Annual report pursuant to Section 13 and 15(d)

Debt and Other Financing

v3.24.1
Debt and Other Financing
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
Debt and Other Financing 13. Debt and Other Financing
The carrying value of the Company’s outstanding debt consisted of the following amounts:
December 31, December 31,
2023 2022
(in thousands)
Non-current portion of long-term debt $ 84,578  $ 77,132 
Unamortized debt issuance cost (1,077) (913)
Outstanding balance $ 83,502  $ 76,219 
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.
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. The Amendment amended the secured loan facility to, among other things: (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. 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.
Under the Company’s loan agreements, minimum required maturities are as follows:
For the years ending December 31, (in thousands)
2024 $ — 
2025 — 
2026 84,578 
Total outstanding $ 84,578 
Fair Value of Debt
The estimated fair value of the Company’s outstanding long-term debt was 78.7 million and $73.2 million as of December 31, 2023 and 2022, respectively, which is different than the historical cost of the long-term debt as reflected in the Company’s consolidated balance sheets. The fair value of the long-term debt was estimated using Level 3 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements and credit rating.
Compliance with Debt Covenants
As 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:
•$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.
As of December 31, 2023, all debt instruments contained customary covenants and events of default. The Company was in compliance with all covenants as of December 31, 2023.