Quarterly report pursuant to Section 13 or 15(d)

Fair Value of Financial Instruments

v3.22.2.2
Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments 16. Fair Value of Financial Instruments
Recurring basis
The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, as well as indicate the fair value hierarchy level of the valuation techniques and inputs that the Company utilized to determine such fair value:
September 30, 2022 Quoted Prices in Active Markets Significant Other Observable Input Significant Other Unobservable Inputs
(Level 1) (Level 2) (Level 3)
(in thousands)
Liabilities
Public Warrants $ 2,846  $ —  $ — 
Private Placement Warrants —  —  1,624 
Sponsor Shares —  —  1,826 
$ 2,846  $ —  $ 3,450 
December 31, 2021 Quoted Prices in Active Markets Significant Other Observable Input Significant Other Unobservable Inputs
(Level 1) (Level 2) (Level 3)
(in thousands)
Liabilities
Public Warrants $ 8,697  $ —  $ — 
Private Placement Warrants —  —  3,496 
Sponsor Shares —  —  4,732 
$ 8,697  $ —  $ 8,228 
The carrying values of the following financial instruments approximated their fair values as of September 30, 2022 and December 31, 2021 based on their maturities: cash and cash equivalents, restricted cash, short-term investments, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, leases payable and other current liabilities.
There were no transfers into or out of any of the levels of the fair value hierarchy during the nine months ended September 30, 2022 or 2021.
Changes in the fair value of the Level 3 liabilities during the nine months ended September 30, 2021 of $16.1 million included the Bridge Notes, Private Placement Warrants, Sponsor Shares, Class A common stock warrants, Legacy BlackSky preferred stock warrants and Consent Fees. The following is a summary of changes in the fair value of the Level 3 liabilities during the nine months ended September 30, 2022:
Sponsor Shares Private Placement Warrants
(in thousands)
Balance, January 1, 2022 $ 4,732  $ 3,496 
Gain from changes in fair value (2,906) (1,872)
Balance, September 30, 2022 $ 1,826  $ 1,624