Note 13 Related Party Transactions

Lockheed Martin

Lockheed Martin, directly and through its wholly-owned subsidiary Astrolink International, LLC (“Astrolink”), is a significant holder of debt and equity instruments of the Company. Refer to Note 5 “Debt” and Note 6 “Warrants and Derivatives” for further discussion regarding debt and equity transactions with Lockheed Martin.

Strategic Cooperation Agreement

On June 26, 2017, the Company entered into a strategic cooperation agreement with Lockheed Martin (the “Strategic Cooperation Agreement”), as amended, pursuant to which the parties agreed to (i) collaborate on the development, production and sale of satellites for use in U.S. Government spacecraft and spacecraft procurements and (ii) establish a cooperation framework to enable the parties to enter into projects, research and development agreements and other collaborative business arrangements and “teaming activities.”

On October 31, 2022, in connection with the Convertible Note and Warrant Purchase Agreement, the Company and Lockheed Martin terminated the Strategic Cooperation Agreement, as amended, and entered into a new Strategic Cooperation Agreement (the “2022 SCA”), pursuant to which the parties have agreed to continue to share business development opportunities and work collaboratively on small satellite and other aerospace and defense opportunities and ventures. Unless earlier terminated, the 2022 SCA has a term of 13 years and will terminate in 2035. During the term of the 2022 SCA, Lockheed Martin will be entitled to appoint a director to the Company’s board of directors and to appoint a separate board observer. As part of the 2022 SCA, the Company has also agreed that it will not make any public announcement with respect to, or seek approval by the board of directors of, any sale transaction or Fundamental Change (as defined in the Convertible Note and Warrant Purchase Agreement) with respect to the Company, or any other extraordinary transaction involving the Company, with any other person regarding any of the foregoing, without giving prior notice to Lockheed Martin and to include Lockheed Martin in any such sale process, in each case, subject to the fiduciary duties of the board of directors and management of the Company.

Revenue

The Company recognized revenue from Lockheed Martin of $110.2 million and $71.6 million in 2023 and 2022, respectively. In addition, the Company had accounts receivable due from Lockheed Martin of $9.6 million and $687 thousand as of December 31, 2023 and 2022, respectively, and contract assets from contracts with Lockheed Martin of $20.1 million and $4.1 million as of December 31, 2023 and 2022, respectively. The Company had contract liabilities from contracts with Lockheed Martin of $89.1 million and $22.5 million as of December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, programs associated with Lockheed Martin represented approximately 8% and 81% of the Company's remaining performance obligations, respectively.

Expenses

During 2023, the Company incurred approximately $4.3 million of expenses in connection with engineering and research and development support provided by Lockheed Martin.

GeoOptics, Inc.

The Company owns a non-controlling equity interest in GeoOptics, Inc. (“GeoOptics”), a privately held company engaged in the acquisition and sale of Earth observation data and a purchaser of products and services from the Company. Additionally, one of the Company’s executive officers formerly served as a member of the GeoOptics board of directors. As of December 31, 2023 and 2022, the Company’s $1.7 million investment in GeoOptics represented less than a 3% ownership interest and was fully impaired.

The Company did not recognize revenue from GeoOptics during 2023 and had no accounts receivable or contract assets due from GeoOptics as of December 31, 2023 and 2022. The Company recognized revenue from GeoOptics of $1.7 million during 2022.

Transactions with Chairman and CEO

The Company leases office space in a building beneficially owned by its Chairman and CEO with a lease term of April 1, 2021 to March 31, 2026. The Company has a one-time right to extend the lease for a period of five additional years. The lease payments under this lease were approximately $241 thousand and $234 thousand in 2023 and 2022, respectively.

PIPE Investment Obligation

The PIPE Investment Obligation is considered a related party transaction. Refer to Note 5 “Debt” for further discussion.