10q10k10q10k.net
Spire Global, Inc.

Spire Global, Inc.SPIREarnings & Financial Report

NYSE · Communication Services · Communications Services, NEC

Spire Global, Inc. is a space-to-cloud data and analytics company that specializes in the tracking of global data sets powered by a large constellation of nanosatellites, such as the tracking of maritime, aviation and weather patterns.

What changed in Spire Global, Inc.'s 10-K — 2023 vs 2024

Top changes in Spire Global, Inc.'s 2024 10-K

499 paragraphs added · 397 removed · 303 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

36 edited+13 added−2 removed66 unchanged
Akin to cloud-based services like Amazon Web Services (“AWS”), Microsoft Azure, and Google Cloud Platform, we provide customers fast, scalable and reliable access to space data at a fraction of the cost and time it historically took by leveraging the same operational infrastructure we use for our own data and analytics solutions across maritime, aviation and weather.
Akin to cloud-based services like Amazon Web Services (“AWS”), Microsoft Azure, and Google Cloud Platform, we provide customers fast, scalable and reliable access to space data at a fraction of the cost and time it historically took by leveraging the same operational infrastructure we use for our own data and analytics solutions across maritime, aviation, and weather and climate.
We believe that more accurate weather data, prediction technologies and analytics will play an increasingly important role in helping to devise strategies to maintain water quality and availability, modify land use, protect and preserve coastal land and development, manage stormwater logistics, mitigate the spread of wildfires, repair and retrofit vulnerable facilities and maximize the use of green infrastructure.
We believe that more accurate weather and climate data, prediction technologies and analytics will play an increasingly important role in helping to devise strategies to maintain water quality and availability, modify land use, protect and preserve coastal land and development, manage stormwater logistics, mitigate the spread of wildfires, repair and retrofit vulnerable facilities and maximize the use of green infrastructure.
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.
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.
From time to time, third parties may assert claims of infringement, misappropriation, and other violations of intellectual property against us or our customers, with whom our agreements may obligate us to indemnify against these claims. Employees and Human Capital Resources Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
From time to time, third parties may assert claims of infringement, misappropriation, and other violations of intellectual property against us or our customers, with whom our agreements may obligate us to indemnify against these claims. 15 Employees and Human Capital Resources Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K. 15
Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K.
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 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.
Our AIS-based maritime solutions increase global maritime domain awareness, facilitate coastline policing, the protection of offshore assets, and provide greater ocean coverage. Key applications include: • Tracking vessels globally : Precise vessel tracking using AIS data helps owners and operators know where vessels are located.
Our 9 AIS-based maritime solutions increase global maritime domain awareness, facilitate coastline policing, the protection of offshore assets, and provide greater ocean coverage. Key applications include: • Tracking vessels globally: Precise vessel tracking using AIS data helps owners and operators know where vessels are located.
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.
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.
The industries in which we compete are dynamic and require constant change and innovation, and we plan to continue to evolve our technology to provide our customers with comprehensive data and analytics that protect our environment and our communities, transform global logistics and contribute to economic stability.
The industries in which we compete are dynamic and require constant change and innovation, and we plan to continue to evolve our technology to provide our customers with comprehensive data and analytics that protect our environment and our communities, transform global 14 logistics and contribute to economic stability.
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.
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.
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.
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.
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”).
As of December 2024, 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”).
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.
LEMUR is compatible with a significant number of available launch vehicles, having completed more than 43 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.
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.
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 199 satellites launched and is a meaningful member of that ecosystem.
We announce material information to the public about us, our products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts, the investor relations section of our website at www.ir.spire.com and our Twitter account (@SpireGlobal) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
We announce material information to the public about us, our products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts, the investor relations section of our website at www.ir.spire.com, and X account (@SpireGlobal), our Bluesky account (@spire.com) and our LinkedIn page in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., MeteoGroup (acquired by DTN, LLC), Tomorrow.ai, Climavision and The Weather Company with respect to predictive analytics. We compete with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionics LLC, ISISSpace and Open Cosmos Ltd. in our Space Services channel.
Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., DTN, LLC, Tomorrow.io, Climavision and The Weather Company with respect to predictive analytics. We compete with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionics LLC, ISISSpace and Open Cosmos Ltd. in our Space Services channel.
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.
As of December 31, 2024, we had 447 employees located in seven countries, of which 434 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.
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.
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 and climate 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. 10 Weather and Climate 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.
As of December 31, 2023, the LEMUR platform has accumulated over 600 years of space flight heritage, with more than 170 satellites deployed.
As of December 31, 2024, the LEMUR platform has accumulated over 600 years of space flight heritage, with more than 199 satellites deployed.
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.
Via the SpireSight API, our customers receive proprietary data, analysis, and predictive data and solutions delivered seamlessly in real and near real-time. 8 We collect data from space once and can sell it an unlimited number of times without added cost.
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.
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 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.
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.
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.
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. 11 Our Technology Platform Our Constellation We operate a large constellation of LEMUR nanosatellites along with a global network of ground stations.
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.
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.
Our Technology Platform Our Constellation We operate a large constellation of LEMUR nanosatellites along with a global network of ground stations. By operating our own satellites and ground stations, we are able to quickly and efficiently collect large volumes of data and make them available to our customers.
By operating our own satellites and ground stations, we are able to quickly and efficiently collect large volumes of data and make them available to 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 customer success and sales engineer teams, along with our sales team, manage our relationships with our customers. 13 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.
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.
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.
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.
Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather and climate data vertical, PlanetiQ with respect to our radio occultation data services.
Our business is also subject to various laws and regulations relating to the protection of the environment and human health and safety, including those governing the management, storage and disposal of hazardous materials, such as fuels and batteries, which may contain hazardous materials.
In some cases, data privacy laws and regulations, such as the European Union’s (“EU”) General Data Protection Regulation (“GDPR”), impose obligations on us and on many of our customers. 16 Our business is also subject to various laws and regulations relating to the protection of the environment and human health and safety, including those governing the management, storage and disposal of hazardous materials, such as fuels and batteries, which may contain hazardous materials.
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.
The Company designs, manufacturers, integrates, and operates its own satellites and ground stations to deliver unique end-to-end comprehensive solutions. The Company offers the following three data solutions to customers: Maritime, Aviation, and Weather and Climate. As a fourth solution, the Company is providing “space-as-a-service” through its Space Services solution.
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.
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 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.
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.
Competition The maritime, aviation and weather data industries are fragmented and highly competitive and characterized by rapid changes in technology, customer requirements and industry standards and frequent introductions of improvements to existing offerings. Our primary competitors in these industries include companies that specialize in one or more services similar to those offered by us on a local or regional basis.
Competition The maritime, aviation, and weather and climate data industries are fragmented and highly competitive and characterized by rapid changes in technology, customer requirements and industry standards and frequent introductions of improvements to existing offerings.
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.
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.
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. 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.
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. Available Information Our website is located at www.spire.com, and our investor relations website is located at www.ir.spire.com.
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.
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. 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.
Removed
In some cases, data privacy laws and regulations, such as the European Union’s (“EU”) General Data Protection Regulation (“GDPR”), impose obligations on us and on many of our customers.
Added
On November 13, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”).
Removed
Available Information Our website is located at www.spire.com, and our investor relations website is located at www.ir.spire.com.
Added
The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations. The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.
Added
The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million. 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. The data is then autonomously moved from ground stations to proprietary data warehouses for cleansing, standardization, fusion and analysis.
Added
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. The largest industries we currently serve include maritime, aviation and government (civil and defense).
Added
Our customers track the shipment of commodities by ship type and port calls to identify patterns and analyze global commodity flows. Pursuant to the Purchase Agreement with Buyer, we agreed to sell our maritime business (the “Maritime Business ”) to Buyer.
Added
Among other things, the Purchase Agreement contemplates that we will complete a pre-closing reorganization to segregate the Maritime Business into certain existing and to-be-formed entities, which will then be conveyed to the Buyer or its designated affiliates, subject to the terms and conditions set forth in the Purchase Agreement.
Added
The Maritime Business includes, among other things, contracts with customers of the our maritime AIS data tracking service (other than customers associated with the U.S. federal government), certain related supply agreements, personnel supporting the business, and the equity of exactEarth Ltd.
Added
It does not include any part of the our satellite network or operations, which will be retained following the Transactions. The Purchase Agreement provides for the parties to enter into a data supply agreement pursuant to which Buyer will provide certain data to the our affiliate following the closing.
Added
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.
Added
According to the National Oceanic and Atmospheric Administration, there were 27 severe weather events in the United States in 2024, with each one having losses that exceeded one billion dollars. This was just shy of the 12 record 28 such events in 2023.
Added
To drive such expansion in our existing customers, our sales team works closely with our sales engineers and marketing teams to foster customer success.
Added
Our primary competitors in these industries include companies that specialize in one or more services similar to those offered by us on a local or regional basis. We also compete with global, national, regional and local firms and government entities specializing in our industries.
Added
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

130 edited+72 added−16 removed441 unchanged
Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business, including increased complexity resulting from any international expansion. Further, weaknesses in our disclosure controls and our internal control over financial reporting have been identified, and others may be discovered in the future.
Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business, including increased complexity resulting from any further international expansion. Further, weaknesses in our disclosure controls and our internal control over financial reporting have been identified, and others may be discovered in the future.
If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in future material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
These rights and remedies allow government customers, among other things, to: • Terminate existing contracts for convenience with short notice; • Reduce orders under or otherwise modify contracts; • Cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • Claim rights in solutions, systems, or technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services, and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position; • Prohibit future procurement awards for particular future contracts due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment; • Subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction, or modification of the awarded contract; • Suspend or debar us from doing business with the applicable government; • Demand a set-off of amounts due to us on other contracts to satisfy amounts due to a contract default termination on a specific contract; and • Control or prohibit the export of our services.
These rights and remedies allow government customers, among other things, to: • Terminate existing contracts for convenience with short notice; 22 • Reduce orders under or otherwise modify contracts; • Cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • Claim rights in solutions, systems, or technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services, and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position; • Prohibit future procurement awards for particular future contracts due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment; • Subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction, or modification of the awarded contract; • Suspend or debar us from doing business with the applicable government; • Demand a set-off of amounts due to us on other contracts to satisfy amounts due to a contract default termination on a specific contract; and • Control or prohibit the export of our services.
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.
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 53 • 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.
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.
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; • 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.
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.
For example, these obligations could, among other things: • make it difficult for us to pay other obligations; 51 • 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.
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.
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.
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.
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: o mechanical failures that degrade the functionality of a satellite, such as the failure of solar array panel drive mechanisms, rate gyros, or momentum wheels; o antenna failures and defects that degrade the communications capability of the satellite; o circuit failures that reduce the power output of the solar array panels on the satellites; o failure of the battery cells that power the payload and spacecraft operations during daily solar eclipse periods; o power system failures that result in a shutdown or loss of the satellite; o avionics system failures, including GPS, that degrade or cause loss of the satellite; o altitude control system failures that degrade or cause the inoperability of the satellite; o transmitter or receiver failures that degrade or cause the inability of the satellite to communicate with our ground stations; o communications system failures that affect overall system capacity; o satellite computer or processor re-boots or failures that impair or cause the inoperability of the satellites; and o radio frequency interference emitted internally or externally from the spacecraft affecting the communication links. • Equipment degradation during the satellite’s lifetime, including: o degradation of the batteries’ ability to accept a full charge; o degradation of solar array panels due to radiation; o general degradation resulting from operating in the harsh space environment, such as from solar flares; o degradation or failure of reaction wheels; o degradation of the thermal control surfaces; o degradation and/or corruption of memory devices; and o system failures that degrade the ability to reposition the satellite. • Deficiencies of control or communications software, including: o failure of the charging algorithm that may damage the satellite’s batteries; o problems with the communications functions of the satellite; o limitations on the satellite’s digital signal processing capability that limit satellite communications capacity; and o problems with the fault control mechanisms embedded in the satellite.
Eastern Time on the Closing Date that both (a) such Legacy Spire Founder is no longer providing services to us as an officer, employee, or consultant and (b) such Legacy Spire Founder is no longer a director of the Company; (iii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date that such Legacy Spire Founder’s employment with us is terminated for cause (as defined in our certificate of incorporation); and (iv) upon the death or disability (as defined in our certificate of incorporation) of such Legacy Spire Founder.
Eastern Time on the closing date of the Merger that both (a) such Legacy Spire Founder is no longer providing services to us as an officer, employee, or consultant and (b) such Legacy Spire Founder is no longer a director of the Company; (iii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date that such Legacy Spire Founder’s employment with us is terminated for cause (as defined in our certificate of incorporation); and (iv) upon the death or disability (as defined in our certificate of incorporation) of such Legacy Spire Founder.
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.
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 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.
Noncompliance with applicable regulations or requirements could subject us to: • investigations, enforcement actions, orders, and sanctions; • mandatory changes to our global satellite system; • disgorgement of profits, fines, and damages; • civil and criminal penalties or injunctions; • claims for damages by our customers; • termination of contracts; • loss of intellectual property rights; and • temporary or permanent debarment from sales to government organizations.
Noncompliance with applicable regulations or requirements could subject us to: • investigations, enforcement actions, orders, and sanctions; 42 • mandatory changes to our global satellite system; • disgorgement of profits, fines, and damages; • civil and criminal penalties or injunctions; • claims for damages by our customers; • termination of contracts; • loss of intellectual property rights; and • temporary or permanent debarment from sales to government organizations.
Specifically, certain personnel have the ability to both (a) create and post journal entries within our general ledger system, and (b) prepare and review account reconciliations; The material weaknesses above resulted in certain immaterial audit adjustments, which were recorded prior to the issuance of the consolidated financial statements as of and for the year ended December 31, 2020.
Specifically, certain personnel have the ability to both (a) create and post journal entries within our general ledger system, and (b) prepare and review account reconciliations; The material weaknesses above resulted in certain immaterial audit adjustments, which were recorded prior to the issuance of the consolidated financial statements as of and for the year ended December 31, 2020. iv.
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.
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 39 unable to implement adequate preventative measures, anticipate attempted security breaches or other incidents, or react in a timely manner.
We cannot assure you that all of our employees, business partners, third-party intermediaries, representatives, 36 and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
We cannot assure you that all of our employees, business partners, third-party intermediaries, representatives, and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Our exposure for violating these laws increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
These material weaknesses are as follows: We did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company. Specifically, we lacked a sufficient number of professionals with an appropriate level of internal controls and accounting knowledge, training, and experience to appropriately analyze, record and disclose accounting matters timely and accurately.
These material weaknesses are as follows: i. We did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company. Specifically, we lacked a sufficient number of professionals with an appropriate level of internal controls and accounting knowledge, training, and experience to appropriately analyze, record and disclose accounting matters timely and accurately.
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.
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 restatement 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.
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.
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.
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.
Additionally, many governmental agencies, such as NOAA, provide weather and climate 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 ability to grow revenue depends, in 24 part, on our ability to recruit, train, and retain sufficient numbers of sales personnel to support our growth. New hires require significant training and may take significant time before they achieve full productivity, and our remote and online onboarding and training processes may be less effective and take longer than in-person processes.
Our ability to grow revenue depends, in part, on our ability to recruit, train, and retain sufficient numbers of sales personnel to support our growth. New hires require significant training and may take significant time before they achieve full productivity, and our remote and online onboarding and training processes may be less effective and take longer than in-person processes.
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.
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 restatement 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; 33 • 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.
If our customers do not renew, upgrade, or expand their subscriptions, defer their subscriptions to a later date, renew their subscriptions on less favorable terms, or fail to increase adoption of our platform, including tiered and premium features or project-based services, our business, financial condition, and results of operations would be adversely affected.
If our customers do not renew, upgrade, or expand their subscriptions, defer their subscriptions to a later date, renew their subscriptions on less favorable terms, or fail to increase adoption of our platform, 30 including tiered and premium features or project-based services, our business, financial condition, and results of operations would be adversely affected.
Further, if these services cease to be available to us on commercially reasonable terms, or at all, we may be required to use additional or alternative services, or to develop additional capabilities within our business, any of which may not be available or could require significant resources and adversely affect our business, financial condition, and results of operations.
Further, if these services cease to be available to us on commercially reasonable terms, or at all, we may be required to use 31 additional or alternative services, or to develop additional capabilities within our business, any of which may not be available or could require significant resources and adversely affect our business, financial condition, and results of operations.
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.
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.
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.
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 17 platform, increasing competition, a decrease in the growth of our overall market or market saturation, and our failure to capitalize on growth opportunities.
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.
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.
We have experienced, and may in the future experience, anomalies in some of the categories described above. The effects of these anomalies include, but are not limited to, failure of the satellite, degraded communications performance, reduced power available to the satellite in sunlight and/or eclipse, battery overcharging or undercharging and limitations on satellite communications capacity.
We have experienced, and may in the future experience, anomalies in some of the categories described above. The effects of these anomalies include, but are not limited to, failure of the satellite, degraded communications performance, reduced power 21 available to the satellite in sunlight and/or eclipse, battery overcharging or undercharging and limitations on satellite communications capacity.
In addition, such governments could sell or provide free of charge similar data and analytics and thereby compete with our offerings. 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.
In addition, such governments could sell or provide free of charge similar data and analytics and thereby compete with our offerings. Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather and climate data vertical, GeoOptics, Inc. with respect to our radio occultation data services.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but the estimates and assumptions involve significant subjectivity and judgment.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section titled 48 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but the estimates and assumptions involve significant subjectivity and judgment.
We are required to provide an annual management report on the effectiveness of our internal controls over financial reporting. The standards required for a public company under Section 404(a) are significantly more stringent than those that were required of us as a privately-held company.
We are required to provide an annual management report on the effectiveness of our internal controls over financial reporting. The standards required for a public company under Section 404(a) are significantly more stringent than 50 those that were required of us as a privately-held company.
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.
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.
The timing of customer acceptance on project-based deliverables may impact or delay our recognition of revenue from such projects. The variability of our results of operations or other operating estimates could result in our failure to meet our expectations or those of securities analysts or investors.
The timing of customer acceptance on project-based deliverables may impact or 54 delay our recognition of revenue from such projects. The variability of our results of operations or other operating estimates could result in our failure to meet our expectations or those of securities analysts or investors.
Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak.
Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights 36 may be weak.
We may experience a partial or total loss of one or more of our ground stations due to disasters such as tsunamis, tornados, floods, hurricanes, other extreme or unusual weather events, earthquakes, fires, acts of war or terrorism, or other catastrophic events.
We may experience a partial or total loss of one or more of our ground stations due to disasters such as tsunamis, tornados, floods, hurricanes, other extreme or unusual weather events, earthquakes, fires, acts of war or terrorism, or other catastrophic 25 events.
Our current insurance does not protect us against all satellite-related losses that we may experience. Our insurance does not protect us against business interruption, loss of revenues, or delay of revenues. In addition, we only carry third-party liability insurance outside of the United States.
Our current insurance does not protect us against all satellite-related losses that we may experience. Our insurance does not protect us against business interruption, loss of revenues, or delay of revenues. In addition, we only carry third-party liability 47 insurance outside of the United States.
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.
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 can result in the loss of the program or significantly reduce our revenue or margin from the program.
As such, our growth strategy depends, in part, on our continued international expansion. We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will be successful.
As such, our growth strategy depends, in part, on our continued international expansion. We are continuing to adapt to and develop strategies to address international markets, but 32 there is no guarantee that such efforts will be successful.
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.
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.
Any disruption in these services would negatively impact our data service uptime and our 26 ability to service customers reliably and consistently, which could reduce sales and adversely affect our business, financial condition and results of operations.
Any disruption in these services would negatively impact our data service uptime and our ability to service customers reliably and consistently, which could reduce sales and adversely affect our business, financial condition and results of operations.
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.
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.
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.
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; 26 • larger and more mature intellectual property rights portfolios; and • substantially greater financial, technical, and other resources.
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.
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 elevated 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.
Errors, viruses, or bugs may also be present in data, software, or hardware that we acquire or license from third parties and incorporate into our platform or in third-party software or hardware that our customers use in conjunction with our platform.
Errors, viruses, or bugs may also be present in data, software, or 24 hardware that we acquire or license from third parties and incorporate into our platform or in third-party software or hardware that our customers use in conjunction with our platform.
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.
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 efforts.
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.
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.
If we are at any point unable to repay or otherwise refinance our indebtedness when due, or if any other event of default (including as a result of our failure to comply with any of our affirmative or negative covenants) is not cured or waived, the applicable lenders could accelerate our outstanding obligations or proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation.
If we are at any point unable to repay or otherwise refinance our indebtedness when due, or if any future event of default (including as a result of our failure to comply with our affirmative or negative covenants) is not cured or waived, the applicable lenders could accelerate our outstanding obligations or proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation.
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.
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; • the volume of sales generated by subscription sales as opposed to Space Services Contracts and R&D Services Contracts; • 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.
Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, trade uncertainties, military conflicts, and rising interest rates, cause instability and volatility in the global financial markets and disruptions within our industries that have negatively impacted, and could continue to negatively impact our business, our financial results, and our stock price.
Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, trade uncertainties, military conflicts, and elevated interest rates, cause instability and volatility in the global financial markets and disruptions within our industries that have negatively impacted, and could continue to negatively impact our business, our financial results, and our stock price.
Our failure to provide and maintain high quality customer support would harm our reputation and brand and adversely affect our business, financial condition, and results of operations.
Our 29 failure to provide and maintain high quality customer support would harm our reputation and brand and adversely affect our business, financial condition, and results of operations.
Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions. This material weakness contributed to the following additional material weaknesses: i.
Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions. This material weakness contributed to the following additional material weaknesses: ii.
In addition, due to the material weaknesses in internal control over financial reporting, we have also determined that our disclosure controls and procedures were ineffective as of December 31, 2023. We are working to remediate the material weaknesses as efficiently and effectively as possible, but there can be no assurance as to when the material weaknesses will be remediated.
In addition, due to the material weaknesses in internal control over financial reporting, we have also determined that our disclosure controls and procedures were ineffective as of December 31, 2024. We are working to remediate the material weaknesses as efficiently and effectively as possible, but there can be no assurance as to when the material weaknesses will be remediated.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.
A decline in the market price of 56 our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.
In addition, changing interest rates have and could continue to negatively affect businesses across many industries, including by increasing our existing and prospective customers’ costs and constraining their budgets. Increasing interest rates in 2023 resulted in higher interest expenses for us, as our credit facility is based on a floating interest rate.
In addition, changing interest rates have and could continue to negatively affect businesses across many industries, including by increasing our existing and prospective customers’ costs and constraining their budgets. Increasing interest rates in 2024 resulted in higher interest expenses for us, as our credit facility is based on a floating interest rate.
We did not design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement in our financial statements. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement in the financial statements; ii.
We did not design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement in our financial statements. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement in the financial statements; iii.
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.
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 elevated interest rates.
Some such licenses may be non-exclusive, and therefore our competitors may have access to the same technology licensed to us.
Some such licenses may be non-exclusive, and therefore our competitors may have access to 37 the same technology licensed to us.
From time to time, we have been involved, and may in the future become involved, in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
From time to time, we have been involved, are currently involved, and may in the future become involved, in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
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.
During the existence of an event of default, under the Blue Torch Financing 52 Agreement, 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.
The Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, includes changes to U.S. federal tax rates and the rules governing Net Operating Losses.
The Tax Cuts and Jobs Act (the "Tax Act"), as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, includes changes to U.S. federal tax rates and the rules governing Net Operating Losses.
Accordingly, the Class B common stock held by the Legacy Spire Founders represents approximately 39.1% of the voting power of our outstanding capital stock in the aggregate as of December 31, 2023.
Accordingly, the Class B common stock held by the Legacy Spire Founders represents approximately 39.1% of the voting power of our outstanding capital stock in the aggregate as of December 31, 2024.
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 have historically derived a significant portion of our revenue from contracts with federal, state, local, and foreign governments, which accounted for approximately 36% of our revenues for the year ended December 31, 2024. 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.
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 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.
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.
Our sales cycle can vary considerably and is made more uncertain by regional or global events, inflation, elevated interest rates and other global economic and political uncertainties.
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.
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.
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.
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 pending litigation or investigations is a complex and fact-intensive process that requires significant subjective judgment.
Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., MeteoGroup (acquired by DTN, LLC), Tomorrow.ai, Climavision and The Weather Company with respect to predictive analytics. We compete with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionics LLC, ISISSpace and Open Cosmos Ltd. in our Space Services channel.
Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., DTN, LLC, Tomorrow.io, Climavision and The Weather Company with respect to predictive analytics. We compete with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionics LLC, ISISSpace and Open Cosmos Ltd. in our Space Services channel.
We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. 57 We are an “emerging growth company” as defined in the JOBS Act.
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.
Within the government channel, approximately 58% of revenue for the year ended December 31, 2024, 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.
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.
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, 2024, we had $14.7 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.
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.
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 26,8% of the voting power of our outstanding capital stock in the aggregate as of December 31, 2024.
Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. iii.
Additionally, each of the material weaknesses described above could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
If our senior management team fails to work together effectively and to execute our plans and strategies, our business, financial condition, and results of operations could be adversely affected. Our future success also depends, in part, on our ability to continue to attract and retain highly skilled personnel.
If our senior management team fails to work together effectively and to execute our plans and strategies, including as a result of recent executive transitions, our business, financial condition, and results of operations could be adversely affected. Our future success also depends, in part, on our ability to continue to attract and retain highly skilled personnel.
There can be no assurance that any contract with the government of any jurisdiction will not be terminated or suspended in the future. For example, the National Oceanic and Atmospheric Administration ("NOAA") did not renew one of its sales orders with us for the time period from mid-July 2023 through mid-January 2024.
There can be no assurance that any contract with the government of any jurisdiction will not be terminated or suspended in the future. For example, the National Oceanic and Atmospheric Administration ("NOAA") did not fully renew one of its sales orders with us for the time period September 2024 through September 2025.
As a result, any currently held regulatory authorizations and licenses are subject to rescission and renewal and may not remain sufficient or additional authorizations may be necessary that we may not be able to obtain on a timely basis or on terms that are not unduly burdensome. There is no guarantee that such licenses will be renewed.
As a result, any currently held regulatory authorizations and licenses are subject to rescission and renewal and may not remain sufficient or additional authorizations may be necessary that we may not be able to obtain on a timely basis or on terms that are not unduly burdensome.
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.
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 34 common stock.
We may face competition from companies using new service solutions, innovative technologies, and equipment, including new low earth orbit constellations and expansion of existing geostationary satellite systems or new technology that could eliminate the need for a satellite system.
The satellite communications industry is subject to rapid advances and innovations in technology. We may face competition from companies using new service solutions, innovative technologies, and equipment, including new low earth orbit constellations and expansion of existing geostationary satellite systems or new technology that could eliminate the need for a satellite system.
During the fiscal year ended December 31, 2023, one of our launch partners experienced a launch failure, but we did not have any satellites on the failed launch. The launch partner then delayed future launches until it completed its investigations and obtained the necessary approvals to resume launches.
For example, one of our launch partners experienced a launch failure, but we did not have any satellites on the failed launch. The launch partner then delayed future launches until it completed its investigations and obtained the necessary approvals to resume launches.
As of December 31, 2023, we had $115.5 million outstanding under our financing agreement (the "Blue Torch Financing Agreement") that we entered into with Blue Torch Finance LLC in June 2022, which matures on June 13, 2026.
As of December 31, 2024, we had $98.4 million outstanding under our financing agreement (the "Blue Torch Financing Agreement") that we entered into with Blue Torch Finance LLC (“Blue Torch”) in June 2022, which matures on June 13, 2026.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, such as the restatements of our financial statements for the periods ended September 30, 2021, December 31, 2021, March 31, 2022 and June 30, 2022.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, such as the restatement of our financial statements for the Affected Periods.
Risks Related to Legal and Regulatory Matters We have been involved, and may in the future become involved, in claims, lawsuits, government investigations, and other proceedings that could adversely affect our business, financial condition, and results of operations.
We have been involved, are currently involved, and may in the future become involved, in claims, lawsuits, government investigations, and other proceedings that could adversely affect our business, financial condition, and results of operations.
We expected this sales order to provide approximately $9.9 million of revenue over that time period, and while we were awarded a new order for $9.4 million, commencing in January 2024 and running for eight months, there can be no assurance that renewals or new orders will be awarded in full, for the full period and on favorable terms, or at all, in the future.
We expected this sales order to provide approximately $7.0 million of revenue over this time period, and while we were awarded a new order for $3.8 million, there can be no assurance that renewals or new orders will be awarded in full, for the full period and on favorable terms, or at all, in the future.

… 138 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−2 removed13 unchanged
We maintain consistent communications via email, chat services, ticketing systems, and regular meetings with these partners to promptly address and remediate any perceived vulnerabilities. 45 Additionally, we also provide mandatory training to our employees to help identify, avoid and mitigate cybersecurity threats. These trainings cover a wide range of cybersecurity topics such as insider threats, phishing, spoofing, and the like.
We maintain consistent communications via email, chat services, ticketing systems, and regular meetings with these partners to promptly address and remediate any perceived vulnerabilities. Additionally, we also provide mandatory training to our employees to help identify, avoid and mitigate cybersecurity threats. These trainings cover a wide range of cybersecurity topics such as insider threats, phishing, spoofing, and the like.
Cybersecurity risk management forms part of our overall risk management framework, which is regularly reviewed by our Chief Technology Officer (“CTO”), our senior management team and our Board of Directors.
Cybersecurity risk management forms part of our overall risk management framework, which is regularly reviewed by our Chief Transformation Officer (“CTO”), our senior management team and our Board of Directors.
We describe how cybersecurity threats are likely to materially affect us, including our business strategy, results of operations, and financial condition, in the section titled “Risk Factors” in this Annual Report on Form 10-K.
We describe how cybersecurity threats are likely to materially affect us, including our business strategy, results of operations, and financial condition, in the section titled “Risk Factors” in this Annual Report on Form 10-K. Cybersecurity Governance Our cybersecurity program is overseen by the Company’s CTO in close collaboration with the CEO and our legal and compliance teams.
Our legal and compliance teams supporting the Company’s cybersecurity efforts bring a wealth of experience from prior positions, as well as participation in ongoing training sessions and industry events.
O ur CTO has a technical background and is well informed about cyberse curity risk management best practices, as well as our Company’s risk management framework. Our legal and compliance teams supporting the Company’s cybersecurity efforts bring a wealth of experience from prior positions, as well as participation in ongoing training sessions and industry events.
Some risk mitigation and minimization activities include: regular software patches and updates; permitting only required connections to sensitive and critical systems; reactive response to newly identified and discovered exploitable vulnerabilities; implementation of additional auditing and monitoring controls; and cadence-driven system security assessments for critical systems.
Some risk mitigation and minimization activities include: regular software patches and updates; permitting only required connections to sensitive and critical systems; reactive response to newly identified and discovered exploitable vulnerabilities; implementation of additional auditing and monitoring controls; and cadence-driven system security assessments for critical systems. 58 We assess the cybersecurity posture of third-party service providers , vendors and suppliers at least annually and whenever the vendor implements significant product or operational changes.
Removed
We assess the cybersecurity posture of third-party service providers, vendors and suppliers at least annually and whenever the vendor implements significant product or operational changes.
Removed
Cybersecurity Governance Our cybersecurity program is overseen by the Company’s CTO in close collaboration with the CEO/Chairman of the Board of Directors and our legal and compliance teams. Both our CEO and our CTO have technical backgrounds and are well informed about cybersecurity risk management best practices, as well as our Company’s risk management framework.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
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.
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+25 added−0 removed1 unchanged
The 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
The 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. 61 PART II
Item 3. Legal Proceedings From time to time, we are involved in various legal proceedings arising from the normal course of business activities. Spire is not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, results of operations, financial condition, or cash flows.
Except as disclosed above, we are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, results of operations, financial condition, or cash flows.
Added
Item 3. Legal Proceedings From time to time, we are involved in various legal proceedings arising from the normal course of business activities.
Added
Stockholder Litigation On August 20, 2024, we and two of our executive officers were named as defendants in a purported federal securities law class action filed in the United States District Court for the Eastern District of Virginia, captioned Michal Bousso v. Spire Global, Inc. et al., Court File No. 1:24-cv-1458 (the "Bousso Lawsuit").
Added
On October 14, 2024, a second plaintiff filed a similar lawsuit against us and three current or former executive officers, also in the United States District Court for the Eastern District of Virginia, captioned Kohei Tagawa v. Spire Global, Inc. et al., Court File No. 1:24-cv-1810 (the “Tagawa Lawsuit”).
Added
On 59 November 22, 2024, the court consolidated the Bousso Lawsuit and the Tagawa Lawsuit, appointed Michal Bousso as lead plaintiff, and renamed the case to “In re Spire Global, Inc. Securities Litigation,” Master File No. 1:24-cv-1458-MSN-WEF (the “Master Securities Lawsuit”).
Added
On December 23, 2024, the plaintiff filed an amended complaint in the Master Securities Lawsuit, which alleges violations of Sections 10(b) and 20(a) of the Exchange Act (and Rule 10b-5 thereunder), arising from or relating to our announcements in August 2024 that certain of our previously issued audited and unaudited financial statements should not be relied upon.
Added
Plaintiff alleges that we and the individual defendants made false or misleading statements relating to (1) how revenue was recognized for pre-space services for certain space contracts, and (2) how costs for certain contracts were characterized.
Added
The plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired our common stock between May 11, 2022 and August 14, 2024. The plaintiff seeks damages and other relief, including attorneys' fees and costs. The defendants are vigorously defending this lawsuit. On January 22, 2025, the defendants moved to dismiss the amended complaint in its entirety.
Added
The court in the Master Securities Lawsuit held argument on our motion to dismiss on March 14, 2025. After hearing argument from both sides, the court issued its order on the record dismissing the Master Securities Lawsuit without prejudice. The court granted the plaintiff 30 days to consider whether to amend.
Added
On September 5, 2024, a stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, purportedly on behalf of us against certain of our officers and directors and us (as a nominal defendant), captioned Lawrence Hollin v. Platzer et al. , Court File No. 1:24-cv-01558 (the “ Hollin Lawsuit”).
Added
On September 10, 2024, a second stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, also purportedly on behalf of us against certain of our officers and directors and us (as a nominal defendant), captioned Richard Cobb v. Platzer et al. , Court File No. 1:24-cv-01596 (the “ Cobb Lawsuit”).
Added
On November 12, 2024, a third stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, also purportedly on behalf of us against certain of our officers and directors and us (as a nominal defendant) captioned L. Robert Oros v. Platzer et al. , 1:24-cv-02020 (the “ Oros Lawsuit”).
Added
On November 14, 2024, the Court consolidated the Hollin Lawsuit and the Cobb Lawsuit and renamed the case to In re Spire Global, Inc. Stockholder Derivative Litigation , No. 1:24-cv-01596 (the “Master Derivative Case”). On December 2, 2024, the Court consolidated the Oros Lawsuit into the Master Derivative Case.
Added
The lawsuits in the Master Derivative Case arise out of the same subject matter as the Master Securities Lawsuit, and they allege some or all of the following claims: (1) breach of fiduciary duty; (2) gross mismanagement; (3) waste of corporate assets; (4) unjust enrichment; (5) as against the director defendants, violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder; (6) as against the officer defendants, contribution under Sections 10(b) and 21D of the Exchange Act; and (7) aiding and abetting.
Added
Each of the lawsuits in the Master Derivative Case seeks damages and other relief, including attorneys' fees and costs. The Master Derivative Case is currently stayed pending the motion to dismiss in the Master Securities Lawsuit.
Added
Share Purchase Agreement Litigation As previously disclosed, on November 13, 2024, we entered into the Purchase Agreement with Buyer, pursuant to which we agreed to complete the Transactions. The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.
Added
The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments. The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.
Added
The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement. We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied. Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.
Added
Buyer has cited various reasons for declining to close, which we have rejected.
Added
There is currently no governmental order in effect prohibiting closing and, in the Purchase Agreement, Buyer agreed to “use best efforts, and to take any and all actions necessary, to eliminate each and every impediment that is asserted” by relevant government entities so as to enable the parties to consummate the Transactions promptly.
Added
We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.
Added
As a result of the foregoing, on February 10, 2025, we filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement.
Added
In the complaint, we also requested a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing. 60 Buyer removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court.
Added
The District of Delaware initially selected a March 4 trial date, but on February 26, 2025, the court set a trial date of May 28-30, 2025.
Added
There is no assurance as to what action the District of Delaware will take with respect to the proceeding initiated by us and there is no assurance as to whether or not the Transactions will be consummated on the terms contemplated or at all.
Added
Whether or not the Transactions are consummated as required, we reserve all of our rights under the Purchase Agreement and in law and equity, including the right to seek damages and other remedies from Buyer. The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed4 unchanged
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.
As of February 28, 2025, 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 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.
Holders of Record As of February 28, 2025, there were 137 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.

Item 7. Management's Discussion & Analysis

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

122 edited+86 added−73 removed88 unchanged
We believe our technology and solutions give us the ability to also expand into additional industries, including energy, financial services, agriculture, transportation, and insurance, and into additional geographies, including Latin America, Africa, and the Middle East. Our revenue growth is dependent upon our ability to continue to expand into new industries and geographies.
We believe our technology and solutions give us the ability to expand into additional industries, including energy, financial services, agriculture, transportation, and insurance, and also into additional geographies, including Latin America, Africa, and the Middle East. Our revenue growth is dependent upon our ability to continue to expand into new industries and geographies.
The second amendment exit fee is $1.8 million (which is an amount equal to one and a half percent (1.50%) of the aggregate outstanding principal balance of the term loans on the effective date of the Waiver and Amendment), bears interest from the date of the Waiver and Amendment at the Adjusted Term SOFR for a 3-month interest period plus the applicable margin under the Financing Agreement, and is payable to Blue Torch by us in cash upon the termination of the Blue Torch Financing Agreement, either as a result of acceleration of the loans or at the final maturity date.
The second amendment exit fee is $1.8 million (which is an amount equal to one and a half percent (1.50%) of the aggregate outstanding principal balance of the term loans on the effective date of the Waiver and Amendment), bears interest from the date of the Waiver and Amendment at Adjusted Term SOFR for a 3-month interest period plus the applicable margin under the Financing Agreement, and is payable to Blue Torch by us in cash upon the termination of the Blue Torch Financing Agreement, either as a result of acceleration of the loans or at the final maturity date.
Key Business Metrics We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions: • ARR • ARR Customers • ARR Solution Customers • ARR Net Retention Rate Annual Recurring Revenue We define ARR as our expected annualized revenue from customers that are under contracts with us at the end of the reporting period with a binding and renewable agreement for our subscription solutions or customers that are under a binding multi-year contract that can range from components of our Space Services solution to a project-based customer solution.
Key Business Metrics We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions: • ARR • ARR Customers • ARR Solution Customers • ARR Net Retention Rate 67 Annual Recurring Revenue We define ARR as our expected annualized revenue from customers that are under contracts with us at the end of the reporting period with a binding and renewable agreement for our subscription solutions or customers that are under a binding multi-year contract that can range from components of our Space Services solution to a project-based customer solution.
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.
Unless the context otherwise requires, all references to “the Company,” “we,” “us,” or “our” and similar terms refer to Spire and its subsidiaries. 62 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 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.
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.
These value-add data features allow customers to solve various use cases and provide a path to expand throughout the customer’s relationship. As our fourth solution, we are also pioneering an innovative business model through our Space Services solution. We leverage our fully deployed infrastructure and large-scale operations to enable our customers to obtain customized data through our API.
These value-add data features allow customers to solve various use cases and provide a path to expand throughout the customer’s relationship. 63 As our fourth solution, we are also pioneering an innovative business model through our Space Services solution. We leverage our fully deployed infrastructure and large-scale operations to enable our customers to obtain customized data through our API.
We offer three data solutions to our customers, which vary in complexity and price and can be delivered in near real-time via our API that can be easily integrated into our customers’ business operations: • Maritime : Precise space-based data used for highly accurate ship monitoring, ship safety and route optimization. • Aviation : Precise space-based data used for highly accurate aircraft monitoring, aircraft safety and route optimization. • Weather : Precise space-based data used for highly accurate weather forecasting.
We offer three data solutions to our customers, which vary in complexity and price and can be delivered in near real-time via our API that can be easily integrated into our customers’ business operations: • Maritime: Precise space-based data used for highly accurate ship monitoring, ship safety, and route optimization. • Aviation: Precise space-based data used for highly accurate aircraft monitoring, aircraft safety, and route optimization. • Weather and Climate: Precise space-based data used for highly accurate weather forecasting.
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 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.
As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Smaller Reporting Company Status Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Smaller Reporting Company Status We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
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.
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 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.
The costs associated with these expansions may adversely affect our results of operations. Impact of the Solar Cycle on our Assets' Remaining Life A stronger solar cycle has the potential to impact some of our satellites, accelerating their deorbiting and shortening their useful lives.
The costs associated with these expansions may adversely affect our results of operations. 66 Impact of the Solar Cycle on our Assets' Remaining Life A stronger solar cycle has the potential to impact some of our satellites, accelerating their deorbiting and shortening their useful lives.
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.
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 Climate, and Space Services.
It is important to note that while this expense is excluded for purposes of non-GAAP presentation, the revenue of the acquired companies is reflected in the non-GAAP measures and that the assets contribute to revenue generation. • Mergers and acquisition related expenses.
It is important to note that 75 while this expense is excluded for purposes of non-GAAP presentation, the revenue of the acquired companies is reflected in the non-GAAP measures and that the assets contribute to revenue generation. • Mergers and acquisition related expenses.
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 .
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. 69 Sales and Marketing.
The Blue Torch Financing Agreement provides for, among other things, a term loan facility in an aggregate principal amount of up to $120.0 million (the “Blue Torch Credit Facility”).
The Blue Torch Financing Agreement provides for, among other things, a term loan facility in an aggregate principal amount of 78 up to $120.0 million (the “Blue Torch Credit Facility”).
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.
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, 2024 and 2023 are referred to herein as fiscal year 2024 and fiscal year 2023, respectively.
On February 4, 2024, we entered into a securities purchase agreement for the issuance and sale of 833,333 shares of our Class A common stock to Signal Ocean Ltd at a price of $12.00 per share (the “Private Placement”). The Private Placement closed on February 8, 2024, resulting in gross proceeds to us of $10.0 million.
On February 4, 2024, we entered into a securities purchase agreement for the issuance and sale of 833,333 shares of our Class A common stock to Signal Ocean Ltd at a price of $12.00 per share (the “2024 Private Placement”). The 2024 Private Placement closed on February 8, 2024, resulting in gross proceeds to us of $10.0 million.
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
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. 85
For additional detail regarding the terms associated with our financing arrangements, see Note 6 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Equity Distribution Agreement On September 14, 2022, we entered into the Equity Distribution Agreement with Canaccord Genuity LLC, as sales agent.
For additional detail regarding the terms associated with our financing arrangements, see Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Equity Distribution Agreement On September 14, 2022, we entered into the Equity Distribution Agreement with Canaccord Genuity LLC, as sales agent.
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.
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 depends on many factors, including, but not limited to, those described below.
While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. For additional information about these risks, see the section titled “ Risk Factors. ” If we are unable to address these risks, our business and results of operations could be adversely affected.
While these areas present significant opportunity, they also present risks that we must manage to achieve successful results. For additional information about these risks, see the section titled “Risk Factors.” If we are unable to address these risks, our business and results of operations could be adversely affected.
Therefore, the Company concluded there was no impairment of goodwill during the fourth quarter of 2023. There also was no goodwill impairment recorded during the year ended December 31, 2022. If the Company’s market capitalization continues to decline, and if macroeconomic conditions worsen, the Company’s reporting unit may be at risk for future goodwill impairments.
Therefore, the Company concluded there was no impairment of goodwill during the fourth quarter of 2024. There also was no goodwill impairment recorded during the year ended December 31, 2023. If the Company’s market capitalization continues to decline, and if macroeconomic conditions worsen, the Company’s reporting unit may be at risk for future goodwill impairments.
Determining whether solutions and services are distinct performance obligations that should be accounted for separately or combined as a single performance obligation involves significant judgement that requires us to assess the nature of the promise and value delivered to the customer.
Determining whether solutions and services are distinct performance obligations that should be accounted for separately or combined as a single performance obligation involves significant judgment that requires us to assess the nature of the promise and value delivered to the customer.
Non-cash items primarily consisted of $18.2 million of depreciation and amortization expense, $13.0 million of stock-based compensation expense, $2.9 million of amortization of operating lease right-of-use assets, $2.3 million of debt issuance amortization costs, $1.6 million change in fair value of warrant liabilities, and a $1.0 million loss on decommissioned satellites and impairment of assets, partially offset by $0.3 million of other, net, and a $0.1 million change in fair value of contingent earnout liability.
Non-cash items primarily consisted of $18.2 million of depreciation and amortization expense, $13.0 million of stock-based compensation expense, $2.9 million of amortization of operating lease right-of-use assets, $2.3 million of debt issuance amortization costs, $1.6 million change in fair value of warrant liabilities, and a $1.0 million loss on decommissioned satellites and disposal of assets, partially offset by $0.5 million of other, net, and a $0.1 million change in fair value of contingent earnout liability.
On December 29, 2023, we pre-paid $2.0 million on our outstanding balance to maintain compliance with the maximum debt to annualized recurring revenue leverage ratio financial covenant, which otherwise would have been short by $2.0 million as of December 31, 2023 due to the delay in the award of the $9.4 million radio occultation sales order by NOAA.
On December 29, 2023, we pre-paid $2.0 million on our outstanding balance to maintain compliance with the maximum debt to annualized recurring revenue leverage ratio financial covenant, which otherwise would have been short by $2.0 million as of December 31, 2023 due to the delay in the award of the $9.4 million RO sales order by NOAA.
Subject to certain exceptions, prepayments of the Blue Torch Credit Facility will be subject to early termination fees in an amount equal to 3.0% of the principal prepaid if prepayment occurs on or prior to the first anniversary of the closing date, 2.0% of principal prepaid if prepayment occurs after the first anniversary of the closing date but on or prior to the second anniversary of the closing date and 1.0% of principal prepaid if prepayment occurs after the second anniversary of the closing date but on or prior to the third anniversary of the closing date, plus if prepayment occurs on or prior to the first anniversary of the closing date, a make-whole amount equal to the amount of interest that would have otherwise been payable through the maturity date of the Blue Torch Credit Facility.
Subject to certain exceptions, prepayments of the Blue Torch Credit Facility were subject to early termination fees in an amount equal to 3.0% of the principal prepaid if prepayment would have occurred on or prior to the first anniversary of the closing date, 2.0% of principal prepaid if prepayment would have occurred after the first anniversary of the closing date but on or prior to the second anniversary of the closing date and, 1.0% of principal prepaid if prepayment occurs after the second anniversary of the closing date but on or prior to the third anniversary of the closing date, plus if prepayment would have occurred on or prior to the first anniversary of the closing date, a make-whole amount equal to the amount of interest that would have otherwise been payable through the maturity date of the Blue Torch Credit Facility.
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.
For additional information regarding the terms of our credit facilities and notes, see Note 7 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.
A stronger solar cycle may accelerate the deorbiting of our satellites sooner than expected or planned. Our ability to minimize the solar cycle impact, our ability to replenish our existing constellation in a timely manner and the costs associated with these actions may adversely affect our results of operations.
A stronger solar cycle has accelerated the deorbiting of our satellites sooner than expected or planned. Our ability to minimize the solar cycle impact, our ability to replenish our existing constellation in a timely manner and the costs associated with these actions may adversely affect our results of operations.
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.
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 (as defined below) we have from one fiscal year to the next.
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.
On June 13, 2022, in connection with the Blue Torch Financing Agreement, we issued warrants to affiliates of the Lenders to purchase shares of Class A common stock (the “2022 Blue Torch Warrants”), which were exercisable for an aggregate of 437,024 shares of our Class A common stock with a per share exercise price of $16.08. 79 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.
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.
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 decommissioned satellites and does not reflect the cash capital expenditure requirements for the replacements of lost satellites.
General and Administrative . General and administrative expenses consist of employee-related expenses for personnel in our executive, finance and accounting, facilities, legal, human resources, global supply chain, and management information systems functions, as well as other administrative employees.
General and administrative expenses consist of employee-related expenses for personnel in our executive, finance and accounting, facilities, legal, human resources, and management information systems functions, as well as other administrative employees.
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.
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. • Other acquisition accounting amortization.
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.
Customers with Space Services 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.
Government Loan As part of the Acquisition in November 2021, we assumed a loan agreement with the Strategic Innovation Fund ("SIF") which was recorded at fair value of the debt. As of December 31, 2023, $5.1 million was included in long-term debt, non-current on our consolidated balance sheets related to the SIF loan agreement.
Government Loan As part of the Acquisition in November 2021, we assumed a loan agreement with the Strategic Innovation Fund ("SIF") which was recorded at fair value of the debt. As of December 31, 2024, $4.6 million was included in long-term debt, non-current on our consolidated balance sheets related to the SIF loan agreement.
As of December 31, 2023, we were in compliance with all applicable financial covenants under the Blue Torch Financing Agreement.
As of December 31, 2024, we were not in compliance with all applicable financial covenants under the Blue Torch Financing Agreement.
Due to the nature of these events, we cannot predict the magnitude or frequency of future satellite deorbit and launch failure 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.
Due to the nature of these events, we cannot predict the magnitude or frequency of future satellite deorbit and launch failure losses. We sometimes purchase launch insurance when financially practical; however, the proceeds from these insurance policies will typically only cover a portion of our launch loss.
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.
The results of the annual impairment test performed in the fourth quarter of fiscal year 2024 indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by more than 3600% based on the 30-day trading VWAP and by more than 5000% based on the stock price on the date of valuation.
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.
As of December 31, (dollars in thousands) 2024 2023 % Change ARR $ 112,190 $ 106,827 5 % 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.
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.
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, allowance for current expected credit losses, and amortization of purchased intangible backlog associated with the Acquisition. Commission costs on new customer contract bookings are considered costs of obtaining customer contracts.
For the reasons set forth below, we believe that excluding the following items provides information that is helpful in understanding our results of operations, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures. • Loss on satellite deorbit, launch failure and decommissioning.
For the reasons set forth below, we believe that excluding the following items provides information that is helpful in understanding our results of operations, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures. • Loss on decommissioned satellites.
Interest expense includes interest costs associated with our promissory and convertible notes, and amortization of deferred financing costs. Change in Fair Value of Contingent Earnout Liability. Change in fair value of contingent earnout liability includes mark-to-market adjustments to reflect changes in the fair value of the contingent earnout liability. Change in Fair Value of Warrant Liabilities .
Interest expense primarily includes interest costs associated with our debt and amortization of deferred financing costs. Change in Fair Value of Contingent Earnout Liability. Change in fair value of contingent earnout liability includes mark-to-market adjustments to reflect changes in the fair value of the contingent earnout liability. Change in Fair Value of Warrant Liabilities.
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 additional information, see Notes 2 and 9 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 $5.3 million for fiscal year 2024 compared to a loss of $1.6 million in fiscal year 2023.
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.
We expect our ARR to continue to fluctuate from period to period in the future. 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.
Expansion into New Industries and Geographies As our solutions have grown, we continue to focus on further penetration of our initial industries including maritime, aviation, logistics and government (civil and defense/intelligence) among others.
Expansion into New Industries and Geographies As our solutions grow, we continue to focus on further penetration of our initial industries including maritime, aviation, logistics, and government (civil and defense/intelligence).
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.
Item 7. 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, 2024 and 2023 and the related notes appearing elsewhere in this Form 10-K.
This was driven by $19.9 million of proceeds from long-term debt, $7.9 million of proceeds from issuance of common stock, and $0.7 million of proceeds from the employee stock purchase plan, partially offset by $4.5 million of long-term debt repayments, and $0.1 million of payments of debt issuance costs.
The net cash provided by financing activities was driven by $19.9 million of proceeds from long-term debt, $7.9 million of proceeds from issuance of common stock, and $0.7 million of proceeds from the employee stock purchase plan, partially offset by $4.5 million of long-term debt repayments, and $0.1 million of payments of debt issuance costs.
An ARR Net Retention Rate greater than 100% is an indication that we are growing the value of the solutions our customers are purchasing from us from a fiscal period end versus the prior fiscal period end.
An ARR Net Retention Rate greater than 100% is an indication that we are growing the value of the solutions our customers are purchasing from us at current fiscal year ended versus the prior fiscal year end.
We also intend to continue to add headcount as needed to our research and development teams and otherwise invest to improve and innovate our nanosatellite, ground station and data analytics technologies. For fiscal year 2023, our spending on research and development increased by $3.8 million, or 11%, from fiscal year 2022.
We also intend to continue to add headcount as needed to our research and development teams and otherwise invest to improve and innovate our nanosatellite, ground station and data analytics technologies. For fiscal year 2024, our spending on research and development increased by $1.5 million, or 6%, from fiscal year 2023.
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.
We elected the Term SOFR rate which was 12.6571% as of December 31, 2024. 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.
Blue Torch Credit Agreement On June 13, 2022, we, as borrower, and certain of our subsidiaries, as guarantors, entered into a financing agreement (the “Blue Torch Financing Agreement”) with Blue Torch Finance LLC, a Delaware limited liability company (“Blue Torch”), as administrative agent and collateral agent, and certain lenders (the “Lenders”).
Blue Torch Credit Agreement On June 13, 2022, we, as borrower, and certain of our subsidiaries, as guarantors, entered into a financing agreement (the “Blue Torch Financing Agreement”) with Blue Torch, as administrative agent and collateral agent, and certain lenders (the “Lenders”).
Spire excludes this as it does not reflect the underlying cash flows or operational results of the business. • Loss on extinguishment of debt. We exclude this as it does not reflect the underlying cash flows or operational results of the business. • Foreign exchange gain/loss.
Spire excludes this as it does not reflect the underlying cash flows or operational results of the business. • Issuance of stock warrants. We exclude this as it does not reflect the underlying cash flows or operational results of the business. • Foreign exchange gain/loss.
As of December 31, 2023 2022 % Change ARR Customers 712 709 0 % ARR Solution Customers 745 733 2 % ARR Net Retention Rate We calculate our ARR Net Retention Rate for a particular fiscal period end by dividing (i) our ARR from those ARR Customers at that fiscal period end that were also customers as of the last day of the prior fiscal period end by (ii) the ARR from all customers as of the last day of the prior fiscal period.
As of December 31, 2024 2023 % Change ARR Customers 572 712 (20 )% ARR Solution Customers 621 745 (17 )% ARR Net Retention Rate We calculate our ARR Net Retention Rate for a particular fiscal period end by dividing (i) our ARR from those ARR Customers at that fiscal period end that were also customers as of the last day of the prior fiscal period end by (ii) the ARR from all customers as of the last day of the prior fiscal period.
Loss on Decommissioned Satellites Years Ended December 31, (dollars in thousands) 2023 2022 % Change Loss on decommissioned satellites $ 747 $ 549 36% Percentage of total revenues 1 % — % * In fiscal years 2023 and 2022, we recognized a non-cash expense of $0.7 million and $0.5 million, respectively, on decommissioned satellites prior to the ends of their useful lives.
Loss on Decommissioned Satellites Year Ended December 31, (dollars in thousands) 2024 2023 % Change Loss on decommissioned satellites $ 3,447 $ 747 361 % Percentage of total revenues 3 % 1 % We recognized a non-cash expense of $3.4 million and $0.7 million in fiscal years 2024 and 2023, respectively, on decommissioned satellites prior to the ends of their useful lives.
Liquidity and Capital Resources Our principal sources of liquidity to fund our operations are from cash and cash equivalents, and marketable securities which totaled $40.9 million as of December 31, 2023, mainly from net proceeds from borrowings under the Blue Torch Credit Facility (as defined below) and the sale of common stock under the Equity Distribution Agreement with Canaccord Genuity LLC, as sales agent (the "Equity Distribution Agreement").
Liquidity and Capital Resources Our principal sources of liquidity to fund our operations are from cash and cash equivalents, which totaled $19.2 million as of December 31, 2024, mainly from net proceeds from borrowings under the Blue Torch Credit Facility (as defined below), proceeds from the 2024 Private Placement and Offering (each as defined below), and the sale of common stock under the Equity Distribution Agreement with Canaccord Genuity LLC, as sales agent (the "Equity Distribution Agreement").
Commission costs for multi-year deals are considered contract acquisition costs and are deferred and then amortized over the period of the contract excluding the last twelve months, which are expensed at the beginning of the final twelve-month period. Commission costs on contracts completed with a term of twelve months or less are expensed in the period incurred.
Commission costs for multi-year deals are considered contract acquisition costs and are deferred and then amortized over the period of the contract. Commission costs on contracts completed with a term of twelve months or less are expensed in the period incurred. General and Administrative .
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.
We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any loss on decommissioned satellites, change in fair value of warrant liabilities, change in fair value of contingent earnout liability, issuance of common stock warrants, other (expense) income, net, stock-based compensation, foreign exchange gain/loss, other acquisition accounting amortization, mergers and acquisition related expenses, and other unusual and infrequent 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.
An ARR Net Retention Rate less than 100% is an indication that the value of the solutions our customers are purchasing from us declined at current fiscal year end versus the prior fiscal year end.
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.
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.
The U.S. dollar exhibited a modest increase in strength against the local functional currencies of our foreign subsidiaries for the fiscal year ended December 31, 2023, compared to the fiscal year ended December 31, 2022. This had a marginal negative impact on our revenue, as about one-third of our sales are conducted in foreign currencies.
The U.S. Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for the fiscal year ended December 31, 2024, as compared to the fiscal year ended December 31, 2023. The U.S. Dollar's decrease had a positive impact on our revenue, as approximately one-third of our sales are conducted in foreign currencies.
The $1.6 million loss in fiscal year 2023 was primarily driven by mark-to-market adjustments. This was also impacted by the issuance of new warrants and reduction in the exercise price of the Blue Torch warrants in connection with the Waiver and Amendment (as defined below).
The $5.3 million loss for fiscal year 2024 was primarily driven by mark-to-market adjustments to reflect the fair market valuation of the underlying stock price. This was also impacted by the issuance of new warrants and reduction in the exercise price of the Blue Torch warrants in connection with the Waiver and Amendment (as defined below).
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.
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.
Change in fair value of contingent earnout liability experienced a reduction year over year of $9.5 million driven by the mark-to-market adjustments in 2022 to reflect the fair market valuation of the underlying stock price not repeating in 2023. During 2023 the contingent earnout liability remained relatively flat, resulting in a moderate $0.1 million profit.
Change in fair value of contingent earnout liability increased year over year by $1.4 million driven by the mark-to-market adjustments in fiscal year 2024 to reflect the fair market valuation of the underlying stock price. During fiscal year 2023 the contingent earnout liability remained relatively flat, resulting in a moderate $0.1 million gain.
The increase in depreciation expense was primarily driven by a reset of the estimated useful lives of our satellites to account for the potential impact of increased solar activity related to the current solar cycle.
The increase in satellite operation expense was driven by recognition of launch costs associated with a Space Services Contract. The increase in depreciation expense was primarily driven by a reset of the estimated useful lives of our satellites to account for the impact of increased solar activity related to the current solar cycle.
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.
Changes in operating assets and liabilities primarily included a $13.7 million increase in contract liabilities, a $4.1 million decrease in accounts receivable, net, a $1.7 million decrease in other long-term assets, and a $1.4 million increase in accounts payable, partially offset by a $9.8 million increase in other current assets, a $2.8 million decrease in operating lease liabilities, a $2.7 million decrease in accrued wages and benefits, a $1.6 million increase in contract assets, and a $1.1 million decrease in other accrued expenses.
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.
We exclude this amortization expense for our internal management reporting processes because it has already been incurred and is a non-cash expense. Our management also finds it useful to exclude this charge when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods.
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.
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. A default interest rate of 16.61448% was applied on our outstanding obligations from November 1, 2024 to March 11, 2025.
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.
The net cash used in investing activities was driven by purchases of $40.1 million in short-term investments and $17.4 million of investment in property and equipment, partially offset by $52.5 million in maturities of short-term investments.
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.
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 contracts with more than one performance obligation, the transaction price is allocated among the performance obligations using the relative standalone selling price (“SSP”) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation. SSP is generally estimated using cost plus a reasonable margin based on value added to the customer.
For contracts with more than one performance obligation, the transaction price is allocated among the performance obligations using the relative standalone selling price (“SSP”) of each obligation. Judgment is required to determine the SSP for each distinct performance obligation.
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.
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.
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.
The following table summarizes our ARR Net Retention Rate for each of fiscal years 2024 and 2023: Year Ended December 31, 2024 2023 % Change ARR Net Retention Rate 93 % 98 % (5 )% 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.
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 Transactions also include a twelve-month transition service and data provision agreement for $7.5 million. 65 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 United States.
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.
These amounts compare to cash and cash equivalents and marketable securities of $40.9 million as of December 31, 2023, of which $29.1 million was in cash and cash equivalents and the remaining $11.7 million was in short-term marketable securities, which can be converted to cash with minimal transaction costs.
Non-cash items primarily consisted of a $22.3 million loss on extinguishment of debt, $18.3 million of depreciation and amortization expense, $11.5 million of stock-based compensation expense, $3.8 million of debt issuance amortization costs, $2.3 million of amortization of operating lease assets, and a $0.8 million loss on impairment of assets, partially offset by a $9.7 million gain on change in fair value of contingent earnout liability and an $8.8 million gain on change in fair value of warrant liabilities.
Non-cash items primarily consisted of $21.7 million of depreciation and amortization expense, $19.4 million of stock-based compensation expense, $5.3 million change in fair value of warrant liabilities, $4.8 million of amortization of operating lease right-of-use assets, $4.5 million of debt issuance amortization costs, a $4.0 million loss on decommissioned satellites and disposal of assets, $2.4 million related to issuance of stock warrants, and a $1.2 million change in fair value of contingent earnout liability, partially offset by $0.3 million of other, net.
Changes in operating assets and liabilities primarily included a $3.2 million increase in other current assets, a $2.8 million decrease in operating lease liabilities, a $2.7 million decrease in accrued wages and benefits, a $2.5 million increase in contract assets, and a $0.6 million decrease in other accrued expenses.
Changes in operating assets and liabilities primarily included a $12.4 million decrease in other current assets, a $7.1 million increase in other accrued expenses, a $3.1 million decrease in contract assets, a $2.7 million increase in contract liabilities, a $2.6 million increase in accounts payable, a $2.0 million decrease in other long-term assets, and a $0.9 million increase in accrued wages and benefits, partially offset by a $5.0 million increase in accounts receivable, net, and a $4.7 million decrease in operating lease liabilities.
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 .
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. Issuance of Stock Warrants. Issuance of stock warrants includes expense related to the value of the right to purchase company shares. Foreign Exchange Gain/Loss.
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.
Personnel costs also include the cost of our employees supporting and managing projects for our research and development services. 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.
This calculation measures the overall impact from increases in customer contract value (upsells), the decreases in customer contract value (downsells) and the decreases in customer value resulting from customers that have chosen not to renew their contracts with us (lost customers). The following table summarizes our ARR Net Retention Rate for each of fiscal years 2023 and 2022.
This calculation measures the overall impact from increases in customer 68 contract value (upsells), the decreases in customer contract value (downsells) and the decreases in customer value resulting from customers that have chosen not to renew their contracts with us (lost customers).
Net cash provided by financing activities in fiscal year 2023 was $23.9 million.
Net cash provided by financing activities was $23.9 million for the year ended December 31, 2023.

… 201 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−1 removed6 unchanged
However, a higher rate of inflation in the future may have a negative impact on our operational and capital expenditures, which we may not be able to pass along as cost increases to our customers.
However, a higher rate of inflation in the future may have a negative impact on our operational and capital expenditures, which we may not be able to pass along as cost increases to our customers. 86
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.
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 2024 or 2023.
For 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.
We had a loss of $4.3 million due to changes in foreign currency exchange rates for fiscal year 2024 and a gain of $1.5 million due to changes in foreign currency exchange rates for fiscal year 2023. A hypothetical 10% strengthening or weakening of the U.S.
We are exposed to market risks related to fluctuations in interest rates related to the Blue Torch Credit Facility.
The cash and cash equivalents are held for working capital purposes or strategic investment purposes. We are exposed to market risks related to fluctuations in interest rates related to the Blue Torch Credit Facility.
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.
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 2024 pre-tax loss of approximately $3.5 million. Interest rate sensitivity We had cash and cash equivalents totaling $19.2 million and no short-term marketable securities as of December 31, 2024.
Removed
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