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What changed in Spire Global, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Spire Global, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+390 added−476 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-15)

Top changes in Spire Global, Inc.'s 2023 10-K

390 paragraphs added · 476 removed · 309 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

45 edited+9 added−24 removed50 unchanged
Biggest changeFor additional information regarding the laws and regulations to which we are subject and the risks to our business associated with such laws and regulations, see Part I, Item 1A, Risk Factors of this Annual Report on Form 10-K. Available Information Our website is located at www.spire.com, and our investor relations website is located at www.ir.spire.com.
Biggest changeWe could incur significant costs, including cleanup costs, fines, sanctions, and third-party claims, as a result of violations of or in connection with liabilities under environmental laws and regulations. 14 For additional information regarding the laws and regulations to which we are subject and the risks to our business associated with such laws and regulations, see Part I, Item 1A, Risk Factors of this Annual Report on Form 10-K.
The data is then autonomously moved from ground stations to proprietary data warehouses for cleansing, standardization, fusion and analysis. Via the SpireSight API, our customers receive proprietary data, analysis, and predictive solutions delivered seamlessly in real and near real-time. We collect data from space once and can sell it an unlimited number of times without added cost.
The data is then autonomously moved from ground stations to proprietary data warehouses for cleansing, standardization, fusion and analysis. Via the SpireSight API, our customers receive proprietary data, analysis, and predictive data and solutions delivered seamlessly in real and near real-time. We collect data from space once and can sell it an unlimited number of times without added cost.
Weather We provide space-based data, AI-powered insights and predictive weather analytics to empower the world to optimize costs, increase safety, boost decarbonization and make optimal business decisions. By utilizing radio occultation technology (“RO”), we are able to offer improved global weather observation capabilities, capturing detailed temperature, humidity, and pressure information across the entire planet.
Weather We provide space-based data, AI-powered insights and predictive weather analytics to empower the world to optimize costs, increase safety, boost decarbonization and make optimal business decisions. By utilizing radio occultation technology (“RO”), we are able to offer improved global weather and Earth observation capabilities, capturing detailed temperature, humidity, and pressure information across the entire planet.
More recently, there has been a growing realization that the world lacks sufficient tools to anticipate and respond effectively to extreme weather events and climate change, and that more of our efforts and investment should be focused on how we can best protect vulnerable populations, infrastructure, land and the impact to the global economy.
More recently, there has been a growing realization that the world lacks sufficient tools to anticipate and respond effectively to extreme weather events and climate change, and that more of our efforts and investment should be focused on how we can best protect vulnerable populations, infrastructure, land and the impact to the global 11 economy.
Additionally, the research and development team works closely with our sales team to collect market and customer feedback to enhance our portfolio. Our research and development organization is distributed across the United States, Canada, Luxembourg, Scotland and Singapore, each of which we believe is a strategic advantage for us, allowing us to develop capabilities more efficiently.
Additionally, the research and development team works closely with our sales team to collect market and customer feedback to enhance our portfolio. Our research and development organization is distributed across the United States, Canada, Luxembourg, Germany, Scotland and Singapore, each of which we believe is a strategic advantage for us, allowing us to develop capabilities more efficiently.
We also license data and software from third parties for integration into our business, including open-source software and other software available on commercially reasonable terms. Additionally, we rely upon unpatented trade secrets and confidential know-how and continuing technological innovation to develop and maintain our competitive position.
We also license data and software from third parties for integration into our business, including open-source software and other software available on commercially reasonable terms. 13 Additionally, we rely upon unpatented trade secrets and confidential know-how and continuing technological innovation to develop and maintain our competitive position.
We believe the enhancement of our solutions and the timely development of new services and features is essential to maintaining our competitive position, and we incorporate suggestions and feedback from our customers into our services. Our research and development teams work closely with operations to monitor and maintain the high availability of all our services.
We believe the enhancement of our solutions and the timely development of new services and features is essential to maintaining our competitive position, and we incorporate suggestions and feedback from our customers into our services. Our research and development teams work closely with operations to monitor and 12 maintain the high availability of all our services.
The largest industries we currently serve include maritime, aviation and government (civil and defense). 9 Maritime We provide current and historical data, insights and predictive analytics for highly accurate ship monitoring, real-time and near real-time vessel updates, port operations, ship safety and route optimization.
The largest industries we currently serve include maritime, aviation and government (civil and defense). Maritime We provide current and historical data, insights and predictive analytics for highly accurate ship monitoring, real-time and near real-time vessel updates, port operations, ship safety and route optimization.
Using ADS-B, customers can track the overall operational status of aviation assets and relevant weather conditions along a given aircraft’s flight path or in particular areas of interest around the world.
Using ADS-B, customers can track the overall operational status of aviation assets and relevant weather conditions along a given aircraft’s flight 9 path or in particular areas of interest around the world.
Our consistent launch schedule and end-to-end LEMUR design and manufacturing process allow customer sensors to go from design to launch in a matter of months, as opposed to three to five years–common under legacy satellite development.
Our launch schedule and end-to-end LEMUR design and manufacturing process allow customer sensors to go from design to launch in a matter of months, as opposed to three to five years–common under legacy satellite development.
Customers can run queries by Maritime Mobile Service Identity (MMSI), vessel name, call signs, AIS class type and more. • Supply chain and port operations: Expected time of arrival and vessel tracking data enables shippers, third-party logistic companies and ports to optimize routes, minimize delays and time at port, plan berths and orchestrate last mile delivery. • Optimizing fuel efficiencies : Smart route planning, identification of busy shipping lanes, weather forecasts and port selection enable customers to effectively manage fuel costs. • Monitoring illegal activities and compliances : Real-time and dark vessel detection solutions help facilitate organizations to secure fishing territories, protect underwater infrastructure and analyze maritime incidents. • Analyzing commodity trading : Fuel, grain, building materials and precious metals are all traded by sea.
Customers can run queries by Maritime Mobile Service Identity (MMSI), vessel name, call signs, AIS class type and more. • Supply chain and port operations: Expected time of arrival and vessel tracking data enables shippers, third-party logistic companies and ports to optimize routes, minimize delays and time at port, plan berths and orchestrate last mile delivery. • Optimizing fuel efficiencies : Smart route planning, identification of busy shipping lanes, weather forecasts and port selection enable customers to effectively manage fuel costs. • Monitoring illegal activities and compliances : Real-time, position validation solutions help facilitate organizations to secure fishing territories, protect underwater infrastructure and analyze maritime incidents. • Analyzing commodity trading : Fuel, grain, building materials and precious metals are all traded by sea.
LEMUR is compatible with a significant number of available launch vehicles, having completed more than 30 launch campaigns on ten unique vehicles. • Software-defined radio frequency sensors : We have developed a number of software-defined-radio based sensors, including AIS receivers, ADS-B receivers, and GNSS radio occultation (GNSS-RO) receivers.
LEMUR is compatible with a significant number of available launch vehicles, having completed more than 35 launch campaigns on ten unique vehicles. • Software-defined radio frequency sensors : We have developed a number of software-defined-radio based sensors, including AIS receivers, ADS-B receivers, and GNSS radio occultation (GNSS-RO) receivers.
We also compete with global, national, regional and local firms and government entities specializing in our industries. Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather data vertical, GeoOptics, Inc. with respect to our radio occultation data services.
We also compete with global, national, regional and local firms and government entities specializing in our industries. Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather data vertical, PlanetiQ with respect to our radio occultation data services.
Our extensive low-orbit satellite constellation collects near real-time data from every layer of the atmosphere, even at traditionally difficult high altitudes, polar areas, and 10 remote oceanic regions. This data is used to power Spire's Global Weather forecast system, and to enable enhanced accuracy across the planet, especially improving the quality in areas that are traditionally under-observed.
Our satellite constellation collects near real-time data from every layer of the atmosphere, even at traditionally difficult high altitudes, polar areas, and remote oceanic regions. This data is used to power Spire's Global Weather forecast system and enable enhanced forecast accuracy across the planet, especially improving the quality in areas that are traditionally under-observed.
These sensors are used to produce the proprietary datasets used in our data and analytics solutions. • Ground station network : We have deployed and operate a network of approximately 30 ground stations distributed around the globe.
These sensors are used to produce the proprietary datasets used in our data and analytics solutions. • Ground station network : We have deployed and operate a network of more than 30 ground stations distributed around the globe.
For additional information, see the section titled “ Risk Factors—Risks Related to Our Industry and Business—We face intense competition and could face pricing pressure from, and lose market share to, our competitors, which would adversely affect our business, financial condition, and results of operations .” In addition to the “listening” (radio frequency) satellite market, there is a “looking” (imagery) satellite market and a “talking” (communications) satellite market shown in the image in Part I, Item 1.
For additional information, see the section titled “ Risk Factors—Risks Related to Our Industry and Business—We face intense competition and could face pricing pressure from, and lose market share to, our competitors, which would adversely affect our business, financial condition, and results of operations .” In addition to the “listening” (radio frequency) satellite market, there is a “looking” (imagery) satellite market, and a “talking” (communications) satellite market shown below.
We leverage the International Maritime Organization AIS standard, which is an automatic tracking system that uses transceivers on ships to provide geographic location data through historical or live satellite AIS (“S-AIS”) data as observed by our satellites and terrestrial AIS (“T-AIS”) data. Dynamic AIS™ (D-AIS™) provides greater vessel tracking data in high traffic zones.
We leverage the International Maritime Organization automatic identification system (“AIS”) standard, which is an automatic tracking system that uses transceivers on ships to provide geographic location data through historical or live satellite AIS (S-AIS) data as observed by our satellites and terrestrial AIS (T-AIS) data. Dynamic AIS™ (D-AIS™) provides greater vessel tracking data in high traffic zones.
The principal competitive factors for companies in our verticals are: • Data: global coverage, temporal and spatial resolution, accuracy, uniqueness, relevance and latency of data and analytics; • Platform: speed, scale, reliability and relevance of API/user interface, ease of deployment and use, ability to ingest and manage a broad variety and large volume of data, ongoing innovation of services and customer support; • Integration: quality of training and consulting; • Cost: flexible packaging and total cost of ownership; and • Business Strength: long-term business viability, customer satisfaction, brand awareness and reputation. 13 We believe that we compare favorably with our competitors on the basis of the factors listed above.
The principal competitive factors for companies in our verticals are: • Data: global coverage, temporal and spatial resolution, accuracy, uniqueness, relevance and latency of data and analytics; • Platform: speed, scale, reliability and relevance of API/user interface, ease of deployment and use, ability to ingest and manage a broad variety and large volume of data, ongoing innovation of services and customer support; • Integration: quality of training and consulting; • Cost: flexible packaging and total cost of ownership; and • Business Strength: long-term business viability, customer satisfaction, brand awareness and reputation.
As of December 31, 2022, we had 415 employees located in five countries, of which 411 were full-time employees. In addition, we engage contractors and third-party service providers in connection with certain projects. In certain countries in which we operate, we are subject to local labor law requirements which may automatically make employees subject to industry-wide collective bargaining agreements.
As of December 31, 2023, we had 416 employees located in six countries, of which 407 were full-time employees. In addition, we engage contractors and third-party service providers in connection with certain projects. In certain countries in which we operate, we are subject to local labor law requirements which may automatically make employees subject to industry-wide collective bargaining agreements.
A diversified architecture encompassing both governmental and commercial satellites, in varying constellation sizes and orbits, provides resilience to the space-based ecosystem. With over 100 satellites in space, Spire is a meaningful member of that ecosystem.
A diversified architecture encompassing both governmental and commercial satellites, in varying constellation sizes and orbits, provides resilience to the space-based ecosystem. Spire has a fully deployed constellation with over 170 satellites launched and is a meaningful member of that ecosystem.
Our satellites capture global aircraft movements from space using ADS-B signals, even when the aircraft is flying over oceans, deserts, mountains and regions without available ground-based tracking. • Flight tracking : We generate near real-time information on the movements of all ADS-B equipped aircrafts across continents and oceans for a long suite of regulatory and operations applications; • Estimated time of arrival/on-time performance : Our versatile, near real-time aviation ADS-B data streams provide insight into both historical on-time performance and real-time estimated time of arrivals, which can benefit airline and airport operations; • Air cargo and freight analytics : Tracking all cargo aircraft in near real-time can be leveraged for analysis of supply of air cargo capacity which aids in optimizing pricing and distribution; • Analytics and market intelligence : Companies integrate live and historical flight and weather data into innovative solutions for their customers and internal teams, driving more favorable outcomes through deeper insights; and • Predictive maintenance and aircraft management : By tracking aircraft usage and flight patterns, our data aids in the analysis allowing for less aircraft downtime and fewer schedule disruptions.
Key applications include: • Flight tracking : We generate near real-time information on the movements of all ADS-B equipped aircrafts across continents and oceans for a long suite of regulatory and operations applications. • Estimated time of arrival/on-time performance : Our versatile, near real-time aviation ADS-B data streams provide insight into both historical on-time performance and real-time estimated time of arrivals, which can benefit airline and airport operations. • Air cargo and freight analytics : Tracking all cargo aircraft in near real-time can be leveraged for analysis of supply of air cargo capacity which aids in optimizing pricing and distribution. • Analytics and market intelligence : Companies integrate live and historical flight and weather data into innovative solutions for their customers and internal teams, driving more favorable outcomes through deeper insights. • Predictive maintenance and aircraft management : By tracking aircraft usage and flight patterns, our data aids in the analysis allowing for less aircraft downtime and fewer schedule disruptions.
As of December 2022, our sensors covered the entirety of the globe over 200 times per day on average, including remote areas where terrestrial AIS, ADS-B and atmospheric weather information are out of reach. Our constellation already has radio frequency links (RF links) in-orbit and we have begun testing optical intersatellite links (“optical ISLs”).
As of December 2023, our sensors covered the entirety of the globe over 200 times per day on average, including remote areas where terrestrial AIS, ADS-B and atmospheric weather information are out of reach. Our constellation already has Radio Frequency links (RF links) in-orbit and we have successfully completed an in-orbit technology demonstration of Optical Intersatellite Links (“OISLs”).
An effective rollout of this technology throughout our constellation will create a mesh network in a similar way to how personal computers were linked with one another through the internet. We believe optical ISLs will enable us to deliver more data faster and in an even more secure way to our customers.
An effective rollout of this technology throughout our constellation will create a mesh network in a similar way to how personal computers were linked with one another through the internet. We believe OISLs will enable us to deliver more data faster and with higher resiliency to interference, higher security, and higher efficiency.
Our customers can deploy their own applications and sensors into space quickly and efficiently with our diverse offerings: • Software in Space: Deploy customer software to existing satellites, using Software Defined Radios (SDR) in space without the need to launch a dedicated spacecraft. • Payload in Space: Host customer payloads on trusted, fully-integrated space, ground and web platform. • Solutions in Space: Customers partner with Spire to build a custom end-to-end solution from payload development to mission operations. • Operation in Space: Customers can access Spire’s ground infrastructure and API’s to operate their existing or future satellites.
Our Space Services offering allows us to quickly and efficiently put a satellite into service for our customers while they focus on what they do best. 10 Our customers can deploy their own applications and sensors into space quickly and efficiently with our diverse offerings: • Software in Space: Deploy customer software to existing satellites, using Software Defined Radios (SDR) in space without the need to launch a dedicated spacecraft. • Payload in Space: Host customer payloads on trusted, fully integrated space, ground and web platform. • Solution in Space: Customers partner with Spire to build a custom end-to-end solution from payload development to mission operations. • Operation in Space: Customers can access Spire’s ground infrastructure and APIs to operate their existing or future satellites.
As a result, NavSight Merger Sub merged with and into Legacy Spire, the separate corporate existence of NavSight Merger Sub ceased, and Legacy Spire continued as the surviving corporation and a wholly owned subsidiary of NavSight (the “Merger,” such consummation, the “Closing”). NavSight then changed its name to Spire Global, Inc.
As a result, Legacy Spire continued as the surviving corporation and a wholly owned subsidiary of NavSight (the “Merger,” and such consummation, the “Closing”). NavSight then changed its name to Spire Global, Inc. and Legacy Spire changed its name to Spire Global Subsidiary, Inc.
These tools provide immense value to governments, commercial companies, and individuals across the world, including the following sample of applications: • Weather forecasting: Taking exact measurements around the world helps improve forecasts since weather systems connect globally and can provide emergency management professionals and search and rescue teams with highly detailed forecasting across their operational regions; • Asset protection : Our data can help facilitate the risk mitigation of physical assets like power lines from storm damage; • Crop yields : Customers can use our solutions to help to optimize crop yields with optimal farm operations; • Reducing losses and insurance: Provision of data can decrease losses related to inclement weather and provide enhanced customer experiences in insurance; and • Minimize supply chain disruptions: Reduce risks to cargo, ship and crew safety, optimize fuel consumption and manage operational costs with highly accurate weather forecasts for maritime, aviation and ground operations.
These tools provide immense value to governments, commercial companies, and individuals across the world, including the following sample of applications: • Weather forecasting: Space-based RO data offers global measurements to greatly enhance the accuracy of weather forecasts, providing industries such as agriculture, energy and utilities, and supply chain with highly detailed forecasting across their operational regions. • Asset protection : Our data can help facilitate the risk mitigation of physical assets like power lines from storm damage. • Crop yields : Customers can use our solutions to help optimize crop yields with optimal farm operations. • Reducing losses and insurance: Provision of data can decrease losses related to inclement weather and provide enhanced customer experiences in insurance. • Minimize supply chain disruptions: Reduce risks to cargo, ship and crew safety, optimize fuel consumption and manage operational costs with highly accurate weather forecasts for maritime, aviation and ground operations.
If we obtain a required authorization but do not meet milestones regarding the construction, launch and operation of a satellite by deadlines that may be established in the authorization, we may lose our authorization to operate a satellite using certain frequencies in an orbital location. 14 We hold FCC and foreign governmental licensing authority licenses, permits and approvals for our satellite constellations and earth stations.
If we obtain a required authorization but do not meet milestones regarding the construction, launch and operation of a satellite by deadlines that may be established in the authorization, we may lose our authorization to operate a satellite using certain frequencies in an orbital location.
The four forms of data we sell to customers are: • Clean data : Clean and structured data directly from our proprietary satellites; • Smart data : Clean data fused with third-party datasets and proprietary analysis to enhance value and provide insights; • Predictive data : Big data, artificial intelligence (“AI”), and machine learning (“ML”) algorithms applied to fused data sets to create predictive analytics and insights; and • Solutions : Data-driven actionable recommendations to solve specific business problems, utilizing the full spectrum of our data analytics suite.
The four forms of data we sell to customers are: • Clean data : Clean and structured data directly from our proprietary satellites; • Smart data : Clean data fused with third-party datasets and proprietary analysis to enhance value and provide insights; • Predictive data : Big data, artificial intelligence (“AI”), and machine learning (“ML”) algorithms applied to fused data sets to create predictive analytics and insights; and • Solutions : Data-driven actionable recommendations to solve specific business problems, utilizing the full spectrum of our data analytics suite. 8 We monetize our proprietary solutions across a broad and growing range of current and target industries including agriculture, logistics, financial services, insurance, aerospace, energy, fishing, academia and real estate, among others.
Our customer success and sales engineer teams, along with our sales team, manage our relationships with our customers. Once a solution sale is made, our sales team leverages our land-and-expand model to generate incremental revenue through increased levels of adoption of our data by our customers.
Once a solution sale is made, our sales team leverages our land-and-expand model to generate incremental revenue through increased levels of adoption of our data by our customers. To drive such expansion in our existing customers, our sales team works closely with our sales engineers and marketing teams to foster customer success.
Our sales professionals are responsible for acquiring new customers along with managing and expanding business with our existing customers. The efforts are focused on sourcing and developing new customer relationships, maintaining customer relationships, increasing solution penetration, driving sales of additional solutions and furthering contract renewals.
The efforts are focused on sourcing and developing new customer relationships, maintaining customer relationships, increasing solution penetration, driving sales of additional solutions and furthering contract renewals. Our customer success and sales engineer teams, along with our sales team, manage our relationships with our customers.
(together with its subsidiaries) is referred to as “Spire,” the “Company,” “we,” “us,” or “our.” Overview We are a global provider of space-based data, analytics and Space Services, offering unique datasets and powerful insights about Earth from the ultimate vantage point—space—so that organizations can make decisions with confidence, accuracy and speed.
(together with its subsidiaries) is referred to as “Spire,” the “Company,” “we,” “us,” or “our.” Overview Spire is a global provider of space-based data, analytics and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world. Spire builds, owns, and operates a fully deployed satellite constellation.
Aviation We provide global satellite-based aircraft tracking data to power applications, drive decision making and improve cost efficiencies. We utilize International Civil Aviation Organization-backed ADS-B aircraft tracking data to provide a near real-time precision and situational awareness.
Our customers track the shipment of commodities by ship type and port calls to identify patterns and analyze global commodity flows. Aviation We provide global satellite-based aircraft tracking data to power applications, drive decision making and improve cost efficiencies. We utilize International Civil Aviation Organization-backed ADS-B aircraft tracking data to provide a near real-time precision and situational awareness.
As we build out our satellite constellation, we will require new licenses, permits and approvals from the FCC and/or foreign governmental licensing authorities or modifications to existing licenses, permits and approvals. Changes to our satellite constellation and earth stations may also require prior approval from the FCC or other governmental authorities, which can take time.
We hold FCC and foreign governmental licensing authority licenses, permits and approvals for our satellite constellations and earth stations. As we build out our satellite constellation, we will require new licenses, permits and approvals from the FCC and/or foreign governmental licensing authorities or modifications to existing licenses, permits and approvals.
As of December 31, 2022, the LEMUR platform has accumulated over 500 years of space flight heritage, with more than 150 satellites deployed in over 30 unique configurations.
As of December 31, 2023, the LEMUR platform has accumulated over 600 years of space flight heritage, with more than 170 satellites deployed.
Global security response The events of February 24, 2022, when Russia invaded Ukraine, brought to the world’s attention the importance of global security. In dynamic times, truth and transparency have never been more important.
Global security response Over the past two years, geopolitical conflicts have brought the importance of global security to the world’s attention. In dynamic times, truth and transparency have never been more important.
The operations system includes proprietary optimization algorithms which allow coordinated operations of multiple satellites, enabling us and our Space Services users to scale operations of constellations efficiently. 11 Industry Background We believe technological advancements and the rapid pace of innovation continue to drive the commercialization of spaced-based data, analytics, and insights, making them more relevant to businesses, governments and to the public at large.
Industry Background We believe technological advancements and the rapid pace of innovation continue to drive the commercialization of spaced-based data, analytics, and insights, making them more relevant to businesses, governments and to the public at large.
Our business is also dependent on the use of satellite signals and on terrestrial communication bands. International allocations of radio frequency are made by the International Telecommunication Union (“ITU”).
Changes to our satellite constellation and earth stations may also require prior approval from the FCC or other governmental authorities, which can take time. Our business is also dependent on the use of satellite signals and on terrestrial communication bands. International allocations of radio frequency are made by the International Telecommunication Union (“ITU”).
Spire launched its first supercomputer in-orbit with a teraflop of data processing capability in October 2020 and has iterated on the technology since to meet the needs of Space Services customers and enhance the data solutions delivered to customers. 12 Sales and Marketing Sales We operate primarily a direct sales organization dispersed geographically to align with our existing customers along with reaching potential new customers worldwide.
Lastly, the computing power on-board satellites in-orbit continues to improve. Spire launched its first supercomputer in-orbit with a teraflop of data processing capability in October 2020 and has iterated on the technology since to meet the needs of Space Services customers and enhance the data solutions delivered to customers.
Intellectual Property Our success depends in part upon our ability to safeguard our core technology and other intellectual property protection for our technology, inventions, improvements, proprietary rights, and other assets.
We do not compete in the “looking” or “talking” satellite markets, nor do we see any significant competition across the “looking,” “talking,” or “listening” satellite markets. Intellectual Property Our success depends in part upon our ability to safeguard our core technology and other intellectual property protection for our technology, inventions, improvements, proprietary rights, and other assets.
The response to the world’s problem of global warming and climate change over the past several decades has been largely focused on efforts to reduce greenhouse gas emissions.
According to the National Oceanic and Atmospheric Administration, 2023 set the record for the largest number of weather/climate disaster events with losses each exceeding $1 billion to affect the United States. The response to the world’s problem of global warming and climate change over the past several decades has been largely focused on efforts to reduce greenhouse gas emissions.
NavSight Holdings, Inc. was incorporated in May 2020 as a Delaware corporation and a special purpose acquisition company and, on September 9, 2020, completed its initial public offering. Our principal executive office is located at 8000 Towers Crescent Drive, Suite 1100, Vienna, Virginia 22182, and our telephone number is (202) 301-5127.
Our principal executive office is located at 8000 Towers Crescent Drive, Suite 1100, Vienna, Virginia 22182, and our telephone number is (202) 301-5127. In this Annual Report on Form 10-K, Spire Global, Inc.
Our versatile datasets include historical and near real-time aircraft position and status, aircraft type and airline data, and flight and airport information, delivered via our near real-time and historical data APIs.
Our versatile datasets include historical and near real-time aircraft position and status, aircraft type and airline data, and flight and airport information, delivered via our near real-time and historical data APIs. Our satellites capture global aircraft movements from space using ADS-B signals, even when the aircraft is flying over oceans, deserts, mountains and regions without available ground-based tracking.
("exactEarth"), a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions in Canada. Our Data Solution Offerings Our proprietary constellation of low Earth multi-use receiver (“LEMUR”) satellites collects and transmits data to our proprietary global ground station network.
We also offer Space as a Service solutions that empower customers to leverage our established infrastructure to put their business in space. We provide customers these solutions through an application programming interface (“API”) infrastructure. Our Data Solution Offerings Our proprietary constellation of Low Earth Multi-Use Receiver (“LEMUR”) satellites collects and transmits data to our proprietary global ground station network.
Space Services We leverage our at-scale ground and cloud infrastructure, our proven, low-risk development lifecycle and proprietary infrastructure to provide our Space Services solution, which takes full advantage of our space heritage, vertically integrated capabilities and global ground station infrastructure to revolutionize how customers access space.
Space Services Built on 600+ years of space heritage, we offer Space as a Service solutions that empower our customers to leverage our established infrastructure to put their business in space. Our Space Services solutions are built upon our vertically integrated capabilities, global ground station network and cloud infrastructure to revolutionize how customers access space.
Item 1. Business General On August 16, 2021 (the “Closing Date”), Spire Global Subsidiary, Inc. (formerly known as Spire Global, Inc.) (“Legacy Spire”) closed its Merger with NavSight Holdings, Inc.
The Company is headquartered in Vienna, Virginia and has several wholly owned operating subsidiaries in the United States, United Kingdom, Luxembourg, Singapore, Australia, Germany, and Canada. On August 16, 2021, Spire Global Subsidiary, Inc. (formerly known as Spire Global, Inc.) (“Legacy Spire”) closed its previously announced merger with NavSight Holdings, Inc. (“NavSight”), a special purpose acquisition company.
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(“NavSight”), a special purpose acquisition company, pursuant to the terms of the Business Combination Agreement, dated as of February 28, 2021, by and among Spire, NavSight, NavSight Merger Sub, Inc., a wholly owned subsidiary of NavSight (“NavSight Merger Sub”), and Peter Platzer, Theresa Condor, Jeroen Cappaert, and Joel Spark.
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Item 1. Business General Spire Global, Inc. (“Spire” or the “Company”), founded in August 2012, is a global provider of space-based data and analytics that offers its customers unique datasets and insights about Earth from the ultimate vantage point. The Company collects this space-based data through its proprietary constellation of multi-purpose nanosatellites.
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(together with its consolidated subsidiary, “New Spire” or “Spire”) and Legacy Spire changed its name to Spire Global Subsidiary, Inc. Prior to the Merger, NavSight’s shares and warrants were traded on the New York Stock Exchange (“NYSE”) under the ticker symbols “NSH” and “NSH.WS”, respectively.
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By designing, manufacturing, integrating, and operating its own satellites and ground stations, the Company has unique end-to-end control and ownership over its entire system. The Company offers the following three data solutions to customers: Maritime, Aviation and Weather. As a fourth solution, the Company is providing “space-as-a-service” through its Space Services solution.
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On the Closing Date, Spire’s Class A common stock and warrants began trading on the NYSE under the ticker symbols “SPIR” and “SPIR.WS”, respectively. Legacy Spire was incorporated in 2012 as a Delaware corporation under the name NanoSatisfi, Inc., which was changed to Spire Global, Inc. in 2015.
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We believe it is one of the world’s largest “listening” constellations, observing the Earth in real time using radio frequency technology. The data acquired by our multipurpose satellites provide global weather intelligence, ship and plane movements, and spoofing and jamming detection to better predict how their patterns impact economies, global security, business operations and the environment.
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In this Annual Report on Form 10-K, Spire Global, Inc.
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Through the use of Global Navigation Satellite System Reflectometry (“GNSS-R”), Spire captures information about precipitation, soil moisture and flooding, as well as ocean winds and wave roughness, and ice thickness, extent and age on the polar caps.
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We own and operate one of the world’s largest multi-purpose satellite constellations in low earth orbit. Our multi-receiver satellites obtain Automatic Identification Systems ("AIS") data from vessels, Automatic Dependent Surveillance–Broadcast (“ADS–B”) data from aircraft and radio occultation (“RO”) data utilizing Global Navigation Satellite Systems (“GNSS”) satellites.
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We also offer weather solutions including Deep Navigation Analytics™, a weather intelligence platform for the maritime industry; DeepVision™, an advanced weather visualization dashboard for global supply chain management; and High Resolution Weather Forecast, a regional high-resolution weather forecasting service designed to meet the critical demands of the energy and commodity markets.
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Our fully deployed constellation consists of more than 100 satellites, and we believe it is also one of the world’s largest “listening” constellations, observing the earth utilizing radio frequency sensors.
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The operations system includes proprietary optimization algorithms which allow coordinated operations of multiple satellites, enabling us and our Space Services users to scale operations of constellations efficiently.
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We enrich this hard-to-acquire, valuable data with analytics and predictive solutions, providing data as a subscription to organizations around the world so that they can improve business operations, decrease their environmental footprint, deploy resources for growth and competitive advantage and mitigate risk.
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Sales and Marketing Sales We operate primarily a direct sales organization dispersed geographically to align with our existing customers along with reaching potential new customers worldwide. Our sales professionals are responsible for acquiring new customers along with managing and expanding business with our existing customers.
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In December 2022, our constellation covered the earth more than 200 times per day on average and our global ground station network performed thousands of contacts each day on average, reliably and resiliently collecting data with low latency. Our cloud-based data infrastructure in aggregate processes three terabytes of data each day on average, in creating our proprietary data analytics solutions.
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We believe that we compare favorably with our competitors on the basis of the factors listed above.
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We provide customers these solutions through an application programming interface (“API”) infrastructure. The global proprietary data that we collect includes data that can only be captured from space with no terrestrial alternatives.
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Available Information Our website is located at www.spire.com, and our investor relations website is located at www.ir.spire.com.
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We collect this data once and can then sell it an unlimited number of times across a broad and growing set of industries, including weather, aviation and maritime, with global coverage, real-time and near real-time data that can be easily integrated into our customers’ operations.
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Our Space Services offering enables our customers, both commercial and government organizations, to go from idea to orbit simply, reliably, quickly and cost efficiently. We launch software, payloads and dedicated satellite constellations for our customers that we own and manage on their behalf.
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Just like our proprietary data and analytic solutions, our customers subscribe to the data that is collected through an API. 8 From our founding in 2012, we have set out to leverage data from space to solve problems on Earth. We aim to help inspire, lead, and innovate the business of space-based data.
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Today, our proprietary data and solutions are being used to help commercial and government organizations gain the advantage that they seek to innovate and solve some of the world’s greatest challenges, like climate change and global security. We have experienced rapid growth in recent periods. In November 2021, we acquired exactEarth Ltd.
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Key elements of our data platform include: • All-in-one: Our data platform provides a unified view of robust, deep data sets that are accessed from multiple data sources, globally.
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Through this single view, users are able to gain better insight and make informed decisions; • SaaS platform : Our cloud-based platform allows users to ingest massive amounts of data from real-time to near real-time; and • Cloud-based data analytics : We have developed data processing and analytics systems which are used to process the data produced by its sensors, combine it with third-party data, and provide predictive analytics solutions for our customers.
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We monetize our proprietary solutions across a broad and growing range of current and target industries including agriculture, logistics, financial services, insurance, aerospace, energy, fishing, academia and real estate, among others.
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Our customers track the shipment of commodities by ship type and port calls to identify patterns and analyze global commodity flows. In November 2021, we acquired (the “Acquisition”) exactEarth, a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions that was mainly based out of Canada.
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Our Space Services offering allows us to quickly and efficiently put a satellite into service for our customers while they focus on what they do best.
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According to the National Oceanic and Atmospheric Administration and EM-DAT, the international disaster database, between 1980 and 1990 the world saw three mega disasters, each causing over $20 billion in damage. In the 10 years from 2010 to 2020 that number increased nearly five times to 14.
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Yet in 2022, in a single year, the world saw three mega disasters causing over $156 billion in damages. In addition, there were 42 weather disasters in 2022 that caused over one-billion dollars in damages each.
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Lastly, the computing power on-board satellites in-orbit continues to improve.
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To drive such expansion in our existing customers, our sales team works closely with our sales engineers and marketing teams to foster customer success.
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Business under the “Overview” section. We do not compete in the “looking” or “talking” satellite markets, nor do we see any significant competition across the “looking,” “talking,” or “listening” satellite markets.
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We could incur significant costs, including cleanup costs, fines, sanctions, and third-party claims, as a result of violations of or in connection with liabilities under environmental laws and regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur bylaws require, to the fullest extent permitted by law, that the sole and exclusive forum for any derivative actions brought in our name, actions against directors, officers, and employees for breach of fiduciary duty, actions arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, and actions asserting a claim governed by the internal affairs doctrine is the Court of Chancery in the State of Delaware or, if that court does not have jurisdiction, the federal district court for the District of Delaware.
Biggest changeOur bylaws provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a chosen judicial forum for disputes with us or our directors, officers, employees, or stockholders. 42 Our bylaws require, to the fullest extent permitted by law, that the sole and exclusive forum for any derivative actions brought in our name, actions against directors, officers, and employees for breach of fiduciary duty, actions arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, and actions asserting a claim governed by the internal affairs doctrine is the Court of Chancery in the State of Delaware or, if that court does not have jurisdiction, the federal district court for the District of Delaware.
Some of the principal satellite anomalies that may affect the actual commercial service lives of our satellites include: • Mechanical and electrical failures due to manufacturing error or defect, including: • mechanical failures that degrade the functionality of a satellite, such as the failure of solar array panel drive mechanisms, rate gyros, or momentum wheels; • antenna failures and defects that degrade the communications capability of the satellite; • circuit failures that reduce the power output of the solar array panels on the satellites; • failure of the battery cells that power the payload and spacecraft operations during daily solar eclipse periods; • power system failures that result in a shutdown or loss of the satellite; • avionics system failures, including GPS, that degrade or cause loss of the satellite; • altitude control system failures that degrade or cause the inoperability of the satellite; • transmitter or receiver failures that degrade or cause the inability of the satellite to communicate with our ground stations; 18 • communications system failures that affect overall system capacity; • satellite computer or processor re-boots or failures that impair or cause the inoperability of the satellites; and • radio frequency interference emitted internally or externally from the spacecraft affecting the communication links. • Equipment degradation during the satellite’s lifetime, including: • degradation of the batteries’ ability to accept a full charge; • degradation of solar array panels due to radiation; • general degradation resulting from operating in the harsh space environment, such as from solar flares; • degradation or failure of reaction wheels; • degradation of the thermal control surfaces; • degradation and/or corruption of memory devices; and • system failures that degrade the ability to reposition the satellite. • Deficiencies of control or communications software, including: • failure of the charging algorithm that may damage the satellite’s batteries; • problems with the communications functions of the satellite; • limitations on the satellite’s digital signal processing capability that limit satellite communications capacity; and • problems with the fault control mechanisms embedded in the satellite.
Some of the principal satellite anomalies that may affect the actual commercial service lives of our satellites include: • Mechanical and electrical failures due to manufacturing error or defect, including: • mechanical failures that degrade the functionality of a satellite, such as the failure of solar array panel drive mechanisms, rate gyros, or momentum wheels; • antenna failures and defects that degrade the communications capability of the satellite; • circuit failures that reduce the power output of the solar array panels on the satellites; • failure of the battery cells that power the payload and spacecraft operations during daily solar eclipse periods; • power system failures that result in a shutdown or loss of the satellite; • avionics system failures, including GPS, that degrade or cause loss of the satellite; • altitude control system failures that degrade or cause the inoperability of the satellite; • transmitter or receiver failures that degrade or cause the inability of the satellite to communicate with our ground stations; • communications system failures that affect overall system capacity; • satellite computer or processor re-boots or failures that impair or cause the inoperability of the satellites; and • radio frequency interference emitted internally or externally from the spacecraft affecting the communication links. • Equipment degradation during the satellite’s lifetime, including: • degradation of the batteries’ ability to accept a full charge; • degradation of solar array panels due to radiation; 18 • general degradation resulting from operating in the harsh space environment, such as from solar flares; • degradation or failure of reaction wheels; • degradation of the thermal control surfaces; • degradation and/or corruption of memory devices; and • system failures that degrade the ability to reposition the satellite. • Deficiencies of control or communications software, including: • failure of the charging algorithm that may damage the satellite’s batteries; • problems with the communications functions of the satellite; • limitations on the satellite’s digital signal processing capability that limit satellite communications capacity; and • problems with the fault control mechanisms embedded in the satellite.
In addition, we may be 19 subject to multiple rebid requirements over the life of a government program in order to continue to participate in such program, which can result in the loss of the program or significantly reduce our revenue or margin from the program.
In addition, we may be subject to multiple rebid requirements over the life of a government program in order to continue to participate in such program, which 19 can result in the loss of the program or significantly reduce our revenue or margin from the program.
Anomalies may also reduce the expected 20 capacity, commercial operation and/or useful life of a satellite, thereby reducing the amount of space data collected, which, if material, could impact revenue or create additional expenses due to the need to provide replacement or back-up satellites or satellite capacity earlier than planned and could have a material adverse effect on our business.
Anomalies may also reduce the expected capacity, commercial operation and/or useful life of a satellite, thereby reducing the amount of space data collected, which, if material, could impact 20 revenue or create additional expenses due to the need to provide replacement or back-up satellites or satellite capacity earlier than planned and could have a material adverse effect on our business.
Our international sales and operations are subject to a number of risks, including the following: • greater difficulty in enforcing contracts and managing collections in countries where our recourse may be more limited, as well as longer collection periods; • higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations; • differing labor regulations, especially in the EU, where labor laws are often more favorable to employees; • greater risks of unexpected changes in regulatory practices, tariffs, trade disputes, and tax laws and treaties, particularly due to the United Kingdom’s exit from the EU; • challenges inherent to efficiently recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture and employee programs across all of our offices; • fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business; 27 • management communication and integration problems resulting from language and cultural differences and geographic dispersion; • difficulties in penetrating new markets due to established and entrenched competitors; • difficulties in developing services that are tailored to the needs of local customers; • lack of local acceptance, recognition, or knowledge of our brand and services; • unavailability of or difficulties in establishing relationships with local customers; • significant investments, including the development, deployment, and maintenance of dedicated facilities in certain countries with laws that require such facilities to be installed and operated within their jurisdiction to connect the traffic coming to and from their territory; • difficulties in obtaining required regulatory or other governmental approvals; • costs associated with language localization of our platform; • risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platform that may be required in foreign countries; • greater risk of unexpected changes in regulatory requirements, tariffs and tax laws, trade laws, export quotas, customs duties, treaties, and other trade restrictions; • costs of compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations, including, but not limited to data privacy, data protection, and data security laws and regulations; • compliance with anti-bribery laws, including, without limitation, the U.S.
Our international sales and operations are subject to a number of risks, including the following: • greater difficulty in enforcing contracts and managing collections in countries where our recourse may be more limited, as well as longer collection periods; • higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations; • differing labor regulations, especially in the EU, where labor laws are often more favorable to employees; • greater risks of unexpected changes in regulatory practices, tariffs, trade disputes, and tax laws and treaties, particularly due to the United Kingdom’s exit from the EU; • challenges inherent to efficiently recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture and employee programs across all of our offices; 27 • fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business; • management communication and integration problems resulting from language and cultural differences and geographic dispersion; • difficulties in penetrating new markets due to established and entrenched competitors; • difficulties in developing services that are tailored to the needs of local customers; • lack of local acceptance, recognition, or knowledge of our brand and services; • unavailability of or difficulties in establishing relationships with local customers; • significant investments, including the development, deployment, and maintenance of dedicated facilities in certain countries with laws that require such facilities to be installed and operated within their jurisdiction to connect the traffic coming to and from their territory; • difficulties in obtaining required regulatory or other governmental approvals; • costs associated with language localization of our platform; • risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platform that may be required in foreign countries; • greater risk of unexpected changes in regulatory requirements, tariffs and tax laws, trade laws, export quotas, customs duties, treaties, and other trade restrictions; • costs of compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations, including, but not limited to data privacy, data protection, and data security laws and regulations; • compliance with anti-bribery laws, including, without limitation, the U.S.
It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines, and penalties that could adversely affect our business, financial condition, and results of operations. These proceedings could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in our business practices.
It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines, and penalties that could adversely affect our business, financial condition, and results of operations. These proceedings could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in our business practices.
If we fail to obtain or maintain particular authorizations for any of the required licenses for our ground stations, satellite launches, satellite constellations, or for our ability to uplink or downlink satellite data on acceptable terms, such failure could delay or prevent us from offering some or all of our services, including subscription services and project-based services, which could adversely affect our results of business, financial condition, and results of operations.
If we fail to obtain or maintain particular authorizations for any of the required licenses for our ground stations, satellite launches, satellite constellations, or for our ability to uplink or downlink satellite data on acceptable terms, such failure could delay or prevent us from offering some or all of our services, including subscription services and project-based services, which could adversely affect our business, financial condition, and results of operations.
From time to time, we may have pending applications for permanent or temporary changes in frequencies and technical design. From time to time, we have filed or will need to file applications to replace or add satellites to our satellite constellation. These licenses, permits, and approvals are also subject to modification by the FCC and foreign government licensing authorities.
From time to time, we may have pending applications for permanent or temporary changes in frequencies and technical design, and we have filed or will need to file applications to replace or add satellites to our satellite constellation. These licenses, permits, and approvals are also subject to modification by the FCC and foreign government licensing authorities.
Specifically, we did not design and maintain: a. controls to timely identify and account for warrant instruments, which resulted in the restatement of the previously issued financial statements of NavSight related to adjustments to warrant liabilities and equity; b. controls to account for business combinations, including the associated valuation estimates and the completeness and accuracy of the opening balance sheet, which did not result in a misstatement to our consolidated financial statements; c. controls to timely identify and account for the fair value of the contingent earnout liability, which resulted in an error in the fair value of the contingent earnout liability in, and the restatement of, our previously issued unaudited condensed consolidated financial statements as of and for each of the interim periods ended September 30, 2021, March 31, 2022 and June 30, 2022 and our consolidated financial statements as of and for the year ended December 31, 2021.
Specifically, we did not design and maintain: 39 a. controls to timely identify and account for warrant instruments, which resulted in the restatement of the previously issued financial statements of NavSight related to adjustments to warrant liabilities and equity; b. controls to account for business combinations, including the associated valuation estimates and the completeness and accuracy of the opening balance sheet, which did not result in a misstatement to our consolidated financial statements; c. controls to timely identify and account for the fair value of the contingent earnout liability, which resulted in an error in the fair value of the contingent earnout liability in, and the restatement of, our previously issued unaudited condensed consolidated financial statements as of and for each of the interim periods ended September 30, 2021, March 31, 2022 and June 30, 2022 and our consolidated financial statements as of and for the year ended December 31, 2021.
Factors affecting the trading price of our securities may include: • actual or anticipated fluctuations in our quarterly financial results or the annual financial results of companies perceived to be similar to us; • changes in the market’s expectations about our results of operations; • success of competitors; • our results of operations failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us or the satellite data and analytics industry in general; • operating and share price performance of other companies that investors deem comparable to us; • our ability to bring our services and technologies to market on a timely basis, or at all; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; • material weaknesses, ineffective internal control over financial reporting, ineffective disclosure controls, and restatements of our financial statements; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our common stock available for public sale; • any major change in our board of directors or management; • sales of substantial amounts of shares of our common stock by our directors, executive officers, or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, inflation, geopolitical instability, acts of war or terrorism, and fluctuations in interest rates, fuel prices and international currency.
Factors affecting the trading price of our securities may include: • actual or anticipated fluctuations in our quarterly financial results or the annual financial results of companies perceived to be similar to us; • changes in the market’s expectations about our results of operations; • success of competitors; 43 • our results of operations failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us or the satellite data and analytics industry in general; • operating and share price performance of other companies that investors deem comparable to us; • our ability to bring our services and technologies to market on a timely basis, or at all; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; • material weaknesses, ineffective internal control over financial reporting, ineffective disclosure controls, and restatements of our financial statements; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Class A common stock available for public sale; • any major change in our board of directors or management; • sales of substantial amounts of shares of our Class A common stock by our directors, executive officers, or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, inflation, geopolitical instability, acts of war or terrorism, and fluctuations in interest rates, fuel prices and international currency.
We also may not achieve the anticipated benefits or synergies from the acquired business due to a number of factors, including, without limitation: • unanticipated costs or liabilities associated with the acquisition, including claims related to the acquired company, our offerings, or technology; • incurrence of acquisition-related expenses, which would be recognized as a current period expense; • inability to generate sufficient revenue to offset acquisition or investment costs; • inability to maintain relationships with customers and partners of the acquired business; 28 • challenges with incorporating acquired technology and rights into our platform and maintaining quality and security standards consistent with our brand; • inability to identify security vulnerabilities in acquired technology prior to integration with our technology and platform; • inability to achieve anticipated synergies or unanticipated difficulty with integration into our corporate culture; • delays in customer purchases due to uncertainty related to any acquisition; • the need to integrate or implement additional controls, procedures, and policies; • challenges caused by distance, language, and cultural differences; • harm to our existing business relationships with business partners and customers as a result of the acquisition; • potential loss of key employees; • use of resources that are needed in other parts of our business and diversion of management and employee resources; • inability to recognize acquired contract liabilities in accordance with our revenue recognition policies; and • use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition.
We also may not achieve the anticipated benefits or synergies from the acquired business, offerings and technologies due to a number of factors, including, without limitation: • unanticipated costs or liabilities associated with the acquisition, including claims related to the acquired company, its offerings, or technology; • incurrence of acquisition-related expenses, which would be recognized as a current period expense; 28 • inability to generate sufficient revenue to offset acquisition or investment costs; • inability to maintain relationships with customers and partners of the acquired business; • challenges with incorporating acquired technology and rights into our platform and maintaining quality and security standards consistent with our brand; • inability to identify security vulnerabilities in acquired technology prior to integration with our technology and platform; • inability to achieve anticipated synergies or unanticipated difficulty with integration into our corporate culture; • delays in customer purchases due to uncertainty related to any acquisition; • the need to integrate or implement additional controls, procedures, and policies; • challenges caused by distance, language, and cultural differences; • harm to our existing business relationships with business partners and customers as a result of the acquisition; • potential loss of key employees; • use of resources that are needed in other parts of our business and diversion of management and employee resources; • inability to recognize acquired contract liabilities in accordance with our revenue recognition policies; and • use of substantial portions of our available cash or the incurrence of debt to consummate the acquisition.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as: • greater name recognition, longer operating histories, and larger customer bases; • larger sales and marketing budgets and resources; • broader distribution and established relationships with suppliers, manufacturers, and customers; • greater customer support resources; • greater resources to make acquisitions and enter into strategic partnerships; • lower labor and research and development costs; • larger and more mature intellectual property rights portfolios; and • substantially greater financial, technical, and other resources.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as: • greater name recognition, longer operating histories, and larger customer bases; • larger sales and marketing budgets and resources; • broader distribution and established relationships with suppliers, manufacturers, and customers; • greater customer support resources; • greater resources to make acquisitions and enter into strategic partnerships; 22 • lower labor and research and development costs; • larger and more mature intellectual property rights portfolios; and • substantially greater financial, technical, and other resources.
We monitor these developments and devote a significant amount of management’s time and external resources towards compliance with these laws, regulations, and guidelines, and such compliance places a significant burden on management’s time and other resources, and it may limit our ability to expand into certain jurisdictions. 33 Moreover, changes in law, the imposition of new or additional regulations, or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate.
We monitor these developments and devote a significant amount of management’s time and external resources towards compliance with these laws, regulations, and guidelines, and such compliance places a significant burden on management’s time and other resources, and may limit our ability to expand into certain jurisdictions. 33 Moreover, changes in law, the imposition of new or additional regulations, or the enactment of any new or more stringent legislation that impacts our business could require us to change the way we operate.
For example, these obligations could, among other things: • make it difficult for us to pay other obligations; • increase our cost of borrowing from other sources; • make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, investments, acquisitions, debt service requirements, or other purposes; • restrict us from making acquisitions or cause us to make divestitures or similar transactions; • adversely affect our liquidity and result in a material adverse effect on our financial condition upon repayment of the indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to service and repayment of the indebtedness, reducing the amount of cash flow available for other purposes; • limit our ability to hire or properly support our infrastructure which could have adverse impact on revenue, margins and overall financial performance; • increase our vulnerability to adverse economic conditions, including increased interest rates; • place us at a competitive disadvantage compared to our less leveraged competitors; and 41 • limit our flexibility in planning for and reacting to changes in our business.
For example, these obligations could, among other things: • make it difficult for us to pay other obligations; • increase our cost of borrowing from other sources; • make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, investments, acquisitions, debt service requirements, or other purposes; • restrict us from making acquisitions or cause us to make divestitures or similar transactions; • adversely affect our liquidity and result in a material adverse effect on our financial condition upon repayment of the indebtedness; • require us to dedicate a substantial portion of our cash flow from operations to service and repayment of the indebtedness, reducing the amount of cash flow available for other purposes; • limit our ability to hire or properly support our infrastructure which could have an adverse impact on revenue, margins and overall financial performance; • increase our vulnerability to adverse economic conditions, including increased interest rates; • place us at a competitive disadvantage compared to our less leveraged competitors; and • limit our flexibility in planning for and reacting to changes in our business.
New innovative start-up companies and competitors that are making significant investments in research and development may invent similar or superior offerings and technologies that compete with our offerings. In addition to satellite-based competitors, terrestrial data service providers could further expand into rural and remote areas and provide 22 some of the same general types of offerings that we provide.
New innovative start-up companies and competitors that are making significant investments in research and development may invent similar or superior offerings and technologies that compete with our offerings. In addition to satellite-based competitors, terrestrial data service providers could further expand into rural and remote areas and provide some of the same general types of offerings that we provide.
If we are unable to attract, retain, motivate and adequately train sufficient numbers of effective sales personnel, if our 24 sales personnel do not reach significant levels of productivity in a timely manner, or if our sales personnel are not successful in converting potential customers into new customers or increasing sales to our existing customer base, our business, financial condition, and results of operations would be adversely affected.
If we are unable to attract, retain, motivate and adequately train sufficient numbers of effective sales personnel, if our sales personnel do not reach significant levels of productivity in a timely manner, or if our sales personnel are not successful in converting potential customers into new customers or increasing sales to our existing customer base, our business, financial condition, and results of operations would be adversely affected.
Further, because there are many different security breach and other cyberattack techniques and such 31 techniques continue to become more sophisticated, frequent and adaptive and are generally not detected until after an incident has occurred, we may be unable to implement adequate preventative measures, anticipate attempted security breaches or other incidents, or react in a timely manner.
Further, because there are many different security breach and other cyberattack techniques and such techniques continue to become more sophisticated, frequent and adaptive and are generally not detected until after an incident has occurred, we may be unable to implement adequate preventative measures, anticipate attempted security breaches or other incidents, or react in a timely manner.
Similarly, if we are unable to purchase terrestrial data sets from third parties now, or in the future, on commercially reasonable terms or at all, we may be forced to produce terrestrial data sets ourselves, which we may be unable to do in a commercially feasible manner, or at all, which would adversely affect our business, financial condition, and results of operations.
Similarly, if we are unable to purchase terrestrial data sets from third parties now, or in the future, on commercially reasonable terms or at all, we may be forced to attempt to produce terrestrial data sets ourselves, which we may be unable to do in a commercially feasible manner, or at all, which would adversely affect our business, financial condition, and results of operations.
In order for our business to keep pace with technological changes and remain competitive, we may need to make significant capital expenditures, including capital to design and launch new platform features and services. New technologies may also be protected by patents or other intellectual property laws and therefore may not be available for us to use.
In order for our business to keep pace with technological changes and remain competitive, we may need to 23 make significant capital expenditures, including capital to design and launch new platform features and services. New technologies may also be protected by patents or other intellectual property laws and therefore may not be available for us to use.
Any write-off of a material portion of our goodwill would negatively affect our results of operations. 38 Our results of operations may be adversely affected by changes in accounting principles applicable to us. GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC, and other various bodies formed to promulgate and interpret appropriate accounting principles.
Any write-off of a material portion of our goodwill would negatively affect our results of operations. Our results of operations may be adversely affected by changes in accounting principles applicable to us. GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC, and other various bodies formed to promulgate and interpret appropriate accounting principles.
Investors may find our common stock less attractive because we rely on these exemptions, which may result in a less active trading market for our common stock and the trading price may be more volatile. Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of the Securities Act.
Investors may find our Class A common stock less attractive because we rely on these exemptions, which may result in a less active trading market for our Class A common stock and the trading price may be more volatile. Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of the Securities Act.
In addition, appropriate launch windows for satellites in our industry are limited and may become more so as additional satellite networks and other spacecraft are launched and/or as space debris becomes more common. Coordinating with partners and regulators to reserve launch windows and prepare for launches may as a result become more difficult over time.
In addition, appropriate launch windows for 21 satellites in our industry are limited and may become more so as additional satellite networks and other spacecraft are launched and/or as space debris becomes more common. Coordinating with partners and regulators to reserve launch windows and prepare for launches may as a result become more difficult over time.
Additionally, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Additionally, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the 17 future lead to market-wide liquidity problems.
Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it would have a substantial adverse effect on our business, results of operations, or the market price of our common stock.
Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it would have a substantial adverse effect on our business, results of operations, or the market price of our Class A common stock.
Our estimates and judgments relating to our critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause our results of operations to fall below expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
Our estimates and judgments relating to our critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.
This concentrated control may have the effect of delaying, preventing, or deterring a change in control, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and might ultimately affect the market price of our common stock.
This concentrated control may have the effect of delaying, preventing, or deterring a change in control, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of the Company, and might ultimately affect the market price of our Class A common stock.
In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Risks Related to Our Industry and Business Our revenue growth rate and financial performance in recent periods may not be indicative of future performance.
In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Risks Related to Our Industry and Business Our revenue growth and financial performance in recent periods may not be indicative of future performance.
Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future. Such tax assessments, penalties, interest, or future requirements could adversely affect our financial condition and results of operations.
Certain jurisdictions in which we do not collect 37 such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future. Such tax assessments, penalties, interest, or future requirements could adversely affect our financial condition and results of operations.
To effectively manage this growth, we will need to continue to improve and expand our operating and administrative systems, financial infrastructure, financial controls, technological operations infrastructure, and our internal IT systems, which we may not be able to do efficiently in a timely manner, or at all.
To effectively manage our growth, we will need to continue to improve and expand our operating and administrative systems, financial infrastructure, financial controls, technological operations infrastructure, and our internal IT systems, which we may not be able to do efficiently in a timely manner, or at all.
In the future, we may pursue acquisitions, dispositions, or strategic transactions, and if we fail to successfully integrate acquired companies into our business or if such acquisitions fail to deliver the expected return on investment, our business, financial condition, and results of operations could be adversely affected.
In the future, we may pursue acquisitions or strategic transactions, and if we fail to successfully integrate acquired companies into our business or if such acquisitions fail to deliver the expected return on investment, our business, financial condition, and results of operations could be adversely affected.
These provisions 42 could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.
The trading market for our securities may be influenced by the research and reports that industry or securities analysts may publish about us, our business, market, or competitors. The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations.
The trading market for our securities may be influenced by the research and reports that industry or securities analysts may publish about us, our business, market, or competitors. The analysts’ estimates are based upon their own opinions and are often different from our estimates or 44 expectations.
We have grown revenue over recent periods, but our recent revenue growth rate and financial performance should not be considered indicative of our future performance. You should not rely on our revenue for any previous quarterly or annual period as any indication of our revenue or revenue growth in future periods.
We have grown revenue over recent periods, but our recent revenue growth and financial performance should not be considered indicative of our future performance. You should not rely on our revenue for any previous quarterly or annual period as any indication of our revenue or revenue growth in future periods.
We may need to enhance the security of our platform, our systems, our data, and the other data we maintain or that we or our third-party service providers maintain or otherwise process, and our internal IT infrastructure, which may require additional resources and may not be successful.
We may need to attempt to enhance the security of our platform, our systems, our data, and the other data we maintain or that we or our third-party service providers maintain or otherwise process, and our internal IT infrastructure, which may require additional resources and may not be successful.
If we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could decline and we could face costly lawsuits, including securities class action suits.
If we fail to meet or exceed such expectations for these or any other reasons, the market price of our Class A common stock could decline and we could face costly lawsuits, including securities class action suits.
From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their platform, and the 30 licensors of such open source software provide no warranties or indemnities with respect to such claims.
From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their platform, and the licensors of such open source software provide no warranties or indemnities with respect to such claims.
Our security measures or those of our third-party service providers could fail and result in loss of or unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, or destruction of, or otherwise unauthorized processing of, such data.
Our security measures or those of our third-party service providers could fail and result in loss of 31 or unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, or destruction of, or otherwise unauthorized processing of, such data.
While we believe our assumptions and the data underlying our metrics and estimates are reasonable, these metrics and estimates may not be accurate and the conditions supporting our metrics and estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
While we believe our assumptions and the data underlying our metrics and estimates are reasonable, these metrics and estimates may not be accurate and the conditions supporting our metrics and estimates may change at any time, thereby reducing the predictive 40 accuracy of these underlying factors.
We will need to 25 continue to maintain or improve our ARR Net Retention Rate to support our growth, and our ability to expand our relationships with customers may require more sophisticated and costly sales efforts.
We will need to maintain or improve our ARR Net Retention Rate to support our growth, and our ability to expand our relationships with customers may require more sophisticated and costly sales 25 efforts.
Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims, and countersuits are successful, we could lose valuable 29 intellectual property rights.
Our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights, and if such defenses, counterclaims, and countersuits are successful, we could lose valuable intellectual property rights.
Litigation may be necessary in the future to enforce our intellectual property rights, and such litigation could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of our intellectual property.
Litigation may be necessary in the future to enforce our intellectual property rights, and such 29 litigation could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of our intellectual property.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a dual-class common stock structure, which provides our founders, Peter Platzer, Theresa Condor, Joel Spark and Jeroen Cappaert ("Legacy Spire Founders"), with the ability to determine or significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of outstanding common stock; • our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; • authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • limiting the liability of, and providing indemnification to, our directors and officers; • prohibiting cumulative voting in the election of directors; • providing that vacancies on our board of directors may be filled only by a majority of directors then in office, including those who have so resigned, of our board of directors, even though less than a quorum; • prohibiting the ability of our stockholders to call special meetings; • establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; and • specifying that special meetings of our stockholders can be called only by a majority of our board of directors, the chairperson of our board of directors, or our president.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a dual-class common stock structure, which provides our founders, Peter Platzer, Theresa Condor, Joel Spark and Jeroen Cappaert ("Legacy Spire Founders"), with the ability to determine or significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of outstanding common stock; • our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause; • authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • limiting the liability of, and providing indemnification to, our directors and officers; • prohibiting cumulative voting in the election of directors; • providing that vacancies on our board of directors may only be filled by a majority of directors then in office, even though less than a quorum; • prohibiting the ability of our stockholders to call special meetings; • establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; and • specifying that special meetings of our stockholders can be called only by a majority of our board of directors, the chairperson of our board of directors, or our president.
Similarly, if we are unable to license necessary technology from third parties now, or in the future, on commercially reasonable terms or at all, we may be forced to develop alternative technology, which we may be unable to do in a commercially feasible manner, or at all, and we may be required to use alternative technology of lower quality or performance standards, which would adversely affect our business, financial condition, and results of operations.
Similarly, if we are unable to license necessary technology from third parties now, or in the future, on commercially reasonable terms or at all, we may be forced to attempt to develop alternative technology ourselves, which we may be unable to do in a commercially feasible manner, or at all, and we may be required to use alternative technology of lower quality or performance standards, which would adversely affect our business, financial condition, and results of operations.
The Legacy Spire Founders may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your 43 interests.
The Legacy Spire Founders may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests.
If securities analysts or investors do not consider our metrics or estimates to be accurate representations of our business, or if we discover material inaccuracies in our metrics or estimates, then the market price of our common stock could decline, our reputation and brand could be harmed, our actual results might diverge from our results of operations projections, and our business, financial condition, and results of operations could be adversely affected.
If securities analysts or investors do not consider our metrics or estimates to be accurate representations of our business, or if we discover material inaccuracies in our metrics or estimates, then the market price of our Class A common stock could decline, our reputation and brand could be harmed, our actual results might diverge from our results of operations projections, and our business, financial condition, and results of operations could be adversely affected.
In addition, satellites in low earth orbit have a limited life cycle and they could become compromised over their designated operational life span. We anticipate that our satellites will have an expected end-of-commercial-service life of three years. It is possible that the actual commercial service lives of our satellites will be shorter than anticipated.
In addition, satellites in low earth orbit have a limited life cycle and they could become compromised over their designated operational life span. We anticipate that our satellites will have an expected end-of-commercial-service life of three to four years. It is possible that the actual commercial service lives of our satellites will be shorter than anticipated.
The risk of litigation may be heightened among public companies, like us, that have recently undergone a merger with a special purpose acquisition company, as well as for companies, like us, that have recently restated their financial statements. Determining reserves for our pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation.
The risk of litigation may be heightened among public companies, like us, that have previously undergone a merger with a special purpose acquisition company, as well as for companies, like us, that have restated their financial statements. Determining reserves for our pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation.
Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness. We are taking certain measures to remediate these material weaknesses described above as described in Part II, Item 9A of this Annual Report on Form 10-K, however such material weaknesses had not been remediated as of December 31, 2022.
Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness. We are taking certain measures to remediate these material weaknesses described above as described in Part II, Item 9A of this Annual Report on Form 10-K, however such material weaknesses had not been remediated as of December 31, 2023.
Some of the factors that may cause our results of operations to fluctuate from period to period include: • our ability to attract new customers, retain existing customers, and expand the adoption of our platform, particularly to our largest customers; • market acceptance and the level of demand for our platform; • the quality and level of the execution of our business strategy and operating plan; • the effectiveness of our sales and marketing programs; 16 • the competitive conditions in the industry, including consolidation within the industry, strategic initiatives by us or by competitors, or introduction of new services by us or our competitors; • the length of our sales cycle, including the timing of upgrades or renewals; • the volume of sales generated by subscription sales as opposed to project-based services; • our ability to successfully expand internationally and penetrate key markets; • pricing pressure as a result of competition or otherwise; • our ability to develop and respond to new technologies; • the impact and costs, including those with respect to integration, related to the acquisition of businesses, talent, technologies, or intellectual property rights; • increases in and the timing of operating expenses that we may incur to grow our operations and to remain competitive; • the cost and availability of components, including any changes to our supply or manufacturing partners; • limited availability of appropriate launch windows, satellite damage or destruction during launch, launch failures, incorrect orbital placement of satellites, or losses due to satellites otherwise deorbiting prior to the end of their useful life; • service outages or security breaches or incidents and any related occurrences; • trade protection measures, such as tariffs or duties; • changes in the legislative or regulatory environment; • adverse litigation judgments, settlements, or other litigation-related costs; and • general economic conditions in either domestic or international markets, including currency exchange rate fluctuations, supply chain impacts, inflation and geopolitical uncertainty and instability, such as the conflict in Ukraine and its impacts on the region and the global economy.
Some of the factors that may cause our results of operations to fluctuate from period to period include: • our ability to attract new customers, retain existing customers, and expand the adoption of our platform, particularly to our largest customers; • market acceptance and the level of demand for our platform; • the quality and level of the execution of our business strategy and operating plan; • the effectiveness of our sales and marketing programs; • the competitive conditions in the industry, including consolidation within the industry, strategic initiatives by us or by competitors, or introduction of new services by us or our competitors; • the length of our sales cycle, including the timing of upgrades or renewals; 16 • the volume of sales generated by subscription sales as opposed to project-based services; • our ability to successfully expand internationally and penetrate key markets; • pricing pressure as a result of competition or otherwise; • our ability to develop and respond to new technologies; • the impact and costs, including those with respect to integration, related to the acquisition of businesses, talent, technologies, or intellectual property rights; • increases in and the timing of operating expenses that we may incur to grow our operations and to remain competitive; • the cost and availability of components, including any changes to our supply or manufacturing partners; • limited availability of appropriate launch windows, satellite damage or destruction during launch, launch failures, incorrect orbital placement of satellites, or losses due to satellites otherwise deorbiting prior to the end of their useful life; • service outages or security breaches or incidents and any related occurrences; • trade protection measures, such as tariffs or duties; • changes in the legislative or regulatory environment; • adverse litigation judgments, settlements, or other litigation-related costs; and • general economic conditions in either domestic or international markets, including currency exchange rate fluctuations, supply chain impacts, inflation and geopolitical uncertainty and instability, such as the conflicts in Ukraine and Gaza and their impacts on the regional and global economies.
We may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect our financial condition or the market price of our common stock. The sale of equity or issuance of equity-linked debt to finance any future acquisitions could result in dilution to our stockholders.
We may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect our financial condition or the market price of our Class A common stock. The sale of equity or issuance of equity-linked debt to finance any future acquisitions could result in dilution to our stockholders.
Amendments to cybersecurity requirements such as through amendments to the Federal Acquisition Regulation or DFARS, may increase our costs or delay the award of contracts if we are unable to certify that we satisfy such cybersecurity requirements. • The U.S. government or a prime contractor customer could require us to relinquish data rights to a product in connection with performing work on a government contract, which could lead to a loss of valuable technology and intellectual property in order to participate in a government program. • We may need to invest additional capital to build out higher level security infrastructure at certain of our facilities to win contracts related to government programs with higher level security requirements.
Amendments to cybersecurity requirements such as through amendments to the FAR or the DFARS, may increase our costs or delay the award of contracts if we are unable to certify that we satisfy such cybersecurity requirements. • The U.S. government or a prime contractor customer could require us to relinquish data rights to a product in connection with performing work on a government contract, which could lead to a loss of valuable technology and intellectual property in order to participate in a government program. • We may need to invest additional capital to build out higher level security infrastructure at certain of our facilities to win contracts related to government programs with higher level security requirements.
Travel Act, and the UK Bribery Act 2010 (the “UK Bribery Act”), violations of which could lead to significant fines, penalties, and collateral consequences for us; • risks relating to the implementation of exchange controls, including restrictions promulgated by the Office of Foreign Assets Control ("OFAC"), and other similar trade protection regulations and measures; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our financial condition and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • exposure to regional or global public health issues, such as the outbreak of a pandemic, and to travel restrictions and other measures undertaken by governments in response to such issues; • general economic and political conditions in these foreign markets, including political and economic instability in some countries, such as the conflict in Ukraine and its impacts on the region and the regional global economy; • foreign exchange controls or tax regulations that might prevent us from repatriating cash earned outside the United States; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and • provisions in government contracts prohibiting foreign nationals from working on certain programs.
Travel Act, and the UK Bribery Act 2010 (the “UK Bribery Act”), violations of which could lead to significant fines, penalties, and collateral consequences for us; • risks relating to the implementation of exchange controls, including restrictions promulgated by the Office of Foreign Assets Control ("OFAC"), and other similar trade protection regulations and measures; • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our results of operations and result in restatements of, or irregularities in, financial statements; • the uncertainty of protection for intellectual property rights in some countries; • exposure to regional or global public health issues, such as the outbreak of a pandemic, and to travel restrictions and other measures undertaken by governments in response to such issues; • general economic and political conditions in these foreign markets, including political and economic instability in some countries and its impacts on the region and the regional and global economies; • foreign exchange controls or tax regulations that might prevent us from repatriating cash earned outside the United States; • double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and • provisions in government contracts prohibiting foreign nationals from working on certain programs.
In addition, our federal and state Net Operating Losses and certain tax credits may be subject to significant limitations under Section 382 and Section 383, respectively, of the Internal Revenue Code of 1986, as amended (the “Code”), and similar provisions under state law.
In addition, our federal and state Net Operating Losses and certain tax attributes may be subject to significant limitations under Section 382 and Section 383, respectively, of the Internal Revenue Code of 1986, as amended (the “Code”), and similar provisions under state law.
If any of the analysts who cover us adversely changes its recommendation regarding our common stock or provides more favorable relative recommendations about our competitors or publishes inaccurate or unfavorable research about our business, the price of our common stock would likely decline.
If any of the analysts who cover us adversely changes its recommendation regarding our Class A common stock or provides more favorable relative recommendations about our competitors or publishes inaccurate or unfavorable research about our business, the price of our Class A common stock would likely decline.
For example, if new transmitters are deployed that emit in the same frequencies as automatic identification system (“AIS,”), they might cause our AIS services to be severely compromised or disabled or alternatively if a material number of vessels were to turn off their AIS transmitting devices during their voyages then this would reduce the utility of our AIS data services.
For example, if new transmitters are deployed that emit in the same frequencies as automatic identification system (“AIS”), they might cause our AIS services to be severely compromised or disabled, or alternatively, if a material number of vessels were to turn off their AIS transmitting devices during their voyages, then this would reduce the utility of our AIS data services.
Moreover, our customers may demand substantial price discounts as part of the negotiation of contracts. There can be no assurance that we will not be forced to reduce the pricing for our services or to increase our sales and marketing and other expenses to attract and retain customers in response to competitive pressures.
Moreover, our customers may demand substantial price discounts as part of the negotiation of contracts. There can be no assurance that we will not be forced to reduce the pricing for our services, to change our business models, or to increase our sales and marketing and other expenses to attract and retain customers in response to competitive pressures.
We expect our future revenue growth rates to decline compared to prior fiscal years due to a number of reasons, which may include more challenging comparisons to prior periods, slowing demand for our platform, increasing competition, a decrease in the growth of our overall market or market saturation, and our failure to capitalize on growth opportunities.
Our future revenue growth may decline compared to prior fiscal years due to a number of reasons, which may include more challenging comparisons to prior periods, slowing demand for our platform, increasing competition, a decrease in the growth of our overall market or market saturation, and our failure to capitalize on growth opportunities.
Although we attempt to ensure that government contracts have standard provisions such as termination for convenience language which reimburses us for reasonable costs incurred, the payments are not assured and may not be sufficient to fully compensate us for any early termination of a contract.
Although we attempt to ensure that government contracts have standard provisions such as termination for convenience language which reimburses us for reasonable costs incurred, the payments are not assured and would likely not be sufficient to fully compensate us for any early termination of a contract.
Competition for these personnel is intense, and the industry in which we operate is generally characterized by significant competition for skilled personnel as well as high employee 45 attrition. We may not be successful in attracting, retaining, training, or motivating qualified personnel to fulfill our current or future needs.
Competition for this personnel is intense, and the industry in which we operate is generally characterized by significant competition for skilled personnel as well as high employee attrition. We may not be successful in attracting, retaining, training, or motivating qualified personnel to fulfill our current or future needs.
Additional risks and uncertainties related to our government contracts include, but are not limited to, the following: • We are subject to the Defense Federal Acquisition Regulation Supplement (the “DFARS”), and the Department of Defense, and other federal cybersecurity requirements, in connection with our defense work for the U.S. government and prime contractors.
Additional risks and uncertainties related to our government contracts include, but are not limited to, the following: • We are subject to the Federal Acquisition Regulation (the “FAR”), the Defense Federal Acquisition Regulation Supplement (the “DFARS”), and other federal cybersecurity requirements, in connection with our defense work for the U.S. government and prime contractors.
During the existence of an event of default under the Blue Torch Credit Facility, the lenders could exercise their rights and remedies thereunder, including by way of initiating foreclosure proceedings against any assets constituting collateral for our obligations under such credit facility.
During the existence of an event of default under the Blue Torch Financing Agreement, the lenders could 41 exercise their rights and remedies thereunder, including by way of initiating foreclosure proceedings against any assets constituting collateral for our obligations under such credit facility.
We have historically derived a significant portion of our revenue from contracts with federal, state, local, and foreign governments, which accounted for approximately 34% of our revenues for the year ended December 31, 2022. We believe that the future success and growth of our business will depend in part on our ability to continue to maintain and expand government contracts.
We have historically derived a significant portion of our revenue from contracts with federal, state, local, and foreign governments, which accounted for approximately 42% of our revenues for the year ended December 31, 2023. We believe that the future success and growth of our business will depend in part on our ability to continue to maintain and expand government contracts.
We depend on our management team and other highly skilled personnel, and we may fail to attract, retain, motivate, or integrate highly skilled personnel, which could adversely affect our business, financial condition, and results of operations. We depend on the continued contributions of our management team, key employees, and other highly skilled personnel.
General Risk Factors We depend on our management team and other highly skilled personnel, and we may fail to attract, retain, motivate, or integrate highly skilled personnel, which could adversely affect our business, financial condition, and results of operations. We depend on the continued contributions of our management team, key employees, and other highly skilled personnel.
Additionally, many governmental agencies, such as the National Oceanic and Atmospheric Administration ("NOAA"), provide weather data at little to no cost. We are constantly exposed to the risk that our competitors may utilize data they receive from us to develop and offer competing products and services to their customers, which may reduce the overall demand for our products and services.
Additionally, many governmental agencies, such as NOAA, provide weather data at little to no cost. We are constantly exposed to the risk that our competitors may utilize data they receive from us to develop and offer competing products and services to their customers, which may reduce the overall demand for our products and services.
Our systems are vulnerable to damage or interruption from floods, fires, power loss, aging infrastructure, telecommunications failures, computer viruses, computer denial of service attacks, cyberattacks or other attempts to harm our systems. The conflict in Ukraine and associated activities in Ukraine and Russia may increase the risk of cyberattacks on various types of infrastructure and operations.
Our systems are vulnerable to damage or interruption from floods, fires, power loss, aging infrastructure, telecommunications failures, computer viruses, computer denial of service attacks, cyberattacks or other attempts to harm our systems. The conflict in Ukraine and associated activities in Ukraine and Russia have increased the risk of cyberattacks on various types of infrastructure and operations.
If we suffer performance issues or downtime that exceeds the service level commitments under our contracts with our customers, our business, financial condition, and results of operations would be adversely affected.
If we suffer performance issues or downtime that fall below the service level commitments under our contracts with our customers, our business, financial condition, and results of operations would be adversely affected.
Increasingly, threats from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse, and general hacking have become more prevalent in our industry.
Increasingly, threats from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse, and general hacking have become more prevalent.
Additionally, the Class A common stock and Class B common stock held by two of the Legacy Spire Founders, Peter Platzer and Theresa Condor, who are husband and wife, represents approximately 33.4% of the voting power of our outstanding capital stock in the aggregate as of December 31, 2022.
Additionally, the Class A common stock and Class B common stock held by two of the Legacy Spire Founders, Peter Platzer and Theresa Condor, who are husband and wife, represents approximately 30.4% of the voting power of our outstanding capital stock in the aggregate as of December 31, 2023.
For Net Operating Losses arising in tax years beginning after December 31, 2017, the Tax Act, as modified by the CARES Act, limits a taxpayer’s ability to utilize Net Operating Losses to 80% of taxable income (as calculated before taking the Net Operating Losses, and certain other tax attributes, into account) for taxable years beginning after December 31, 2020.
For Net Operating Losses arising in tax years beginning after December 31, 2017, the Tax Act, limits a taxpayer’s ability to utilize Net Operating Losses to 80% of taxable income (as calculated before taking the Net Operating Losses, and certain other tax attributes, into account).
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the listing standards of the NYSE. Section 404(a) of the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the listing standards of the New York Stock Exchange (“NYSE”). Section 404(a) of the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Within the government channel, approximately 69% of revenue for the year ended December 31, 2022, was generated by three government customers. Contracts with any government entity may be terminated or suspended by the government at any time, with or without cause.
Within the government channel, approximately 63% of revenue for the year ended December 31, 2023, was generated by three government customers. Contracts with any government entity may be terminated or suspended by the government at any time, with or without cause.
We may not be able to mitigate these risks and challenges to achieve our anticipated growth or successfully increase our market share, which could materially adversely affect our business, financial condition, and results of operations. Changes to our subscription model could adversely affect our ability to attract or retain customers.
We may not be able to mitigate these risks and challenges to achieve our anticipated growth or successfully increase our market share, which could materially adversely affect our business, financial condition, and results of operations. Changes to our business models and pricing strategies could adversely affect our ability to attract or retain customers.
In general, under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income or tax liability may be limited.
In general, under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, including research and development tax credits and interest expense limitation carryforwards, to offset its post-change income or tax liability may be limited.
Further, our suppliers may become capacity-constrained or could face financial difficulties as a result of a surge in demand, a natural disaster, or other event, including the impacts of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, continuing uncertainty surrounding the effects of COVID-19, and rising interest rates.
Further, our suppliers may become capacity-constrained or could face financial difficulties as a result of a surge in demand, a natural disaster, or other event, including the impacts of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, and rising interest rates.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. Item 1B. Unresolved Staff Comments Not applicable.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. Taking advantage of such reduced disclosure obligations may also make comparison of our financial statements with other public companies difficult or impossible. Item 1B. Unresolved Staff Comments Not applicable.
Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, continuing uncertainty surrounding the effects of COVID-19, and rising interest rates may result in longer and unpredictable sales cycles, could result in potential customers deciding not to contract with us or current customers deciding not to renew, could cause delays in renewal, upgrade, or expansion decisions for some of our existing customers, may reduce the effectiveness of our sales and marketing efforts, and could reduce the duration of subscriptions.
Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, Israel’s war with Hamas, and rising interest rates may result in longer and unpredictable sales cycles, could result in potential customers deciding not to contract with us or current customers deciding not to renew, could cause delays in renewal, upgrade, or expansion decisions for some of our existing customers, may reduce the effectiveness of our sales and marketing efforts, and could reduce the duration of subscriptions.
Material impairments in the carrying value of our goodwill would negatively affect our operating results. Goodwill represents a significant portion of our assets. As of December 31, 2022, we had $50.0 million in goodwill, which resulted from our acquisition activity and represents the excess of the consideration transferred over the fair value of the net assets acquired.
Material impairments in the carrying value of our goodwill would negatively affect our operating results. Goodwill represents a significant portion of our assets. As of December 31, 2023, we had $51.2 million in goodwill, which resulted from our acquisition activity and represents the excess of the consideration transferred over the fair value of the net assets acquired.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, and we are still in the process of transferring the approximately $31.2 million of cash and cash equivalents that we had on deposit at SVB to other banks.
For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, and we had to transfer approximately $31.2 million of cash and cash equivalents that we had on deposit at SVB to other banks.
Our sales cycle can vary considerably and may be lengthened and made more uncertain by regional or global events, inflation, rising interest rates and other global economic and political uncertainties.
Our sales cycle can vary considerably and is made more uncertain by regional or global events, inflation, rising interest rates and other global economic and political uncertainties.
We may fail to effectively manage our growth, which would adversely affect our business, financial condition, and results of operations. We are a rapidly growing company, and our future growth depends, in part, on our ability to manage our growth successfully.
We may fail to effectively manage our growth, which would adversely affect our business, financial condition, and results of operations. Our future growth depends, in part, on our ability to manage our growth successfully.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters is located in Vienna, Virginia, where we currently lease approximately 8,319 square feet under a lease agreement that expires in June 2029. We also lease and license facilities in San Francisco, California; Boulder, Colorado; Luxembourg, Luxembourg; Glasgow, Scotland; Cambridge, Ontario; Singapore, Singapore and Oxfordshire, United Kingdom.
Biggest changeItem 2. Properties Our corporate headquarters is located in Vienna, Virginia, where we currently lease approximately 8,319 square feet under a lease agreement that expires in June 2029. We also lease and license facilities in San Francisco, California; Boulder, Colorado; Luxembourg, Luxembourg; Glasgow, Scotland; Cambridge, Ontario; Singapore, Singapore and Munich, Germany.
Additionally, we operate over 30 ground stations to transmit our satellite data across the globe. As the business grows and we add employees, we will evaluate our need to expand our facilities or add new facilities in different geographic locations. We believe that suitable additional or alternative space will be available as needed to accommodate any such growth.
Additionally, we operate over 33 ground stations to transmit our satellite data across the globe. As the business grows and we add employees, we will evaluate our need to expand our facilities or add new facilities in different geographic locations. We believe that suitable additional or alternative space will be available as needed to accommodate any such growth.
We expect to incur additional expenses in connection with such new or expanded facilities. 46
We expect to incur additional expenses in connection with such new or expanded facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures Not applicable. 47 PART II
Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures Not applicable. 46 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−3 removed2 unchanged
Biggest changeIn addition, the terms of the Blue Torch Financing Agreement contain restrictions on our ability to declare and pay cash dividends on our capital stock.
Biggest changeIn addition, the terms of the Blue Torch Financing Agreement contain restrictions on our ability to declare and pay cash dividends on our capital stock. Repurchases of Securities None. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 6. [Reserved]
Dividend Policy We have never declared or paid any cash dividends on our capital stock, and do not intend to pay cash dividends to our stockholders in the foreseeable future. We expect to retain all available funds and any future earnings, if any, to fund the growth and development of our business.
Dividend Policy We have never declared or paid any cash dividends on our capital stock, and do not intend to pay cash dividends to our stockholders in the foreseeable future. We expect to retain all available funds and any future earnings to fund the growth and development of our business.
As of February 24, 2023, there were four holders of record of our Class B common stock. All shares of our Class B common stock are beneficially owned by Peter Platzer, Theresa Condor, Jeroen Cappaert and William Joel Spark, or their affiliates.
As of February 23, 2024, there were four holders of record of our Class B common stock. All shares of our Class B common stock are beneficially owned by Peter Platzer, Theresa Condor, Jeroen Cappaert and William Joel Spark, or their affiliates.
Holders of Record As of February 24, 2023, there were 162 holders of record of our Class A common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Holders of Record As of February 23, 2024, there were 150 holders of record of our Class A common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Removed
Repurchases of Securities In November 2022, we commenced a warrant exchange, and on December 19, 2022, 9,956,489 publicly-traded warrants (“Public Warrants”) and 6,600,000 private placement warrants were each exchanged for 0.2 shares of our Class A common stock, or an aggregate 3,311,286 shares of Class A common stock.
Removed
On December 19, 2022, we also entered into an amendment to the warrant agreement that provided us with the right to require the exchange of the remaining outstanding Public Warrants for Class A common stock at an exchange ratio of 0.18 shares for each Public Warrant.
Removed
We exercised this exchange right on December 19, 2022, and the remaining 1,543,493 of Public Warrants were exchanged on January 4, 2023 for 277,828 shares of the Company's Class A common stock. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

126 edited+63 added−99 removed94 unchanged
Biggest changeWe account for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are recognized based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted rates and laws that will be in effect when the differences are expected to reverse. 53 Results of Operations Fiscal Year 2022 Compared to Fiscal Year 2021 The following tables set forth selected consolidated statements of operations data for each of the periods indicated: Years Ended December 31, (in thousands) 2022 2021 Revenue $ 80,268 $ 43,375 Cost of revenue (1) 40,327 18,720 Gross profit 39,941 24,655 Operating expenses (1) : Research and development 35,153 31,615 Sales and marketing 28,502 20,387 General and administrative 44,831 40,479 Loss on decommissioned satellites 549 — Total operating expenses 109,035 92,481 Loss from operations (69,094 ) (67,826 ) Other income (expense): Interest income 948 23 Interest expense (13,955 ) (11,417 ) Change in fair value of contingent earnout liability 9,677 48,248 Change in fair value of warrant liabilities 8,757 (1,600 ) Loss on extinguishment of debt (22,510 ) (3,255 ) Other expense, net (2,912 ) (1,766 ) Total other expense, net (19,995 ) 30,233 Loss before income taxes (89,089 ) (37,593 ) Income tax provision 322 497 Net loss $ (89,411 ) $ (38,090 ) (1) Includes stock-based compensation as follows: Years Ended December 31, (in thousands) 2022 2021 Cost of revenue $ 232 $ 432 Research and development 3,154 2,859 Sales and marketing 2,822 2,307 General and administrative 5,283 6,036 Total stock-based compensation $ 11,491 $ 11,634 Revenue Years Ended December 31, (in thousands) 2022 2021 % Change Revenue $ 80,268 $ 43,375 85 % Total revenue increased $36.9 million, or 85%, driven primarily by the growth in the number of ARR Customers combined with our ARR Net Retention Rate greater than 100%.
Biggest changeResults of Operations Fiscal Year 2023 Compared to Fiscal Year 2022 The following tables set forth selected consolidated statements of operations data for each of the periods indicated: Years Ended December 31, (in thousands) 2023 2022 Revenue $ 105,703 $ 80,268 Cost of revenue (1) 42,434 40,327 Gross profit 63,269 39,941 Operating expenses (1) : Research and development 38,923 35,153 Sales and marketing 25,754 28,502 General and administrative 42,494 44,831 Loss on decommissioned satellites 747 549 Total operating expenses 107,918 109,035 Loss from operations (44,649 ) (69,094 ) Other income (expense): Interest income 2,332 948 Interest expense (19,036 ) (13,955 ) Change in fair value of contingent earnout liability 129 9,677 Change in fair value of warrant liabilities (1,597 ) 8,757 Loss on extinguishment of debt — (22,510 ) Other expense, net (1,063 ) (2,912 ) Total other expense, net (19,235 ) (19,995 ) Loss before income taxes (63,884 ) (89,089 ) Income tax provision 72 322 Net loss $ (63,956 ) $ (89,411 ) (1) Includes stock-based compensation as follows: Years Ended December 31, (in thousands) 2023 2022 Cost of revenue $ 197 $ 232 Research and development 3,474 3,154 Sales and marketing 2,707 2,822 General and administrative 6,600 5,283 Total stock-based compensation $ 12,978 $ 11,491 Revenue Years Ended December 31, (dollars in thousands) 2023 2022 % Change Revenue $ 105,703 $ 80,268 32 % Total revenue increased $25.4 million, or 32%, driven primarily by the growth in the number of ARR Customers combined with growth in revenue recognized for milestone-based projects.
Our research and development efforts are focused on improving our satellite technology, developing new data sets, developing new algorithms and enhancing our smart and predictive analytics, and enhancing the ease of use and utility of our space-based data solutions. Sales and Marketing .
Our research and development efforts are focused on improving our satellite technology, developing new data sets, developing new algorithms, enhancing our smart and predictive analytics, and enhancing the ease of use and utility of our space-based data solutions. Sales and Marketing .
The Blue Torch Financing Agreement contains customary affirmative covenants and customary negative covenants limiting our ability and the ability of our subsidiaries, to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock and make investments, in each case subject to certain exceptions.
The Blue Torch Financing Agreement contains customary affirmative and negative covenants limiting our ability and the ability of our subsidiaries to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock and make investments, in each case subject to certain exceptions.
Changes in operating assets and liabilities primarily included a $4.2 million increase in accounts receivable, net, a $1.6 million decrease in operating lease liabilities, a $1.8 million decrease in accounts payable, a $1.4 million increase in contract assets, and a $0.9 million decrease in accrued wages and benefits.
Changes in operating assets and liabilities primarily included a $4.2 million increase in accounts receivable, net, a $1.8 million decrease in accounts payable, a $1.6 million decrease in operating lease liabilities, a $1.4 million increase in contract assets, and a $0.9 million decrease in accrued wages and benefits.
We determine the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the following assumptions: • Common Stock Valuation—Prior to our Closing Date of the Merger, determining the fair value of the shares of common stock underlying our stock-based awards, which were not publicly traded, involved significant judgment and had historically been determined with the help of an independent third-party valuation firm.
We determine the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the following assumptions: • Common Stock Valuation—Prior to the closing date of the Merger, determining the fair value of the shares of common stock underlying our stock-based awards, which were not publicly traded, involved significant judgment and had historically been determined with the help of an independent third-party valuation firm.
In accordance with ASC 815-40, the earnout shares are not indexed to the Common Stock and therefore are accounted for as a liability and an offset to additional paid-in capital on the consolidated balance sheets at the reverse recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of Other income (expense) in the consolidated statements of operations.
In accordance with ASC 815-40, the earnout shares are not indexed to the Class A common stock and therefore are accounted for as a liability and an offset to additional paid-in capital on the consolidated balance sheets at the reverse recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense) in the consolidated statements of operations.
The four forms of data we monetize are: • Clean data : Clean and structured data directly from our proprietary nanosatellites; • Smart data : Clean data fused with third-party datasets and proprietary analysis to enhance value and provide insights; • Predictive solutions : Big data, AI, and ML algorithms applied to fused data sets to create predictive analytics and insights; and • Solutions : Data-driven actionable recommendations to solve specific business problems, utilizing the full spectrum of our data analytics suite.
The four forms of data we monetize are: 47 • Clean data : Clean and structured data directly from our proprietary nanosatellites; • Smart data : Clean data fused with third-party datasets and proprietary analysis to enhance value and provide insights; • Predictive solutions : Big data, AI, and ML algorithms applied to fused data sets to create predictive analytics and insights; and • Solutions : Data-driven actionable recommendations to solve specific business problems, utilizing the full spectrum of our data analytics suite.
In accordance with the terms of the Equity Distribution Agreement, we may offer and sell our Class A common stock having an aggregate offering price of up to $85.0 million from time to time through the agent pursuant to a registration statement on Form S-3, which became effective on September 26, 2022.
In accordance with the terms of the Equity Distribution Agreement, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $85.0 million from time to time through the agent pursuant to a registration statement on Form S-3, which became effective on September 26, 2022.
Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one 57 period to the next, we believe that exclusion of such realized and unrealized gains and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. • Amortization of purchased intangibles.
Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis. • Amortization of purchased intangibles.
We are also required to pay other customary fees and costs in connection with the Blue Torch Credit Facility, including a commitment fee in an amount equal to $2.4 million on the closing date, a $0.3 million agency fee annually and an exit fee in an amount equal to $1.8 million upon termination of the Blue Torch Financing Agreement.
We are also required to pay other customary fees and costs in connection with the Blue Torch Credit Facility, including a commitment fee in an amount equal to $2.4 million on the closing date, a $0.3 million agency fee annually and an exit fee in an amount equal to $1.8 million upon termination of 58 the Blue Torch Financing Agreement.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30. 63
Customers with project-based contracts are considered recurring when there is a multi-year binding agreement that has a renewable component in the contract. Customers are also considered recurring when they have multiple contracts over multiple years. Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.
Customers with project-based contracts are considered recurring when there is a 50 multi-year binding agreement that has a renewable component in the contract. Customers are also considered recurring when they have multiple contracts over multiple years. Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.
Our future revenue growth and our path to profitability are dependent upon our ability to continue to land new customers and then expand adoption of our solutions within their organizations. We track our progress landing new customers by measuring the number of ARR Solution Customers we have from one fiscal year to the next.
Our future revenue growth and our path to profitability are dependent upon our ability to continue to land new customers and then expand adoption of our solutions within their organizations. 49 We track our progress landing new customers by measuring the number of ARR Solution Customers we have from one fiscal year to the next.
For awards granted subsequent to the Closing Date, the fair value of our common stock is based on the closing price of our common stock, as reported on the NYSE, on the date of grant of the related stock-based award. • Expected Term—Because of the lack of sufficient historical data, we use the simple average of the vesting period and the contractual term to estimate the period the stock options are expected to be outstanding. • Expected Volatility—We determine the expected stock price volatility based on the historical volatility of our Class A common stock and the historical volatilities of an industry peer group. • Expected Dividend Yield—The dividend rate used is zero as we have never paid any cash dividends on our common stock and do not anticipate doing so in the foreseeable future. 65 • Risk-Free Interest Rate—The interest rates used are based on the implied yield available on U.S.
For awards granted subsequent to the closing date of the Merger, the fair value of our Class A common stock is based on the closing price of our Class A common stock, as reported on the NYSE, on the date of grant of the related stock-based award. • Expected Term—Because of the lack of sufficient historical data, we use the simple average of the vesting period and the contractual term to estimate the period the stock options are expected to be outstanding. • Expected Volatility—We determine the expected stock price volatility based on the historical volatility of our Class A common stock and the historical volatilities of an industry peer group. • Expected Dividend Yield—The dividend rate used is zero as we have never paid any cash dividends on our Class A common stock and do not anticipate doing so in the foreseeable future. • Risk-Free Interest Rate—The interest rates used are based on the implied yield available on U.S.
Prior to the consummation of a Qualifying IPO (as defined in the FP Credit Agreement), which includes the Merger, we were required to maintain, as of the last day of each fiscal quarter, minimum unrestricted cash of at least $15.0 million, as determined in accordance with the FP Credit Agreement, provided that this covenant did not apply following any fiscal quarter in which we achieved positive EBITDA so long as we continued to maintain positive EBITDA in subsequent fiscal quarters.
Prior to the consummation of a Qualifying IPO (as defined in the FP Credit Agreement), which included the Merger, we were required to maintain, as of the last day of each fiscal quarter, minimum unrestricted cash of at least $15.0 million, as determined in accordance with the FP Credit Agreement, provided that this covenant did not apply following any fiscal quarter in which we achieved positive EBITDA so long as we continued to maintain positive EBITDA in subsequent fiscal quarters.
We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our fiscal years ended December 31, 2022 and 2021 are referred to herein as fiscal year 2022 and fiscal year 2021, respectively.
We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our fiscal years ended December 31, 2023 and 2022 are referred to herein as fiscal year 2023 and fiscal year 2022, respectively.
Personnel costs are primarily related to the cost of our employees supporting and managing our constellation operations including satellite operations, ground station control and launch management. Costs associated with the manufacture and launch of our satellites, including personnel costs, are capitalized and depreciated upon placement in service, typically over a three-year expected useful life.
Personnel costs are primarily related to the cost of our employees supporting and managing our constellation operations including satellite operations, ground station control and launch management. Costs associated with the manufacture and launch of our satellites, including personnel costs, are capitalized and depreciated upon placement in service, typically over a four-year expected useful life.
Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021 and the related notes appearing elsewhere in this Annual Report on Form 10-K.
Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2023 and 2022 and the related notes appearing elsewhere in this Annual Report on Form 10-K.
While these expenses could occur in a given year, the existence and magnitude of these costs could vary greatly and is unpredictable. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
While these expenses could occur in a given year, the existence and magnitude of these costs could vary greatly and are unpredictable. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
While we expect research and development expenses to increase in absolute dollars in future periods primarily due to higher headcount as we continue to invest in the development of our solutions offerings and new technologies, we expect research and development expenses to decrease as a percentage of revenue in future periods as our revenue growth exceeds our growth in research and development spend.
We expect research and development expenses to increase in absolute dollars in future periods primarily due to higher headcount as we continue to invest in the development of our solutions offerings and new technologies; however, we expect research and development expenses to decrease as a percentage of revenue in future periods as our revenue growth exceeds our increase in research and development spend.
As a result, the count of ARR Solution Customers exceeds the count of ARR Customers in each year as some customers contract with us for multiple solutions. Our multiple solutions customers are those that are under contract for at least two of our solutions: Maritime, Aviation, Weather, and Space Services.
As a result, the count of ARR Solution Customers exceeds the count of ARR Customers at each year end, as some customers contract with us for multiple solutions. Our multiple solutions customers are those that are under contract for at least two of our solutions: Maritime, Aviation, Weather, and Space Services.
Loss on decommissioned satellites consist of the write-off of the remaining capitalized costs associated with the manufacture and launch of our satellites prior to the end of the satellite’s useful life. We contract with third-party companies to launch, carry and deploy our satellites into space.
Loss on decommissioned satellites consists of the write-off of the remaining capitalized costs associated with the manufacture and launch of our satellites prior to the end of the satellite’s useful life. We contract with third-party companies to launch, carry and deploy our satellites into space.
The Russian invasion of Ukraine and the continuing conflict created additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers, which delayed revenue recognition of certain sales contracts.
The Russian invasion of Ukraine and the continued conflict created additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers, which delayed revenue recognition of certain sales contracts.
Acquisitions Our business strategy may include acquiring other complementary solutions, technologies, or businesses, such as the Acquisition, that we believe will allow us to continue on our path to profitability, reduce the time or costs required to develop new technologies, incorporate enhanced functionality into and complement our existing solution offerings, augment our engineering workforce and enhance our technological capabilities.
Acquisitions Our business strategy may include acquiring other complementary solutions, technologies, or businesses that we believe will allow us to continue on our path to profitability, reduce the time or costs required to develop new technologies, incorporate enhanced functionality into and complement our existing solution offerings, augment our engineering workforce and enhance our technological capabilities.
Net cash provided by financing activities in the fiscal year 2022 was $26.4 million.
Net cash provided by financing activities in fiscal year 2022 was $26.4 million.
Any downturn of the general economy or industries in which we operate would adversely affect our business, financial condition, and results of operations. Key Factors Affecting Our Performance We believe that our current and future performance are dependent on many factors, including, but not limited to, those described below.
Any downturn of the general economy or industries in which we operate would adversely affect our business, financial condition, and results of operations. Key Factors Affecting Our Performance We believe that our current and future performance depend on many factors, including, but not limited to, those described below.
For additional information regarding the terms of our credit facilities and notes, see Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
For additional information regarding the terms of our credit facilities and notes, see Note 6 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 61 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Sales and marketing expenses consist primarily of employee-related expenses, sales commissions, marketing and advertising costs, costs incurred in the development of customer relationships, brand development costs, travel-related expenses and amortization of purchased intangible backlog associated with the Acquisition. Commission costs for new customer contract bookings are considered costs of obtaining customer 52 contracts.
Sales and marketing expenses consist primarily of employee-related expenses, sales commissions, marketing and advertising costs, costs incurred in the development of customer relationships, brand development costs, travel-related expenses and amortization of purchased intangible backlog associated with the Acquisition. Commission costs on new customer contract bookings are considered costs of obtaining customer contracts.
Our primary uses of cash for operating activities are for employee-related expenditures, expenses related to our technology infrastructure, expenses related to our computing infrastructure (including computing power, database storage and content delivery costs), building infrastructure costs (including office leases), fees for third-party services, and marketing program costs.
Our primary uses of cash from operating activities are for employee-related expenditures, expenses related to our technology infrastructure, expenses related to our computing infrastructure (including 60 computing power, database storage and content delivery costs), building infrastructure costs (including leases for office space), fees for third-party services, and marketing program costs.
Because these costs have already been incurred and cannot be recovered, and are non-cash expenses, we exclude these expenses for our internal management reporting processes. Our management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods. • Other acquisition accounting amortization.
Because these costs have already been incurred and cannot be recovered, and are non-cash expenses, we exclude these expenses for our internal management reporting processes. Our management also finds it useful to exclude these charges when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods.
Our ARR growth in 2022 was driven by landing new ARR Customers (as defined below) along with increasing the amount of business with our existing customers.
Our ARR growth in 2023 was driven by landing new ARR Customers (as defined below) along with increasing the amount of ARR business with our existing customers.
The costs of these investments may adversely affect our result of operations, but we believe that these investments will contribute to our long-term growth.
The costs of these investments may adversely affect our results of operations, but we believe that these investments will contribute to our long-term growth.
Some of these limitations are: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; • Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us; and • Adjusted EBITDA does not reflect the loss on decommissioned satellites and does not reflect the cash capital expenditure requirements for the replacements of lost satellites.
Some of these limitations are: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; 57 • Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us; and • Adjusted EBITDA does not reflect the decommissioned satellite deorbit, launch failure and decommissioning and does not reflect the cash capital expenditure requirements for the replacements of lost satellites.
For additional information, see Notes 2, 3 and 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Change in fair value of warrant liabilities was a gain of $8.8 million in fiscal year 2022 compared to a loss of $1.6 million in fiscal year 2021, a 647% difference.
For additional information, see Notes 2 and 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Change in fair value of warrant liabilities was a loss of $1.6 million in fiscal year 2023 compared to a gain of $8.8 million in fiscal year 2022.
For instance, we have increased our number of ARR Solution Customers from 598 as of December 31, 2021 to 733 as of December 31, 2022. We track our progress in expanding our customer relationships by measuring our ARR Net Retention Rate.
For instance, we have increased our number of ARR Solution Customers from 733 as of December 31, 2022 to 745 as of December 31, 2023. We track our progress in expanding our customer relationships by measuring our ARR Net Retention Rate.
Upon funding in May 2021, the FP Term Loan was used (i) to pay off our existing credit facilities with Eastward and EIB and (ii) to fund working capital and for general corporate purposes. We incurred $12.3 million of debt issuance costs relating to the FP Term Loan.
Upon funding in May 2021, the FP Term Loan was used (i) to pay off our existing credit facilities with Eastward Fund Management, LLC and European Investment Bank and (ii) to fund working capital and for general corporate purposes. We incurred $12.3 million of debt issuance costs relating to the FP Term Loan.
Cost of Revenue Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure and high-power computing costs, third-party operating and royalty costs associated with delivering our data and services to our customers and amortization of purchased intangibles associated with the Acquisition.
Cost of Revenue Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure and high-power computing costs, third-party operating and royalty costs associated with delivering our data and services to our customers and amortization of purchased intangibles associated with our acquisition of exactEarth in November 2021 (the “Acquisition”).
The Credit Agreement Warrants may be exercised on a cashless basis. The Credit Agreement Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur of ten years from the date of issuance or the consummation of certain of our acquisitions as set forth in the Credit Agreement Warrants.
The Credit Agreement Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur of ten years from the date of issuance or the consummation of certain of our acquisitions as set forth in the Credit Agreement Warrants.
The results of the annual impairment test performed in the fourth quarter of fiscal year 2022 indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by more than 80% based on the 30-day trading VWAP and by more than 70% based on the stock price on the date of valuation.
The results of the annual impairment test performed in the fourth quarter of fiscal year 2023 indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by more than 101% based on the 30-day trading VWAP and by more than 150% based on the stock price on the date of valuation.
As of December 31, (dollars in thousands) 2022 2021 % Change ARR $ 99,414 $ 70,752 41 % Number of ARR Customers and ARR Solution Customers We define an ARR Customer as an entity that has a contract with us or through our reseller partners contracts, that is either a binding and renewable agreement for our subscription solutions, or a binding multi-year contract as of the measurement date independent of the number of solutions the entity has under contract.
As of December 31, (dollars in thousands) 2023 2022 % Change ARR $ 106,827 $ 99,414 7 % Number of ARR Customers and ARR Solution Customers We define an ARR Customer as an entity that has a contract with us or through our reseller partners contracts, that is either a binding and renewable agreement for our subscription solutions, or a binding multi-year contract as of the measurement date independent of the number of solutions the entity has under contract.
Fiscal Year 2022 2021 % Change ARR Net Retention Rate 117 % 110 % 7 % Our ARR Net Retention Rate can be impacted from period to period by large increases or decreases in customer contract value and large decreases in contract value from customers that have not renewed their contracts with us.
Fiscal Year 2023 2022 % Change ARR Net Retention Rate 98 % 117 % (19 )% Our ARR Net Retention Rate can be impacted from period to period by large increases or decreases in customer contract value and large decreases in contract value from customers that have not renewed their contracts with us.
For the definition of ARR Net Retention Rate, see the section titled “— Key Business Metrics. ” Our organic ARR Net Retention Rate was 117% for fiscal year 2022 and 110% for fiscal year 2021.
For the definition of ARR Net Retention Rate, see the section titled “— Key Business Metrics. ” Our ARR Net Retention Rate was 98% for fiscal year 2023 and our organic ARR Net Retention Rate was 117% for fiscal year 2022.
In fiscal year 2022, approximately 35% of our revenues were generated in non-U.S. dollar-denominated currencies. This compares to fiscal year 2021 when approximately 46% of our revenues were generated in non-U.S. dollar-denominated currencies.
In fiscal year 2023, approximately 30% of our revenues were generated in non-U.S. dollar-denominated currencies. This compares to fiscal year 2022 when approximately 35% of our revenues were generated in non-U.S. dollar-denominated currencies.
We define EBITDA as net income (loss), plus depreciation and amortization expense, plus interest expense, and plus the provision for (or minus benefit from) income taxes. • Adjusted EBITDA: We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any loss on satellite deorbit, launch failure and decommissioning, change in fair value of warrant liabilities, change in fair value of contingent earnout liability, other (expense) income, net, stock-based compensation, loss on extinguishment of debt, foreign exchange loss, other acquisition accounting amortization, mergers and acquisition related expenses, and other unusual one-time costs.
We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any loss on satellite deorbit, launch failure and decommissioning, change in fair value of warrant liabilities, change in fair value of contingent earnout liability, other (expense) income, net, stock-based compensation, loss on extinguishment of debt, foreign exchange gain/loss, other acquisition accounting amortization, mergers and acquisition related expenses, and other unusual costs.
An ARR Net Retention Rate less than 100% is an indication that we are reducing the value of the solutions our customers are purchasing from us from a fiscal period end versus the prior fiscal period end. For fiscal year 2022, our ARR Net Retention Rate increased 7% from fiscal year 2021.
An ARR Net Retention Rate less than 100% is an indication that we are reducing the value of the solutions our customers are purchasing from us from a fiscal period end versus the prior fiscal period end.
Since the Merger occurred, we are no longer required to maintain this financial covenant per the terms of the FP Credit Agreement.
After the Merger occurred, we were no longer required to maintain this financial covenant per the terms of the FP Credit Agreement.
The FP Lenders were also entitled to a commitment fee of $1.75 million that was fully earned and paid upon signing the FP Credit Agreement. The FP Term Loan bears interest at a rate of 9.00% per annum. Prior to the Merger, the FP Term Loan bore interest at a rate of 8.50% per annum.
The FP Lenders 59 were also entitled to a commitment fee of $1.75 million that was fully earned and paid upon signing the FP Credit Agreement. At the time of repayment, the FP Term Loan bore interest at a rate of 9.00% per annum.
The outstanding principal and interest under the FP Credit Agreement in an aggregate amount equal to approximately $72.8 million was repaid with proceeds of the term loan under the Blue Torch Credit Facility.
The outstanding principal and interest under the FP Credit Agreement in an aggregate amount equal to approximately $72.8 million was repaid with proceeds of the term loan under the Blue Torch Credit Facility. We incurred no early termination penalties in connection with the termination of the FP Credit Agreement.
In addition, on June 13, 2022, in connection with the closing of the financing, we paid Urgent Capital LLC, a Delaware limited liability company, a fee for introducing us to the Lenders, for the purpose of loan financing, in the amount equal to $0.6 million in cash and a warrant to purchase fully paid and non-assessable shares of Class A common stock (the “GPO Warrant” and, collectively with the Blue Torch Warrants, the “Credit Agreement Warrants”), which is exercisable for an aggregate of 198,675 shares of our Class A common stock with a per share exercise price of $2.01.
In addition, on June 13, 2022, in connection with the closing of the financing, we paid Urgent Capital LLC, a Delaware limited liability company, a fee for introducing us to the Lenders, for the purpose of loan financing, in the amount equal to $0.6 million in cash and a warrant to purchase shares of Class A common stock (the “GPO Warrant” and, collectively with the 2022 Blue Torch Warrants and the 2023 Blue Torch Warrants (as defined below), the “Credit Agreement Warrants”), which is exercisable for an aggregate of 24,834 shares of our Class A common stock with a per share exercise price of $16.08.
Unless the context otherwise requires, all references to “the Company,” “we,” “us,” or “our” and similar terms refer to Spire and its subsidiaries. Overview We are a global provider of space-based data, analytics and Space Services, offering unique datasets and powerful insights about Earth from the ultimate vantage point—space—so that organizations can make decisions with confidence, accuracy and speed.
Unless the context otherwise requires, all references to “the Company,” “we,” “us,” or “our” and similar terms refer to Spire and its subsidiaries. Overview Spire is a global provider of space-based data, analytics and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world.
The cash and cash equivalent amounts are exclusive of restricted cash which totaled $0.4 million as of each of December 31, 2022 and 2021.
The cash and cash equivalent amounts are exclusive of restricted cash which totaled $0.5 million as of December 31, 2023 and $0.4 million for December 31, 2022.
We incurred a $0.5 million loss on decommissioned satellites in fiscal year 2022. We did not incur any such loss in fiscal year 2021. Other Income (Expense) Interest Income . Interest income includes interest earned on our cash balances and short-term marketable securities. Interest Expense .
We incurred a $0.7 million loss on decommissioned satellites in fiscal year 2023 and a $0.5 million loss on decommissioned satellites in fiscal year 2022. Other Income (Expense) Interest Income . Interest income includes interest earned on our cash balances and short-term marketable securities. Interest Expense .
ARR is a leading indicator and accordingly will tend to outpace the revenue impact as we recognize the contract value over time. The following table summarizes our ARR at each fiscal year end for the periods indicated. The table includes the Acquisition data as the Acquisition closed prior to fiscal year 2021 year end.
ARR is a leading indicator and accordingly will tend to outpace the impact on our revenue as we recognize the contract value of various agreements over time. The following table summarizes our ARR at each fiscal year end for the periods indicated.
For fiscal year 2022, we derived 46% of our revenue from the Americas, 40% of our revenue from Europe, the Middle East and Africa (“EMEA”), and 14% of our revenue from Asia Pacific (“APAC”). For fiscal year 2021, we derived 36% of our revenue from the Americas, 48% of our revenue from EMEA, and 16% of our revenue from APAC.
For fiscal year 2023, we derived 56% of our revenue from the Americas, 35% of our revenue from Europe, the Middle East and Africa (“EMEA”), and 9% of our revenue from Asia Pacific (“APAC”). For fiscal year 2022 we derived 46% of our revenue from the Americas, 40% of our revenue from EMEA, and 14% of our revenue from APAC.
We elected the Term SOFR rate which was 12.75713% as of December 31, 2022. Principal on the term loan is only payable at maturity and interest on the term loan is due and payable monthly for reference rate borrowings and quarterly for Term SOFR borrowings.
We elected the Term SOFR rate which was 13.6408% as of December 31, 2023. Principal on the term loan is only payable at maturity and interest on the term loan is due and payable quarterly for Term SOFR borrowings.
Cash Flows The following table summarizes our net cash used in operating activities, net cash used in investing activities, and net cash provided by financing activities for the periods indicated: Years Ended December 31, (in thousands) 2022 2021 Net cash used in operating activities $ (47,820 ) $ (57,986 ) Net cash used in investing activities $ (41,828 ) $ (119,479 ) Net cash provided by financing activities $ 26,373 $ 270,534 Cash Flows from Operating Activities Our largest source of operating cash inflows is cash collections from our customers.
Cash Flows The following table summarizes our net cash used in operating activities, net cash used in investing activities, and net cash provided by financing activities for the periods indicated: Years Ended December 31, (in thousands) 2023 2022 Net cash used in operating activities $ (23,622 ) $ (47,820 ) Net cash used in investing activities $ (17,653 ) $ (41,828 ) Net cash provided by financing activities $ 23,907 $ 26,373 Cash Flows from Operating Activities Our largest source of operating cash inflows is cash collections from our customers.
We do not provide for income taxes on undistributed earnings of our foreign subsidiaries since we intend to invest these earnings outside of the United States permanently.
Income Tax Provision Provision for income taxes consists of federal income taxes in the United States and income taxes in certain foreign jurisdictions. We do not provide for income taxes on undistributed earnings of our foreign subsidiaries since we intend to invest these earnings outside of the United States permanently.
Our solutions are offered to customers across numerous industries and we not only have the opportunity to upsell within each one, but we also have the opportunity to cross-sell among all our solutions. We provide our solutions to global customers through a subscription model or project-based solutions. We currently sell directly to end customers and utilize reseller partners when beneficial.
Our solutions are offered to customers across numerous industries and we not only have the opportunity to upsell within each one, but we also have the opportunity to cross-sell among all our solutions. We provide our solutions to global customers either through a subscription or based on a specific project.
While we sometimes purchase launch insurance when financially practical, the proceeds from these policies will typically only cover a portion of our loss in the event of an unplanned satellite deorbit or launch failure.
Due to the nature of these events, we cannot predict the magnitude or frequency of future decommissioning losses. While we sometimes purchase launch insurance when financially practical, the proceeds from these policies will typically only cover a portion of our loss in the event of an unplanned satellite deorbit or launch failure.
Income Taxes Years Ended December 31, (in thousands) 2022 2021 % Change Income tax provision $ 322 $ 497 (35 )% Income tax provision decreased $0.2 million, or 35%, primarily driven by the impact of higher tax credits.
Income Taxes Years Ended December 31, (dollars in thousands) 2023 2022 % Change Income tax provision $ 72 $ 322 (78 )% Income tax provision decreased $0.3 million, or 78%, primarily driven by the impact of higher tax credits.
Net cash used in operating activities in the fiscal year 2022 was $47.8 million. This reflected our net loss of $89.4 million, adjustments for non-cash items of $40.6 million and a net increase of $1.0 million in operating assets and liabilities.
This reflected our net loss of $89.4 million, adjustments for non-cash items of $40.6 million and a net increase of $1.0 million in operating assets and liabilities.
This was partially offset by a $7.8 million increase in contract liabilities, a $1.9 million decrease in other long-term assets, a $1.0 million increase in other accrued expenses, and a $0.3 million decrease in other current assets. Net cash used in operating activities in the fiscal year 2021 was $58.0 million.
This was partially offset by a $7.8 million increase in contract liabilities, a $1.9 million decrease in other long-term assets, a $1.0 million increase in other accrued expenses, and a $0.3 million decrease in other current assets.
Impact of Foreign Exchange Rates We report in U.S. dollars, and the functional currency of our foreign operating subsidiaries is the local currency, including the Euro, the British Pound, the Singapore Dollar and the Canadian Dollar. The U.S. dollar has strengthened against many of these currencies since fiscal year 2021.
Impact of Foreign Exchange Rates We report in U.S. dollars, and the functional currency of our foreign operating subsidiaries is the local currency, including the Euro, the British Pound, the Singapore Dollar and the Canadian Dollar. The U.S. dollar remained strong against those currencies compared to fiscal year 2022.
Stock-Based Compensation We have an equity incentive plan under which we grant stock-based awards to employees and non-employees. We account for stock-based awards in accordance with ASC 718, which requires the measurement and recognition of compensation expense, based on estimated fair values, for all stock-based awards made to employees and non-employees for stock options.
We account for stock-based awards in accordance with ASC 718, which requires the measurement and recognition of compensation expense, based on estimated fair values, for all stock-based awards made to employees and non-employees for stock options. We recognize the cost of stock-based awards granted to our employees and non-employees based on the estimated grant-date fair value of the awards.
Net cash used in investing activities in the fiscal year 2022 was $41.8 million. This was driven by purchases of $40.2 million in short-term investments and $18.9 million of investment in property and equipment, partially offset by $17.3 million in maturities of short-term investments. Net cash used in investing activities in the fiscal year 2021 was $119.5 million.
This was driven by purchases of $40.1 million in short-term investments and $30.0 million of investment in property and equipment, partially offset by $52.5 million in maturities of short-term investments. Net cash used in investing activities in fiscal year 2022 was $41.8 million.
While we expect our general and administrative expenses to continue to grow in absolute dollars in future periods as our employee-related expenses increase to support our revenue growth and we have increased expenses from being a public company, we expect our general and administrative expenses as a percentage of revenue to decrease as revenue growth exceeds our growth in general and administrative spend.
We expect our general and administrative expenses to generally grow in absolute dollars in future periods as our employee-related expenses increase to support our revenue growth; however, we expect our general and administrative expenses as a percentage of revenue to decrease as revenue growth exceeds our increases in general and administrative spend.
All entities that have contracts for data trials and one-time transactions are excluded from the calculation of ARR Solution Customers. 51 The growth in each of our ARR Customers and ARR Solution Customers in 2022 was driven by landing new ARR Customers across our four solutions (Maritime, Aviation, Weather and Space Services), expanding our industry and geographical footprints, and having a low number of customers who have not renewed their contracts with us.
The growth in each of our ARR Customers and ARR Solution Customers in 2023 was driven by landing new ARR Customers across our four solutions (Maritime, Aviation, Weather and Space Services), expanding our industry and geographical footprints, and having a low number of customers who have not renewed their contracts with us.
We exclude other (expense) income, net because it includes one-time and other items that do not reflect the underlying operational results of our business. • Stock-based compensation. We exclude stock-based compensation expenses primarily because they are non-cash expenses that we exclude from our internal management reporting processes.
We exclude other (expense) income, net because it includes unusual items that do not reflect the underlying operational results of our business. Examples of such expenses include prepayment penalties on outstanding debt and vendor dispute legal settlements. • Stock-based compensation. We exclude stock-based compensation expenses primarily because they are non-cash expenses that we exclude from our internal management reporting processes.
We recognize the cost of stock-based awards granted to our employees and non-employees based on the estimated grant-date fair value of the awards. For restricted stock units ("RSU") with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant using the intrinsic value method.
For restricted stock units ("RSU") with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant using the intrinsic value method.
Of the $70.3 million total, $47.2 million was in cash and cash equivalents of which approximately $18.8 million was held outside of the United States. The remaining $23.1 million was held in short-term marketable securities, all of which was held in the United States and which can be converted to cash with minimal transaction costs.
Of the $40.9 million total, $29.1 million was in cash and cash equivalents of which approximately $13.7 million was held outside of the United States. The remaining $11.7 million was held in short-term marketable securities, all of which was held in the United States and which can be converted to cash with minimal transaction costs.
Change in fair value of warrant liabilities includes mark-to-market adjustments to reflect changes in the fair value of warrant liabilities and the exchange of warrants for common stock. Loss on Extinguishment of Debt . Loss on extinguishment of debt includes accelerated debt issuance expenses, legal and other fees associated with the payoff or refinancing of existing debt.
Change in fair value of warrant liabilities includes mark-to-market adjustments to reflect changes in the fair value of warrant liabilities and the exchange of warrants for common stock. Loss on Extinguishment of Debt .
Examples of these types of expenses include legal, accounting, regulatory, other consulting services, severance, and other employee costs. • Other unusual one-time costs. We exclude these as they are unusual items that do not reflect the ongoing operational results of our business.
We exclude these expenses as they are transaction costs and expenses associated with the transaction that are generally infrequent in nature and not reflective of the underlying operational results of our business. Examples of these types of expenses include legal, accounting, regulatory, other consulting services, severance, and other employee costs. • Other unusual and infrequent costs.
Macroeconomic, Geopolitical and COVID-19 Impact Over the past two years, we have been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, the COVID-19 pandemic, increasing interest rates and the Russian invasion of Ukraine.
Macroeconomic and Geopolitical Impact Over the past two years, we have been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, increasing interest rates and geopolitical conflicts like the Russian invasion of Ukraine, Israel's war with Hamas and the increased tensions between China and the U.S.
The number of shares for which the Credit Agreement Warrants are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Credit Agreement Warrants. NavSight Merger On August 16, 2021, we announced that we had closed our merger with NavSight (the "Merger").
The number of shares for which the Credit Agreement Warrants are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Credit Agreement Warrants.
Under certain circumstances, a default interest rate would have applied on all obligations during the existence of an event of default under the finance contract at a per annum rate equal to 2% above the otherwise applicable interest rate.
Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Blue Torch Financing Agreement at a per annum rate equal to 2.00% above the applicable interest rate.
For certain project-based performance obligations, we recognize a portion of our revenue over time using the output method, specifically contract milestones, which we have determined to be the most direct and reasonable measure of progress as they reflect the results achieved and value transferred to the customer. 64 Business Combinations and Valuation of Goodwill and Acquired Intangible Assets We allocate the purchase price of acquired companies to tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.
For certain project-based performance obligations, we recognize a portion of our revenue over time using the output method, specifically contract milestones, which we have determined to be the most direct and reasonable measure of progress as they reflect the results achieved and value transferred to the customer.
Other Income (Expense), Net. Other income (expense), net consists primarily of tax credits, grant income, the impact of foreign exchange gains and losses, benefit from loan forgiveness, loss on debt extinguishment, all transaction costs and other administrative fees associated with the warrant exchange, and sales and local taxes.
Other expense, net consists primarily of tax credits, grant income, the impact of foreign exchange gains and losses, share of equity investment loss, all transaction costs and other administrative fees associated with the warrant exchange, sales and local taxes, and write-off of certain prepaid assets and legal settlements.
Contingent Earnout Liability In connection with the Reverse Recapitalization and pursuant to the Merger Agreement, eligible Spire equity holders are entitled to receive additional shares of our Common Stock upon the achievement of certain Earnout Triggering Events.
The Company continues to monitor for potential impairment should impairment indicators arise. Contingent Earnout Liability In connection with the reverse recapitalization that was part of the Merger, eligible Spire equity holders are entitled to receive additional shares of our Class A common stock upon the achievement of certain earnout triggering events.
If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.
If we are unable to raise additional capital when desired or unable to meet the minimum liquidity covenant or other financial covenants under the Blue Torch Financing Agreement, our business, financial condition, and results of operations could be adversely affected.
Our future capital requirements will depend on many factors including our growth rate, 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.
The sufficiency of our working capital and our ability to meet our financial covenants will depend on many factors, including our growth rate, 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, all of which are subject to risks, uncertainties, and other factors that may cause actual results to differ materially.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor fiscal year 2022 and fiscal year 2021, we had a loss due to changes in foreign currency exchange rates of $0.9 million and $1.9 million, respectively.
Biggest changeFor fiscal year 2023, we had a gain due to changes in foreign currency exchange rates of $1.5 million and for fiscal year 2022, we had a loss due to changes in foreign currency exchange rates of $0.9 million.
Quantitative and Qualitative Disclosures About Market Risk Foreign currency exchange risk 66 Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound Sterling, Singapore Dollar, and Canadian Dollar and may be adversely affected in the future due to changes in foreign currency exchange rates.
Quantitative and Qualitative Disclosures About Market Risk Foreign currency exchange risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound Sterling, Singapore Dollar, and Canadian Dollar and may be adversely affected in the future due to changes in foreign currency exchange rates.
Inflation Risk We are exposed to inflation risk. Inflationary factors, such as increases in component parts, labor and other overhead expenses, could impair our operating results. Although there has been a significant increase in inflation in the recent period, it has not had a substantial impact on our results of operations for fiscal years 2022 or 2021.
Inflation Risk We are exposed to inflation risk. Inflationary factors, such as increases in component parts, labor and other overhead expenses, could impair our operating results. Although there has been a significant increase in inflation in recent years, it has not had a substantial impact on our results of operations for fiscal years 2023 or 2022.
A hypothetical 10% strengthening or weakening of the U.S. dollar relative to the currencies in which our revenue and expenses are denominated would have resulted in an increase or decrease in our reported fiscal year 2022 pre-tax loss of approximately $2.6 million.
A hypothetical 10% strengthening or weakening of the U.S. dollar relative to the currencies in which our revenue and expenses are denominated would have resulted in an increase or decrease in our reported fiscal year 2023 pre-tax loss of approximately $3.3 million.
Interest rate sensitivity We had cash and cash equivalents totaling $47.2 million and short-term marketable securities of $23.1 million as of December 31, 2022. These amounts were held primarily in demand deposit accounts and short-term marketable securities. The cash and cash equivalents are held for working capital purposes or strategic investment purposes.
Interest rate sensitivity We had cash and cash equivalents totaling $29.1 million and short-term marketable securities of $11.7 million as of December 31, 2023. These amounts were held primarily in demand deposit accounts and short-term marketable securities. The cash and cash equivalents are held for working capital purposes or strategic investment purposes.

Other SPIR 10-K year-over-year comparisons