Filing Scope and Business Context
The filing is a Form 10-Q for the quarter ended September 30, 2019, filed December 11, 2019. The registrant identified in the filing is Osprey Technology Acquisition Corp., formerly Osprey Energy Acquisition Corp. II, not BlackSky Technology Inc. Osprey was a newly formed blank check company focused on completing a business combination, with an intended emphasis on technology and Software-as-a-Service businesses. As of September 30, 2019, it had not commenced operations, identified an acquisition target, or generated revenue.
The financial statements are unaudited, prepared under U.S. GAAP for interim reporting, and cover the quarter and nine months ended September 30, 2019, with the prior comparable information consisting primarily of the period from inception on June 15, 2018 through September 30, 2018.
Financial Highlights
| Metric | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | Balance at September 30, 2019 |
|---|---|---|---|
| Revenue | $0 | $0 | — |
| Net loss | $(1,061) | $(2,881) | Accumulated deficit: $(5,058) |
| Formation and operating costs | $1,061 | $2,881 | — |
| Cash | — | — | $35,405 |
| Total assets | — | — | $471,388 |
| Total current liabilities | — | — | $451,446 |
| Related-party promissory note | — | — | $187,600 |
| Stockholders’ equity | — | — | $19,942 |
Basic and diluted net loss per share was reported as $0.00 loss for both the quarter and nine-month period because the loss was minimal on a per-share basis. No dilutive securities were outstanding at September 30, 2019.
Operating cash flow was $(2,516) for the nine months ended September 30, 2019. Financing cash flow was $(4,140), consisting primarily of $87,600 in proceeds from the related-party promissory note and $91,740 of offering-cost payments. Ending cash declined by $6,656 from $42,061 at December 31, 2018.
The company had no long-term debt, capital leases, operating leases, or off-balance-sheet arrangements as of September 30, 2019. Liquidity before the initial public offering depended on sponsor funding and related-party loans.
Material Changes Versus the Prior Comparable Period
- Net loss increased to $2,881 for the nine months ended September 30, 2019 from $798 for the period from inception through September 30, 2018, reflecting higher formation and operating costs.
- Cash used in operating activities was $2,516 in the 2019 nine-month period, compared with no operating cash flow reported for the 2018 inception period.
- Cash decreased to $35,405 at September 30, 2019 from $42,061 at December 31, 2018.
- Deferred offering costs increased to $435,983 from $172,277 at December 31, 2018, while accrued offering costs increased to $261,993 from $90,027.
- The related-party promissory note increased to $187,600 from $100,000 at December 31, 2018.
- In April 2019, the sponsor contributed back 1,581,250 founder shares for no consideration. Class B shares outstanding were 7,906,250 at September 30, 2019, compared with 9,487,500 at December 31, 2018.
Subsequent Offering, Outlook, Risks, and Unusual Items
After the reporting period, on November 5, 2019, the company completed an initial public offering of 27,500,000 units at $10.00 per unit, generating gross proceeds of $275.0 million, and sold 7,500,000 private placement warrants for $7.5 million. On November 13, 2019, the underwriters exercised their over-allotment option in full, resulting in an additional $42.075 million of gross proceeds. Aggregate funds of $316.25 million were placed in the trust account, and $1.127 million remained outside the trust account for working capital.
Offering transaction costs totaled $18.048 million, including $6.325 million of underwriting fees, $11.069 million of deferred underwriting fees, and $654,126 of other offering costs. The related-party promissory note balance, which was $187,600 at September 30, 2019, was reported as repaid in full for $224,992 on November 5, 2019.
Management intended to use substantially all trust-account proceeds to complete a business combination. The company had until November 5, 2021 to complete a transaction. If it failed to do so, it would be required to cease operations, redeem public shares using trust-account assets, and liquidate; warrants could expire worthless. Public stockholders had redemption rights in connection with a business combination, subject to the stated conditions and limitations.
Key risks included the absence of an identified target, the possibility that no business combination would be completed, potential dilution from additional equity or equity-linked securities, possible use of debt to fund a transaction, insufficient working capital, redemption demands, and the broad discretion of management in selecting and structuring a transaction. The filing reported no legal proceedings and no material changes to previously disclosed risk factors.
Beginning November 5, 2019, the company agreed to pay its sponsor $10,000 per month for office space, utilities, and administrative support until completion of a business combination or liquidation.
Investor Verification Items
- Confirm the issuer identity: this filing is for Osprey Technology Acquisition Corp., not BlackSky Technology Inc.
- Verify whether the subsequent November 2019 offering, over-allotment exercise, trust-account funding, and private warrant transactions are relevant to the requested issuer and investment analysis.
- Review the absence of operating revenue, acquisition activity, and an identified target as of September 30, 2019.
- Reconcile the $35,405 of pre-offering cash with accrued offering costs, sponsor financing, and the subsequent repayment of the related-party note.
- Assess redemption, liquidation, dilution, warrant, sponsor-conflict, and business-combination execution risks.
- Confirm the company’s stated November 5, 2021 deadline for completing a business combination and the consequences of failing to meet it.