BlackSky Technology Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Tax

Income Tax

12 Months Ended

Dec. 31, 2019

NOTE 8. INCOME TAX

The Company did not have any significant deferred tax assets or liabilities as of December 31, 2018. The provision for income taxes was deemed to be immaterial for the period from June 15, 2018 (inception) through December 31, 2018.

The Company’s net deferred tax asset at December 31, 2019 was as follows:


	December 31, 2019
Deferred tax asset
Unrealized loss on marketable securities held in Trust Account	$	1,361

Total deferred tax asset		1,361
Valuation allowance		—

Deferred tax asset, net of allowance	$	1,361

The income tax provision for the year ended December 31, 2019 consists of the following:


	December 31, 2019
Federal
Current	$	94,636
Deferred		(1,361	)
State
Current	$	—
Deferred		—
Change in valuation allowance		—

Income tax provision	$	93,275

As of December 31, 2019 and 2018, the Company did not have any U.S. federal and state net operating loss carryovers (“NOLs”) available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2019 is as follows:


	December 31, 2019
Statutory federal income tax rate		21.0	%
State taxes, net of federal tax benefit		0.0	%

Income tax provision		21.0	%

The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions. The Company’s tax returns since inception remain open and subject to examination.