Annual report [Section 13 and 15(d), not S-K Item 405]

Debt and Other Financing

v3.25.1
Debt and Other Financing
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Debt and Other Financing 14. Debt and Other Financing
The carrying value of the Company’s outstanding debt consisted of the following amounts:
December 31, December 31,
2024 2023
(in thousands)
Current portion of long-term debt $ 2,000  $ — 
Non-current portion of long-term debt 107,034  84,578 
Total long-term debt 109,034  84,578 
Unamortized debt issuance costs (1,371) (1,077)
Outstanding balance $ 107,663  $ 83,502 

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. 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.
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:
For the years ending December 31, (in thousands)
2025 $ 2,000 
2026 105,034 
2027 2,000 
Total outstanding $ 109,034 
Fair Value of Debt
The estimated fair value of the Company’s outstanding long-term debt was $120.3 million and $78.7 million as of December 31, 2024 and 2023, 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
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 financial and non-financial covenants as of December 31, 2024.