What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-20 compared with 2024-03-20 · 490 added, 342 removed, 976 unchanged (46% of the section changed)

12 unchanged sentences

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, 2023, 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, 2023, based on those criteria.

In November 2024, we acquired the remaining 50% of common units of LeoStella LLC (“LeoStella”) and LeoStella became a wholly-owned subsidiary of BlackSky.

As part of the ongoing integration of LeoStella, we are in the process of incorporating the controls and related procedures of this businesses.

As permitted by the SEC rules, management's assessment and conclusion on the effectiveness of our internal control over financial reporting as of December 31, 2024 excludes an assessment of the internal control over financial reporting of LeoStella, acquired on November 6, 2024.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 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.

and management believes that we maintained effective internal control over financial reporting as of December 31, 2024 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.

Changes in 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 quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In November 2024, we acquired the remaining 50% of common units of LeoStella and LeoStella became a wholly-owned subsidiary of BlackSky.

As part of the ongoing integration of LeoStella, we are in the process of incorporating the controls and related procedures of this businesses.

Other than incorporating controls for LeoStella, 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 quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

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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

3.1 Amended and Restated Certificate of Incorporation of the Company, as amended

3.2 Amended and Restated Bylaws of the Company

1 unchanged sentence

4.1 Specimen Common Stock Certificate

S-3 333-267889 4.1 October 14, 2022

4.2 Form of Indenture

1 unchanged sentence

Specimen Warrant Certificate

S-1 333-234180 4.3 October 11, 2019

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

1 unchanged sentence

Description of Securities

March 23, 2023

F orm of Warrant

Form of Warrant

8-K 001-39113 4.1

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Outside Director Compensation Policy

8-K 001-39113 10.13 September 15, 2021

BlackSky Technology Inc.

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S-4/A 333-256103 10.17 June 28, 2021

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

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

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

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.

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

BlackSky HQ Lease Agreement, dated February 28, 2019, by and between Northridge Office Building LLC and Spaceflight Industries, Inc.

S-1 333-260458 10.25 October 25, 2021

BlackSky HQ Lease Agreement, dated November 20, 2023, by and between 2411 Dulles Corner Metro Owner LLC and BlackSky Holdings, Inc.

March 20, 2024

BlackSky Technology Inc.

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

Executive Change in Control and Severance Plan, adopted August 16, 2021, and form of P articipation A greement attached as A ppendix A

001-39113 10.6 August 18, 2021

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S-8 333-261778 4.7 December 20, 2021

2014 Equity Incentive Plan

S-8 333-261778 4.8 December 20, 2021

Spaceflight, Inc.

Amended and Restated 2011 Equity Incentive Plan Assumed by Spaceflight Industries and forms of agreements thereunder

Form of Restricted Stock Award Agreement under the BlackSky 2021 Equity Incentive Plan

S-8 333-261778 4.6 December 20, 2021

Form of Restricted Stock Award Agreement

BlackSky Holdings, Inc.

2014 Equity Incentive Plan

S-8 333-261778 4.8 December 20, 2021

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March 9, 2023

Production Work Order 003, dated November 13, 2023, by and between BlackSky Global LLC and LeoStella LLC

Exhibit Description Form SEC File No.

Filing Date Filed or Furnished Herewith

Subordinated Loan and Security Agreement, dated November 3, 2023, by and between BlackSky Technology Inc.

and the subsidiaries named therein and Rocket Lab USA, Inc.

March 20, 2024

Loan and Security Agreement, dated as of April 11, 2024, by and among BlackSky Technology Inc., BlackSky Holdings, Inc., BlackSky Geospatial Solutions, Inc.

(n/k/a BlackSky Geospatial Solutions, LLC), BlackSky Global LLC, SFI IP Holdco LLC, BlackSky International, Building 5 LLC and Stifel Bank

April 15, 2024

I nsider Tradi ng Policy

21.1 List of Subsidiaries

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

Exhibit Description Form SEC File No.

Filing Date Filed or Furnished Herewith

24.1 Power of Attorney (included in signature pages hereto)

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

C ompensation Recovery Policy

Compensation Recovery Policy

10-K 001-39113

March 20, 2024

101.INS Inline XBRL Instance Document X

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+ Indicates management contract or compensatory plan.

† Certain portions of this exhibit have been omitted in accordance with Regulation S-K Item 601.

† Certain portions of this exhibit have been omitted in accordance with Item 601 of Regulation S-K.

The Registrant agrees to furnish an unredacted copy of the exhibit to the SEC upon request.

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(the "Company") as of December 31, 2024, and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2024, 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, 2023 and 2022 , and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America

Basis for Opinion

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

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Acquisition — Valuation of LeoStella and Related Intangible Assets — Refer to Note 7 to the financial statements

Critical Audit Matter Description

On November 6, 2024, the Company acquired the remaining 50% of the common units of LeoStella, which the Company’s initial 50% ownership interest was previously accounted for as an equity method investment.

The transaction was accounted for as a step acquisition using the acquisition method of accounting for business combinations.

As of the date of the acquisition the Company determined the fair value of LeoStella using a combination of cost approaches and discounted cash flow methods.

With respect to intangible assets, the estimated

fair values were determined based on relief from royalty and multi-period Excess Earnings Method approach.

The Company remeasured its pre-existing 50% interest in LeoStella at fair value immediately prior to the acquisition and recorded a gain on its investment of $0.9 million in the Statement of Operations and Comprehensive Loss.

The identifiable assets and liabilities of LeoStella were recorded at fair value on the date of acquisition.

The fair value determination of LeoStella and identifiable intangible assets required management to make significant estimates and assumptions related to future cash flows and the selection of the discount rate.

We identified the valuation of LeoStella and the related acquired identifiable intangible assets to be a critical audit matter because of the significant estimates and assumptions management made to determine the fair value of LeoStella and acquired identifiable intangible assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s forecasts of future cash flows, and other valuation assumptions, including the selection of the discount rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the valuation of LeoStella and the related acquired identifiable intangible assets included the following, among others:

• We tested the design and implementation of controls over the valuation of LeoStella and the related intangible assets, including management’s controls over forecasts of future cash flows and selection of the discount rates.

• We tested the completeness and accuracy of the underlying data used in the fair value models which included inspecting contractual documents, comparing projected cash flows to both historical actuals, management's plans and inquiring of management.

• We involved our valuation specialists to assist with the evaluation of the methodology used by the Company and significant valuation assumptions included in the fair value estimates, including the discount rate applied to future cash flows.

• We performed a sensitivity analysis over assumptions used in the fair value model, to evaluate the risk associated with a change in the fair value of the intangible assets resulting from changes in the assumptions.

/s/ Deloitte & Touche LLP

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Accounts receivable, net of allowance of $ 45 and $ 151 , respectively

Prepaid expenses and other current assets 3,916 4,713

Contract assets 27,852 15,213

Inventories 6,043 —

Prepaid expenses and other current assets 4,356 3,916

Total current assets 106,736 79,331

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Goodwill 10,260 9,393

Investment in equity method investees — 5,285

Intangible assets - net 5,446 1,357

Satellite procurement work in process 55,976 50,954

Satellite work in process 80,601 55,976

Other assets 1,461 9,263

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Contract liabilities - current 2,183 3,670

Debt - current portion 1,927 —

Other current liabilities 1,493 1,405

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Derivative liabilities 17,964 15,149

Long-term debt 83,502 76,219

Long-term debt - net of current portion 105,736 83,502

Other liabilities 2,387 1,724

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Operating loss ( 44,288 ) ( 55,980 )

Gain on derivatives 7,679 11,812

(Loss) gain on derivatives ( 2,815 ) 7,679

Income on equity method investments 879 4,165

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Interest expense ( 12,187 ) ( 9,306 )

Other (expense) income, net ( 1,807 ) 2,081

Other income (expense), net 3 ( 1,807 )

Loss before income taxes ( 56,848 ) ( 53,186 )

Income tax expense ( 370 ) ( 673 )

Loss from continuing operations ( 53,859 ) ( 74,879 )

Discontinued operations:

Gain from discontinued operations — 707

Income tax (expense) benefit — —

Gain from discontinued operations, net of income taxes — 707

Net loss ( 57,218 ) ( 53,859 )

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Basic and diluted loss per share of common stock:

Loss from continuing operations $ ( 0.40 ) $ ( 0.64 )

Gain from discontinued operations, net of income taxes — 0.01

Net loss per share of common stock $ ( 2.67 ) $ ( 3.18 )

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Stock-based compensation — — 11,724 — 11,724

Issuance of common stock upon exercise of stock options 407 — 10 — 10

Issuance of common stock upon exercise of stock options and ESPP shares purchased 64 — 308 — 308

Issuance of common stock upon vesting of restricted stock awards 3 — — — —

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Issuance of common stock upon vesting of restricted stock units 504 — — — —

Issuance of common stock, net of equity issuance costs 2,483 1 14,972 — 14,973

Withholding of stock units to satisfy tax withholding obligations upon the vesting of restricted stock units and exercise of stock options ( 126 ) — ( 1,410 ) — ( 1,410 )

Repurchase and retirement of common stock ( 15 ) — — ( 30 ) ( 30 )

Net loss — — — ( 53,859 ) ( 53,859 )

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Net loss $ ( 57,218 ) $ ( 53,859 )

Gain from discontinued operations, net of income taxes — 707

Loss from continuing operations ( 53,859 ) ( 74,879 )

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

Depreciation and amortization expense 43,536 43,431

Transfer of satellite procurement work in process to engineering service costs 4,854 —

Transfer of satellite work in process to engineering service costs 334 4,854

Operating lease right of use assets amortization 583 883

Bad debt expense (recovery) 179 ( 22 )

Bad debt expense 145 179

Stock-based compensation expense 11,169 10,862

Income on equity method investment ( 4,165 ) ( 2,087 )

Loss on disposal of property and equipment 127 —

Loss on impairment of assets 81 —

Gain on derivatives ( 7,679 ) ( 11,812 )

Amortization of debt issuance costs and non-cash interest expense 9,207 7,967

Loss (gain) on derivatives 2,815 ( 7,679 )

Non-cash interest income ( 1,074 ) ( 796 )

Other, net — 106

Loss on impairment of assets 131 81

Loss on disposal of assets 44 127

Income on equity method investment ( 879 ) ( 4,165 )

Changes in operating assets and liabilities:

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Purchase of property and equipment ( 15,678 ) ( 15,274 )

Satellite procurement work in process ( 28,441 ) ( 32,385 )

Satellite work in process ( 34,558 ) ( 28,441 )

Purchases of short-term investments ( 52,860 ) ( 40,078 )

Proceeds from maturities of short-term investments 34,225 59,110

Cash received from business acquisition 541 —

Proceeds from sale of equity method investment — 9,450

Proceeds from sale of property and equipment — 22

Distributions from equity method investment — 804

Cash flows used in investing activities - continuing operations ( 15,211 ) ( 80,601 )

Cash flows used in investing activities - discontinued operations — ( 978 )

Net cash used in investing activities ( 68,330 ) ( 15,211 )

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Proceeds from equity issuances, net of equity issuance costs 47,009 32,733

Proceeds from options exercised 10 47

Proceeds from issuance of debt 20,000 —

Proceeds from options exercised and ESPP shares purchased 308 10

Debt payments ( 10,000 ) —

Withholding tax payments on vesting of restricted stock units ( 967 ) ( 1,410 )

Payments of transaction costs for debt modification ( 1,311 ) —

Payments of transaction costs related to derivative liabilities ( 905 ) —

Payments for debt issuance costs ( 632 ) —

Payments for deferred financing costs — ( 67 )

Payments for deferred offering costs ( 60 ) —

Net cash provided by (used in) financing activities 29,050 ( 5,053 )

Payments of transaction costs for debt modification — ( 1,311 )

Payments of transaction costs related to derivative liabilities — ( 905 )

Net cash provided by financing activities 55,658 29,050

Net decrease in cash, cash equivalents, and restricted cash ( 19,056 ) ( 3,582 )

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Supplemental disclosures of non-cash financing and investing information:

Property and equipment additions accrued but not yet paid $ 10,420 $ 6,455

Increase of debt principal for paid-in-kind interest $ 8,456 $ 7,446

Transfer of satellite procurement work in process to engineering service costs 4,854 —

Vendor financed satellite launch costs 6,000 —

Transfer of satellite work in progress to inventories 5,997 —

Accretion of short-term investments' discounts and premiums 1,074 777

Property and equipment additions accrued but not yet paid 1,117 10,420

Capitalized stock-based compensation 555 709

Transfer of satellite work in process to engineering service costs 334 4,854

Capitalization of depreciation expense 177 —

Deferred offering costs accrued but not yet paid 54 4

Equity issuance costs accrued but not yet paid 46 13

Capitalized interest for property and equipment placed into service — 220

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Satellite procurement costs included in settlement with LeoStella — 36

Equity issuance costs accrued but not yet paid 13 491

Deferred financing costs accrued but not yet paid 4 —

Repurchase and retirement of common stock — 30

See notes to consolidated financial statements

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

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 as an equity method investment.

The Company's equity issuances during the year ended December 31, 2023 included a private placement and an at-the-market (“ATM”) offering.

In March 2023, the Company completed the private placement of 16.4 million shares of the Company’s Class A common stock and an equal number of corresponding warrants, for a purchase price of $ 1.79 per share and associated warrant.

The Company received $ 29.4 million in gross proceeds from the private placement.

The Company also sold 3.5 million common shares in its ATM offering, at an average purchase price per share of $ 1.45 , resulting in gross proceeds of $ 5.0 million.

The transaction costs for these equity issuances consisted of legal fees, accounting fees, placement agent fees, and other third-party costs directly related to the equity issuances.

During the year ended December 31, 2023, $ 1.8 million of transaction costs that had been incurred were recorded as a reduction to additional paid-in capital in the consolidated statements of changes in stockholders’ equity and consolidated balance sheets, and as a reduction to the proceeds from the transaction in the consolidated statements of cash flows.

On May 9, 2023, BlackSky and its subsidiaries entered into the Second Amendment (the “Amendment”) to its Amended and Restated Loan and Security Agreement with Intelsat Jackson Holdings SA (“Intelsat”) and Seahawk SPV Investment LLC (“Seahawk”), dated October 31, 2019 and previously amended on September 9, 2021.

The Amendment amended the secured loan facility to, among other things, extend the maturity date of the loan, roll the cash interest payment due on May 1, 2023 into the outstanding principal to be paid on the maturity date, and increase the interest rate.

See Note 13 for more information regarding the Amendment.

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

On November 6, 2024, the Company acquired the remaining 50 % of the common units of LeoStella LLC (“LeoStella”).

LeoStella was previously a joint venture with Thales Alenia Space US Investment LLC (“Thales”) and the Company accounted for LeoStella as an equity method investment.

On the acquisition date, LeoStella became a wholly-owned subsidiary of the Company.

LeoStella is a vertically-integrated small satellite design and manufacturer based in Tukwila, Washington and it is expected that this acquisition will allow the Company to improve its control over the Gen-3 supply chain and production operations.

See Note 7 - "Business Acquisition"- for further detail.

In September 2024, the Company effected a one-for-eight reverse stock split (the “Reverse Stock Split”) of its issued Class A common stock.

As a result, every eight shares of its issued common stock were combined into one share of common stock.

No fractional shares of the Company's common stock were issued as a result of the Reverse Stock Split.

Each stockholder who would otherwise have been entitled to receive a fractional share as a result of the Reverse Stock Split received a cash payment equal to the product obtained by multiplying the number of shares of common stock held by such stockholder before the Reverse Stock Split that would otherwise have been exchanged for such fractional share interest by the closing price per share of the common stock as reported on the New York Stock Exchange (“NYSE”) on September 6, 2024, the date of the effective time of the Reverse Stock Split.

As a result of the Reverse Stock Split, proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding warrants to purchase shares of the Company's common stock.

These notes to the consolidated financial statements and the accompanying consolidated financial statements give retroactive effect to the Reverse Stock Split for all periods presented.

The shares of common stock retained a par value of $ 0.0001 per share.

The Company's equity issuances during the year ended December 31, 2024 included a public offering of shares and shares sold as part of the Company's at-the-market (“ATM”) offering program.

In September 2024, the Company raised gross proceeds of $ 46.0 million via a public offering comprised of 11.5 million shares of the Company's Class A common stock for a public offering price of $ 4.00 per share.

The Company also sold 500 thousand shares from the ATM offering program at an average purchase price per share of $ 9.68 , resulting in gross proceeds of $ 4.8 million during the year ended December 31, 2024.

The transaction costs of $ 3.9 million for the equity issuances incurred during the year ended December 31, 2024, consisting of underwriting discounts and commissions, legal fees, and placement agent fees, have been recorded as a reduction to additional paid-in capital in the consolidated statements of changes in stockholders’ equity and consolidated balance sheets.

Basis of Presentation and Summary of Significant Accounting Policies

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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.

As noted in Note 1 and Note 7, on November 6, 2024, the Company acquired the remaining 50 % of the common units of LeoStella and LeoStella became a wholly-owned subsidiary of BlackSky.

Prior to the acquisition, the consolidated financial statements included the Company’s proportionate share of the earnings or losses of its equity method investments and a corresponding increase or decrease to its investments, with recorded losses limited to the carrying value of the Company’s investments.

All intercompany transactions and balances have been eliminated upon consolidation.

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

Emerging Growth Company

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 the requirement in Public Company Accounting Oversight Board Auditing Standard 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, to communicate critical audit matters in the auditor’s report;

(iv) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, 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

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Actual results could materially differ from these estimates.

Significant estimates made by the Company include, but are not limited 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, the incremental borrowing rate to measure the operating lease right of use assets, and stock-based compensation.

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.

Cash and Cash Equivalents

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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.

The Company invests in short-term investments, which generally consist of A-1, or higher, rated corporate debt and governmental securities.

The investments are classified as held-to-maturity and have a stated maturity date of one year or less from the balance sheet date.

Any investments with original maturities less than three months are considered cash equivalents.

As of December 31, 2024 and December 31, 2023, the Company’s short-term investments had a carrying value of $ 39.4 million and $ 19.7 million, respectively, which represents amortized cost, and an aggregate fair

value of $ 39.4 million and $ 19.7 million, respectively, which represents a Level 1 measurement based off of the fair value hierarchy.

Accounts Receivable - net

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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 $ 151 thousand and $ 0 as of December 31, 2023 and 2022, respectively.

The Company assessed all existing accounts receivable and recorded an allowance for doubtful accounts of $ 45 thousand and $ 151 thousand as of December 31, 2024 and 2023, respectively.

Inventories are categorized into raw materials and work in process.

Raw materials are costs used to build satellites, including those materials and labor that are in process of being built.

Work in process primarily consists of costs associated with specific anticipated contracts.

As of December 31, 2024, the Company had $ 46 thousand of raw materials inventory and $ 6.0 million of work in process inventory.

As of December 31, 2023, the Company did not have any inventory.

Inventories are stated on a consistent basis at the lower of historical cost or net realizable value.

Net realizable value is determined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

The Company estimates future sales and will write down excess inventories as needed.

The Company had a reserve of $ 0 for inventory as of December 31, 2024, and 2023, respectively.

The Company’s estimates of future sales are based on confirmed and expected contracts.

The carrying values of inventories approximated their fair values as of December 31, 2024.

Prepaid Expenses and Other Current Assets

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Other current assets consist primarily of non-trade receivables and short-term deposits.

The Company invests in short-term investments, which generally consist of A-1, or higher, rated corporate debt and governmental securities.

The investments are classified as held-to-maturity and have a stated maturity date of one year or less from the balance sheet date.

Any investments with original maturities less than three months are considered cash equivalents.

As of December 31, 2023 and 2022, the Company’s short-term investments had a carrying value of $ 19.7 million and $ 38.0 million, respectively, which represents amortized cost, and an aggregate fair value of $ 19.7 million and $ 37.9 million, respectively, which represents a Level 1 measurement based off of the fair value hierarchy.

The gross unrecognized holding gains as of December 31, 2023 and 2022 were $ 6 thousand and $ 0 , respectively;

the gross unrecognized holding losses as of December 31, 2023 and 2022 were $ 0 and $ 134 thousand, respectively.

The carrying values of prepaid expenses and other current assets approximated their fair values as of December 31, 2024.

Property and Equipment - net

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Estimated useful lives (years)

Capitalized software

Office furniture and fixtures 5

Production and engineering equipment 3 - 6

Computer equipment and software 3

Site and other equipment 3 - 4

Office furniture and fixtures 5

Capitalized software

Leasehold improvements shorter of useful life or remaining lease term

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Costs incurred prior to and after the application development stage are charged to expense.

We regularly review our capitalized software projects for impairment.

The Company regularly reviews its capitalized software projects for impairment.

The Company leases office space under various non-cancellable operating leases with varying lease expiration dates through 2036.

Several leases contain renewal options and termination options that were not reasonably certain to be exercised upon inception of the lease and are not included in the lease expiration dates.

We determine whether a contract is or contains a lease and whether the lease should be classified as an operating or finance lease at contract inception.

The Company determines whether a contract is or contains a lease and whether the lease should be classified as an operating or finance lease at contract inception.

The Company determines if an arrangement is a lease at inception of the contract.

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For leases where the rate is not determinable, the Company determines the incremental borrowing rate.

We do not recognize a ROU asset and a lease liability for leases with an initial term of 12 months or less;

we recognize lease expense for these leases on a straight-line basis over the lease term.

The Company does not recognize a ROU asset and a lease liability for leases with an initial term of 12 months or less;

the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Many of the Company’s lease agreements contain incentives for tenant improvements.

For tenant improvement incentives received, if the incentive is determined to be a leasehold

improvement owned by the lessee, the Company generally records the incentives as a reduction to the ROU asset, which reduces rent expense over the lease term.

For these lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use.

For tenant improvement incentives received, if the incentive is determined to be a leasehold improvement owned by the lessee, the Company generally records the incentives as a reduction to the ROU asset, which reduces rent expense over the lease term.

For these lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when

the Company is given the right of access to the space and begins to make improvements in preparation for intended use.

Many of the Company’s lease arrangements contain multiple lease components, such as fixed rent payments and non-lease components, such as common-area maintenance (“CAM”) costs.

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The Company's variable lease expense primarily consists of CAM expenses paid directly to lessors of real estate leases.

Finance leases are not material to our consolidated financial statements and the Company is not a lessor in any material arrangements.

We do not have any material restrictions or covenants in our lease agreements, sale-leaseback transactions, land easements or residual value guarantees.

Finance leases are not material to the Company's consolidated financial statements and the Company is not a lessor in any material arrangements.

The Company does not have any material restrictions or covenants in its lease agreements, sale-leaseback transactions, land easements or residual value guarantees.

Goodwill, Intangible Assets - net, and Other Long-Lived Assets

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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 concluded it has one reporting unit as of December 31, 2024 with goodwill of $ 10.3 million.

The Company continuously evaluates whether indicators of impairment exist to determine whether it is necessary to perform a quantitative goodwill impairment test.

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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.

Long-Lived Assets and Intangible Assets

The Company reviews long-lived assets, including intangible assets, property and equipment, satellite 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.

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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.

Finite-lived intangible assets include various assets that are subject to amortization, which primarily includes trade names, trademarks, and customer relationships.

Such intangible assets are amortized on a straight-line basis over their estimated useful lives.

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

Trade names and trademarks 5

Customer relationships 10

Indefinite life intangible assets is made up of in-process research and development, which has an indefinite life until development is complete.

These assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable.

Satellite Work in Process

Satellite work in process primarily represents (a) amounts paid to third party vendors for progress payments associated with the engineering, long lead procurement of satellite components, and manufacturing of the Company's satellites, (b) internal labor costs incurred to develop and integrate the Company's satellites, including salaries and allocations of fringe and stock-based compensation and (c) launch service vendors for the costs associated with launching the Company's satellites, which includes launch and launch insurance costs.

Satellite work in process capitalized, but not yet paid, is recognized as the Company has the rights to the in-process assets being engineered 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 8).

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 voting interest in the investee or retains a voting seat on the investee's board of directors.

In evaluating whether the Company has significant influence, the Company considers the nature of its ownership interest in the investee, as well as other factors that may give the Company the ability to exercise significant influence over the investee's operating and capital financial policies.

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.

As noted in Note 1 and Note 7, on November 6, 2024, the Company acquired the remaining 50 % of the common units of LeoStella and LeoStella became a wholly-owned subsidiary of BlackSky.

Prior to the acquisition, the Company had the ability to exercise significant influence, but not control, over LeoStella and accounted for it under the equity method of accounting, including it as an in investment in equity method investees on the Company's consolidated balance sheets.

Significant influence typically exists if a Company has a 20% to 50% ownership voting interest in the investee or retains a voting seat on the investee's board of directors.

In evaluating whether the Company had significant influence, the Company considered the nature of its ownership interest in the investee, as well as other factors that may have given the Company the ability to exercise significant influence over the investee's operating and capital financial policies.

Under this method of accounting, the Company's share of the net earnings or losses of the investee were included in the Company's consolidated statements of operations and comprehensive loss.

The Company did not recognize any percentage of LeoStella's estimated net loss during the year ended December 31, 2024 through the acquisition date since its investment in LeoStella was recorded at $ 0 as of December 31, 2023.

The investment in LeoStella prior to acquisition was not significant to the Company's consolidated financial statements.

Intra-entity profits arising from the sale of assets from the equity method investments to the Company were eliminated and deferred if those assets were still held by the Company at the end of a reporting period.

The intra-entity profits were partially recognized as the assets were consumed.

As of December 31, 2023, the Company had differences between the carrying value of its equity method investment and the underlying equity in the net assets of the investee of $ 1.2 million.

This amount was fully recognized during the year ended December 31, 2024 as part of the accounting for the acquisition of LeoStella in November 2024.

In November 2023, the Company sold its equity method investment in X-Bow Launch Systems Inc.

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The $ 9.5 million gain on the sale of X-Bow was recognized as income on equity method investments in the consolidated statements of operations and comprehensive loss.

As of December 31, 2023, the Company accounts for its LeoStella joint venture as its only equity method investment.

The investment in LeoStella is not significant to the financial statements.

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.

As of December 31, 2023 and 2022, the Company had differences between the carrying value of its equity method investment and the underlying equity in the net assets of the investee of $ 1.2 million and $ 2.6 million, respectively.

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.

Satellite Procurement Work in Process

Satellite procurement work in process primarily represents deposits paid to (a) third party vendors, including LeoStella, for 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 being engineered 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 7).

Equity method investments were evaluated for impairment whenever events or changes in circumstances indicated that the carrying amounts of such investments could be impaired.

If a decline in the value of an equity method investment was determined to be other than temporary, a loss would have been recorded in earnings that period.

Contingent Liabilities

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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.

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.

The Company does 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, the Company discloses 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.

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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 Company utilizes the market valuation methodology and specific option pricing methodology, such as the Monte Carlo simulation, 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.

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The Company generates revenue from the sale of imagery and software analytical services and professional and engineering services.

Imagery and software analytical services revenue, which is mostly from contracts from government agencies, includes imagery, data, software, and analytics.

Imagery and software analytical services revenue, which is mostly from contracts from domestic and international government agencies, includes imagery, data, software, and analytics.

This revenue is primarily recognized from services rendered under non-cancellable subscription order agreements or, in limited circumstances, variable not-to-exceed purchase orders.

Professional and engineering services revenue is generated from both time and materials basis contracts and firm fixed price service solutions contracts and firm fixed price long-term engineering and construction contracts.

Professional and engineering services revenue is generated from time and materials basis, firm fixed price service solutions, and firm fixed price long-term engineering and construction contracts.

In accordance with Accounting Standards Update No.

2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASC 606”), the Company uses the five-step model of identifying the contract with a customer, identifying the performance obligations contained in a contract, determining the transaction price, allocating the transaction price, and determining when performance obligations are satisfied, which can require the application of significant judgment, as further discussed below.

2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“Accounting Standards Codification (“ASC”) 606”), the Company uses the five-step model of identifying the contract with a customer, identifying the performance obligations contained in a contract, determining the transaction price, allocating the transaction price, and determining when performance obligations are satisfied, which can require the application of significant judgment, as further discussed below.

Revenue is measured at the fair value of consideration received or receivable and net of discounts.

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Imagery services include imagery delivered from the Company’s proprietary satellite constellation and Spectra software platform and in limited cases directly uploaded to certain customers.

Customers can directly task our proprietary satellite constellation to collect and deliver imagery over specific locations, sites and regions that are critical to their operations.

We offer customers several service level subscription options that include on-demand tasking or multi-year assured access programs, where customers can secure priority access and imaging capacity at a premium over a region of interest on a take or pay basis.

Customers can directly task the Company's proprietary satellite constellation to collect and deliver imagery over specific locations, sites and regions that are critical to their operations.

The Company offers customers several service level subscription options that include on-demand tasking or multi-year assured access programs, where customers can secure priority access and imaging capacity at a premium over a region of interest on a take or pay basis.

Imagery revenue is recognized ratably over the subscription period based on the promise to continuously provide contractual satellite capacity for tasked imagery or analytics at the discretion of the customer.

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and other sites that contain critical commodities and supply chain inventory .

Our analytics services are also offered on a similar subscription basis and provide customers with access to our site monitoring, event monitoring and global data services.

The Company's analytics services are also offered on a similar subscription basis and provide customers with access to the Company's site monitoring, event monitoring and global data services.

Analogous with the recognition of revenue for imagery, software analytical services revenue is recognized ratably over the subscription period.

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The Company also provides engineering services, which include developing and delivering advanced 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 promises, based on the context of the contract, are capable of being distinct performance obligations.

These services, based on the context of the contract, are capable of being distinct performance obligations.

For firm fixed price professional and engineering service contracts, the Company recognizes revenue over time using the cost-to-complete method to measure progress to complete the performance obligation (“Estimate at Completion” or “EAC”).

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Due to the continuous nature of the work, as well as when a change in circumstances warrants a modification, the EAC is reviewed and may result in cumulative changes to the contract profit.

We recognize changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis in the period in which the change is identified.

If at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, we recognize the total loss as and when known.

The following table presents the effect of aggregate net EAC adjustments on our professional and engineering services contracts:

The Company recognizes changes in estimated contract sales or costs and the resulting changes in contract profit on a cumulative basis in the period in which the change is identified.

If, at any time, the estimate of contract profitability indicates a probable anticipated loss on the contract, the Company recognizes the total loss as and when known.

The following table presents the effect of aggregate net EAC adjustments on the Company's professional and engineering services contracts:

Years Ended December 31,

2023 2022 (1)

(in thousands)

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Basic and diluted net loss per share $ 0.00 $ ( 0.09 )

(1) For the year ended December 31, 2022, the amounts represent the effect of aggregate net EAC adjustments on two professional and engineering service contracts

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.

(1) For the year ended December 31, 2024, the Company had a favorable EAC adjustment of $ 1.1 million for an existing individual professional services contract.

The remaining EAC adjustments are not individually significant to the Company.

Imagery and Software Analytical Service and Professional and Engineering Service Costs

Imagery and software analytical service costs primarily include internal labor to support the ground station network and space operations, third-party data and imagery, 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.

The Company recognizes stock-based compensation expense for those employees whose work supports the imagery and software analytical service costs it provides to customers, under imagery and software analytical service costs, excluding depreciation and amortization.

For those employees who provide these services to support customer-based programs, the stock-based compensation expense is classified under imagery and software analytical services costs.

Professional and engineering service costs primarily include the cost of internal labor for design and engineering in support of long-term development contracts for satellites and payload systems, as well as subcontract direct materials and external labor costs to build and test specific components, such as the communications system, payload demands, and sensor integration.

In addition, we also recognize internal labor costs and external subcontract labor costs for our customer-centric software service solutions.

We recognize stock-based compensation expense for those employees who provide professional and engineering services support to customers, under professional and engineering service costs, excluding depreciation and amortization.

In addition, the Company also recognizes internal labor costs and external subcontract labor costs for its customer-centric software service solutions.

The Company recognizes stock-based compensation expense for those employees who provide professional and engineering services support to customers, under professional and engineering service costs, excluding depreciation and amortization.

Research and Development Costs

The Company incurs research and development costs, which are expensed as incurred, for data science modeling and algorithm development related to its geospatial analytical platform.

The Company incurs research and development costs, which are expensed as incurred, for researching next generation space and ground architectures in support of its long-term strategy.

With the Company's acquisition of LeoStella in November 2024, research and development expense also includes investments in next generation satellite design and functionality.

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.

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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, 2024.

The Sponsor Shares are adjusted to fair value at each reporting period and the change in fair value is recognized in gain on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

The Sponsor Shares are adjusted to fair value at each reporting period and the change in fair value is recognized in (loss) gain on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

Stock-Based Compensation

Restricted Stock Awards and Restricted Stock Units

The Company has granted restricted stock awards ("RSAs") and grants restricted stock units ("RSUs") to certain employees, for which the grant date fair value is equal to the fair value of the Class A common stock on the date of grant.

In order to determine the fair value of its Class A common stock on the date of grant prior to the Merger, we historically performed a valuation analysis using a combination of market and income approaches.

The Company grants restricted stock units ("RSUs") to certain employees, for which the grant date fair value is equal to the fair value of the Class A common stock on the date of grant.

In order to determine the fair value of its Class A common stock on the date of grant prior to the Merger, the Company 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.

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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 the classification of each employees’ cash compensation.

Expense related to stock-based payments is classified in the consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation.

As of December 31, 2024, 4 thousand RSUs with performance vesting conditions were outstanding and the associated remaining expense of $ 26 thousand will be recognized through September 30, 2025.

Stock Options

The Company uses the Black-Scholes option pricing model to value all options, including options under the 2021 Employee Stock Purchase Plan ("ESPP"), and the straight-line method to recognize the fair value as compensation cost over the requisite service period.

The Company uses the Black-Scholes option pricing model to value all options, including stock options and options under the 2021 Employee Stock Purchase Plan ("ESPP"), 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 in the year ended December 31, 2023.

The Company did not grant any stock options during the year ended December 31, 2024;

stock options were granted during the year ended December 31, 2023.

The Company uses the following inputs when applying the Black-Scholes option pricing model:

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Expected Term .

For options granted in 2021 through 2023, since there was 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 liquidity event based on a weighted average consideration of the most likely exit prospects for that stage of development.

For stock options granted in 2021 through 2024, since there was not a significant history of stock option exercises as a public company, the Company considered the stock option vesting terms and contractual period, as well as the demographics of the holders, in estimating the expected term.

For stock 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.

BlackSky Holdings, Inc.

(“Legacy BlackSky”) was privately funded and, accordingly, the lack of marketability was factored into the expected term of options granted.

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The most significant assumption used to determine the fair value of the Legacy BlackSky equity-based awards was the estimated fair value of the Legacy BlackSky Class A common stock on the grant date.

In order to determine the fair value of its Class A common stock on the date of grant prior to the Merger, Legacy BlackSky historically relied on a valuation analysis performed using a combination of market and income approaches.

Subsequent to the Merger, the Company uses the NYSE trading price as the fair value of the Company's 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.

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.

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In October 2019, Osprey, BlackSky's predecessor company and special purpose acquisition company, issued 2.0 million public warrants and 1.0 million Private Placement Warrants in connection with its public offering.

In March 2023, the Company issued 16.4 million Private Placement Warrants in connection with a private placement of shares of Class A common stock and accompanying warrants (see Note 14 and Note 16).

In March 2023, the Company issued 2.1 million Private Placement Warrants in connection with a private placement of shares of Class A common stock and accompanying warrants.

The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “ Distinguishing Liabilities from Equity ” (“ASC 480”) and ASC 815, “ Derivatives and Hedging ” (“ASC 815”).

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The October 2019 and March 2023 Private Placement Warrants were valued using a Black-Scholes option pricing model for initial and subsequent measurements.

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 on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

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 (loss) gain on derivatives in the Company’s consolidated statements of operations and comprehensive loss.

Transaction Costs

Transaction costs consist of legal fees, accounting fees, placement agent fees, commissions, and other third-party costs related directly to equity issuances and debt restructuring.

The Company incurs underwriting discounts and commissions, legal fees, accounting fees, placement agent fees, and other third-party costs related directly to equity issuances.

Transaction costs incurred for equity issuances are allocated to the components of the transaction based on their relative fair market value, including common equity and equity warrants classified as derivatives and, as such, based on the Company's allocation, are either expensed in the consolidated statements of operations and comprehensive loss or recorded as a reduction to additional paid-in capital in the consolidated statements of changes in stockholders’ equity and consolidated balance sheets.

The Company incurred lender fees and other incremental third-party costs associated with its debt Amendment, as described in Note 13.

Lender fees were capitalized and included in long-term debt in the consolidated balance sheets.

The Company has also incurred lender fees and other incremental third-party costs associated with its debt financing, as described in Note 14.

Lender fees have been capitalized and included in either debt - current portion or long-term debt - net of current portion in the consolidated balance sheets, depending on the classification of the associated debt.

Third-party costs associated with the debt modification were expensed in the consolidated statements of operations and comprehensive loss.

Deferred Offering Costs

Offering costs consist of legal fees, accounting fees, underwriting fees, and other third-party costs that are directly related to the Company’s future equity offering(s) and will be charged to additional paid in capital upon the completion of the applicable future transactions.

During the year ended December 31, 2022 the Company incurred offering costs of $ 0.5 million, which were included in other assets in the Company's consolidated balance sheets as of December 31, 2022;

there were no deferred offering costs capitalized as of December 31, 2023.

Additionally, during 2024, the Company incurred legal fees, accounting fees, information technology fees, and other incremental third-party costs related to its business acquisition, as described in Note 7.

Transaction fees were expensed as incurred as selling, general and administrative in the consolidated statements of operations and comprehensive loss.

Deferred Financing Costs

Financing costs consist of legal fees, accounting fees, and other third-party costs that are directly related to the Company’s future financing transactions and will be assigned to the cost of financing upon the completion of the applicable future transaction(s).

During the year ended December 31, 2023, the Company incurred financing costs of $ 0.1 million, which are included in other assets in the Company's consolidated balance sheets as of December 31, 2023;

There were no deferred financing costs capitalized as of December 31, 2024.

During the year ended December 31, 2023, the Company incurred deferred financing costs of $ 0.1 million, which were included in other assets in the Company's consolidated balance sheets as of December 31, 2023.

Deferred Offering Costs

Deferred offering costs consist of legal fees, accounting fees, underwriting fees, and other third-party costs that are directly related to the Company’s future equity offering(s) and will be charged to additional paid in capital upon the completion of the applicable future transactions.

During the year ended December 31, 2024 the Company incurred $ 0.1 million of deferred offering costs, which were included in other assets in the Company's consolidated balance sheets as of December 31, 2024.

The Company did not incur any deferred offering costs during the year ended December 31, 2023.

Business Combinations

Business acquisitions are accounted for using the acquisition method of accounting, in accordance with ASC 805, Business Combinations , and are included in the Company's consolidated financial statements from their respective acquisition dates.

Assets acquired and liabilities assumed, if any, are measured at fair value on the acquisition date using the appropriate valuation method.

Goodwill generated from acquisitions is recognized if the fair value of the purchase consideration transferred, or the fair value of the acquirer’s interest in the acquiree if no consideration is transferred, and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed.

In determining the fair value of identifiable assets, the Company uses various valuation techniques which requires it to make estimates and assumptions surrounding projected revenues and costs, future growth, and discount rates.

Accounting Standards Updates (“ASU”)

Accounting Standards Recently Issued But Not Yet Adopted

Accounting Standards Recently Adopted

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

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Improvements to Reportable Segment Disclosures.

Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker ("CODM").

ASU 2023-07 will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025.

Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 is effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025.

ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements.

The Company is assessing the effect of this update on our consolidated financial statements and related disclosures.

The Company adopted ASU 2023-07 during the year ended December 31, 2024 .

See Note 4—“Segment Information” for further detail.

Accounting Standards Recently Issued But Not Yet Adopted

On December 14, 2023, the FASB issued ASU No.

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ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively.

The Company is assessing the effect of this update on our consolidated financial statements and related disclosures.

Other accounting standards updates adopted and/or issued, but not effective until after December 31, 2023, are not expected to materially impact the Company.

The Company is currently evaluating the impacts of this update and plans to adopt these amendments using the prospective approach for annual disclosures in 2025.

On November 4, 2024, the FASB issued ASU No.

2024-03 Disaggregation of Income Statement Expenses.

ASU 2024-03 requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 will be effective for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and will be applied on a prospective basis with the option to apply the standard retrospectively.

The Company is evaluating the disclosure impact of ASU 2024-03;

however, it is not expected that the standard will have a material impact on the Company’s consolidated financial position, results of operations and/or cash flows.

Segment Information

The Company’s Chief Operating Decision Maker (“CODM”) 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.

The CODM uses consolidated net loss to assess financial performance and allocate resources.

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, of which the Company incurs costs and recognizes revenue on professional and engineering services including but not limited to, the development, integration, and operation of satellites and software platforms, as well as ground systems, that support the Company's primary imagery service subscriptions.

The following table presents selected financial information with respect to the Company’s single reportable segment for the years ended December 31, 2024 and 2023:

Years Ended December 31,

Imagery & software analytical services $ 70,062 $ 65,391

Professional & engineering services 32,031 29,101

Total revenue 102,093 94,492

Costs and Expenses

Imagery & software analytical direct labor costs 2,502 3,304

Imagery & software analytical direct materials costs 11,405 10,489

Professional & engineering direct labor costs 9,167 13,160

Professional & engineering direct materials costs 4,358 6,828

Salaries and benefit costs 41,742 40,720

Stock-based compensation expense 10,526 10,118

Other segment items 23,145 22,422

Depreciation and amortization 43,536 43,431

Loss (gain) on derivatives 2,815 ( 7,679 )

Income on equity method investments ( 879 ) ( 4,165 )

Interest income ( 1,560 ) ( 2,063 )

Interest expense 12,187 9,306

Other (income) expense, net ( 3 ) 1,807

Income tax expense 370 673

Net loss $ ( 57,218 ) $ ( 53,859 )

(1) Other segment items included in net loss primarily includes selling, general, and administrative costs and research and development costs.

As of December 31, 2024 and 2023, the Company's segment assets, which are equal to the Company's consolidated assets on the consolidated balance sheets, are owned and operated by United States entities and are classified within the United States.

See Note 5—“Revenue” for additional information about revenue by geographic region.

Disaggregation of Revenue

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Total revenue $ 102,093 $ 94,492

The approximate revenue based on geographic location of end customers is as follows for the years ended December 31, 2023 and 2022:

The approximate revenue based on geographic location of end customers was as follows for the years ended December 31, 2024 and 2023:

Years Ended December 31,

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Asia Pacific (2)

22,768 25,058

Other 986 1,026

Total revenue $ 102,093 $ 94,492

Revenue from categories of end customers for the years ended December 31, 2023 and 2022 is as follows:

(1) For the year ended December 31, 2024, Middle East revenue included $ 12.3 million of revenue from Country A;

the amount of revenue from Country A for the year ended December 31, 2023 was not individually significant to the Company.

The remaining Middle East countries were not individually significant to the Company.

(2) For the years ended December 31, 2024 and 2023, Asia Pacific revenue included $ 16.5 million and $ 13.3 million of revenue, respectively, from Country B.

Asia Pacific revenue included $ 11.5 million of revenue from Country C for the year ended December 31, 2023;

the amount of revenue from Country C for the year ended December 31, 2024 was not individually significant to the Company.

The remaining Asia Pacific countries were not individually significant to the Company.

Revenue from categories of end customers for the years ended December 31, 2024 and 2023 was as follows:

Years Ended December 31,

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Total revenue $ 102,093 $ 94,492

As of December 31, 2023 and 2022, accounts receivable consisted of the following:

December 31, December 31,

(in thousands)

federal government and agencies $ 5,994 $ 2,540

International governments 895 261

Commercial and other 333 311

Allowance for doubtful accounts ( 151 ) —

Total accounts receivable $ 7,071 $ 3,112

Backlog represents the future sales the Company expects to recognize on firm orders it receives and is equivalent to the Company’s remaining performance obligations at the end of each period.

It comprises both

funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog.

It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog.

The Company's backlog excludes unexercised contract options.

As of December 31, 2023, the Company had $ 261.7 million of backlog, which represents the transaction price of executed contracts less inception to date revenue recognized.

As of December 31, 2024, the Company had $ 261.7 million of backlog, which represents the transaction price of executed contracts less inception to date

revenue recognized.

The Company expects to recognize revenue relating to its backlog, of which a portion is recorded in deferred revenue in the consolidated balance sheets, of $ 75.9 million, $ 45.2 million, and $ 140.6 million in fiscal year 2025, fiscal year 2026, and thereafter, respectively.

8 unchanged sentences

Unbilled revenue - long-term $ 173 $ 8,150

Contract assets - long-term 610 681

Other contract assets - long-term 937 610

Total contract assets - long-term (1)

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Deferred revenue - current $ 2,160 $ 3,670

Other contract liabilities - current 23 —

Total contract liabilities - current $ 2,183 $ 3,670

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(1) Total contract assets - long term is included in other assets in the consolidated balance sheets.

(2) Total contract liabilities - long term is included in other liabilities in the 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.

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Changes in contract assets or contract liabilities, net of reclassification to receivables 17,599 1,694

Cumulative catch-up adjustment arising from changes in estimates to complete 595 225

Cumulative catch-up adjustment arising from changes in estimates to complete during the year 55 65

Cumulative catch-up adjustment arising from contract modifications — ( 11 )

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Balance as of December 31, 2024 $ 28,962 $ 2,861

Discontinued Operations

On June 12, 2020, the Company completed the sale of 100 % of its equity interests in Spaceflight to M&Y Space.

Under a transition services agreement that ended in March 2022, the Company provided 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 Spaceflight

On February 9, 2022, the Company received an indemnification claim notice regarding certain collection and tax payments related to the Share Purchase Agreement dated as of January 31, 2020 among BlackSky Holdings, Inc., Spaceflight, and M&Y Space.

On October 21, 2022, the parties agreed to the framework for a global settlement of such indemnification claims, to include a settlement payment by the Company of $ 1.0 million and a holdback amount of $ 0.1 million subject to M&Y Space Co.’s ability to collect against certain receivables.

As a result, the existing contingent liability was reduced by $ 0.7 million, which was recorded as a gain from discontinued operations in the year ended December 31, 2022.

Business Acquisition

On November 6, 2024, the Company acquired the remaining 50 % of the common units of LeoStella, and LeoStella became a wholly-owned subsidiary of the Company.

Purchase consideration of $ 0.9 million consisted of the value of the Company's 50% ownership in LeoStella at the time of the business combination.

It is expected that this acquisition will allow the Company to improve its control over the Gen-3 supply chain and production operations.

Prior to obtaining a controlling interest, the Company accounted for its 50 % ownership in LeoStella as an equity method investment (see Note 2 for information regarding the previous treatment of LeoStella).

This transaction was accounted for as a “step acquisition” (as defined by GAAP) and, as such, the Company remeasured its pre-existing equity interest in LeoStella immediately prior to the completion of the acquisition to its estimated fair value.

The results of LeoStella since the acquisition date have been included in the Company’s consolidated financial statements.

The following table presents the preliminary purchase price allocation, which summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition.

The purchase price allocation is preliminary and is subject to change during the measurement period, which is generally one year from the acquisition date.

All intra-entity deferred profits have been excluded from the table (see Note 2—“Basis of

Presentation and Summary of Significant Accounting Policies” for discussion of the Company's pre-existing relationship with LeoStella).

(in thousands)

Current assets, including cash acquired of $ 541

Property and equipment 5,106

Intangible assets:

In-process research and development

Trade names and trademarks 1,200

Total intangible assets

Other assets 1,525

Current liabilities $ 11,910

Other liabilities 970

Total liabilities

Goodwill of $ 0.9 million from the business acquisition was primarily attributed to the value expected from the workforce acquired from the acquisition.

In addition, $ 0.5 million of the goodwill recognized is expected to be deductible for income tax purposes.

Intangible assets acquired included in-process research and development, which has an indefinite life until development is complete, and various finite-lived intangible assets that are subject to amortization, including trade names and trademarks with estimated useful lives of 5 years.

The acquisition-date fair value was determined using a combination of cost approaches and discounted cash flow methods.

With respect to intangible assets, the estimated fair values were determined based on relief from royalty and multi-period excess earnings methods.

These models used primarily Level 3 inputs, including estimates of projected revenue growth rates, projected EBITDA margins, and an estimated discount rate.

In accordance with accounting for a step acquisition, the Company recognized a gain of $ 0.9 million as a result of remeasuring its pre-existing interest in LeoStella held immediately before the business combination, which is included in income on equity method investments in the consolidated statements of operations and comprehensive loss.

During the year ended December 31, 2024, the Company incurred $ 0.5 million of acquisition-related transactions costs, which is included in selling, general and administrative costs in the consolidated statements of operations and comprehensive loss.

The amounts of LeoStella's revenue and net loss included in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2024 were not significant.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information summarizes the combined results of the Company and LeoStella as if the acquisition had occurred on January 1, 2023.

The pro forma results have been prepared for comparative purposes only, and do not necessarily represent what the results of operations would have been had the acquisition been completed on January 1, 2023.

In addition, these pro forma results are not intended to be a projection of future operating results and do not reflect synergies that might be achieved.

The unaudited pro forma financial information includes adjustments for the pro forma impact of the Company's preliminary purchase price allocation, including the amortization of newly acquired intangible assets;

the impact of transaction costs;

and the alignment of accounting policies.

Years Ended December 31,

(in thousands)

Pro forma revenue

$ 107,032 $ 102,371

Pro forma net loss

( 68,128 ) ( 63,295 )

Property and Equipment - net

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Software 32,587 20,384

Office furniture and fixtures 9,171 4,039

Production and engineering equipment 2,986 —

Software development in process 3,656 2,673

Site equipment 2,502 2,557

Computer equipment 1,578 1,642

Office furniture and fixtures 4,039 674

Other equipment 812 811

Site equipment 2,557 2,558

Total 160,296 157,230

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Property and equipment — net $ 45,613 $ 67,116

Depreciation of property and equipment was $ 42.9 million and $ 35.1 million for the years ended December 31, 2023 and 2022, respectively.

The Company recognized impairment losses of $ 121 thousand of capitalized software and leasehold improvements, resulting in a net impairment loss of $ 81 thousand.

As of December 31, 2023 and 2022, the Company's primary long-lived assets, including satellites in service, are owned and operated by United States entities and are classified within the United States geographic region.

Depreciation of property and equipment was $ 42.9 million for each of the years ended December 31, 2024 and 2023.

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, 2023.

The Company performed an annual qualitative goodwill assessment of the goodwill held related to its reporting unit as of October 1, 2024.

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, 2024.

As of December 31, 2023, the Company believes that the estimated fair value of the BlackSky reporting unit is still in excess of its respective carrying value and therefore is not at-risk of being impaired.

As of December 31, 2024, the Company believes that the estimated fair value of its reporting unit is still in excess of its respective carrying value and therefore is not at-risk of being impaired.

As a result, the Company did not have any impairment losses during the years ended December 31, 2024 and 2023.

To the extent this reporting unit realizes actual operating results in the future below forecasted results, or realizes 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, 2023 December 31, 2022

(in thousands)

Gross Carrying Amount

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Net Carrying Value of Goodwill

(in thousands)

December 31, 2024

Balance as of January 1, 2024

$ 9,393 $ — $ 9,393

Balance as of December 31, 2024 $ 10,260 $ — $ 10,260

December 31, 2023

Balance as of January 1, 2023

$ 9,393 $ — $ 9,393

Balance as of December 31, 2023

$ 9,393 $ — $ 9,393

Intangible Assets - net

Intangible assets - net was as follows:

December 31, 2023 December 31, 2022

(in thousands)

Gross Carrying Amount

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Net Carrying Amount

(in thousands)

December 31, 2024

Finite-lived intangible assets:

Trade names and trademarks $ 1,200 $ ( 49 ) $ 1,151

Customer relationships 5,614 ( 4,819 ) 795

Total finite-lived intangible assets:

6,814 ( 4,868 ) 1,946

(1) For the years ended December 31, 2023 and 2022, the net carrying amount of intangible assets was made up entirely of customer relationships.

Indefinite-lived intangible assets:

In-process research and development 3,500 — 3,500

Total intangible assets at December 31, 2024

$ 10,314 $ ( 4,868 ) $ 5,446

December 31, 2023

Finite-lived intangible assets:

Customer relationships $ 6,530 $ ( 5,173 ) $ 1,357

Distribution agreements 326 ( 326 ) —

Technology and domain name 3,948 ( 3,948 ) —

Total intangible assets at December 31, 2023

$ 10,804 $ ( 9,447 ) $ 1,357

For the years ended December 31, 2024 and 2023, amortization expense related to intangible assets was $ 0.6 million.

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The Company provides a 401(k) employer match of 50 % of the first 6 % of the employee’s contribution of eligible compensation.

For the years ended December 31, 2023 and 2022, the 401(k) employer match expense was $ 1.1 million and $ 0.9 million, respectively.

The 401(k) employer match expense was $ 1.2 million and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively.

The Company's consolidated effective income tax rate from continuing operations for the years ended December 31, 2024 and 2023 was - 0.70 % and - 1.26 %, respectively.

The Company's provision for income taxes from continuing operations for the years ended December 31, 2023 and 2022 is as follows:

The Company's provision for income taxes from continuing operations for the years ended December 31, 2024 and 2023 was as follows:

Years Ended December 31,

1 unchanged sentence

Federal $ — $ —

State 205 569

Foreign 165 104

34 unchanged sentences

Net deferred tax liabilities $ — $ —

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.

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.

In the year ended December 31, 2023, the Company performed a historic ownership change analysis and concluded that $ 1.5 million of federal net operating loss carryforward pre-tax attributes were subject to limitations, as defined by the Internal Revenue Code Sections 382 and 383.

In the year ended December 31, 2022, the Company performed a historic ownership change analysis and concluded that $ 1.5 million of federal net operating loss carryforward pre-tax attributes were subject to limitations, as defined by the Internal Revenue Code Sections 382 and 383, will go unutilized.

Tax Effected Expiration

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The majority of the unrecognized tax benefits in the year ended December 31, 2024 is from the valuation of guaranteed incentives shares issued for SVB guarantors.

The balance of unrecognized tax benefits as of December 31, 2023 and 2022, 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.

The balance of unrecognized tax benefits as of December 31, 2024 and 2023, if recognized, would not affect the Company's 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

2 unchanged sentences

(in thousands)

Current portion of long-term debt $ 2,000 $ —

Non-current portion of long-term debt 107,034 84,578

Unamortized debt issuance cost ( 1,077 ) ( 913 )

Total long-term debt 109,034 84,578

Unamortized debt issuance costs ( 1,371 ) ( 1,077 )

Outstanding balance $ 107,663 $ 83,502

The outstanding debt was solely comprised of loans from related parties with effective interest rates of 12.23 % to 12.57 % and a maturity date of October 31, 2026.

Effective Interest Rate December 31, December 31,

Name of Loan 2024 2023

(in thousands)

Loans from related parties

12.23 % - 12.57 %

$ 93,034 $ 84,578

Satellite launch vendor financing

10.45 % 6,000 —

Commercial bank line

10.98 % 10,000 —

Total $ 109,034 $ 84,578

Loans from Related Parties

On May 9, 2023, BlackSky and its subsidiaries entered into an Amendment to its Amended and Restated Loan and Security Agreement with Intelsat and Seahawk, dated October 31, 2019 and previously amended on September 9, 2021.

1 unchanged sentence

(i) extend the maturity date of the loan from October 31, 2024 to October 31, 2026, (ii) roll the cash interest payment due on May 1, 2023 into the outstanding principal to be paid on the maturity date, (iii) increase the interest rate on the loan as of the Amendment date from 9 % to 12 %, of which (x) 9.6 % will be paid in kind as principal due on the maturity date, with the remainder paid as cash interest on a semi-annual basis, until May 1, 2025 and (y) after May 1, 2025, up to 4 % can be paid in kind as principal due on the maturity date, with the remainder to be paid as cash interest on a semi-annual basis, and (iv) add certain financial covenants.

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.

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.

The Amendment was accounted for as a debt modification and related transaction costs of $ 1.3 million were recorded during the year ended December 31, 2023.

Satellite Launch Vendor Financing

In November 2023, the Company entered into a vendor financing agreement for multiple satellite launches providing for $ 27.0 million, of which a portion can be drawn down equally per satellite launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone.

Payments will accrue interest at 12.6 % per annum, beginning on each launch date.

The Company may prepay at any time until the maturity date without premium or penalty.

During the year ended December 31, 2024, the Company incurred $ 6.0 million of debt related to the satellite launch vendor financing agreement.

Commercial Bank Line

In April 2024, the Company, and certain subsidiaries of the Company, as co-borrowers, entered into a commercial bank line with Stifel Bank.

The commercial bank line provides for a $ 20.0 million revolving credit facility, including a $ 0.5 million sub-facility for the issuance of letters of credit and other ancillary banking services.

As of December 31, 2024, there was $ 10.0 million outstanding under the revolving credit facility.

The commercial bank line matures on June 30, 2026.

The commercial bank line accrues interest at a rate equal to the greater of (A) the prime rate or (B) 6 %.

Interest on the loan is payable quarterly in arrears.

The Company is required to pay an unused line fee of 0.25 % per annum, payable quarterly in arrears.

The Company may borrow, prepay and re-borrow revolving loans, without premium or penalty.

The principal amount of outstanding loans, together with accrued and unpaid interest, is due on the loan maturity date.

The Company is also obligated to pay a fee to the lender upon the occurrence of certain change of control events or the refinancing, repayment, or termination of the commercial bank line, along with other customary fees for a loan facility of this size and type.

The Company’s obligations under the commercial bank line are secured by substantially all of the Company’s assets, including intellectual property.

Pursuant to a subordination arrangement, the security interest granted to Stifel Bank is senior to the security interest the Company granted to Intelsat Jackson Holdings SA pursuant to that certain Amended and Restated Loan and Security Agreement, dated as of October 31, 2019, as amended.

Debt Maturities

Under the Company’s loan agreements, minimum required maturities are as follows:

5 unchanged sentences

Compliance with Debt Covenants

As part of the Amendment, the Company is required to maintain a minimum cash and cash equivalents balance of not less than $ 10.0 million, measured quarterly as of the last day of each fiscal quarter.

In addition, the Company is required to maintain Adjusted EBITDA, measured quarterly as of the last day of each fiscal quarter, of not less than:

The Company is required to maintain the following financial covenants:

• $ 10.0 million of minimum cash and cash equivalents balance, measured quarterly as of the last day of each fiscal quarter.

• Adjusted EBITDA, measured quarterly as of the last day of each fiscal quarter, of not less than:

• $ 5.0 million for the trailing four quarter period ending as of December 31, 2024 through September 30, 2025 and

• $ 10.0 million for the trailing four quarter period ending as of December 31, 2025 and as of the end of each fiscal quarter thereafter.

• Quarterly minimum revenue targets agreed upon by the Company and the bank at the beginning of each year.

• Unrestricted and unencumbered cash and cash equivalents in an amount equal to at least one hundred percent of the outstanding debt at all times.

In addition, the commercial bank line contains customary affirmative and negative covenants, including covenants limiting the Company's ability to, among other things, incur debt, grant liens, pay dividends and distributions on its capital stock, make investments and acquisitions, and make capital expenditures, in each case subject to customary exceptions for a loan facility of this size and type.

If the Company fails to meet the minimum cash covenant, the commercial bank line provides the Company with the ability to cure the breach with the deposit of proceeds from the issuance of capital stock or subordinated debt.

As of December 31, 2024, all debt instruments contained customary covenants and events of default.

The Company was in compliance with all covenants as of December 31, 2023.

The Company was in compliance with all financial and non-financial covenants as of December 31, 2024.

Equity Warrants Classified as Derivative Liabilities

1 unchanged sentence

In March 2023, the Company completed the closing of a private placement whereby the Company issued warrants to purchase up to 2.1 million shares of Class A common stock.

The purchase price of each share and associated warrant was $ 1.79 .

Including the issuance of Company’s Class A common stock (see Note 16), the aggregate gross proceeds to the Company from the private placement were $ 29.4 million, before deducting the placement agent fees and other offering expenses payable by the Company.

The purchase price of each share and associated warrants was $ 17.61 .

Including the issuance of Company’s Class A common stock, the aggregate gross proceeds to the Company from the private placement were $ 29.4 million, before deducting the placement agent fees and other offering expenses payable by the Company.

The Company uses the net proceeds from the private placement for general corporate purposes, including working capital.

4 unchanged sentences

The Company incurred transaction costs which consisted of legal fees, accounting fees, placement agent fees, and other third-party costs directly related to the March 2023 private placement.

The transaction costs of $ 0.9 million related to the 2023 Private Placement Warrants were included in other (expense) income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

The Company also has approximately 24.1 million additional outstanding warrants, including 15.8 million public warrants and 8.3 million Private Placement Warrants, issued by Osprey, the Company's predecessor company, in 2019 in connection with its initial public offering as a special purpose acquisition company.

The 2019 warrants are each exercisable for one share of the Company's Class A common stock.

The transaction costs of $ 0.9 million related to the 2023 Private Placement Warrants were included in other income (expense), net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2023.

The Company also has outstanding warrants, which includes public warrants exercisable for 2.0 million shares and Private Placement Warrants exercisable for 1.0 million shares (certain of which are subject to the achievement of trading price targets), issued by Osprey, the Company's predecessor company, in 2019 in connection with its initial public offering as a special purpose acquisition company.

Warrant Valuation

1 unchanged sentence

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 (see Note 22).

The Company's derivative liabilities were made up of only equity warrants and the Sponsor Shares as of December 31, 2023 and December 31, 2022.

The Company's derivative liabilities were made up of only equity warrants and the Sponsor Shares as of December 31, 2024 and 2023.

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, 2024:

Number of Shares Exercise Price Redemption Price Expiration Date Classification Gain in Value for the Year Ended December 31, 2023 Fair Value as of December 31, 2023

Number of Shares Exercise Price Redemption Price Expiration Date Classification Loss in Value for the Year Ended December 31, 2024 Fair Value as of December 31, 2024

(in thousands) (in thousands)

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Private Placement Warrants - Issued March 2023 2,050 17.61 N/A 9/8/2028 Liability 1,353 13,820

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

In addition, the Company has 221 thousand Class A common stock warrants outstanding which have an exercise price of $ 0.88 and expiration dates from June 27, 2028 to October 31, 2029.

These warrants are equity classified and were included in additional paid-in capital in the Company’s consolidated balance sheets.

Other Income (Expense)

Years Ended December 31,

1 unchanged sentence

Transaction costs associated with debt and equity financings $ — $ ( 1,738 )

Proceeds from earn-out payment — 2,000

Other 3 ( 69 )

15 unchanged sentences

Total Class A common stock reserved 269,040 282,145

The Company has approximately 2.4 million Sponsor 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, 2023 and December 31, 2022, the Company's derivative liabilities in the consolidated balance sheets included Sponsor Shares of $ 1.3 million and $ 1.7 million, respectively.

The Company recorded a $ 0.4 million gain on derivatives in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 related to the fair value adjustments of these Sponsor Shares.

The Company has approximately 0.3 million Sponsor 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 (the “Lock-Up Sponsor Shares”), 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, 2024 and 2023, the Company's derivative liabilities in the consolidated balance sheets included Sponsor Shares of $ 1.7 million and $ 1.3 million, respectively.

The Company recorded a $ 0.4 million loss on derivatives in the Company’s consolidated statements of operations and comprehensive loss for the year ended December 31, 2024 related to the fair value adjustments of these Sponsor Shares.

The Sponsor Shares have the following provisions:

Contractual Life Seven years from the closing date of the Merger

Release Provision Exactly half of the Sponsor 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 ten of any twenty consecutive trading days.

Release Provision Exactly half of the Lock-Up Sponsor Shares have a release provision (“Release”) at such time that the volume weighted average price (“VWAP”) is equal to, or greater than, $ 120.00 per share for ten of any twenty consecutive trading days.

The remaining Lock-Up Sponsor Shares Release at such time that the VWAP is equal to, or greater than, $ 140.00 per share for ten 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 Shares have not met the Release provisions, the Sponsor Shares will automatically forfeit and be cancelled.

Private Placement

In March 2023, the Company completed a private placement of 16.4 million shares of the Company’s Class A common stock and an equal number of corresponding warrants, for a purchase price of $ 1.79 per share and associated warrant.

The Company received $ 29.4 million in gross proceeds from the private placement.

The Company sold 3.5 million common shares in its ATM offering during the years ended December 31, 2023, at an average purchase price per share of $ 1.45 , resulting in gross proceeds of $ 5.0 million.

The transaction costs for these equity issuances consisted of legal fees, accounting fees, placement agent fees, and other third-party costs related directly to the equity issuances.

Forfeiture Provision If, within the seven year period, the Lock-Up Sponsor Shares have not met the Release provisions, the Lock-Up Sponsor Shares will automatically forfeit and be cancelled.

Net Loss Per Share of Class A Common Stock

The following table includes the calculation of basic and diluted net (loss) income per share:

The following table includes the calculation of basic and diluted net loss per share:

Years Ended December 31,

(in thousands except per share information)

Loss from continuing operations $ ( 53,859 ) $ ( 74,879 )

Gain from discontinued operations — 707

Net loss available to common stockholders $ ( 53,859 ) $ ( 74,172 )

Basic and diluted net loss per share - continuing operations $ ( 0.40 ) $ ( 0.64 )

Basic and diluted net gain per share - discontinued operations — 0.01

Net loss available to common stockholders - basic and diluted $ ( 57,218 ) $ ( 53,859 )

Basic and diluted net loss per share $ ( 2.67 ) $ ( 3.18 )

Shares used in the computation of basic and diluted net loss per share

21,443 16,931

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, 2024 and 2023.

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Awards generally expired 10 years from the date of grant.

As of December 31, 2023, the Company had 2 thousand and 945 thousand options outstanding, respectively, under the 2011 and 2014 Plans.

In connection with the Merger, the Company adopted its 2021 Equity Incentive Plan (the "2021 Plan", together with the Prior Plans, collectively the “Plans”) under which it has granted equity awards following the Merger and the Company adopted its ESPP under which eligible employees began participating in December 2023.

As of December 31, 2024, the Company had no options outstanding under the 2011 Plan and 93 thousand options outstanding under the 2014 Plan.

Merger and the Company adopted its ESPP under which eligible employees began participating in December 2023.

The stock-based compensation expense attributable to continuing operations is included in the consolidated statements of operations and comprehensive loss as indicated in the table below:

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Total stock-based compensation expense $ 11,169 $ 10,862

The Company recorded stock-based compensation related to capitalized internal labor for software development activities of $ 0.7 million and $ 1.5 million during the years ended December 31, 2023 and 2022, respectively.

These amounts are included in property, plant, and equipment - net in the consolidated balance sheets.

The Company recorded stock-based compensation related to capitalized internal labor for software development activities and satellite work in process of $ 0.6 million and $ 0.7 million during the years ended December 31, 2024 and 2023, respectively.

These amounts were included in property, plant, and equipment - net and satellite work in process in the consolidated balance sheets.

Stock Options

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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 Black-Scholes option pricing model is used to determine the fair value of stock options granted.

The Company utilized assumptions concerning expected term, a risk-free interest rate, and expected volatility to determine such values.

A summary of the weighted-average assumptions used by the Company is presented below:

Years Ended December 31,

The Company did not grant any stock options in the year ended December 31, 2024.

A summary of the weighted-average assumptions used by the Company during the year ended December 31, 2023 is presented below:

Year Ended December 31, 2023

Fair value per common share $ 1.27

$ 2.06 - $ 2.15

Weighted-average risk-free interest rate 4.31 %

3.20 % - 4.72 %

Volatility 31.20 %

33.90 % - 41.10 %

Expected term (in years) 8.00

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Outstanding - January 1, 2024 1,101 $ 19.94

Granted 2,075 1.27

Exercised ( 23 ) 0.10

Forfeited ( 202 ) 49.57

Expired ( 243 ) 2.06

Outstanding - December 31, 2024 876 13.62 7.62 $ 954

Exercisable - December 31, 2024 876 13.62 7.62 954

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, 2023 and 2022 was $ 0.6 million and $ 1.8 million, respectively.

The total fair value of options vested during the years ended December 31, 2023 and 2022 was $ 2.0 million and $ 1.2 million, respectively.

For stock 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 stock options exercised during the years ended December 31, 2024 and 2023 was $ 0.2 million and $ 0.6 million, respectively.

The total fair value of stock options vested during the years ended December 31, 2024 and 2023 was $ 2.3 million and $ 2.0 million, respectively.

As of December 31, 2024, there was $ 2.3 million of total unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of 1.7 years.

Restricted Stock Awards

During 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, 2023 is presented below:

Restricted Stock Awards Weighted-Average Grant-Date Fair Value

(in thousands)

Nonvested - January 1, 2023 57 $ 0.01

Vested ( 34 ) 0.01

Canceled — 0.01

Nonvested - December 31, 2023 23 0.01

The Company has not granted any RSAs since 2020.

Restricted Stock Units

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Nonvested - December 31, 2024 2,419 9.54

During the year ended December 31, 2023, 1.0 million of the vested RSUs were withheld to satisfy payroll tax withholding obligations, which was recorded to additional paid-in capital totaling $ 1.4 million.

During the year ended December 31, 2024, 48 thousand of the vested, but not yet issued, RSUs were withheld to satisfy payroll tax withholding obligations, which was recorded to additional paid-in capital totaling $ 1.6 million.

Unrecognized compensation costs related to nonvested RSUs totaled $ 21.4 million as of December 31, 2024, which is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

Beginning in December 2023, the Company's eligible employees were able to begin participating in the Company's ESPP.

The ESPP allows eligible participants to contribute up to 15 % of their eligible compensation towards the purchase of Class A common stock at a discounted price, subject to certain limitations,.

The purchase price of the shares on each purchase date is equal to 85 % of the lower of the fair market value of Class A common stock on the first and last trading days of each offering period.

The offerings under the ESPP are currently designed to be intended to qualify under Section 423 of the Internal Revenue Code.

The Company estimates the fair value of each purchase right under the ESPP on the date of grant using the Black-Scholes valuation model and uses the straight-line attribution approach to record the expense over the six-month offering period.

The maximum number of shares that may be issued under the ESPP is 3,000,700 plus any shares added to the ESPP under the automatic annual increase at the beginning of each fiscal year.

Total Lease Cost

The components of rent expense, which are included in selling, general and administrative expenses in the Company's consolidated statements of operations and comprehensive loss, were as follows:

The components of rent expense, which are primarily included in selling, general and administrative expenses in the Company's consolidated statements of operations and comprehensive loss, were as follows:

Years Ended December 31,

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Short-term lease expense 138 273

Sublease income — ( 127 )

Total rent expense $ 1,878 $ 1,805

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Operating lease right of use assets - net $ 4,029 $ 1,630

Operating lease liabilities:

Other current liabilities $ 775 $ 621

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Name Description of the Transactions (in thousands)

LeoStella Joint Venture with Thales Alenia Space The Company owns 50% of LeoStella, its joint venture with Thales.

The Company contracts with LeoStella for the design, development and manufacture of satellites to operate its business.

$ 23,910 $ 28,042 $ 10,843 $ 3,728

X-Bow Equity Method Investee The Company had a less than 20 % investment in X-Bow and held one Board seat through November 2023 when it sold its investment.

LeoStella (1)

Former Joint Venture with Thales Alenia Space

The Company owned 50 % of LeoStella, its joint venture with Thales.

The Company contracted with LeoStella for the design, development and manufacture of satellites to operate its business.

In November 2024, the Company acquired the remaining 50 % of common units of LeoStella and LeoStella became a wholly-owned subsidiary of BlackSky.

$ 27,127 $ 23,910 N/A

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.

The Company has a non-cancelable operational commitment with Ursa Space Systems.

500 458 42 42

Thales Alenia Space Shareholder and Parent of Wholly-owned Subsidiary, Seahawk (Debt Issuer) Design, development and manufacture of telescopes.

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1,844 1,042 67,962 61,785

The Company recorded revenue from related parties of $ 11.5 million and $ 0 for the years ended December 31, 2023 and 2022, respectively.

Accounts receivable from related parties was $ 0 as of December 31, 2023 and 2022.

The Company incurred $ 0.4 million of offering costs to related parties in relation to the Amendment.

See Note 13 for information regarding the Amendment.

(1) For the year ended December 31, 2024, the total payments to LeoStella presented are from January 1, 2024 through the acquisition date of November 6, 2024.

Subsequent to the acquisition date, all payments to and from LeoStella are considered intercompany transactions and are eliminated in consolidation.

The Company recorded revenue from related parties of $ 4.3 million and $ 11.5 million for the years ended December 31, 2024 and 2023, respectively.

Accounts receivable from related parties was $ 0 as of December 31, 2024 and December 31, 2023.

Interest on the term loan facility is accrued and is due semi-annually.

The Company made interest payments of $ 1.0 million and $ 0 during the years ended December 31, 2023 and 2022, respectively.

December 31, 2023, the Company had interest due to related parties of $ 1.7 million, of which $ 0.3 million is to be paid as cash interest on a semi-annual basis and was included in other current liabilities and $ 1.4 million is paid in kind as principal due on the maturity date and was included in other liabilities.

As of December 31, 2022, the Company had interest due to related parties of $ 1.2 million that was included in other current liabilities.

The Company made interest payments of $ 2.4 million and $ 1.0 million during the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company had interest due to related parties of $ 1.9 million, of which $ 0.4 million is to be paid as cash interest on a semi-annual basis and was included in other current liabilities and $ 1.5 million is paid in kind as principal due on the maturity date and was included in other liabilities.

As of December 31, 2023, the Company had interest due to related parties of $ 1.7 million, of which $ 0.3 million was included in other current liabilities and $ 1.4 million was included in other liabilities.

Fair Value of Financial Instruments

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Private Placement Warrants - Issued October 2019 — — 583

Private Placement Warrants - Issued March 2023 — — 12,467

Sponsor Shares — — 1,304

$ 795 $ — $ 14,354

The carrying values of the following financial instruments approximated their fair values as of December 31, 2023 and 2022 based on their maturities:

cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, and other current liabilities.

The carrying values of the following financial instruments approximated their fair values as of December 31, 2024 and 2023 based on their short-term maturities:

cash and cash equivalents, restricted cash, short-term investments, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities, short-term debt, and other current liabilities.

See Note 7—“Business Acquisition” for additional information on the fair value of assets acquired via business acquisition.

There were no transfers into or out of any of the levels of the fair value hierarchy during the years ended December 31, 2024 or 2023.

Changes in the fair value of the Level 3 liabilities during the year ended December 31, 2022 of $ 5.2 million included the Sponsor Shares and the October 2019 Private Placement Warrants.

Changes in the fair value of the Level 3 liabilities during the year ended December 31, 2023 of $ 11.3 million included the Sponsor Shares, the October 2019 Private Placement Warrants, and the March 2023 Private Placement Warrants.

The following is a summary of changes in the fair value of the Level 3 liabilities during the year ended December 31, 2024:

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Balance as of January 1, 2024 $ 1,304 $ 583 $ 12,467

Liability recorded at fair value — — 17,716

Gain from changes in fair value ( 380 ) ( 749 ) ( 5,249 )

Loss from changes in fair value

399 130 1,353

Balance as of December 31, 2024 $ 1,703 $ 713 $ 13,820

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Present value of lease liabilities $ 8,823

As of December 31, 2023, the Company has approximately $ 7.3 million of commitments for an office space lease that has not yet commenced.

The lease commenced in January 2024 with a lease term of 13 years.

Ground Station Services

The Company has purchase commitments for ground station services to be performed by third-parties subsequent to December 31, 2023.

The Company has service agreements for ground station services to be performed by third-parties subsequent to December 31, 2024.

Future purchase commitments under non-cancellable ground station service contracts as of December 31, 2024 are as follows:

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From time to time, the Company may become involved in various claims and legal proceedings arising in the ordinary course of business, which, by their nature, are inherently unpredictable.

The Company is not currently a party to any material claims or legal proceedings the outcome of which, if determined adversely to the Company, would individually or in the aggregate, have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows.

Regardless of outcome, litigation and other legal proceedings can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

On May 7, 2024, a putative class action relating to the Merger of Legacy BlackSky on September 9, 2021 with a wholly-owned subsidiary of Osprey was filed in the Delaware Court of Chancery.

The action is captioned Drulias v.

Osprey Sponsor II, LLC, et al.

(“Drulias”) (Del.

The Drulias complaint asserts breach of fiduciary duty and unjust enrichment claims against the former directors of Osprey (the “Osprey Board”);

the former officers of Osprey;

and Osprey Sponsor II, LLC (the “Sponsor”);

and aiding and abetting breach of fiduciary duty claims against HEPCO Capital Management, LLC;

JANA Partners LLC;

and a director

of Legacy BlackSky.

The Drulias complaint seeks, among other things, damages and attorneys’ fees and costs.

The terms of the Merger required the Company to indemnify the directors of Osprey.

On May 8, 2024, a putative class action relating to the Merger was filed in the Delaware Court of Chancery.

The action is captioned Cheriyala v.

Osprey Sponsor II, LLC (“Cheriyala”) (Del.

The Cheriyala complaint asserts breach of fiduciary duty claims against the former directors of the Osprey Board, the former officers of Osprey, and the Sponsor;

aiding and abetting breach of fiduciary duty claims against BlackSky Holdings, Inc.

and certain directors and officers of Legacy BlackSky;

and unjust enrichment claims against an Osprey director.

The Cheriyala complaint seeks, among other things, damages and attorneys’ fees and costs.

The Court of Chancery granted Drulias’ motion to (i) consolidate the Drulias and Cheriyala actions, and (ii) appoint Drulias as lead plaintiff, and Drulias’ counsel as lead counsel, in the consolidated action.

Though BlackSky Technology Inc.

is not named in either suit, the Company expects to have certain indemnification requirements of directors, officers and former directors and officers.

Other Commitments

During the year ended December 31, 2023, the Company entered into a commitment for non-refundable multi-launch and integration services.

The Company also entered into a commercial agreement with financing terms for multiple launches providing for $ 3.0 million to be paid upfront, and for $ 27.0 million, of which a portion will be drawn down equally per launch and will be repaid quarterly on a pro-rata basis across a three-year period after each successful launch milestone.

Payments will accrue interest at 12.6 % per annum.

The Company may prepay at any time until the maturity date without premium or penalty.

As of December 31, 2023, the minimum commitment associated with the agreement was $ 8.4 million.

Under certain circumstances, a default interest rate will apply on all outstanding and payable obligations during the existence of an event of default under the Loan Agreement at 18.9 % per annum above the applicable interest rate.

We have operational commitments for the next several years that contain termination for convenience options, subject to applicable termination fees.

For example, we have work orders to manufacture our Gen-3 satellites at LeoStella, our satellite manufacturing joint venture.

Our work orders with LeoStella and other manufacturing partners all contain termination for convenience options that allow us to manage the satellite production process from design through manufacturing.

In addition to the above, the Company entered into various operational commitments for the next several years totaling $ 6.6 million as of December 31, 2023.

The Company entered into a non-refundable commitment during the year ended December 31, 2024 for launch insurance, which will cover the risk of total or partial loss for multiple upcoming satellite launches.

The minimum commitment associated with the launch insurance is $ 6.0 million.

In addition to the commitment above, the Company entered into various operational commitments for the next several years totaling $ 5.6 million as of December 31, 2024.

Concentrations, Risks, and Uncertainties

The Company has a concentration of contractual revenue arrangements with the U.S.

federal government and agencies as well as with commercial customers.

The Company had the following customers whose revenue and accounts receivable balances individually represented 10% or more of the Company’s total revenue and/or accounts receivable:

federal government and agencies as well as with international governments.

Accounts receivable related to U.S.

federal government and agencies was $ 11.2 million and $ 6.0 million as of December 31, 2024 and 2023, respectively.

The Company had the following customers whose revenue and accounts receivable balances individually represented 10% or more of the Company’s total revenue:

Years Ended December 31,

(in thousands)

federal government and agencies 60 % 62 %

Customer B 16 % 14 %

Customer C 12 % *

Accounts Receivable

Years Ended December 31, As of December 31,

2023 2022 2023 2022

As of December 31,

(in thousands)

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Customer C * *

* Revenue and/or accounts receivable from these customers were less than 10% of total revenue and/or accounts receivable during the year.

* Revenue and/or accounts receivable from these customers were less than 10% of total revenue and/or accounts receivable during the period.

The Company generally extends credit on account, without collateral.

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Subsequent Events

The Company evaluated subsequent events through March 19, 2024 and determined that there have been no events that have occurred that would require adjustments to our disclosures or the consolidated financial statements.

The Company evaluated subsequent events through March 19, 2025 and determined that there have been no events that have occurred that would require adjustments to its 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