Notes, the Company agreed to pay Consent Fees of $ 2.5 million to Intelsat and Seahawk, which were settled for cash at the closing of the Merger (Note 15).

During the first half of 2021, the Company paid $ 2.5 million to the Founders towards the principal balance, along with a $ 25 thousand interest payment.

In December 2021, the Company issued Class A common stock in exchange for the outstanding principal and accrued interest totaling $ 12.1 million (Note 15).

The total number of Class A common stock exchanged to settle the outstanding debt was 958,082 .

Fair Value of Financial Instruments

Recurring basis

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2021 and 2020, as well as indicate the fair value hierarchy level of the valuation techniques and inputs that the Company utilized to determine such fair value:

December 31, 2021 Quoted Prices in Active Markets Significant Other Observable Input Significant Other Unobservable Inputs

(Level 1) (Level 2) (Level 3)

(in thousands)

Public Warrants 8,697 — —

Private Placement Warrants — — 3,496

Sponsor Shares — — 4,732

$ 8,697 $ — $ 8,228

December 31, 2020 Quoted Prices in Active Markets Significant Other Observable Input Significant Other Unobservable Inputs

(Level 1) (Level 2) (Level 3)

(in thousands)

Series B Preferred Stock Warrants $ — $ — $ 508

Series C Preferred Stock Warrants — — 50

$ — $ — $ 558

The carrying values of the following financial instruments approximated their fair values as of December 31, 2021 and 2020 based on their maturities:

cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, leases payable and other current liabilities.

There were no transfers into or out of any of the levels of the fair value hierarchy during the years ended December 31, 2021 or 2020.

The following is a summary of changes in the fair value of the Level 3 liabilities during the year ended December 31, 2021:

Bridge Notes Consent Fee Liability Sponsor Shares Private Placement Warrants Class A Common Stock Warrants Preferred Stock Warrant Series B and C

(in thousands)

Balance, January 1, 2021 $ — $ — $ — $ — $ — $ 558

Issuance of financial instruments carried at fair value — — — — 18,800

Liability recorded at fair value 77,033 2,715 17,659 14,902 — —

Loss (gain) from changes in fair value 64 ( 251 ) ( 12,927 ) ( 11,406 ) 19,529 1,568

Settlement (1)

( 77,097 ) ( 2,464 ) — — ( 38,329 ) ( 2,126 )

Balance, December 31, 2021 $ — $ — $ 4,732 $ 3,496 $ — $ —

Bridge Notes were converted to class A common stock, Consent fees were settled for cash and all warrants were exercised.

Commitments and Contingencies

The Company entered into long-term operating lease agreements for office space and capital leases for equipment.

The minimum fixed commitments related to all non-cancellable leases are as follows:

Operating Leases Capital Leases

(in thousands)

For the years ending December 31,

2022 $ 2,680 $ 51

Total minimum lease payments $ 5,644 55

amount representing interest ( 2 )

Present value of minimum lease payments 53

current obligation ( 49 )

Long-term obligations under capital lease $ 4

Building leases for the Company's headquarters in Virginia and for the primary satellite operations center and a secondary office space for employees in Washington expire in August 2024 and February 2023, respectively.

During the years ended December 31, 2021 and 2020, the Company entered into capital lease arrangements for $ 0 and $ 8.7 thousand, respectively.

Rent expense for the years ended December 31, 2021 and 2020 was $ 3.7 million and $ 3.2 million, respectively.

Legal Proceedings

In the normal course of business, the Company may become involved in various legal proceedings which, by their nature, may be inherently unpredictable and which could have a material effect in the consolidated financial statements, taken as a whole.

Prior to the Merger closing, Osprey received six demands from putative Osprey stockholders (together, the “Demands”) and had a derivative lawsuit filed against it in the Supreme Court of the State of New York by a purported Osprey stockholder:

Osprey Technology Acquisition Corp., et al., Index No.

653633/2021 (Sup.

In addition, the Osprey board of directors also received six demands from putative stockholders of Osprey (together, the “Demands”).

Prior to closing, Osprey reached agreements with Luster and the six putative stockholders that Osprey’s supplement disclosures and a modification to the authorized share count fairly resolved their claims.

Osprey did not reach agreements with these stockholders on attorneys’ fees and BlackSky inherited this task post-closing.

In the year ended December 31, 2021, the Company paid $ 0.7 million to settle the Demands and recorded $ 0.3 million in reimbursement proceeds from an insurance claim.

Both amounts were recorded in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss.

As of December 31, 2021, with the exception of the items above, the Company was not aware of any additional pending, or threatened, governmental actions or legal proceedings to which the Company is, or will be, a party that, if successful, would result in a material impact to its business or financial condition or results of operations.

Other Contingencies

The Company analyzed its unique facts and circumstances related to potential obligations in a certain state jurisdiction, including the delivery nature of its prior year intercompany services, payroll and other benefits-

related services, current shared services between the parent and subsidiaries, and changing state laws and interpretations of those laws, and has determined that the Company may have an indirect tax obligation.

The Company has continued correspondence with the applicable authorities in an effort toward identifying a taxpayer-favorable resolution of the potential liabilities.

The Company has recognized a liability including interest and penalties based on its best estimate as of December 31, 2021.

The following table summarizes the estimated indirect tax liability activity during the year ended December 31, 2021:

(in thousands)

Balance, January 1, 2021 $ 921

Payments ( 162 )

Adjustment to Expense ( 22 )

Balance, December 31, 2021 $ 737

The Company continues to analyze the additional obligations it may have, if any, and it will adjust the liability accordingly.

Other Commitments

The Company has commitments for multi-launch and integration services with launch services providers.

As of December 31, 2021, the Company has commitments for 2 launches to include up to 4 satellites at estimated launch dates totaling an amount of $ 6.9 million with options for additional launches.

The terms of the arrangements also allow for the Company to remanifest the satellites if significant delays in excess of 365 days or other inexcusable delays occur with the provider.

Subsequent to remanifest efforts four months after the 365 days, the Company can request a refund of all recoverable costs.

Payment terms are 15 days from invoice date.

As of December 31, 2021, the Company has a remaining commitment of $ 8.4 million on its satellite purchase contract with LeoStella.

In addition, the Company entered into a non-refundable commitment to acquire additional satellite components from LeoStella for $ 2.2 million.

The delivery schedule for the components are not specified and is subject to certain engineering milestones.

Payment terms are 15 days from invoice date.

In addition, we entered into various operational commitments for the next several years totaling $ 10.0 million as of December 31, 2021.

Concentrations, Risks, and Uncertainties

The Company maintains all cash and cash equivalents with one financial institution.

Financial instruments that potentially subject the Company to concentrations of credit risk are primarily accounts receivable and cash deposits.

For the years ended December 31, 2021 and 2020, revenue from customers representing 10% or more of the consolidated revenue from continuing operations was $ 15.4 million and $ 15.6 million, respectively.

Accounts receivable related to these customers as of December 31, 2021 and 2020 was $ 1.3 million and $ 2.0 million, respectively.

Revenue from the U.S.

federal government and agencies was $ 29.4 million and $ 17.1 million for the years ended December 31, 2021 and 2020, respectively.

Accounts receivable related to U.S.

federal government and agencies was $ 2.6 million and $ 1.3 million as of December 31, 2021 and 2020, respectively.

The Company generally extends credit on account, without collateral.

Outstanding accounts receivable balances are evaluated by management, and accounts are reserved when it is determined collection is not probable.

As of December 31, 2021 and 2020, the Company evaluated the realizability of the aged accounts receivable, giving consideration to each customer’s financial history and liquidity position, credit rating and the

facts and circumstances of collectability on each outstanding account, and concluded that no reserve for uncollectible account was required.

Subsequent Events

The Company evaluated subsequent events through March 31, 2022 and determined that there have been no events that have occurred that would require adjustments to our disclosures or the consolidated financial statements.

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-K

Item 9A. Controls and Procedures