BlackSky Technology Inc

Previous wording

Our next generation satellites (“Gen-3”), expected to launch in the fourth quarter of 2024, are designed to improve imaging resolution even further and include short wave infrared imaging technology for a broad set of imaging conditions, including nighttime and low-light. We believe these advancements will expand the relevance and certainty of our analytics to continue to ensure our importance to our customers. We also believe the combination of our high-revisit, small satellite constellation, our BlackSky Spectra platform, and low constellation cost is transforming the market for real-time, space-based imagery and analytics.

Current wording

Our next generation satellites (“Gen-3”), expected to ship to the launch site in the coming weeks, are designed to improve imaging resolution even further and include short wave infrared imaging technology for a broad set of imaging conditions, including nighttime and low-light. We believe these advancements will expand the relevance and certainty of our analytics to continue to ensure our importance to our customers. We also believe the combination of our high-revisit, small satellite constellation, our BlackSky Spectra platform, and low constellation cost is transforming the market for real-time, space-based imagery and analytics.

Previous wording

Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase the number of third-party data sources processed by our BlackSky Spectra platform, and to expand our analytics offerings in order to increase the value we deliver to our customers. Our two strategic assets—our satellite constellation and our BlackSky Spectra platform—are mutually reinforcing: as we capture more information about the world’s most important strategic and economic assets and locations, our proprietary database expands and increases its utility, enabling us to better detect, understand, and predict changes that matter most to our customers.

Current wording

Our operating strategy is to continue to enhance the capabilities of our satellite constellation, to increase the number of third-party data sources processed by our BlackSky Spectra platform, and to expand our analytics offerings in order to increase the value we deliver to our customers. Our two strategic assets—our satellite constellation and our BlackSky Spectra platform—are mutually reinforcing: as we capture more information about the world’s most important strategic and economic assets and locations, our proprietary database expands and increases its utility, enabling us to better detect, understand, and predict changes that matter most to our customers. Our business has a natural and powerful “flywheel” effect: the more data we collect and analyze, the more valuable the insights we can deliver to our customers.

Previous wording

We generate revenue by selling On-Demand and Assured product and service offerings that support a broad range of applications including national security, supply chain intelligence, crisis management, critical infrastructure monitoring, economic intelligence, and others. These offerings are comprised of a predefined, standard set of imagery and software analytics products accessible via our basic subscription plan through our BlackSky Spectra software platform, plus professional and engineering services provided to customers on a project-by-project basis. We offer a variety of pricing and utilization options for our imagery and software analytical service offerings, with the majority of our agreements structured as subscription contracts, followed by usage-based pricing and transactional licenses. These options provide customers flexibility to utilize our imagery and software analytical services in a manner that best suits their business needs. We offer a range of pricing tiers that enables the customer to manage collection priorities, when during critical events they can pay a premium to prioritize their monitoring and collection requirements. At other times, customers can select lower priority collections to allow for more economical utilization. Variable and fixed price plans allow our customers to choose what matters most to them—platform licensing-levels, priority for imagery tasking, and whether to apply analytics or monitoring capabilities overtop the imaging service.

Current wording

We generate revenue by selling On-Demand and Assured product and service offerings that support a broad range of applications including national security, supply chain intelligence, crisis management, critical infrastructure monitoring, economic intelligence, and others. These offerings include a predefined, standard set of imagery and software analytics products accessible via our basic subscription plan through our BlackSky Spectra software platform, plus professional and engineering services provided to customers on a project-by-project basis. We offer a variety of pricing and utilization options for our imagery and software analytical service offerings, with the majority of our agreements structured as subscription contracts, followed by usage-based pricing and transactional licenses. These options provide customers flexibility to utilize our imagery and software analytical services in a manner that best suits their business needs. We offer a range of pricing tiers that enables the customer to manage collection priorities, when during critical events they can pay a premium to prioritize their monitoring and collection requirements. At other times, customers can select lower priority collections to allow for more economical utilization. Variable and fixed price plans allow our customers to choose what matters most to them—platform licensing-levels, priority for imagery tasking, and whether to apply analytics or monitoring capabilities overtop the imaging service.

Previous wording

◦Imagery: We offer our customers high-revisit, on-demand high resolution electro optical satellite imaging services. Through our BlackSky Spectra software platform, 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 options that include basic plans for access to capacity subscriptions for 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.

Current wording

◦Imagery: We offer our customers high-revisit, on-demand high resolution electro optical satellite imaging services. Through our BlackSky Spectra software platform, 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 options that include annual plans for access to capacity subscriptions for 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.

Previous wording

•Imagery and software analytical services costs primarily include internal aerospace and geospatial software development labor, third-party data and imagery, internal labor to support the ground stations and space operations, and cloud computing and hosting services. Costs are expensed as incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year and are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements of operations and comprehensive loss based upon the classification of each employee's cash compensation. We recognize stock-based compensation expense for those employees whose work supports the imagery and software analytical services costs we provide to customers, under imagery and software analytical service costs, excluding depreciation and amortization.

Current wording

•Imagery and software analytical services costs primarily include internal aerospace and geospatial software development labor, third-party data and imagery, internal labor to support the ground stations and space operations, and cloud computing and hosting services. Costs are expensed as incurred except for incremental costs to obtain a contract, which are primarily sales commissions on contracts greater than one year and are capitalized and amortized to selling, general, and administrative expenses on a systematic basis consistent with the transfer of goods and services and directly identifiable costs to fulfill a contract. Expense related to stock-based payments is classified in the unaudited condensed consolidated statements of operations and comprehensive (loss) income based upon the classification of each employee's cash compensation. We recognize stock-based compensation expense for those employees whose work supports the imagery and software analytical services costs we provide to customers, under imagery and software analytical service costs, excluding depreciation and amortization.

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

The following table provides the components of results of operations for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table provides the components of results of operations for the three and nine months ended September 30, 2024 and 2023:

Previous wording

Imagery and software analytical services revenue increased for the three and six months ended June 30, 2024 as compared to the same periods in 2023, primarily driven by incremental imagery and analytics subscription orders and renewals from existing customers.

Current wording

Imagery and software analytical services revenue increased for the three and nine months ended September 30, 2024 as compared to the same periods in 2023, primarily driven by incremental imagery and analytics subscription orders and renewals from existing customers for additional services.

Previous wording

Professional and engineering services revenue increased for the three and six months ended June 30, 2024 as compared to the same periods in 2023. The increase was primarily due to a favorable change in the estimation of total costs at completion from identified changes in an engineering program which produced incremental revenue on a cumulative catch-up basis. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. In addition, the incremental revenue was from a new significant engineering contract that began after the comparable prior period. For the impacts of changes in estimates on our contracts, see Note 2—"Basis of Presentation and Summary of Significant Accounting Policies" of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q.

Current wording

For the nine months ended September 30, 2024, as compared to the same period in 2023, professional and engineering services revenue increased as a result of incremental revenue generated from two significant engineering contracts that were new in 2023. One of these contracts included favorable changes in the estimation of total costs at completion from identified changes in an engineering program which produced incremental revenue on a cumulative catch-up basis that occurred in the third quarter of 2023 and again during the second quarter of 2024. Such changes in estimates can result in the recognition of revenue in a current period for performance obligations which were satisfied or partially satisfied in a prior period. For the impacts of changes in estimates on our contracts, see Note 2—"Basis of Presentation and Summary of Significant Accounting Policies" of the notes to the consolidated financial statements contained within this Quarterly Report on Form 10-Q. The increase in revenue from these two contracts was partially offset by a decrease in revenue related to a contract's satisfaction of milestones in the third quarter of 2023, which completed the performance obligations.

Previous wording

Professional & engineering service costs, excluding depreciation and amortization, decreased for the three and six months ended June 30, 2024 as compared to the same periods in 2023, primarily due to fewer direct material costs incurred on a professional services contract, which was driven by an increase in the program's maturity year-over-year. This decrease was partially offset by an increase in satellite procurement work under a firm-fixed price contract that began in the fourth quarter of 2023.

Current wording

Professional & engineering service costs, excluding depreciation and amortization, decreased for the three and nine months ended September 30, 2024 as compared to the same periods in 2023, primarily due to fewer direct material costs incurred on a professional services contract, which was driven by an increase in the program's maturity year-over-year. The decreases were partially offset by an increase in satellite procurement work under a firm-fixed price contract that began in the fourth quarter of 2023.

Previous wording

Research and development expense increased for the three and six months ended June 30, 2024 as compared to the same periods in 2023. The increase was driven by contracting third-party vendors who fulfill our strategic projects as research and development expense.

Current wording

Research and development expense decreased for the three months ended September 30, 2024 and increased for the nine months ended September 30, 2024, as compared to the same periods in 2023. The fluctuations were driven by the timing of contracts from third-party vendors who fulfill our strategic projects as research and development expense. We continue to invest in our research and development initiatives to significantly expand our product capabilities in the future.

Previous wording

Depreciation expense from satellites decreased for the three and six months ended June 30, 2024 as compared to the same periods in 2023 as satellites became fully depreciated.

Current wording

Depreciation expense from satellites decreased for the three and nine months ended September 30, 2024 as compared to the same periods in 2023 as satellites became fully depreciated.

Previous wording

Depreciation expense from all other property and equipment increased for the three and six months ended June 30, 2024 as compared to the same periods in 2023, primarily driven by capitalization of software and the build-out of new office spaces.

Current wording

Depreciation expense from all other property and equipment increased for the three and nine months ended September 30, 2024 as compared to the same periods in 2023, primarily driven by the depreciation of increased asset balances for internal-use software as well as the build-out of new office space in 2023.

Previous wording

Amortization expense remained flat for the three and six months ended June 30, 2024 as compared to the same periods in 2023.

Current wording

Amortization expense remained flat for the three and nine months ended September 30, 2024 as compared to the same periods in 2023.

Previous wording

Fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in the unaudited condensed consolidated balance sheets and measure at fair value are significantly driven by our common stock price. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants. The gains or losses recognized in the period are non-cash fair value adjustments. These instruments generated a gain during the three and six months ended June 30, 2024 and a loss during the three and six months ended June 30, 2023.

Current wording

Fluctuations in our equity warrants and other equity instruments that we classify as derivative liabilities in the unaudited condensed consolidated balance sheets and measure at fair value are significantly driven by our common stock price. Fluctuations to these instruments are inversely related to changes in our common stock price, the volatility of the markets, and the duration of the equity warrants. The gains or losses recognized in the period are non-cash fair value adjustments. These instruments generated gains during the three and nine months ended September 30, 2024 and 2023.

Previous wording

The fluctuations in income on equity method investment are solely impacted by the operating results of our joint venture LeoStella. We did not recognize any percentage of LeoStella's estimated net loss during the three and six months ended June 30, 2024 since our investment in LeoStella was $0 as of December 31, 2023.

Current wording

The fluctuations in income on equity method investment are solely impacted by the operating results of our joint venture LeoStella LLC (“LeoStella”). We did not recognize any percentage of LeoStella's estimated net loss during the three and nine months ended September 30, 2024 since our investment in LeoStella was $0 as of December 31, 2023.

Previous wording

Interest income decreased during the three and six months ended June 30, 2024 as a result of fewer short-term investments held during the periods, as compared to the three and six months ended June 30, 2023.

Current wording

Interest income decreased during the three and nine months ended September 30, 2024 as a result of fewer short-term investments held during the periods as compared to the three and nine months ended September 30, 2023.

Previous wording

Interest expense increased during the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, as a result of increased debt outstanding during the second quarter of 2024 and a higher effective interest rate on our loans from related parties that were amended during the second quarter of 2023.

Current wording

Interest expense increased during the three and nine months ended September 30, 2024, as compared to the three and nine months ended September 30, 2023, as a result of increased debt outstanding during the second and third quarters of 2024 and a higher effective interest rate on our loans from related parties that were amended during the second quarter of 2023.

Previous wording

For the three and six months ended June 30, 2023, other income (expense), net, included $0.8 million of transaction costs associated with our debt modification during the second quarter of 2023. For the six months ended June 30, 2023, other expense, net also included $0.9 million of transaction costs associated with new warrants that are accounted for as derivative liabilities.

Current wording

For the nine months ended September 30, 2023, other (expense) income, net, included $0.9 million of transaction costs associated with new warrants that are accounted for as derivative liabilities and $0.8 million of transaction costs associated with our debt modification during the second quarter of 2023.

Previous wording

Adjusted EBITDA is defined as net income or loss attributable to us before interest income, interest expense, income tax expense or benefit, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not useful in evaluating our core operating performance. These items include, but are not limited to, stock-based compensation expense, unrealized (gain) loss on certain warrants/shares classified as derivative liabilities, litigation, settlements, and related costs, severance, income on equity method investment, transaction costs associated with debt and equity financings, and investment loss on short-term investments. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our ongoing operating results and trends. This non-GAAP measure provides investors with incremental information for the evaluation of our performance after isolation of certain items deemed unrelated to our core business operations.

Current wording

Adjusted EBITDA is defined as net income or loss attributable to us before interest income, interest expense, income tax expense or benefit, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as our management believes these items are not useful in evaluating our core operating performance. These items include, but are not limited to, stock-based compensation expense; unrealized (gain) loss on certain warrants/shares classified as derivative liabilities; non-recurring transaction costs; severance; litigation, settlements, and related costs; impairment losses; income on equity method investment; transaction costs associated with debt and equity financings; and investment loss on short-term investments. We have presented Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the exclusion of certain items in calculating Adjusted EBITDA can produce a useful measure for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides useful information in understanding and evaluating our operating results. In addition, we believe that Adjusted EBITDA provides additional information for investors to use in evaluating our ongoing operating results and trends. This non-GAAP measure provides investors with incremental information for the evaluation of our performance after isolation of certain items deemed unrelated to our core business operations.

Previous wording

The table below reconciles our net loss to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:

Current wording

The table below reconciles our net (loss) income to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023:

Previous wording

As of June 30, 2024, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $25.6 million and $32.8 million as of June 30, 2024 and December 31, 2023, respectively, and our short-term investments totaled $15.7 million and $19.7 million as of June 30, 2024 and December 31, 2023, respectively. We have incurred losses and generated negative cash flows from operations since our inception in September 2014. As of June 30, 2024, we had an accumulated deficit of $624.2 million.

Current wording

As of September 30, 2024, our existing sources of liquidity included cash and cash equivalents and short-term investments. Our cash and cash equivalents excluding restricted cash totaled $56.2 million and $32.8 million as of September 30, 2024 and December 31, 2023, respectively, and our short-term investments totaled $7.1 million and $19.7 million as of September 30, 2024 and December 31, 2023, respectively. We have incurred year to date losses and generated negative cash flows from operations since our inception in September 2014. As of September 30, 2024, we had an accumulated deficit of $636.8 million.

Previous wording

Our short-term liquidity as of June 30, 2024 was $42.3 million. We expect cash and cash equivalents and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors including our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, the expansion of sales and marketing activities, the ongoing investments in technology infrastructure, the introduction of new and enhanced solutions, and the continuing market acceptance of our solutions.

Current wording

Our short-term liquidity as of September 30, 2024 was $64.4 million. We expect cash and cash equivalents and cash generated from operating activities to be sufficient to meet our working capital and capital expenditure needs for the foreseeable future. Our future long-term capital requirements will depend on many factors including our growth rate, customer demand for capacity, the timing and extent of spending to support solution development efforts, the expansion of sales and marketing activities, the ongoing investments in technology infrastructure, the introduction of new and enhanced solutions, and the continuing market acceptance of our solutions.

Previous wording

We have contract assets of $28.2 million and we anticipate receiving the majority of our contract assets in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing our liquidity. From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations.

Current wording

We have current contract assets of $26.7 million and we anticipate receiving this amount in payments over the next 12 months as interim milestones on a few major customer contracts are met and expected to be billed, further enhancing our liquidity.

Previous wording

In April 2024, we entered into a commercial bank line with Stifel Bank, as lender. 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. The commercial bank line matures on June 30, 2026. As of June 30, 2024, we had borrowed $20.0 million in revolving loans. We plan to use the proceeds of the loans for the funding of growth initiatives, including working capital needs, and general corporate purposes. The Company may increase or decrease its borrowings at its discretion with no penalty to meet the funding needs of these growth initiatives.

Current wording

In April 2024, we entered into a commercial bank line with Stifel Bank, as lender. 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. The commercial bank line matures on June 30, 2026. As of September 30, 2024, we had borrowed $10.0 million in revolving loans. We may increase or decrease our borrowings at our discretion with no penalty.

Previous wording

The commercial bank line includes customary events of default, including payment defaults, covenant breach defaults, cross defaults with certain other material indebtedness, bankruptcy and insolvency defaults, and a material adverse effect default, as well as an event of default for certain impairments of the availability of our at-the-market ("ATM") facility. The occurrence of an event of default could result in the acceleration of our obligations under the commercial bank line, the termination of Stifel Bank’s commitments, a 5% increase in the applicable rate of interest, and the exercise by Stifel Bank of other rights and remedies provided for under the commercial bank line.

Current wording

The commercial bank line includes customary events of default, including payment defaults, covenant breach defaults, cross defaults with certain other material indebtedness, bankruptcy and insolvency defaults, and a material adverse effect default, as well as an event of default for certain impairments of the availability of our ATM facility. The occurrence of an event of default could result in the acceleration of our obligations under the commercial bank line, the termination of Stifel Bank’s commitments, a 5% increase in the applicable rate of interest, and the exercise by Stifel Bank of other rights and remedies provided for under the commercial bank line.

Previous wording

The Company also has the ability to offer and sell from time to time up to $75.0 million of newly issued shares in open trading windows at market prices through a designated broker dealer pursuant to an ATM offering, of which we have sold $3.2 million during the six months ended June 30, 2024. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.

Current wording

From time to time, we may seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations. If we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.

Previous wording

As of June 30, 2024, our current assets were $82.4 million, consisting primarily of cash and cash equivalents, short-term investments, and contract assets.

Current wording

As of September 30, 2024, our current assets were $106.5 million, consisting primarily of cash and cash equivalents, short-term investments, and contract assets.

Previous wording

As of June 30, 2024, our current liabilities were $19.7 million, consisting primarily of accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Current wording

As of September 30, 2024, our current liabilities were $18.8 million, consisting primarily of accounts payable and accrued liabilities. Accordingly, we have sufficient cash and working capital to fund our short-term liquidity requirements.

Previous wording

The following table provides a summary of cash flow data for the six months ended June 30, 2024 and 2023. Our short-term liquidity at June 30, 2024 was $42.3 million. Short-term investments of $15.7 million are not classified as cash, cash equivalents, or restricted cash.

Current wording

The following table provides a summary of cash flow data for the nine months ended September 30, 2024 and 2023. Our short-term liquidity at September 30, 2024 was $64.4 million. Short-term investments of $7.1 million are not classified as cash, cash equivalents, or restricted cash.

Previous wording

For the six months ended June 30, 2024, net cash used in operating activities was $5.6 million. The contributor to the significant decrease in cash used during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was the decrease in the operating loss, adjusted for depreciation, amortization, stock-based compensation expense, gain (loss) on derivatives, and other non-cash items. The operating loss decrease in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was due to increased professional & engineering services revenue from a new significant engineering contract that began after the comparable prior period as well as increased imagery revenue driven by incremental subscription orders and renewals from existing customers.

Current wording

For the nine months ended September 30, 2024, net cash used in operating activities was $4.6 million. The contributor to the significant decrease in cash used during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was the decrease in the operating loss, adjusted for depreciation, amortization, stock-based compensation expense, gain on derivatives, and other non-cash items. The operating loss decrease in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was due to increased imagery revenue primarily driven by incremental imagery and analytics subscription orders and renewals from existing customers for additional services as well as increased professional & engineering services revenue primarily driven by a new significant engineering contract that began after the comparable prior period.

Previous wording

The change in net cash used in investing activities was primarily due to decreased proceeds from the redemption and maturity of $18.0 million of our short-term investments in corporate debt and governmental securities in addition to decreased purchases of these same type of investments of $13.5 million during the six months ended June 30, 2024. Comparatively, during the six months ended June 30, 2023, we recognized $41.1 million related to the redemption and maturity of short-term investments, largely due to restructuring our banking relationships with new and existing financial institutions; during the six months ended June 30, 2023, we purchased $19.4 million of short-term investments to replace maturing investments.

Current wording

The change in net cash used in investing activities was primarily due to decreased proceeds from the redemption and maturity of $26.7 million of our short-term investments in corporate debt and governmental securities in addition to decreased purchases of these same type of investments of $13.5 million during the nine months ended September 30, 2024. Comparatively, during the nine months ended September 30, 2023, we recognized $50.1 million related to the redemption and maturity of short-term investments, largely due to restructuring our banking relationships with new and existing financial institutions; during the nine months ended September 30, 2023, we purchased $29.2 million of short-term investments to replace maturing investments.

Previous wording

We continue to have significant cash outflows for satellite procurement and launch related services and incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform. The total amount paid for capital expenditures was relatively flat during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

We continue to have significant cash outflows for satellite procurement and launch related services and incur labor costs for internally developed capitalized software as we add innovative new services and tools to our BlackSky Spectra software platform. The total amount paid for capital expenditures increased during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 as we continue to build and prepare for the launch of our Gen-3 satellites.

Previous wording

The decrease in cash flows from financing activities in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 is due to the decrease in proceeds from our equity issuances, net of equity issuance costs. Our equity issuances in the six months ended June 30, 2024 of $2.9 million included the sale of 2.6 million shares under our ATM offering program, which resulted in $3.2 million in gross proceeds. Our equity issuances in the six months ended June 30, 2023 included a private placement of 16.4 million shares at a purchase price of $1.79 per share, which resulted in $29.4 million in gross proceeds as well as the sale of 1.0 million shares under our ATM offering program, which resulted in $1.9 million in gross proceeds. The decrease in proceeds from equity issuances was partially offset by borrowings from our revolving credit facility of $20.0 million during the six months ended June 30, 2024.

Current wording

The most significant impact on the change in net cash provided by financing activities was the receipt of $47.3 million in proceeds from our equity issuances, net of equity issuance costs, in the nine months ended September 30, 2024 as compared to $30.9 million in the nine months ended September 30, 2023. Our equity issuances during the nine months ended September 30, 2024 included a public offering of 11.5 million shares of common stock resulting in $46.0 million in gross proceeds as well as the sale of 0.5 million shares under our ATM offering program which resulted in $4.8 million in gross proceeds. Our equity issuances in the nine months ended September 30, 2023 included a private placement of 2.1 million shares, which resulted in $29.4 million in gross proceeds, as well as the sale of 0.2 million shares under our ATM offering program, which resulted in $2.9 million in gross proceeds.

Previous wording

We classify revenue as imagery and software analytical services, and professional and engineering services in our unaudited condensed consolidated statements of operations and comprehensive loss based on the predominant attributes of the performance obligations.

Current wording

We classify revenue as imagery and software analytical services, and professional and engineering services in our unaudited condensed consolidated statements of operations and comprehensive (loss) income based on the predominant attributes of the performance obligations.

Previous wording

We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our unaudited condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the merger and the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and recorded to gain (loss) on derivatives in our unaudited condensed consolidated statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.

Current wording

We have classified the Private Placement Warrants issued in October 2019 and March 2023 and the Osprey pre-merger Class B common shares that were exchanged for shares of our Class A common stock (the "Sponsor Shares") as long-term liabilities in our unaudited condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023. The Private Placement Warrants issued in October 2019 and the Sponsor Shares were initially recorded at fair value on the date of the merger and the Private Placement Warrants issued in March 2023 were recorded at fair value on the date of issuance. The Private Placement Warrants were recorded at fair value using a Black-Scholes option pricing model and the Sponsor Shares were recorded at fair value using a Monte Carlo simulation model. These liabilities are re-measured to fair value at each subsequent reporting date and recorded to gain on derivatives in our unaudited condensed consolidated statements of operations and comprehensive (loss) income. We will continue to adjust the liability for changes in fair value until the financial instruments are exercised, redeemed, cancelled or released.