Spire Global, Inc. 10-K/A

Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign currency exchange risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound Sterling, Singapore Dollar, and Canadian Dollar and may be adversely affected in the future due to changes in foreign currency exchange rates. We continue to experience foreign currency fluctuations primarily due to the periodic re-measurement of our foreign currency monetary account balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. Changes in exchange rates may negatively affect our revenue and other results of operations as expressed in U.S. dollars. We do not currently engage in foreign exchange hedging contracts. As we continue to expand our international presence, we will assess options for mitigating foreign exchange risk. We have experienced and will continue to experience fluctuations in our net loss as a result of gains or losses related to revaluing certain asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. 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. 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 $3.4 million. 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. We are exposed to market risks related to fluctuations in interest rates related to the Blue Torch Credit Facility. The Blue Torch Credit Facility accrues interest at a floating rate, to be based, at our election, on either a reference rate or a 3-month Term SOFR rate (subject to a 1.0% floor), plus an interest rate margin of 7.0% for reference rate borrowings and 8.0% for 3-month Term SOFR borrowings, plus an incremental Term SOFR margin of 0.26161%. Accordingly, increases in SOFR could increase our interest payments under the Blue Torch Credit Facility. For example, a hypothetical increase of 100 basis points in the interest rate of the Blue Torch Credit Facility would have an approximately $1.2 million impact on an annual basis on our results of operations. The SIF loan is interest-free. 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. 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. 87 Item 8. Financi al Statements and Supplemental Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 89 Consolidated Balance Sheets as of December 31, 2023 and 2022 (As Restated) 90 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022 (As Restated) 91 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023 and 2022 (As Restated) 91 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2023 and 2022 (As Restated) 92 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 (As Restated) 93 Notes to Consolidated Financial Statements (As Restated) 94 88 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Spire Global, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Spire Global, Inc. and its subsidiaries (the "Company") as of December 31, 2023 and 2022, and the related consolidated statements of operations, of comprehensive loss, of changes in stockholders' equity and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Restatement of Previously Issued Financial Statements As discussed in Note 2 to the consolidated financial statements, the Company has restated its 2023 and 2022 financial statements to correct misstatements. Substantial Doubt about the Company's Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has a history of operating losses and negative cash flows from operations since inception that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP San Francisco, California March 6, 2024, except for the effects of the restatement discussed in Note 2 to the consolidated financial statements and with respect to the matters that raise substantial doubt about the Company’s ability to continue as a going concern discussed in Note 3, as to which the date is March 3, 2025 We have served as the Company’s auditor since 2019. 89 Spire Global, Inc. Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2023 2022 (As Restated) (As Restated) Assets Current assets Cash and cash equivalents $ 29,136 $ 47,196 Marketable securities 11,726 23,084 Accounts receivable, net (including allowance of $ 586 and $ 395 as of December 31, 2023 and 2022, respectively) 9,911 13,864 Contract assets 4,718 2,881 Other current assets 16,848 7,153 Total current assets 72,339 94,178 Property and equipment, net 60,446 55,823 Operating lease right-of-use assets 14,921 11,687 Goodwill 51,155 49,954 Customer relationships 19,363 20,814 Other intangible assets 12,660 13,967 Other long-term assets, including restricted cash 8,380 9,562 Total assets $ 239,264 $ 255,985 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 8,012 $ 4,800 Accrued wages and benefits 1,829 4,502 Contract liabilities, current portion 31,178 20,524 Other accrued expenses 8,326 8,469 Total current liabilities 49,345 38,295 Long-term debt 114,113 98,475 Contract liabilities, non-current 17,923 14,349 Contingent earnout liability 220 349 Deferred income tax liabilities 804 732 Warrant liability 5,988 1,831 Operating lease liabilities, net of current portion 13,079 10,815 Other long-term liabilities 8 8 Total liabilities 201,480 164,854 Commitments and contingencies (Note 10) Stockholders’ equity Common stock, $ 0.0001 par value, 1,000,000,000 Class A and 15,000,000 Class B shares authorized, 21,097,351 Class A and 1,507,325 Class B shares issued and outstanding at December 31, 2023; 17,959,923 Class A and 1,507,325 Class B shares issued and outstanding at December 31, 2022 (1) 2 2 Additional paid-in capital 477,624 455,765 Accumulated other comprehensive loss ( 4,556 ) ( 6,908 ) Accumulated deficit ( 435,286 ) ( 357,728 ) Total stockholders’ equity 37,784 91,131 Total liabilities and stockholders’ equity $ 239,264 $ 255,985 (1) The issued and outstanding shares of the Company's common stock have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). The accompanying notes are an integral part of these consolidated financial statements. 90 Spire Global, Inc. Consolidated Statements of Operations (In thousands, except share and per share amounts) Years Ended December 31, 2023 2022 (As Restated) (As Restated) Revenue $ 97,612 $ 70,767 Cost of revenue 59,024 53,626 Gross profit 38,588 17,141 Operating expenses: Research and development 27,650 22,073 Sales and marketing 25,754 28,502 General and administrative 41,999 44,892 Loss on decommissioned satellites 747 549 Allowance for current expected credit loss on notes receivable 1,218 — Total operating expenses 97,368 96,016 Loss from operations ( 58,780 ) ( 78,875 ) Other income (expense): Interest income 2,332 948 Interest expense ( 19,036 ) ( 13,955 ) Change in fair value of contingent earnout liability 129 9,677 Change in fair value of warrant liabilities ( 1,597 ) 8,757 Loss on extinguishment of debt — ( 22,510 ) Other expense, net ( 748 ) ( 2,769 ) Total other expense, net ( 18,920 ) ( 19,852 ) Loss before income taxes ( 77,700 ) ( 98,727 ) Income tax provision ( 142 ) 285 Net loss $ ( 77,558 ) $ ( 99,012 ) Basic and diluted net loss per share (1) $ ( 3.96 ) $ ( 5.66 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 19,580,006 17,484,927 (1) The shares of the Company's common stock and the per share amounts have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). The accompanying notes are an integral part of these consolidated financial statements. Spire Global, Inc. Consolidated Statements of Comprehensive Loss (In thousands) Years Ended December 31, 2023 2022 (As Restated) (As Restated) Net loss $ ( 77,558 ) $ ( 99,012 ) Other comprehensive gain (loss): Foreign currency translation adjustments 2,318 ( 7,657 ) Net unrealized gain (loss) on investments (net of tax) 34 ( 33 ) Comprehensive loss $ ( 75,206 ) $ ( 106,702 ) The accompanying notes are an integral part of these consolidated financial statements. 91 Spire Global, Inc. Consolidated Statements of Changes in Stockholders’ Equity (In thousands, except share amounts) Common Stock Additional Paid in Accumulated Other Comprehensive Accumulated Total Stockholders' Shares (1) Amount (1) Capital (1) Loss Deficit Equity Balance, December 31, 2021 (Previously Reported) 18,894,262 2 438,709 732 ( 249,236 ) $ 190,207 Restatement adjustment — — — 50 ( 9,480 ) ( 9,430 ) Balance, December 31, 2021 (As Restated) 18,894,262 2 438,709 782 ( 258,716 ) 180,777 Exercise of stock options 62,975 — 806 — — 806 Release of Restricted Stock Units 30,310 — ( 70 ) — — ( 70 ) Issuance of common stock under Employee Stock Purchase Plan 65,726 — 623 — — 623 Stock compensation expense — — 11,491 — — 11,491 Conversion of warrants to common stock 413,910 — 4,206 — — 4,206 Net loss (As Restated) — — — — ( 99,012 ) ( 99,012 ) Foreign currency translation adjustments (As Restated) — — — ( 7,657 ) — ( 7,657 ) Net unrealized loss on investments (net of tax) — — — ( 33 ) — ( 33 ) Balance, December 31, 2022 (As Restated) 19,467,183 2 455,765 ( 6,908 ) ( 357,728 ) 91,131 Exercise of stock options 500 — 3 — — 3 Release of Restricted Stock Units and Performance Stock Units 781,557 — — — — — Issuance of common stock under Employee Stock Purchase Plan 154,371 — 727 — — 727 Stock compensation expense — — 12,978 — — 12,978 Issuance of common stock under the Equity Distribution Agreement, net 2,166,384 — 7,866 — — 7,866 Conversion of warrants to common stock 34,728 — 286 — — 286 Redemption of fractional shares due to reverse stock split ( 47 ) — ( 1 ) — — ( 1 ) Net loss (As Restated) — — — — ( 77,558 ) ( 77,558 ) Foreign currency translation adjustments (As Restated) — — — 2,318 — 2,318 Net unrealized gain on investments (net of tax) — — — 34 — 34 Balance, December 31, 2023 (As Restated) 22,604,676 $ 2 $ 477,624 $ ( 4,556 ) $ ( 435,286 ) $ 37,784 (1) The shares of the Company's common stock have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1) . The accompanying notes are an integral part of these consolidated financial statements. 92 Spire Global, Inc. Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2023 2022 (As Restated) (As Restated) Cash flows from operating activities Net loss $ ( 77,558 ) $ ( 99,012 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 18,228 18,341 Stock-based compensation 12,978 11,491 Amortization of operating lease right-of-use assets 2,928 2,344 Amortization of debt issuance costs 2,337 3,781 Change in fair value of warrant liabilities 1,597 ( 8,757 ) Change in fair value of contingent earnout liability ( 129 ) ( 9,677 ) Loss on decommissioned satellites and impairment of assets 1,024 784 Loss on extinguishment of debt — 22,271 Other, net ( 505 ) ( 38 ) Changes in operating assets and liabilities: Accounts receivable, net 4,144 ( 4,180 ) Contract assets ( 1,647 ) ( 713 ) Other current assets ( 9,803 ) 2,459 Other long-term assets 1,680 1,852 Accounts payable 1,371 ( 1,808 ) Accrued wages and benefits ( 2,747 ) ( 923 ) Contract liabilities 13,693 16,618 Other accrued expenses ( 1,116 ) 1,103 Operating lease liabilities ( 2,782 ) ( 1,632 ) Other long-term liabilities — ( 45 ) Net cash used in operating activities ( 36,307 ) ( 45,741 ) Cash flows from investing activities Purchases of short-term investments ( 40,116 ) ( 40,213 ) Maturities of short-term investments 52,500 17,300 Purchase of property and equipment ( 17,352 ) ( 20,994 ) Net cash used in investing activities ( 4,968 ) ( 43,907 ) Cash flows from financing activities Proceeds from long-term debt 19,886 100,973 Proceeds from issuance of common stock under the Equity Distribution Agreement, net 7,866 — Payments on long-term debt ( 4,500 ) ( 71,512 ) Payments of debt issuance costs ( 75 ) ( 4,516 ) Proceeds from exercise of stock options 3 806 Proceeds from employee stock purchase plan 727 622 Net cash provided by financing activities 23,907 26,373 Effect of foreign currency translation on cash, cash equivalents and restricted cash ( 568 ) 1,199 Net decrease in cash, cash equivalents and restricted cash ( 17,936 ) ( 62,076 ) Cash, cash equivalents and restricted cash Beginning balance 47,569 109,645 Ending balance $ 29,633 $ 47,569 Supplemental disclosure of cash flow information Cash paid for interest $ 16,157 $ 9,438 Income taxes paid $ 47 $ 210 Noncash operating, investing and financing activities Property and equipment purchased but not yet paid $ 2,745 $ 957 Right-of-use assets obtained in exchange for lease liabilities $ 5,868 $ — Accrued long-term debt issuance costs $ 1,800 $ — Conversion of warrants to Class A common stock $ 286 $ 4,205 Issuance of stock warrants with long-term debt (Note 9) $ 2,579 $ 3,579 The accompanying notes are an integral part of these consolidated financial statements. 93 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) 1. Nature of Business Spire Global, Inc. (“Spire” or the “Company”), founded in August 2012, is a global provider of space-based data and analytics that offers its customers unique datasets and insights about earth from the ultimate vantage point. The Company collects this space-based data through its proprietary constellation of multi-purpose nanosatellites. 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. As a fourth solution, the Company is providing “space-as-a-service” through its Space Services solution. The Company is headquartered in Vienna, Virginia and has several wholly owned operating subsidiaries in the United States, United Kingdom, Luxembourg, Singapore, Australia, Germany, and Canada. On August 16, 2021, Spire Global Subsidiary, Inc. (formerly known as Spire Global, Inc.) (“Legacy Spire”) closed its previously announced merger with NavSight Holdings, Inc. (“NavSight”), a special purpose acquisition company. As a result, Legacy Spire continued as the surviving corporation and a wholly owned subsidiary of NavSight (the “Merger,” and such consummation, the “Closing”). NavSight then changed its name to Spire Global, Inc. and Legacy Spire changed its name to Spire Global Subsidiary, Inc. On September 14, 2022, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC, as sales agent (the “Agent”). In accordance with the terms of the Equity Distribution Agreement, the Company may offer and sell its Class A common stock, having an aggregate offering price of up to $ 85,000 from time to time through the Agent pursuant to a registration statement on Form S-3, which became effective on September 26, 2022. Under the Equity Distribution Agreement, the Company sold 2,166,389 shares of its Class A common stock during the year ended December 31, 2023 for gross proceeds of $ 8,235 . On March 24, 2023, the Company, was notified by the New York Stock Exchange (“NYSE”) that the Company was not in compliance with Rule 802.01C of the NYSE’s Listed Company Manual (“Rule 802.01C”) relating to the minimum average closing price of the Company’s Class A common stock, par value of $ 0.0001 per share, required over a consecutive 30 trading-day period. On August 31, 2023, the Company effected a reverse stock split at a ratio of 1-for-8 (the “Reverse Stock Split”) of its common stock. In connection with the Reverse Stock Split, every eight shares of the Company’s Class A and Class B common stock issued and outstanding as of the effective date were automatically combined into one share of Class A or Class B common stock, as applicable. On September 25, 2023, the Company received formal notice from the NYSE that the Company had regained compliance with Rule 802.01C. The par value of the common stock remains $ 0.001 per share after the Reverse Stock Split. All share and per share information has been retroactively adjusted to reflect the impact of the Reverse Stock Split for all periods presented. 2. Restatement of Previously Issued Financial Statements Description of Restatement Adjustments In August 2024, the Company began a comprehensive review of its accounting practices and procedures with respect to revenue recognition related to certain (i) contracts in its “Space as a Service” business (the “Space Services Contracts”) and (ii) contracts in its customer-funded or co-funded research and development arrangements (the “R&D Services Contracts,” and together with the Space Services Contracts, the “Space Services and R&D Services Contracts”) under applicable accounting standards and guidance. As a result of its comprehensive review, the Company determined that a restatement of its previously issued consolidated financial statements for the Affected Periods were required related to consideration of embedded leases for a Space Services Contract, recognition of an allowance for current expected credit loss related to a note receivable issued to a customer, revenue recognition for Space Services and R&D Services Contracts, and income statement classification of costs related to R&D Services Contracts. The Company previously accounted for Space Services Contracts by recognizing revenue separately for each project phase (e.g., development, manufacturing, launch, and satellite operations). Because the Space Services Contracts involve bespoke satellites developed under customer requirements, the Company first evaluated whether any of the Space Services Contracts contain embedded leases. Based on this review, the Company concluded that one Space Services Contract contained embedded leases of satellites to the customer, but because the customer controls the satellites being constructed under this specific contract, it was a 94 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) failed build-to-suit arrangement under Accounting Standards Codification (“ASC”) Topic 842, Leases, and therefore, should still be accounted for under ASC 606, Revenue from Contracts with Customers. The Company determined that the contract requires the transaction price to be allocated to the following performance obligations: design/build, launch, operation, and material rights for up to ten additional satellites. As a result, the Company corrected the financial statements for the Affected Periods to reflect the correct pattern of revenue recognition: over time for the design/build of satellites controlled by the customer, utilizing an input method based on a cost-to-cost measure of progress over the period from initial design to launch; at the point in time when the launch occurred for launch service; over time utilizing an output method based on the number of satellite months as the measure of progress for operating the satellite; and when (or as) the underlying future services are transferred, or when the options expire, for material rights. The Company also made the following correction to account for costs incurred for this contract: construction-related costs were expensed as incurred rather than capitalized as property and equipment, and the prepaid fees for launch services were capitalized as costs to fulfill the contract within other current assets on the consolidated balance sheets, rather than capitalized as property and equipment. The capitalized prepaid launch costs will be recognized as expense upon the successful launch of the satellites . In addition, under this contract, the customer provided a $ 4,500 promissory note to the Company to cover the launch costs. Historically, the Company had not recorded an allowance for current expected credit loss (“CECL”) on the promissory note balance. Management determined that the note receivable is subject to CECL guidance and recorded an allowance for current expected credit loss on the notes receivable balance for the applicable period as of the year ended December 31, 2023. For the Space Services Contracts that do not contain an embedded lease, the Company concluded that, given the contractual clauses in Space Services Contracts by which each company retains its intellectual property, no control of intellectual property was transferred to the end customer during the pre-space period, and therefore, no performance obligation for the pre-space period exists. The Space Services Contracts were determined to generally only have one performance obligation for the overall space service. The transfer of control of the service to the customer starts when the satellite is in operation and the data service commences. As a result, the Company corrected the consolidated financial statements for the Affected Periods to remove revenue recognized during the pre-space period and recognize revenue over time utilizing an output measure of progress based on satellite months during its intended service period. In addition to the one performance obligation for the space service, certain Space Services Contracts have additional performance obligations for customers’ material rights to purchase additional satellites or services in the future at a discounted price, which resulted in the transaction price being allocated to the material rights in addition to the space service performance obligation. Revenue allocated to material rights is recognized over the period of service to which the material right relates or at the time the material right expires. The Company concluded that no change was required to the accounting treatment for costs associated with these contracts as the Company's existing practice of capitalizing satellite costs within property and equipment, the capitalization of costs to obtain the contracts within other current assets, and the related recognition of expense over the expected life of the assets or term of the contracts were appropriate. For the R&D Services Contracts, the Company determined that its previous revenue recognition practice of revenue recognition on completion of each contractual milestone did not accurately represent the pattern of control transfer for the related intellectual property under the contract. The Company concluded that the pattern of control transfer for the intellectual property occurs over time as the Company performs its research and development activities. Therefore, the Company determined that revenue related to customer-funded research and development arrangements should have been recognized by using an input method based on a cost-to-cost measure of progress, over the period from initial design to launch, generally resulting in earlier revenue recognition, as the Company’s performance precedes the related milestone. All costs associated with the R&D Services Contracts were reclassified from research and development to cost of revenue within gross profit on the face of the consolidated statements of operations. In the past, these costs were classified as research and development within operating expenses. The costs for the Company’s internal research and development projects will remain as research and development expense within operating expenses. As a result of the accounting errors detailed above, revenue, cost of revenue, research and development expense, other expense, income tax provision, accumulated other comprehensive loss, contract assets, contract liabilities, property and equipment, and allowance for current expected credit loss on notes receivable were determined to be incorrect on the Company’s consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of stockholders' equity and consolidated statements of cash flows as of and for the Affected Periods. 95 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Other Adjustments The Company historically incorrectly recorded advances made to vendors for property and equipment in other current assets before clearing it to property and equipment, except for the balance as of September 30, 2022, which was included in property and equipment in the condensed consolidated balance sheets. As advances to vendors were included in other current assets, the cash flows associated with these payments were incorrectly reflected in operating activities in the consolidated statements of cash flows. The Company determined that the advances made to vendors for property and equipment should be included in property and equipment. Therefore, advances to vendors were reclassified to property and equipment and the cash flows associated with the advances made were reclassified from operating activities to investing activities in the consolidated statements of cash flows for the applicable Affected Periods (beginning December 31, 2022). The Company identified that the cost associated with a supply chain department should have been classified as cost of revenue but was incorrectly classified as general and administrative expense for the years ended December 31, 2023, and December 31, 2022, as well as the interim periods within such years. The Company corrected the classification by reclassifying all expenses recognized in that department from general and administrative expense to cost of revenue for the Affected Periods. The Company identified that the cash balances held in certain foreign subsidiaries' accounts were remeasured incorrectly. The incorrect remeasurement impacted (i) the cash balance on the condensed consolidated balance sheets as of June 30, 2023 and September 30, 2023, and the consolidated balance sheets as of December 31, 2023; (ii) the foreign currency remeasurement loss on the condensed consolidated statements of operations for the three months and six months ended June 30, 2023 and the three months and nine months ended September 30, 2023; and the consolidated statements of operations for the year ended December 31, 2023. The Company corrected the remeasurement of the affected cash balances in the Affected Periods. The Company did not accrue expenses for Delaware franchise taxes in the proper periods on its consolidated balance sheets and the expenses for Delaware franchise taxes were classified as other expense, net on its consolidated statements of operations. As part of this restatement, the Company accrued for the Delaware franchise taxes in the appropriate periods and reclassified the amounts from other expense, net to general and administrative expenses. The Company identified that certain state taxes that were originally classified as other expense, net are related to state minimums or franchise-like taxes, which are based on revenues. Therefore, those amounts were incorrectly classified as other expense, and should have been classified as general and administrative expense. As part of this restatement, the Company reclassified the amounts from other expense, net to general and administrative expenses. The Company identified that a settlement for a vendor dispute was incorrectly included in other expense, net on its consolidated statements of operations in the three and nine months ended September 30, 2023. As the settlement for a vendor dispute related to operating activities, the Company reclassified the amount from other expense, net to general and administrative expenses. The Company identified that a customer deposit was incorrectly classified as other accrued expenses instead of contract liability on its consolidated balance sheets. As part of this restatement, the Company reclassified the amount from other accrued expense to contract liabilities, non-current. Consolidated Financial Statements - Restatement Reconciliation Tables The following tables reflect the impact of the restatement to the specific line items presented in the Company’s previously reported consolidated financial statements as of and for the years ended December 31, 2023 and 2022. The Company has provided in Note 16 the restated unaudited quarterly condensed consolidated financial information for each of the interim periods in the fiscal years ended December 31, 2023 and 2022. The accompanying applicable Notes to Consolidated Financial Statements have been updated to reflect the effects of the restatement. The impact of the restatement to the consolidated statements of changes in stockholders’ equity includes increases of $ 32,683 and $ 19,081 in accumulated deficit as of December 31, 2023 and 2022, respectively, and a $ 9,480 increase to accumulated deficit as of January 1, 2022. 96 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The amounts in the "As Previously Reported" columns are amounts derived from the Company's previously filed consolidated financial statements in the Original Form 10-K. The amounts in the "Restatement Adjustments" columns present the impact of the following adjustments: • The change in revenue recognition timing for Space Services Contracts, • The change in revenue recognition timing for R&D Services Contracts, • The reclassification of costs related to R&D Services Contracts from research and development expense to cost of revenue, • The recognition of expense for satellite construction and launch services for the failed build-to-suit lease contract, • The recognition of the allowance for current expected credit loss related to a note receivable issued to a customer, • The impact to income tax provision as a result of the restatement adjustments above, • The impact to foreign currency translation gain or loss as a result of the restatement adjustments above, and • Other adjustments including balance sheet reclassification of fixed asset advances and customer deposits, statements of operations reclassification of department costs, a vendor dispute settlement, franchise taxes, other state taxes, and cash remeasurement adjustments. The amounts in the "As Restated" columns are the updated amounts including the impacts from the restatement. Financial statement line items and subtotals that were not impacted by the restatement adjustments have been omitted for enhanced clarity. As of December 31, 2023 As of December 31, 2022 Consolidated Balance Sheets Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Cash and cash equivalents (i) $ 29,144 $ ( 8 ) $ 29,136 $ 47,196 $ - $ 47,196 Contract assets (ii) $ 6,215 $ ( 1,497 ) $ 4,718 $ 3,353 $ ( 472 ) $ 2,881 Other current assets (iii) $ 12,340 $ 4,508 $ 16,848 $ 9,279 $ ( 2,126 ) $ 7,153 Total current assets $ 69,336 $ 3,003 $ 72,339 $ 96,776 $ ( 2,598 ) $ 94,178 Property and equipment, net (iv) $ 71,209 $ ( 10,763 ) $ 60,446 $ 53,752 $ 2,071 $ 55,823 Other long-term assets, including restricted cash (v) $ 8,181 $ 199 $ 8,380 $ 9,562 $ - $ 9,562 Total assets $ 246,825 $ ( 7,561 ) $ 239,264 $ 256,512 $ ( 527 ) $ 255,985 Contract liabilities, current portion (vi) $ 23,165 $ 8,013 $ 31,178 $ 15,856 $ 4,668 $ 20,524 Other accrued expenses (vii) $ 8,540 $ ( 214 ) $ 8,326 $ 8,210 $ 259 $ 8,469 Total current liabilities $ 41,546 $ 7,799 $ 49,345 $ 33,368 $ 4,927 $ 38,295 Contract liabilities, non-current (viii) $ - $ 17,923 $ 17,923 $ - $ 14,349 $ 14,349 Deferred income tax liabilities (ix) $ 1,069 $ ( 265 ) $ 804 $ 771 $ ( 39 ) $ 732 Other long-term liabilities (x) $ 272 $ ( 264 ) $ 8 $ 780 $ ( 772 ) $ 8 Total liabilities $ 176,287 $ 25,193 $ 201,480 $ 146,389 $ 18,465 $ 164,854 Accumulated other comprehensive loss (xi) $ ( 4,485 ) $ ( 71 ) $ ( 4,556 ) $ ( 6,997 ) $ 89 $ ( 6,908 ) Accumulated deficit (xii) $ ( 402,603 ) $ ( 32,683 ) $ ( 435,286 ) $ ( 338,647 ) $ ( 19,081 ) $ ( 357,728 ) Total stockholders’ equity $ 70,538 $ ( 32,754 ) $ 37,784 $ 110,123 $ ( 18,992 ) $ 91,131 Total liabilities and stockholders’ equity $ 246,825 $ ( 7,561 ) $ 239,264 $ 256,512 $ ( 527 ) $ 255,985 Description of restatement adjustments in the consolidated balance sheets: (i) The $ 8 decrease in cash and cash equivalents as of December 31, 2023 is related to the cash remeasurement adjustment for cash balances from certain foreign subsidiaries. (ii) The $ 1,497 and $ 472 decreases in contract assets as of December 31, 2023 and December 31, 2022, respectively, are related to adjustments to correct revenue recognition for Space Services and R&D Services Contracts. (iii) Adjustments to other current assets: a. The $ 4,508 increase in other current assets as of December 31, 2023, resulted from an increase of $ 7,586 from prepaid launch costs for customer-controlled satellites for one specific contract reclassified from property and equipment to other current assets, partially offset by a decrease of $ 1,860 from advances for fixed assets that have 97 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) been reclassified from other current assets to property and equipment and a decrease of $ 1,218 from allowance for current expected credit loss for notes receivable recorded in other current assets. b. The $ 2,126 decrease in other current assets as of December 31, 2022, is related to advances for fixed assets that have been reclassified to other long-term assets from other current assets. (iv) Adjustments to property and equipment: a. The $ 10,763 decrease in property and equipment as of December 31, 2023, resulted from a decrease of $ 7,586 from prepaid launch costs for such satellites reclassified into other current assets and a decrease of $ 5,037 from construction costs for customer-controlled satellites for one specific contract being expensed as cost of revenue rather than capitalized into property and equipment, partially offset by an increase of $ 1,860 from advances for fixed assets that have been reclassified from other current assets to property and equipment. b. The $ 2,071 increase in property equipment as of December 31, 2022 resulted from an increase of $ 2,126 from advances for fixed assets that have been reclassified from other current assets to property and equipment, partially offset by a decrease of $ 55 from construction costs for customer-controlled satellites for one specific satellite being expensed as cost of revenue rather than capitalized into property and equipment. (v) The $ 199 increase in other long-term assets, including restricted cash as of December 31, 2023, is related to the correction of revenue recognition for Space Services and R&D Services Contracts impacting long-term contract assets. (vi) The $ 8,013 and $ 4,668 increases in contract liabilities, current portion as of December 31, 2023, and December 31, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts impacting contract liabilities, current portion. (vii) The $ 214 decrease in other accrued expenses as of December 31, 2023 resulted from a decrease of $ 254 for a customer deposit balance reclassified from other accrued expense to contract liability, non-current, partially offset by an increase of $ 40 for the Delaware franchise tax accrual. The $ 259 increase in other accrued expenses as of December 31, 2022 resulted from a $ 429 increase for Delaware franchise tax accrual, partially offset by a decrease of $ 170 for the customer deposit balance reclassified from other accrued expense to contract liability, noncurrent. (viii) Adjustments to contract liabilities, non-current: a. The $ 17,923 increase in contract liabilities, non-current as of December 31, 2023, resulted from adjustments of $ 17,405 to correct revenue recognition for Space Services and R&D Services Contracts, a $ 264 pre-adjusted balance of contract liabilities, non-current that was historically included within other long-term liabilities but has been reclassified to its own line, and a $ 254 contract liability, non-current balance reclassified from other accrued expense. b. The $ 14,349 increase in contract liabilities, non-current as of December 31, 2022, resulted from adjustments of $ 13,407 to correct revenue recognition for Space Services and R&D Services Contracts, a $ 772 balance of contract liabilities, non-current that was originally included within other long-term liabilities, and an increase of $ 170 from contract liability, non-current balance reclassified from other accrued expense. (ix) The $ 265 and $ 39 decreases in deferred income tax liabilities as of December 31, 2023 and December 31, 2022, respectively, are related to impact to income tax provision as a result of the revenue adjustments. (x) The $ 264 and $ 772 decreases in other long-term liabilities as of December 31, 2023, and December 31, 2022, respectively, are related to the non-current contract liabilities balance that was historically included in other long-term liabilities but now has been presented in its own line (see restatement adjustment description (viii)). (xi) The $ 71 increase and $ 89 decrease of accumulated other comprehensive loss as of December 31, 2023, and December 31, 2022, respectively, are related to the misstatements’ impact on cumulative foreign currency translation loss. (xii) The $ 32,683 increase in accumulated deficit as of December 31, 2023 is related to the cumulative adjustments made in the consolidated statements of operations. The $ 19,081 increase in accumulated deficit as of December 31, 2022 is related to an increase of $ 9,601 in net loss due to the adjustments mentioned above for the year ended December 31, 2022 and an increase of $ 9,480 in the beginning balance of the accumulated deficit as of January 1, 2022 due to the adjustments mentioned above. 98 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Year Ended December 31, 2023 Year Ended December 31, 2022 Consolidated Statements of Operations Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Revenue (i) $ 105,703 $ ( 8,091 ) $ 97,612 $ 80,268 $ ( 9,501 ) $ 70,767 Cost of revenue (ii) $ 42,434 $ 16,590 $ 59,024 $ 40,327 $ 13,299 $ 53,626 Gross profit $ 63,269 $ ( 24,681 ) $ 38,588 $ 39,941 $ ( 22,800 ) $ 17,141 Research and development (iii) $ 38,923 $ ( 11,273 ) $ 27,650 $ 35,153 $ ( 13,080 ) $ 22,073 General and administrative (iv) $ 42,494 $ ( 495 ) $ 41,999 $ 44,831 $ 61 $ 44,892 Allowance for current expected credit loss on notes receivable (v) $ - $ 1,218 $ 1,218 $ - $ - $ - Total operating expenses $ 107,918 $ ( 10,550 ) $ 97,368 $ 109,035 $ ( 13,019 ) $ 96,016 Loss from operations $ ( 44,649 ) $ ( 14,131 ) $ ( 58,780 ) $ ( 69,094 ) $ ( 9,781 ) $ ( 78,875 ) Other expense, net (vi) $ ( 1,063 ) $ 315 $ ( 748 ) $ ( 2,912 ) $ 143 $ ( 2,769 ) Loss before income taxes $ ( 63,884 ) $ ( 13,816 ) $ ( 77,700 ) $ ( 89,089 ) $ ( 9,638 ) $ ( 98,727 ) Income tax provision (vii) $ 72 $ ( 214 ) $ ( 142 ) $ 322 $ ( 37 ) $ 285 Net loss $ ( 63,956 ) $ ( 13,602 ) $ ( 77,558 ) $ ( 89,411 ) $ ( 9,601 ) $ ( 99,012 ) Basic and diluted net loss per share (1) $ ( 3.27 ) $ ( 0.69 ) $ ( 3.96 ) $ ( 5.11 ) $ ( 0.55 ) $ ( 5.66 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 19,580,006 - 19,580,006 17,484,927 - 17,484,927 (1) The shares of the Company's common stock and the per share amounts for the year ended December 31, 2022 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). Description of restatement adjustments in the consolidated statements of operations: (i) The $ 8,091 and $ 9,501 decreases in revenue for the years ended December 31, 2023 and December 31, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) Adjustments to cost of revenue: a. The $ 16,590 increase in cost of revenue for the year ended December 31, 2023 resulted from an increase of $ 11,273 from costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 4,922 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 395 from the reclassification of supply chain department costs from general and administrative expense to cost of revenue. b. The $ 13,299 increase in cost of revenue for the year ended December 31, 2022 resulted from an increase of $ 13,080 from costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 167 from reclassification of supply chain department costs from general and administrative expense to cost of revenue, and an increase of $ 52 from costs for customer-controlled satellites for one specific contract that are expensed as cost of revenue rather than capitalized into property and equipment. (iii) The $ 11,273 and $ 13,080 decreases in research and development expense for the years ended December 31, 2023 and December 31, 2022, respectively, are related to costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue. (iv) Adjustments to general and administrative expense: a. The $ 495 decrease in general and administrative expense for the year ended December 31, 2023 resulted from a decrease of $ 395 of supply chain department costs reclassified to cost of revenue and a decrease of $ 389 from the Delaware franchise tax accrual and reclassification, partially offset by increases of $ 235 and $ 54 for the reclassification of vendor dispute settlement and other state taxes, respectively, from other expense, net. b. The increase of $ 61 in general and administrative expense for the year ended December 31, 2022 resulted from an increase of $ 143 for other state taxes reclassification from other expense, net and an increase of $ 85 for Delaware 99 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) franchise tax accrual and reclassification, partially offset by a decrease of $ 167 for the reclassification of supply chain department costs from general and administrative expense to cost of revenue. (v) The $ 1,218 increase in allowance for current expected credit loss on notes receivable for the year ended December 31, 2023 is related to the allowance for current expected credit loss recorded for the $ 4,500 notes receivable. (vi) Adjustments to other expense, net: a. The $ 315 decrease in other expense, net for the year ended December 31, 2023 resulted from a decrease of $ 235 for the vendor dispute settlement reclassified to general and administrative expense, a decrease of $ 54 from the other state taxes reclassified to general and administrative expense, and a decrease of $ 26 related to foreign currency gain or loss impact of the revenue and cash remeasurement adjustment. b. The $ 143 decrease in other expense, net for the year ended December 31, 2022 is related to the reclassification of other state taxes to general and administrative expense. (vii) The $ 214 and $ 37 decreases in income tax provisions for the year ended December 31, 2023 and December 31, 2022, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. Year Ended December 31, 2023 Year Ended December 31, 2022 Consolidated Statements of Comprehensive Loss Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 63,956 ) $ ( 13,602 ) $ ( 77,558 ) $ ( 89,411 ) $ ( 9,601 ) $ ( 99,012 ) Foreign currency translation adjustments (i) $ 2,478 $ ( 160 ) $ 2,318 $ ( 7,696 ) $ 39 $ ( 7,657 ) Comprehensive loss $ ( 61,444 ) $ ( 13,762 ) $ ( 75,206 ) $ ( 97,140 ) $ ( 9,562 ) $ ( 106,702 ) Description of restatement adjustments in the consolidated statements of comprehensive loss: (i) The $ 160 foreign currency translation loss and $ 39 foreign currency translation gain for the years ended December 31, 2023 and December 31, 2022, respectively, are related to the foreign currency translation impact of consolidated statements of operations adjustments (i) to (v) above. Year Ended December 31, 2023 Year Ended December 31, 2022 Consolidated Statements of Cash Flows Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 63,956 ) $ ( 13,602 ) $ ( 77,558 ) $ ( 89,411 ) $ ( 9,601 ) $ ( 99,012 ) Other, net (i) $ ( 290 ) $ ( 215 ) $ ( 505 ) $ 1 $ ( 39 ) $ ( 38 ) Change in contract assets (ii) $ ( 2,463 ) $ 816 $ ( 1,647 ) $ ( 1,364 ) $ 651 $ ( 713 ) Other current assets (iii) $ ( 3,246 ) $ ( 6,557 ) $ ( 9,803 ) $ 324 $ 2,135 $ 2,459 Change in contract liabilities (iv) $ 6,352 $ 7,341 $ 13,693 $ 7,776 $ 8,842 $ 16,618 Other accrued expenses (v) $ ( 648 ) $ ( 468 ) $ ( 1,116 ) $ 1,012 $ 91 $ 1,103 Net cash used in operating activities $ ( 23,622 ) $ ( 12,685 ) $ ( 36,307 ) $ ( 47,820 ) $ 2,079 $ ( 45,741 ) Purchase of property and equipment (vi) $ ( 30,037 ) $ 12,685 $ ( 17,352 ) $ ( 18,915 ) $ ( 2,079 ) $ ( 20,994 ) Net cash used in investing activities $ ( 17,653 ) $ 12,685 $ ( 4,968 ) $ ( 41,828 ) $ ( 2,079 ) $ ( 43,907 ) Effect of foreign currency translation on cash, cash equivalents and restricted cash (vii) $ ( 560 ) $ ( 8 ) $ ( 568 ) $ 1,199 $ - $ 1,199 Cash, cash equivalents and restricted cash - Ending balance $ 29,641 $ ( 8 ) $ 29,633 $ 47,569 $ - $ 47,569 Description of restatement adjustments in the consolidated statements of cash flows: (i) The $ 215 and $ 39 adjustments to change in other, net for the year ended December 31, 2023 and December 31, 2022, respectively, represents the changes in deferred income tax liabilities related to the impact to income tax provision as a result of the revenue adjustments. 100 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) (ii) The $ 816 and $ 651 adjustments to change in contract assets for the years ended December 31, 2023 and December 31, 2022, respectively, are related to the impact to current and non-current balances of contract assets for the correction of revenue recognition for Space Services and R&D Services Contracts. (iii) Adjustments to change in other current assets: a. The $ 6,557 additional increase in other current assets for the year ended December 31, 2023 resulted from an increase of $ 7,585 from prepaid launch costs for customer-controlled satellites being reclassified from property and equipment to other current assets and an increase of $ 190 from net change in advances for fixed assets balance reclassified to property and equipment, partially offset by a decrease of $ 1,218 from allowance for current expected credit loss related to a note receivable issued to a customer recorded in other current assets. b. The $ 2,135 additional decrease in other current assets as of December 31, 2022, is related to net change in fixed assets advances reclassified from other current assets into property and equipment. (iv) Adjustments to change in contract liabilities: a. The $ 7,341 adjustment to change in contract liabilities for the year ended December 31, 2023 resulted from a $ 7,255 impact to current and non-current balances of contract liabilities from the correction of revenue recognition for Space Services and R&D Services Contracts and the $ 86 change in customer deposit balance reclassified from other accrued expense to contract liability, non-current. b. The $ 8,842 adjustment to change in contract liabilities for the year ended December 31, 2022 is related to the impact to current and non-current balances of contract liabilities from the correction of revenue recognition for Space Services and R&D Services Contracts. (v) The $ 468 adjustment to change in other accrued expense for the year ended December 31, 2023 resulted from a decrease of $ 382 for the Delaware franchise tax accrual and a decrease of $ 86 for change in customer deposit balances reclassified from other accrued expense to non-current contract liability . The $ 91 increase in other accrued expense for the year ended December 31, 2022 is related to the Delaware franchise tax accrual. (vi) Adjustments to purchase of property and equipment: a. The $ 12,685 decrease in purchase of property and equipment for the year ended December 31, 2023 resulted from a decrease of $ 7,585 from prepaid launch costs for the customer-controlled satellites being reclassified into other current assets rather than capitalized into the Company's property and equipment, a decrease of $ 4,834 from costs incurred to design/build the customer-controlled satellites being expensed rather than capitalized into the Company's property and equipment, and a decrease of $ 266 from noncash addition to property and equipment from the prior period advances that was incorrectly reflected as current period’s cash purchase. b. The $ 2,079 increase in purchase of property and equipment for the year ended December 31, 2022 resulted from an increase of $ 2,126 from advances paid for fixed assets that have been reclassified to property and equipment from other current assets, partially offset by a decrease of $ 47 from costs incurred to design/build the customer-controlled satellites being expensed rather than capitalized into the Company's property and equipment. (vii) The $ 8 decrease in cash and cash equivalents as of December 31, 2023 is related to the cash remeasurement adjustment for cash balances from certain foreign subsidiaries, which resulted in an $ 8 change in effect of foreign currency translation on cash, cash equivalents and restricted cash for the fiscal year ended December 31, 2023. 101 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) 3. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and regulations of the U.S. Securities and Exchange Commission (the "SEC"). The Company’s consolidated financial statements include the accounts of Spire Global, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Reverse Stock Split Reported share amounts, including issued and outstanding shares, per share amounts, and reported issued and outstanding warrants and other securities convertible into common stock in these consolidated financial statements and accompanying notes have been retroactively adjusted for the Reverse Stock Split by applying the Reverse Stock Split ratio. The number of authorized shares of common stock was not impacted by the Reverse Stock Split, and therefore has not been retroactively adjusted. Liquidity Risks and Uncertainties The Company has a history of operating losses and negative cash flows from operations since inception. During the year ended December 31, 2023, net loss was $ 77,558 , cash used in operations was $ 36,307 and the Company received net proceeds of $ 7,866 from sales of shares of its Class A common stock under the Equity Distribution Agreement. The Company held cash and cash equivalents of $ 29,136 , excluding restricted cash of $ 497 , and investment in marketable securities of $ 11,726 as of December 31, 2023. The Company’s ability to continue as a going concern for the next 12 months from the date of reissuance of these consolidated financial statements is dependent upon its ability to obtain sufficient cash to meet its obligations, including the repayment of all amounts owed pursuant to the Blue Torch Financing Agreement (as amended, and as defined below in Note 7). The Company has failed to meet its leverage ratio and minimum liquidity financial covenants and SEC periodic filing requirement non-financial covenant under the Blue Torch Financing Agreement, and therefore Blue Torch Finance LLC (“Blue Torch”) has the right to accelerate and declare all or any portion of the loans outstanding under the Blue Torch Financing Agreement to be due and payable. Further, upon the filing of this Form 10-K/A, the Company will fail to comply with the non-financial covenant requiring the Company to have a report or opinion of its auditor without an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern. Based on the Company’s current cash and cash equivalents and investment in marketable securities balances and expected future financial results, if the Transactions (as defined below) do not close, the Company will not have sufficient liquidity to continue operations for at least the next twelve months from the reissuance of these consolidated financial statements. Furthermore, the Company will not have sufficient cash to repay the balance of the loans outstanding under the Blue Torch Financing Agreement in the event Blue Torch declares all or any portion of the loans to be due and payable. The Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which the Company agreed to sell its maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”). The maritime business to be sold pursuant to the Transactions does not include any part of the Company’s satellite network or operations. The purchase price to be paid by Buyer to the Company at the closing of the Transactions is a cash payment based upon an enterprise value of $ 233,500 , subject to customary adjustments. The Transactions also include a twelve-month transition service and data provision agreement for $ 7,500 . 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. On February 10, 2025, the Company 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. In the complaint, the Company 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. 102 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Kpler 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. 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. 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. The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time. The Company intends to use the proceeds from the closing of the Transactions to repay all amounts owed under the Blue Torch Financing Agreement. However, as described above, there is currently no assurance that the Transactions will close or when the Transactions may close. Given the expected delay in the closing of the Transactions, the Company intends to seek additional equity or debt financing (including securities convertible or exchangeable for equity) and may seek waivers of or amendments to contractual obligations, delay, limit, reduce, or terminate certain commercial efforts, or pursue merger, disposition or other strategies, any of which could adversely affect its business, results of operations, and financial condition. There is no assurance that the Company will be successful in achieving any of the foregoing. Due to the Company’s projected cash needs, including amounts owed pursuant to the Blue Torch Financing Agreement and the Company’s breach of its covenants under the Blue Torch Financing Agreement, there is substantial doubt about its ability to continue as a going concern for a period of at least 12 months from the date of reissuance of the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Macroeconomic and Geopolitical Over the past two years, the Company has been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, increasing interest rates and the Russian invasion of Ukraine. A stronger U.S. dollar relative to the Company's foreign subsidiaries' local functional currencies for the year ended December 31, 2023 as compared to the year ended December 31, 2022 negatively impacted the Company’s revenue, since approximately one-third of the Company’s sales are transacted in foreign currencies, though it positively impacted the Company’s expenses, since a majority of the Company’s employees reside in countries outside of the United States. The macroeconomic environment has caused existing or potential customers to re-evaluate their decision to purchase the Company's offerings, at times resulting in additional customer discounts, extended payment terms, longer sales cycles, and a few contract cancellations. Increasing interest rates in 2023 as compared to 2022 resulted in higher interest expenses, as the Company’s credit facility is based on a floating interest rate. The Russian invasion of Ukraine and the continued conflict created additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers, which has delayed revenue recognition of certain sales contracts. If any of these factors continue or worsen, and/or if new macroeconomic or geopolitical issues arise, the Company's results and financial condition could be further negatively impacted. The Company cannot predict the timing, strength, or duration of any economic slowdown, downturn, instability, or recovery, generally or within any particular industry or geography. Any downturn of the general economy or industries in which the Company operates would adversely affect its business, financial condition, and results of operations. Segment Information The Company operates as one reportable and operating segment, which relates to the sale of subscription-based data, insights, predictive analytics and related project-based services to global customers across a range of industries. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the dates of the 103 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management’s significant estimates include assumptions for revenue recognition, which requires estimates of total costs used in measuring the progress of completion for the cost-based input method, allowance for current expected credit losses, valuation of certain assets and liabilities acquired from the acquisition of exactEarth in November 2021 (the “Acquisition”), realizability of deferred income tax assets, and fair value of equity awards, contingent earnout liabilities and warrant liabilities. Actual results could differ from those estimates. Based on an evaluation of the lifespans of its in-service satellites and on current capabilities to extend the useful life of in-service satellites via software updates, the Company changed the estimated useful life of its capitalized satellites and related launch costs from three to four years for depreciation purposes. The Company determined it was appropriate to make this change prospectively beginning June 2023. The change in estimated useful life did not have a material impact for the year ended December 31, 2023. In November 2023, the Company updated the estimated useful lives for 43 capitalized satellites and related launch costs based on updated de-orbit dates. This change represents a change in accounting estimate and the impact of the change was an increase in loss from continuing operations before income taxes of approximately $ 2,467 , or $ 0.13 per basic and diluted share for the months of November and December 2023. Foreign Currency Translation The Company’s foreign subsidiaries, which have defined their functional currency as their local currency, translate their assets and liabilities into U.S. Dollars at the exchange rate existing at the balance sheet date, and translate their results from operations at the average exchange rate for each period. The resulting translation adjustments are included as a component of accumulated other comprehensive loss on the consolidated balance sheets, accumulated other comprehensive loss in the consolidated statements of changes in stockholders' equity and as other comprehensive gain (loss) in the consolidated statements of comprehensive loss. Gains and losses from foreign currency transactions are included in other expense, net in the consolidated statements of operations. Fair Value Measurements To account for fair value measurements and disclosures, a fair value hierarchy was established that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company uses the following valuation techniques to measure fair value for its assets and liabilities: • Level 1: Quoted prices in active markets for identical assets or liabilities. • Level 2: Significant other observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. • Level 3: Unobservable inputs reflecting management’s assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. Cash, Cash Equivalents, Marketable Securities and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash included in Other long-term assets, including restricted cash on the consolidated balance sheets, represents amounts pledged as guarantees or collateral for financing arrangements and lease agreements, as contractually required. The Company invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale 104 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) are recognized in accumulated other comprehensive loss. Interest on securities classified as available-for-sale is included in interest income on the consolidated statements of operations. The following table shows components of cash, cash equivalents, and restricted cash reported on the consolidated balance sheets and in the consolidated statements of cash flows as of and for the years then ended: December 31, 2023 2022 (As Restated) Cash and cash equivalents $ 29,136 $ 47,196 Restricted cash included in Other long-term assets 497 373 $ 29,633 $ 47,569 Accounts Receivable and Notes Receivable (As Restated) Accounts receivable are stated at the amounts management expects to collect from outstanding balances. An allowance for current expected credit losses is recorded based on historical loss experience, consideration of current and future economic conditions, and evaluation of a customer’s current and future financial condition. Increases and decreases in the allowance for current expected credit losses are included as a component of sales and marketing expense in the consolidated statements of operations. Recoveries of accounts receivable for which an allowance exists, or those that were previously written off, are recorded when received. The Company recorded an expense for credit losses of $ 640 and $ 139 on accounts receivables for the years ended December 31, 2023 and 2022, respectively. Notes receivable and interest on notes receivable are recorded in other current assets on the consolidated balance sheets. Notes receivable are stated at the amounts management expects to be paid based on the management's knowledge of the customer's financial position. As of December 31, 2023, the Company recorded an allowance for current expected credit loss of $ 1,218 on the consolidated statements of operations. The Company generally grants credit to its customers on an unsecured basis. The Company does not have any off-balance sheet credit exposure related to its customers. Concentrations of Credit Risk (As Restated) Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and restricted cash, marketable securities, and accounts receivable. The Company typically has cash accounts in excess of Federal Deposit Insurance Corporation insurance coverage limits. The Company has not experienced any losses on such accounts, and management believes that the Company’s risk of loss is remote. The Company had $ 4,500 and $ 0 note receivable balances outstanding as of December 31, 2023 and 2022, respectively. The entire balance as of December 31, 2023 is with one customer for which the Company has established a $ 1,218 allowance for current expected credit loss (Note 10). The Company has a concentration of contractual revenue arrangements with various government agencies. Entities under common control are reported as a single customer. As of December 31, 2023, the Company did not have any customers that accounted for more than 10 % of the Company’s total accounts receivable. As of December 31, 2022, the Company had one customer (Customer A noted below) that accounted for 16 % of the Company’s total accounts receivable. 105 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The following customers represented 10% or more of the Company’s total revenue: Years Ended December 31, 2023 2022 (As Restated) (As Restated) Customer A * 14 % Customer B (1) 28 % 21 % * Revenue from this customer was less than 10 % of total revenue during the year. (1) Consists of multiple U.S. government agencies, of which only one government agency represented greater than 10 % of total revenue for the years ended December 31, 2023 and 2022. The Company has a concentration in vendor purchases. The Company believes its reliance on its vendors could be shifted over a period of time to alternative vendors should such a change be necessary. If the Company were to be unable to obtain alternative vendors due to factors beyond its control, operations would be disrupted until alternative vendors were secured. The Company had one vendor for the year ended December 31, 2023, and did not have any vendors for the year ended December 31, 2022, from which purchases of equipment, components and services individually represented 10% or more of the Company’s total purchases. The Company is dependent on third parties to launch its satellites into space, and any launch delay, malfunction, or failure could have a negative impact on revenue and might cause the Company not to be able to accommodate customers with sufficient data to meet minimum service level agreements until replacement satellites are available. The Company also incorporates technology and terrestrial data sets from third parties into its platform and its inability to maintain rights and access to such technology and data sets would harm its business and results of operations. Property and Equipment (As Restated) Property and equipment are stated at cost, less accumulated depreciation and amortization. In-service satellites and related launch costs are capitalized based on the commission date of the underlying asset. Capitalized launch costs for each satellite are allocated based on the total cost of the launch divided by the number of satellites included on that launch. In-service ground stations and related costs are capitalized once signals are transmitted with in-service satellites. In the event of a failed launch or deployment of satellites, the related equipment impairment and launch costs are expensed and recorded in the consolidated statements of operations. The Company also capitalizes certain software costs incurred in connection with developing internal-use software during the project development stage so long as management with the relevant authority authorizes the project, it is probable the project will be completed, and the software will be used to perform the function intended. Costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized over the estimated useful life of the enhancement. Costs related to preliminary project activities and post-implementation operational activities are expensed as incurred. Internal-use software, which consists primarily of the Company’s enterprise software used to build and operate the Company’s satellites, is stated at cost less accumulated amortization. General maintenance and repairs are charged to expense as incurred. Significant refurbishments, renewals and betterments are capitalized. When assets are retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected as other expense, net in the Company’s consolidated statements of operations. Depreciation and amortization are computed utilizing the straight-line method over the estimated useful lives of depreciable assets in the table below. Leasehold improvements are amortized using the straight-line method over the lesser of the life of the asset or the remaining life of the lease. Years Furniture and fixtures 7 Machinery and equipment 5 In-service ground stations 3 - 10 Computer software and website development 3 Computer equipment 3 Capitalized satellite launch costs and in-service satellites 3 - 4 106 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The following table summarizes the Company's long-lived assets by geography: December 31, 2023 2022 (As Restated) (As Restated) EMEA (1) 62 % 39 % Americas (2) 38 % 61 % Total 100 % 100 % (1) United Kingdom re presented 36 %, Germany represented 14 % and Luxembourg represented 12 % for the year ended December 31, 2023 and United Kingdom represented 31 % for the year ended December 31, 2022. (2) U.S. represented 1 7 % and 34 % and Canada represented 21 % and 27 % for the years ended December 31, 2023 and 2022, respectively. Equity Method Investments The Company accounts for equity investments in which it has significant influence, but not a controlling financial interest, using the equity method of accounting. Under the equity method of accounting, investments are initially recorded at cost, less impairment, and subsequently adjusted to recognize the Company’s share of earnings or losses as a component of other expense, net in the consolidated statements of operations. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value. The Company did not record any impairment losses related to our equity method investments during the years ended December 31, 2023 and 2022. Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Such valuations require us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates which include, but are not limited to, future revenue growth, margins, customer retention rates, technology life, royalty rates, expected use of acquired assets, and discount rates, are inherently uncertain and subject to refinement. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred and included in the general and administrative expenses line item in the consolidated statements of operations. The authoritative guidance allows a measurement period of up to one year from the date of acquisition to make adjustments to the preliminary allocation of the purchase price. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business acquisitions. The Company first performs a qualitative assessment of goodwill annually in the fourth quarter, and more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. If it is determined in the qualitative assessment that the fair value of the Company's single reporting unit is more likely than not below its carrying amount, then the Company will perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount. Any excess in the carrying value of the goodwill over its fair value is recognized as an impairment loss. For purposes of goodwill impairment testing, the Company has one reporting unit. The annual goodwill impairment assessment performed in the fourth quarter of 2023 indicated that the fair value significantly exceeded the carrying value of goodwill. Intangible assets consist of acquired intangible assets which include customer relationships, developed technology and trade names and the costs to obtain patents and perpetual nonexclusive license rights for the use of intellectual property. Acquired intangible assets, other than goodwill, are amortized over their estimated useful lives, ranging from 1 to 12 years, based upon the estimated economic value derived from the related intangible asset. Significant judgment is used in determining fair values of acquired intangible assets and their estimated useful lives. Fair value and useful life determinations may be based on, among other factors, estimates of future expected cash flows, royalty cost savings and appropriate discount rates used in calculating present values. 107 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Intangible assets are tested for impairment whenever there are indicators of impairment. The Company did no t recognize any impairment charges for intangible assets for the year ended December 31, 2023, but recorded an impairment charge relating to patents of $ 72 for the year ended December 31, 2022. Impairment of Long-Lived Assets The Company assesses potential impairments to long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets or asset groups. If impairment exists, the impairment loss is measured and recorded based on undiscounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of cash flows from other asset groups. The Company recognized impairment charges of $ 747 on decommissioned satellites and $ 277 on other long-lived assets for the year ended December 31, 2023, and $ 549 on decommissioned satellites and $ 143 on other long-lived assets for the year ended December 31, 2022. Deferred Offering Costs The Company capitalizes within other current assets on the consolidated balance sheets certain legal, accounting and other third-party fees that are directly related to the Company’s in-process equity financing until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds received from the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are written off to operating expenses. There were no deferred offering costs capitalized as of December 31, 2023 and 2022. Debt Issuance Costs For long-term debt, the Company presents debt issuance costs on the consolidated balance sheets as a direct deduction from the carrying amount of the related debt facility. Debt issuance costs and the fair value assigned to stock warrants issued related to term loans are amortized over the respective term of the debt facility using the effective interest method. Warrants The Company generally classifies warrants for the purchase of shares of its common stock as liabilities on its consolidated balance sheets unless the warrants meet certain specific criteria that require the warrants to be classified within stockholders’ equity. Those warrants accounted for as liabilities are freestanding financial instruments that may require the Company to transfer assets upon exercise. The warrant liability is initially recorded at fair value upon the date of issuance of each warrant and is subsequently remeasured to fair value at each reporting date. Changes in the fair value of the warrant liabilities are recognized as a component in other income (expense) in the consolidated statements of operations. Changes in the fair value of the warrant liabilities will continue to be recognized until the warrants are exercised, expire or qualify for equity classification. Warrants classified as equity are initially recorded at fair value on the date of issuance and recorded in additional paid-in capital on the Company’s consolidated balance sheets until the warrants are exercised or expire. On June 13, 2022, in connection with the Blue Torch Financing Agreement, the Company issued warrants to Blue Torch, which were exercisable for an aggregate of 437,024 shares of the Company’s Class A common stock with a per share exercise price of $ 16.08 (the “2022 Blue Torch Warrants”). Additionally, in connection with the closing of the financing, the Company issued a warrant to Urgent Capital LLC for introducing the Company to the Lenders, which is exercisable for an aggregate of 24,834 shares of the Company's Class A common stock with a per share exercise price of $ 16.08 (the “Urgent Warrants”). On September 27, 2023, the Company issued new warrants to certain Blue Torch affiliates that are exercisable for an additional 597,082 shares of the Company’s Class A common stock at a per share exercise price of $ 5.44 (the “2023 Blue Torch Warrants" and together with the 2022 Blue Torch Warrants and the Urgent Warrants, the “Credit Agreement Warrants”). The Company assumed 1,437,499 publicly-traded warrants (“Public Warrants”) and 825,000 private placement warrants issued by NavSight (“Private Warrants” and, together with the Public Warrants, the “Common Stock Warrants”) upon the Merger, all of which were issued in connection with NavSight’s initial public offering and entitled holders to purchase one share of the Company's Class A common stock at an exercise price of $ 92.00 per share. 108 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The Company evaluated the Credit Agreement Warrants and the Common Stock Warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity. The agreement governing the Credit Agreement Warrants and the Common Stock Warrants includes a provision that could result in a different settlement value for the Common Stock Warrants depending on their holder. Because the holder of an instrument is not an input into the pricing of a fixed-for-fixed option on the Company’s Class A common stock, the Common Stock Warrants are not considered to be indexed to the Company’s own stock. As the Common Stock Warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheets at fair value based on the Black Scholes model. Subsequent changes in their respective fair values are recognized in the consolidated statements of operations at each reporting date. Changes in the fair value of the warrant liabilities will continue to be recognized until the warrants are exercised, expire, or qualify for equity classification. Contingent Earnout Liability In connection with the Merger, eligible Spire equity holders are entitled to receive additional shares of the Company's Class A common stock upon the Company achieving certain earnout triggering events. In accordance with Accounting Standards Codification (“ASC”) 815-40, the earnout shares are not indexed to the Company's Class A common stock and therefore were accounted for as a liability and an offset to additional paid-in capital on the consolidated balance sheets at the reverse recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense) in the consolidated statements of operations. The contingent earnout liability is categorized as a Level 3 fair value measurement using the Monte Carlo model (Note 9) because the Company estimates projections during the earnout period utilizing unobservable inputs. Contingent earnout payments involve certain assumptions requiring significant judgment and actual results may differ from assumed and estimated amounts. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current price of our Class A common stock, expected volatility, risk-free rate, expected term and expected dividend yield. Revenue Recognition (As Restated) To determine revenue recognition, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue as or when the Company satisfies the performance obligation. The Company generates revenue from the following main solutions: Data, Space Services and Research & Development Services. Data Solutions The Company offers the following three data solutions to customers: • 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. The Company recognizes revenue for each separately identifiable performance obligation in a Data Solutions contract representing a promise to transfer data or a distinct service to a customer. In most cases, data provided under the Company’s Data Solutions contracts are accounted for as a single performance obligation due to the integrated nature of the Company’s precise space-based data. The Company determined that each data access subscription provides a series of distinct services in which the customer simultaneously receives and consumes the data service. Therefore, for subscription-based data services, the Company recognizes revenue ratably over the subscription period. Revenue is recognized upon delivery for data products such as archive data and custom reports, which are performance obligations satisfied at a point in time upon transfer of control. 109 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Space Services Solution The Company also provides an innovative “space-as-a-service” business model through its Space Services solution. The customers in these contracts require the use of a satellite that, in addition to other general data service capabilities, has certain sensors or capabilities that are custom designed and integrated into the satellite for a specific mission, together with other data transmission and operating infrastructure. Generally, the Company and the customer collaborate on the satellite design. Either the customer or the Company may provide a payload component that is integrated into the satellite, depending on the terms of the contract. Any customer-provided components are generally a form of customer-provided material. As part of the Space Services solution, the Company performs various activities that range from designing, building, and launching the integrated satellites to enable the customer to send operational requests to the payload through a Company-provided interface. The Company provides a significant service of integrating all the services within the contract into a combined output represented by the Space Services, a stand-ready promise to provide a daily suite of services related to the capture and transmittal of data to the customer based on the customer’s operational requests that is comprised of a series of distinct days of service. The arrangement may also include options granting a material right to extend the service term for the Space Services. This evaluation is performed on a contract-by-contract basis. Third parties may be involved as part of the arrangement to provide services, such as launch or telecommunications support. The Company determined that it controls the services provided to customers and is therefore the principal (i.e., revenue is recognized on a gross basis). The transaction price in a typical contract includes fixed amounts of monthly set-up and service fees. The contracts may also include variable consideration that decreases the transaction price, such as service-level credits when agreed upon service levels are not met, which historically has not been material to the arrangement. The Company allocates service-level credits entirely to the distinct day of service to which they relate. Additionally, these arrangements do not contain significant financing components as any timing difference between payment and transfer of goods and services arises for reasons other than financing. In some arrangements, the customer may provide a payload to the Company to be used in providing the service to the customer. The Company evaluates whether the customer payload is noncash consideration received from the customer. The Company determined that customer-provided payloads are not noncash consideration because the Company does not obtain control of such payloads. When there is an option granting a material right in an arrangement, the Company will allocate the transaction price to the Space Services and to the options granting material rights by applying the practical alternative approach (i.e., allocate the transaction price to the optional services by reference to the services expected to be provided and the corresponding expected consideration). Revenue from Space Services Contracts are recognized over time using an output measure of progress based on satellite months consumed, beginning when the service start date commences for satellites. The consideration allocated to options granting a material right are recognized when (or as) the underlying future services are transferred, or when the options expire. Generally, Space Services solution arrangements do not contain a lease because the Company is able to derive more than insignificant economic benefits from the various capabilities of the integrated satellites. However, in the limited instances when the customer obtains substantially all of the economic benefits determined at contract inception, the Space Services solution arrangements are determined to include an embedded lease of an integrated satellite(s) to the customer. For such arrangements, the Company has determined that that the customer is the deemed owner of the satellite(s) during the construction period. As a result, the Company determined it is providing manufacturing and launch services for those arrangements, and accounts for them based on guidance for other contracts with customers. The Company typically identifies the following performance obligations in these arrangements: (1) manufacturing services, (2) launch services and (3) a stand-ready obligation to provide Space Services that is comprised of a series of distinct days of service. Arrangements may also include options granting a material right to extend the service term for the Space Services. The Company allocates the transaction price to the performance obligations based on the Company’s estimates of standalone selling price. The Company recognizes revenue for the manufacturing services over time using an input measure of progress based on costs incurred. The Company recognizes revenue from launch services at a point in time when the satellites are launched into the orbit. The Company recognizes revenue for Space Services over time using an output measure of progress based on satellite months consumed beginning when the services 110 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) have commenced. If there are options granting a material right in the arrangement, the consideration allocated to the options granting material rights is recognized when (or as) the underlying future services are transferred, or when the options expire. Research and Development Services Solution The Company also offers research and development services (“R&D Services”) to third parties, frequently including governmental entities, for the advancement of contracted satellite technologies. Such services are typically contracted for a specific research goal that may or may not contribute to a broader satellite technology. In addition to providing research and development services, the Company grants the counterparty a license to the developed intellectual property. Generally, the Company and the customer share the costs and benefits of these R&D Services. Within R&D Services Contracts, there is a single, combined performance obligation consisting of research and development activities, license(s) of developed intellectual property, and regular research and development progress meetings, and the transaction price is typically comprised of variable consideration including refundable, up-front cash advances and subsequent milestone-based payments. Such consideration is not expected to be constrained. There is no noncash consideration, no consideration payable, nor a significant financing component. Further, because there generally is only one research and development performance obligation, transaction price allocation is not required. The counterparty obtains control of the developed intellectual property as the Company creates and enhances it, and the related benefits transfer throughout the term over which the obligation is satisfied. Revenue is recognized over time, utilizing an input method based on costs incurred as the best approximation of progress completed to date (i.e., cost-to-cost measure of progress). Accounting for those R&D Services Contracts requires significant judgment relative to estimating total contract revenues and costs; in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel. For all revenue solutions, the Company has elected to exclude from transaction price taxes assessed by a governmental authority that are both imposed on and concurrent with the specific revenue-producing transaction and collected by the entity from a customer. Contract Assets and Liabilities (As Restated) For each of the Company’s contracts, the timing of revenue recognition, customer billings, and cash collections determines the recorded accounts receivable, contract assets, and contract liabilities on the Company’s consolidated balance sheets. Payment terms and conditions generally include a requirement to pay within 30 days. When revenue is recognized in advance of customer invoicing, a contract asset is recorded for the unbilled receivable. Conversely, contract liabilities are recorded when the Company has an unconditional right to consideration before it has satisfied a performance obligation. Contract liabilities consist of funds received in advance of revenue recognition from subscription services or Space Services that are subsequently recognized when the revenue recognition criteria are met. The non-current portion of contract liabilities consists of funds received in advance of revenue recognition from subscription services or Space Services that have remaining contractual obligations greater than one year from the balance sheet date. Deferred Contract Costs Sales commissions earned by the Company’s employees are considered incremental costs of obtaining a contract. An asset is recognized for sales commissions if the Company expects the period of benefit from these costs to be more than one year. The Company amortizes the deferred contract costs on a straight-line basis over the period of expected benefit, which is typically 12 to 24 months, consistent with the pattern of revenue recognition of the related performance obligation. The amortized costs are recorded in sales and marketing expense in the Company’s consolidated statements of operations. The Company expenses sales commissions as incurred when the period of benefit is less than one year. Deferred contract costs are included in other current assets, for the current portion, and other long-term assets, for the non-current portion, on the Company’s consolidated balance sheets. Deferred contract costs were $ 926 and $ 890 , at December 31, 2023 and 2022, respectively, of which $ 487 and $ 439 , respectively, were classified as current. During the years ended December 31, 2023 and 2022, the Company recognized $ 490 and $ 809 , respectively, as amortization of deferred contract costs in sales and marketing expense. 111 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Cost of Revenue (As Restated) Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure and high-power computing costs, third-party operating and royalty costs associated with delivering data and services to customers, costs associated with R&D Services Contracts, allocated overhead costs and amortization of purchased intangibles (e.g., customer relationships and developed technology) associated with the Acquisition. Overhead costs primarily include allocable amounts of utilities, rent, depreciation expense on assets used directly in revenue-producing activities, indirect materials, production and test administration expenses, and repairs and maintenance. In certain Space Services solution arrangements in which the customer is determined to be the deemed owner of the satellite during the construction period, the costs incurred to fulfill the manufacturing performance obligation are expensed as incurred as cost of revenue, following the cost-to-cost progress measure. Costs associated with the launch performance obligation are capitalized as a cost to fulfill the contract until launch occurs, and recognized as cost of revenue at the point in time control of the launch services passes to the customer. As of December 31, 2023 and December 31, 2022, the launch costs capitalized as cost to fulfill the contract related to such arrangements were $ 7,585 and $ 0 , respectively. Costs associated with Space Services Contracts performance obligations will generally be recognized as incurred. Research and Development Costs (As Restated) Research and development expenses consist primarily of employee-related expenses, third-party consulting fees, and computing costs which are expensed as incurred. Costs associated with R&D Services Contracts are included as part of cost of revenue, described above. Amounts included as research and development expense are from the Company’s separate research and development efforts. Leases (As Restated) The Company determines whether a contract is or contains a lease at contract inception. The Company assess whether the Company (as potential lessee) or customer (as potential lessor) has the right to direct the use of an identified asset over the period of use by assessing whether the entity has the right to substantially all of the economic benefits and has the ability to determine how and for what purpose the identified asset is used. Lessee arrangements For lessee arrangements, operating lease right-of-use (“ROU”) assets are presented as a separate line item on the consolidated balance sheets. With respect to lease liabilities, the current portion is presented along with the other accrued expense line item and non-current operating lease liabilities are presented as separate line items on our consolidated balance sheets. The current operating lease liabilities are presented within the other accrued expense line within the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term, discounted using the discount rate for the lease at lease commencement. As the rate implicit in the lease is not readily determinable for the Company’s leases, the Company uses its incremental borrowing rate based on information available at the commencement date as the discount rate. The incremental borrowing rate for a lease is the rate of interest the Company expects to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms in a similar economic environment. ROU assets are recognized at commencement date at the value of the lease liability, adjusted for any prepayments, lease incentives received, and initial direct costs incurred. The lease term may include periods covered by options to extend the lease when it is reasonably certain that we will exercise that option as well as periods beyond the termination date when we are reasonably certain not to exercise a related termination option. In the consolidated statements of operations, lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for them as a single lease component for all underlying asset classes. Accordingly, all related costs are accounted for under the lease accounting model. In addition, the Company elected to apply the short-term lease 112 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) exception for all underlying asset classes. That is, leases with an initial lease term of 12 months or less are not recognized on the consolidated balance sheets, but rather expensed on a straight-line basis over the lease term. Lessor arrangements Certain Space Services solution arrangements are determined to contain an embedded lease when the customer obtains substantially all of the economic benefits from the integrated satellite(s) that is to be constructed for the arrangement. In those instances, the customer is determined to be the deemed owner of the integrated satellite during the construction period, and the transaction is accounted for as a manufacturing and launch service under guidance for other customer contracts. Refer to the “Space Services” subsection within the “Revenue Recognition” section above for more details on these types of arrangements. Sales and Marketing 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, allowance for current expected credit losses, travel-related expenses and amortization of purchased intangible backlog associated with the Acquisition. The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2023 and 2022 was $ 1,103 and $ 933 , respectively, and is included in sales and marketing expenses in the consolidated statements of operations. General and Administrative Costs General and administrative expenses consist of employee-related expenses for personnel in the Company’s executive, finance and accounting, facilities, legal, human resources, and management information systems functions, as well as other administrative employees. In addition, general and administrative expenses include fees related to third-party legal counsel, fees related to accounting, tax and audit costs, office facilities costs, software subscription costs, and other corporate costs. Employee Benefit Plan The Company has a qualified retirement plan which covers all employees who meet certain eligibility requirements. Plan matching contributions, discretionary profit-sharing contributions, and qualified nonelective contributions may be made to the 401(k) salary deferral plan at the discretion of the Company’s Board of Directors. The Company did no t make any matching contributions, discretionary profit-sharing contributions and/or qualified nonelective contributions during the years ended December 31, 2023 and 2022. The Company has defined contribution pension plans at its foreign subsidiaries which cover all employees who meet certain eligibility requirements. The contributions made by the Company under these plans were $ 1,838 and $ 737 during the years ended December 31, 2023 and 2022, respectively. Stock-Based Compensation The Company has an equity incentive plan under which the Company grants stock-based awards to employees and non-employees. The Company accounts for stock-based awards in accordance with ASC 718, Stock-Based Compensation, 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, the fair value is calculated using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires the input of assumptions, including the fair value of the underlying Class A common stock, the expected term of the option, the expected volatility of the price of the Company’s Class A common stock, risk-free interest rates, and the expected dividend yield of the Company’s Class A common stock. 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. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period and forfeitures are accounted for as they occur. Key assumptions used in the determination of fair value for stock options are as follows: • Expected term. Because of the lack of sufficient historical data, the Company uses the simple average of the vesting period and the contractual term to estimate the period the stock options are expected to be outstanding. 113 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) • Expected volatility. The Company determines the expected stock price volatility based on the historical volatility of the Company's Class A common stock and the historical volatilities of an industry peer group. • Expected dividend yield. The Company does not use a dividend rate due to the fact that the Company has never declared or paid cash dividends on its Class A common stock and does not anticipate doing so in the foreseeable future. • Risk-free interest rate. The Company bases its interest rate on a treasury instrument for which the term is consistent with the expected life of the stock options. Income Taxes The Company was incorporated in the state of Delaware as a C corporation. Deferred income taxes of the Company are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. All deferred tax assets and liabilities within each particular tax jurisdiction are offset and presented as a noncurrent deferred tax asset or liability. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The factors used to assess the likelihood of realization include the history of taxable income or loss, forecasts of future taxable income and available tax planning strategies that could be implemented to realize net deferred tax assets. The Company accounts for uncertainty in income taxes in accordance with ASC 740-10, Income Taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return, should be recorded in the consolidated financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties, if any, as a component of income tax expense on the consolidated statements of operations. Beginning in 2022, the Tax Cuts and Jobs Act (the "Tax Act") requires taxpayers to capitalize research and development expenses with amortization periods over five years for U.S. and fifteen years for foreign, which reduced the Company’s taxable loss, and created a new deferred tax asset for capitalized research and development costs, and corresponding adjustments to tax on foreign source income through global intangible low-taxed income ("GILTI"), all of which have been accounted for in determining the Company’s tax provision or benefit. The Company reports income taxes in accordance with Financial Accounting Standards Board ("FASB") ASC 740, Income Taxes, which requires an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. Related Parties (As Restated) In conjunction with the Company's acquisition of exactEarth in November 2021, Myriota Pty Ltd ("Myriota"), an existing Spire customer, became a related party as a result of exactEarth's approximately 13 % ownership of Myriota. As of December 31, 2023, the Company's investment in Myriota, in the amount of $ 2,216 , was included in other long-term assets on the consolidated balance sheets. The Company accounts for this investment using the equity method of accounting. The Company's share of earnings or losses on the investment is recorded based on a one-month lag, due to the timing of receipt of financial statements from Myriota, as a component of other (expense) income, net in the consolidated statements of operations. The Company generated $ 897 and $ 2,278 in revenue from Myriota during the years ended December 31, 2023 and 2022, respectively, and had no accounts receivable as of December 31, 2023 and $ 170 of accounts receivable as of December 31, 2022, from Myriota. 114 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive loss consisting of foreign currency translation adjustments and net unrealized gain and loss on investments. Net Loss Per Share The Company follows the two-class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The Company has two types of common stock, Class A and Class B. Class B common stock has no economic rights, and therefore has been excluded from the computation of basic and diluted net loss per share. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared, if any, and participating rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) is computed by adjusting net income (loss) to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share is computed by dividing the diluted net income (loss) by the weighted-average number of common shares outstanding during the period, including potential dilutive common shares assuming the dilutive effect of common stock equivalents. JOBS Act Accounting Election The Company is provided the option to adopt new or revised accounting guidance under the requirements provided to an “emerging growth company” under the JOBS Act either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. With the exception of certain accounting standards where the Company elected to early adopt when permissible, the Company has elected to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below. Accounting Pronouncements Recently Adopted In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The guidance is effective for annual reporting periods beginning after December 15, 2022, including interim periods within that reporting period, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The adoption of ASU 2021-08 as of January 1, 2023 did not impact the Company’s consolidated financial statements. In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50), guidance on modifying the disclosure requirements to enhance the transparency of supplier finance programs including disclosure of the key terms of the program, the amount outstanding that remains unpaid by the buyer as of the end of the annual period, a description of where those obligations are presented in the balance sheets, and a roll forward of those obligations during the annual period. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2022. The adoption of ASU 2022-04 as of January 1, 2023 did not impact the Company’s consolidated financial statements. Accounting Pronouncements Not Yet Adopted In March 2023, the FASB issued ASU 2023-01, Leases – Common Control Arrangements (Topic 842), to improve the accounting for amortizing leasehold improvements associated with arrangements between entities under common control. The amendment requires that leasehold improvements be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset through a lease. Additionally, leasehold improvements should be accounted for as a transfer between entities under common control 115 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) through an adjustment to equity when the lessee no longer controls the use of the underlying asset. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2023, with early adoption permitted. The Company does not expect this ASU to have a material impact on its consolidated financial statements. In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The amendments in this ASU are intended to facilitate consistency in the application of accounting guidance upon the formation of entities qualifying as joint ventures ("JVs"). This ASU generally requires the use of business combinations accounting at the JV formation date, which would result in the contributed assets/liabilities being revalued to fair value and potentially result in the recognition of goodwill and other intangibles on the JV’s financial statements. However, this ASU does not alter the ongoing accounting for the JV’s operations. This guidance is effective for JVs with formation dates on or after January 1, 2025. The Company does not expect the standard to have a material impact on the Company's consolidated financial statements. In November 2023, the FASB issued ASU 2023-7, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily though enhanced disclosures about significant expenses. The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The guidance is effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures. In December 2023, the FASB issued ASU 2023-9, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted, and should be applied prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures. 4. Revenue, Contract Assets, Contract Liabilities and Remaining Performance Obligations (As Restated) Disaggregation of Revenue Revenue from subscription-based contracts was $ 71,754 , representing 74 % of total revenue for the year ended December 31, 2023. Revenue from subscription-based contracts was $ 58,499 , representing 83 % of total revenue for the year ended December 31, 2022. Revenue from non-subscription-based contracts was $ 25,858 , representing 26 % of total revenue for the year ended December 31, 2023. Revenue from non-subscription-based contracts was $ 12,415 , representing 18 % of total revenue for the year ended December 31, 2022. The following revenue disaggregated by geography was recognized: Year Ended December 31, 2023 Year Ended December 31, 2022 (As Restated) (As Restated) Americas (1) $ 48,652 50 % $ 27,644 39 % EMEA (2) 35,458 36 % 32,411 46 % Asia Pacific 13,502 14 % 10,712 15 % Total $ 97,612 100 % $ 70,767 100 % (1) U.S. represented 41 % and 26 % for the years ended December 31, 2023 and 2022, respectively . (2) United Kingdom represented 13 % and 11 % for the years ended December 31, 2023 and 2022, respectively. Contract Assets At December 31, 2023, contract assets were $ 4,917 , of which $ 4,718 was reported in contract assets, and $ 199 in other long-term assets, including restricted cash on the Company's consolidated balance sheets. At December 31, 2022, contract assets were $ 2,881 , which was reported in contract assets on the Company's consolidated balance sheets. 116 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Changes in contract assets were as follows: 2023 2022 (As Restated) (As Restated) Balance as of January 1 $ 2,881 $ 2,230 Contract assets recorded during the year 4,917 2,881 Reclassified to accounts receivable during the year ( 2,927 ) ( 1,852 ) Other 46 ( 378 ) Balance as of December 31 $ 4,917 $ 2,881 Contract Liabilities At December 31, 2023, contract liabilities were $ 49,101 , of which $ 31,178 was reported in contract liabilities, current portion, and $ 17,923 was reported in other long-term liabilities on the Company’s consolidated balance sheets. At December 31, 2022, contract liabilities were $ 34,873 , of which $ 20,524 was reported in contract liabilities, current portion, and $ 14,349 was reported in other long-term liabilities on the Company’s consolidated balance sheets. The increase in contract liabilities was primarily due to the increase in subscription-based contracts. Changes in contract liabilities were as follows: 2023 2022 (As Restated) (As Restated) Balance as of January 1 $ 34,873 $ 18,692 Contract liabilities recorded during the year 34,409 27,192 Revenue recognized during the year ( 20,549 ) ( 10,538 ) Other 368 ( 473 ) Balance as of December 31 $ 49,101 $ 34,873 Remaining Performance Obligations The Company has performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue. These commitments for future services exclude (i) contracts with an original term of one year or less, and (ii) cancellable contracts. As of December 31, 2023, the amount not yet recognized as revenue from these commitments was $ 219,661 . The Company expects to recognize its remaining performance obligations as of December 31, 2023, over the following periods: December 31, 2023 (As Restated) 1 to 12 months $ 80,062 36 % 13 to 24 months 33,271 15 % 25 to 36 months 30,507 14 % Remaining 75,820 35 % Total $ 219,660 100 % 5. Other Balance Sheet Components (As Restated) Other current assets consisted of the following: December 31, 2023 2022 (As Restated) (As Restated) Technology and other prepaid contracts $ 9,874 $ 2,569 Notes receivable 3,344 $ — Prepaid insurance 1,476 2,594 Deferred contract costs 487 439 Other receivables 1,238 1,123 Other 429 428 Other current assets $ 16,848 $ 7,153 117 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Property and equipment, net consisted of the following: December 31, 2023 2022 (As Restated) (As Restated) Satellites in-service $ 59,751 $ 49,889 Internally developed software 2,138 2,119 Ground stations in-service 4,444 3,369 Leasehold improvements 5,800 4,175 Machinery and equipment 4,787 3,585 Computer equipment 1,908 1,985 Computer software and website development 99 99 Furniture and fixtures 1,336 1,156 80,263 66,377 Less: Accumulated depreciation and amortization ( 36,326 ) ( 32,974 ) 43,937 33,403 Satellite, launch and ground station work in progress 16,483 17,435 Finished satellites not yet placed in-service 26 4,985 Property and equipment, net $ 60,446 $ 55,823 Depreciation and amortization expense related to property and equipment was $ 14,711 and $ 11,771 for the years ended December 31, 2023 and 2022, respectively. There was a loss from decommissioned satellites of $ 747 and $ 549 for the years ended December 31, 2023 and 2022, respectively. Other accrued expenses consisted of the following: December 31, 2023 2022 (As Restated) Operating lease liabilities, current $ 3,506 $ 2,333 Professional services 913 1,198 Third-party operating costs 1,088 1,541 Corporate and sales tax 285 971 Accrued interest 853 765 Software 754 580 Other 927 1,081 Other accrued expenses $ 8,326 $ 8,469 6. Goodwill and Intangible Assets The following table summarizes changes in goodwill balance: Balance at December 31, 2022 $ 49,954 Impact of foreign currency translation 1,201 Balance at December 31, 2023 $ 51,155 118 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Intangible assets consisted of the following: December 31, 2023 Gross Carrying Amount Accumulated Amortization Customer relationships $ 23,427 $ ( 4,064 ) Developed technology 13,313 ( 2,312 ) Trade names 2,257 ( 940 ) Backlog 3,117 ( 3,117 ) Patents 419 ( 308 ) FCC licenses 480 ( 249 ) $ 43,013 $ ( 10,990 ) December 31, 2022 Gross Carrying Amount Accumulated Amortization Customer relationships $ 22,877 $ ( 2,062 ) Developed technology 13,001 ( 1,174 ) Trade names 2,204 ( 478 ) Backlog 3,043 ( 3,036 ) Patents 419 ( 276 ) FCC licenses 480 ( 217 ) $ 42,024 $ ( 7,243 ) As of December 31, 2023, the weighted-average amortization period for customer relationships and developed technology was 9.9 years, trade names was 2.9 years, and patents and FCC licenses was 6.4 years. Amortization expense related to intangible assets for the years ended December 31, 2023 and 2022 was $ 3,518 and $ 6,570 , respectively. During the year ended December 31, 2023 the Company did no t recognize any impairment charges and during the year ended December 31, 2022, the Company recognized impairment charges of $ 72 for intangible assets relating to patent costs which are included in other expense, net in the consolidated statements of operations. The patents asset balance as of each of December 31, 2023 and 2022 included $ 57 of capitalized patent costs that will begin amortization upon the issuance of an official patent right to the Company. As of December 31, 2023, the expected future amortization expense of intangible assets is as follows: Years ending December 31, 2024 $ 3,572 2025 3,563 2026 3,517 2027 3,095 2028 3,094 Thereafter 15,125 31,966 Capitalized patent costs, unissued 57 $ 32,023 119 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) 7. Long-Term Debt Long-term debt consisted of the following: December 31, 2023 2022 Blue Torch term loan $ 117,996 $ 100,511 Other 5,128 4,857 Total long-term debt 123,124 105,368 Less: Debt issuance costs ( 9,011 ) ( 6,893 ) Non-current portion of long-term debt $ 114,113 $ 98,475 The Company recorded $ 19,032 and $ 13,955 of interest expense, which included amortization of deferred issuance costs of $ 2,337 and $ 3,781 from long-term debt for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the scheduled principal payments of long-term debt was as follows: Years ending December 31, 2024 $ — 2025 — 2026 118,281 2027 342 2028 342 Thereafter 4,159 Total debt payments 123,124 Blue Torch Credit Agreement On June 13, 2022, the Company, as borrower, and Spire Global Subsidiary, Inc. and Austin Satellite Design, LLC, 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”). The Blue Torch Financing Agreement provides for, among other things, a term loan facility in an aggregate principal amount of up to $ 120,000 (the “Blue Torch Credit Facility”). A portion of the proceeds of the term loan was used to repay the Company’s then-existing $ 70,000 credit facility with FP Credit Partners, L.P., and the remainder of the proceeds of the term loan may be used for general corporate purposes. The Blue Torch Credit Facility is scheduled to mature on June 13, 2026. Subject to certain exceptions, prepayments of principal under the Blue Torch Credit Facility will be subject to early termination fees in the amount of 3.0%, 2.0% and 1.0% of the principal prepaid if prepayment occurs within the first, second and third years following the closing date, respectively, 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. The $120,000 term loan was available and drawn at closing, of which $19,735 was placed in an escrow account by Blue Torch with such amount to be released upon the Company achieving certain metrics related to annualized recurring revenue and a total annualized recurring revenue leverage ratio. These metrics were achieved and the $19,735 was released from the escrow account and delivered to the Company in February 2023. The term loan accrues interest at a floating rate, to be based, at the Company's election, on either a reference rate or a 3-month Term Secured Overnight Financing Rate ("SOFR") (subject to a 1.0% floor), plus an interest rate margin of 7.0% for reference rate borrowings and 8.0% for 3-month Term SOFR borrowings, plus an incremental Term SOFR margin of 0.26161%. The Company 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. The Company is 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 $ 2,400 on the closing date, a $ 250 annual agency fee and an exit fee of $ 1,800 upon termination of the Blue Torch Financing Agreement. The Blue Torch Financing Agreement contains customary affirmative covenants and customary negative covenants limiting the Company's ability and the ability of its subsidiaries to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock and make investments, in each case subject to certain exceptions. The Company must also comply with a maximum debt to annualized recurring revenue 120 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) leverage ratio financial covenant tested monthly during the first two years of the Blue Torch Financing Agreement, a maximum debt to EBITDA leverage ratio financial covenant tested monthly during the third and fourth years of the Blue Torch Financing Agreement and a minimum liquidity financial covenant tested at all times. The Company was in compliance with all applicable financial covenants as of December 31, 2023. On September 27, 2023, the Company entered into the Waiver and Amendment No. 2 to Financing Agreement (the “Waiver and Amendment”) with Blue Torch and the Lenders, which amends the Blue Torch Financing Agreement to (a) waive an event of default under the Blue Torch Financing Agreement arising out of the total annualized recurring revenue leverage ratio being greater than the permitted ratio, (b) amend the financial covenants to provide covenant relief from the maximum debt to annualized recurring revenue leverage ratio and the maximum debt to EBITDA leverage ratio set forth in the Blue Torch Financing Agreement for future periods, and (c) provide for a second amendment exit fee. The second amendment exit fee is $ 1,800 (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 by the Company 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 Waiver and Amendment required a repayment by the Company of $ 2,500 of the outstanding principal balance of the term loans and a prepayment premium of $ 50 , which were paid on October 2, 2023. The Waiver and Amendment also requires additional reporting if the Company’s liquidity level is less than $ 35,000 at any time during a month and revises the minimum liquidity covenant to require liquidity of at least $ 30,000 at all times, commencing on September 30, 2023, which in both cases represent a $ 5,000 incremental change from the original requirements. On June 13, 2022, in connection with the Blue Torch Financing Agreement, the Company issued warrants to Blue Torch, which were exercisable for an aggregate of 437,024 shares of the Company’s Class A common stock with a per share exercise price of $ 16.08 (the “2022 Blue Torch Warrants”). In addition, in connection with the closing of the financing, the Company paid Urgent Capital LLC, a Delaware limited liability company, a fee for introducing the Company to the Lenders, for the purpose of loan financing, in the amount equal to $ 600 in cash and a warrant to purchase 24,834 fully paid and non-assessable shares of the Company's Class A common stock with a per share exercise price of $ 16.88 (the “Urgent Warrants”). On September 27, 2023, in connection with the Waiver and Amendment, the Company and certain affiliates of Blue Torch amended and restated the 2022 Blue Torch Warrants to reduce the per share exercise price from $ 16.08 to $ 5.44 . The Company also concurrently issued new warrants to certain Blue Torch affiliates that are exercisable for an additional 597,082 shares of the Company’s Class A common stock at a per share exercise price of $ 5.44 (the “2023 Blue Torch Warrants" and together with the 2022 Blue Torch Warrants and the Urgent Warrants, the “Credit Agreement Warrants”). The Company evaluated the Credit Agreement Warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity. The agreements governing the Credit Agreement Warrants include a provision that could result in a different settlement value for the Credit Agreement Warrants depending on their holder. Because the holder of an instrument is not an input into the pricing of a fixed-for-fixed option on the Company’s Class A common stock, the Credit Agreement Warrants are not considered to be indexed to the Company’s Class A common stock. As the Credit Agreement Warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheets at fair value (Note 9) based on the Black-Scholes model as of June 13, 2022 and September 27, 2023 with inputs that include the Company’s Class A common stock price in an actively traded market, making this fair value classified as a Level 2 financial instrument. The other significant assumptions used in the model are the exercise price, expected term, volatility, interest rate, and dividend yield. Subsequent changes in their respective fair values are recognized in the consolidated statements of operations at each reporting date. Changes in the fair value of the warrant liabilities will continue to be recognized until the warrants are exercised, expire, or qualify for equity classification. The Company incurred $ 4,591 of debt issuance costs, inclusive of fees paid to the Lenders, and issued Credit Agreement Warrants with an estimated fair value of $ 6,157 at the date of issuance, the total of which has been presented as a deduction from the carrying amounts of the Blue Torch Credit Facility on the consolidated balance sheets and is being amortized to interest expense over the term of the Blue Torch Credit Facility. The Credit Agreement Warrants may be exercised on a cashless basis. The Credit Agreement Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur of ten years from the date of issuance or the consummation of certain of the Company's acquisitions as set forth in the Credit Agreement Warrants. The number of shares for 121 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) which the Credit Agreement Warrants are exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in the Credit Agreement Warrants. Government Loan In November 2021, the Company completed the Acquisition and assumed an interest free loan agreement with the Strategic Innovation Fund ("SIF") which was recorded at an amount equal to the proceeds received. Under this agreement and subsequent amendment, the Company was eligible to receive funding for certain expenditures incurred from February 13, 2018 to May 12, 2023, up to a maximum of $ 5,701 . As of December 31, 2023 and 2022, $ 5,128 and $ 4,857 , respectively, was included in long-term debt, non-current on the consolidated balance sheets related to the SIF loan agreement. Any amount outstanding under this loan is repayable in 15 annual payments beginning February 28, 2026 and has a stated interest rate of zero. 8. Leases (As Restated) Approximately 80 % of the Company's ROU assets and lease liabilities relate to office facilities leases, with the remaining amounts representing primarily ground station leases. The leases have various expiration dates through 2031. Certain of the Company’s lease agreements include escalating lease payments. Additionally, certain lease agreements contain renewal provisions and other provisions which require the Company to pay taxes, insurance, or maintenance costs. These payments are generally variable and are expensed as incurred on the consolidated statements of operations. Lease expenses were $ 4,172 and $ 3,409 , for the years ended December 31, 2023 and 2022, respectively. Aggregate variable lease expenses and short-term lease expenses were $ 613 and $ 548 , for the years ended December 31, 2023 and 2022, respectively. The following table provides the required information regarding the Company's leases for which the Company is the lessee: December 31, 2023 2022 Assets ROU assets $ 14,921 $ 11,687 Total ROU assets $ 14,921 $ 11,687 Liabilities Current $ 3,506 $ 2,333 Non-current 13,079 10,815 Total lease liabilities $ 16,585 $ 13,148 Weighted-average remaining lease term (years) 5.4 5.7 Weighted-average discount rate 8 % 9 % As of December 31, 2023, the maturity of operating leases are as follows: Years ending December 31, 2024 $ 4,745 2025 4,058 2026 3,639 2027 2,774 2028 1,868 Thereafter 3,586 Total lease payments 20,670 Less: Interest on lease payments ( 4,085 ) Present value of lease liabilities $ 16,585 Operating cash flows paid were $ 2,782 and $ 1,632 included in the measurement of operating lease liabilities for the years ended December 31, 2023 and 2022, respectively, and were included in net cash used in operating activities in the consolidated statements of cash flows. Amortization of ROU assets was $ 2,928 and $ 2,344 for the years ended December 31, 2023 and 2022, respectively. 122 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) 9. Fair Value Measurement Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables present the Company’s fair value hierarchy for its financial instruments that are measured at fair value on a recurring basis: December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 10,114 $ — $ — $ 10,114 $ 10,114 $ — $ — $ 10,114 Marketable securities: U.S. treasury bills and bonds $ 8,840 $ — $ — $ 8,840 Commercial paper — 1,395 — 1,395 U.S. government and agency securities — 1,491 — 1,491 $ 8,840 $ 2,886 $ — $ 11,726 Long-term liabilities: Credit Agreement Warrants $ — $ 5,988 $ — $ 5,988 Contingent earnout liability — — 220 220 $ — $ 5,988 $ 220 $ 6,208 December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 5,180 $ — $ — $ 5,180 Commercial paper — 2,097 — 2,097 $ 5,180 $ 2,097 $ — $ 7,277 Marketable securities: U.S. treasury bills and bonds $ 1,494 $ — $ — $ 1,494 Corporate securities — 7,745 — 7,745 Commercial paper — 2,576 — 2,576 U.S. government and agency securities — 11,269 — 11,269 $ 1,494 $ 21,590 $ — $ 23,084 Liabilities: Current liabilities: Public Warrants $ 267 $ — $ — $ 267 Long-term liabilities: Credit Agreement Warrants $ — $ 1,831 $ — $ 1,831 Contingent earnout liability — — 349 349 $ — $ 1,831 $ 349 $ 2,180 Financial Assets The Company values its Level 1 assets, consisting of money market funds and U.S. treasury bills and bonds, using quoted prices in active markets for identical instruments. Financial assets whose fair values that are measured on a recurring basis using Level 2 inputs consist of commercial paper, corporate securities, and U.S. government and agency securities. The Company measures the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments. 123 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Public and Private Placement Warrants The Company assumed 1,437,499 publicly-traded warrants (“Public Warrants”) and 825,000 private placement warrants issued by NavSight (“Private Warrants” and, together with the Public Warrants, the “Warrants”) upon the Merger, all of which were issued in connection with NavSight’s initial public offering and entitled the holder to purchase one share of the Company’s Class A common stock at an exercise price of $ 92.00 per share. The fair value of the Public Warrants was based on the quoted market price and was classified as a Level 1 financial instrument. In November 2022, the Company announced the commencement of an exchange offer (the "Offer") and consent solicitation relating to all holders of the Warrants to receive 0.2 shares of Class A common stock in exchange for each outstanding Warrant tendered by the holder. On December 19, 2022, a total of 2,069,561 Warrants were tendered and exchanged for 413,910 shares of Class A common stock. Concurrently with the Offer, the Company also solicited consents from holders of the Public Warrants to amend the Warrant Agreement to permit the Company to require that each Warrant that was outstanding upon the closing of the Offer be exchanged for 0.18 shares of Class A common stock, which is a ratio 10 % less than the exchange ratio applicable to the Offer (such amendment, the “Warrant Amendment”). Because consents were received from holders of more than 65 % of the Company’s outstanding Public Warrants, the Warrant Amendment was approved. On December 19, 2022, the Company exercised its right to acquire and retire all remaining outstanding Public Warrants in exchange for shares of Class A common stock in accordance with the terms of the Warrant Amendment. The remaining 192,936 Public Warrants were exchanged on January 4, 2023 for 34,728 shares of the Company's Class A common stock. Following the exchange, none of the Warrants remain outstanding. Credit Agreement Warrants On June 13, 2022, in connection with the Blue Torch Financing Agreement, the Company issued warrants to Blue Torch, which were exercisable for an aggregate of 437,024 shares of the Company’s Class A common stock with a per share exercise price of $ 16.08 (the “2022 Blue Torch Warrants”). Additionally, in connection with the closing of the financing, the Company issued a warrant to Urgent Capital LLC for introducing the Company to the Lenders, which is exercisable for an aggregate of 24,834 shares of the Company's Class A common stock with a per share exercise price of $ 16.08 (together with the 2022 Blue Torch Warrants and the 2023 Blue Torch Warrants (as defined below), the “Credit Agreement Warrants”). On September 27, 2023, in connection with the Waiver and Amendment, the Company and certain affiliates of Blue Torch amended and restated the 2022 Blue Torch Warrants to reduce the per share exercise price from $ 16.08 to $ 5.44 . The Company also concurrently issued new warrants to those affiliates that are exercisable for an additional 597,082 shares of the Company’s Class A common stock at a per share exercise price of $ 5.44 (the “2023 Blue Torch Warrants"). The fair value of the Credit Agreement Warrants is estimated using the Black-Scholes model with inputs that include the Company’s Class A common stock price in an actively traded market, making this fair value classified as a Level 2 financial instrument. The other significant assumptions used in the model are the exercise price, expected term, volatility, interest rate, and expected dividend yield. The table below quantifies the significant inputs used for the Credit Agreement Warrants: December 31, 2023 2022 Fair value of the Company’s Class A common stock $ 7.82 $ 7.68 Exercise price $ 5.44 - 16.08 $ 16.08 Risk-free interest rate 3.88 % 3.88 % Expected volatility factor 55.0 % 55.0 % Expected dividend yield — % — % Remaining contractual term (in years) 8.5 - 9.7 9.1 Contingent Earnout Liability In connection with the Merger, eligible Spire equity holders are entitled to receive additional shares of the Company's Class A common stock upon the achievement of certain earnout triggering events. The estimated fair value of the contingent earnout liability is determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over the 124 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) earnout period, which is a period up to five years post-closing of the Merger, prioritizing the most reliable information available, making this fair value classified as a Level 3 liability. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current price of the Company’s Class A common stock, expected volatility, risk-free interest rate, expected term and expected dividend yield. The table below quantifies the significant inputs used for the contingent earnout liability: December 31, 2023 2022 Fair value of the Company’s Class A common stock $ 7.82 $ 7.68 Risk-free interest rate 4.09 % 4.16 % Expected volatility factor 55.0 % 55.0 % Earnout expiration date August 16, 2026 August 16, 2026 The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis: Contingent Earnout Liability Fair value as of December 31, 2022 349 Change in fair value of contingent earnout liability ( 129 ) Fair value as of December 31, 2023 $ 220 125 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) Cash and Cash Equivalents and Marketable Securities The following table summarizes the Company's cash, cash equivalents and available-for-sale securities by significant marketable securities category: December 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash (As Restated) $ 19,022 $ — $ — $ 19,022 Cash equivalents: Money market funds 10,114 — — 10,114 $ 29,136 $ — $ — $ 29,136 Marketable Securities: U.S. treasury bills and bonds $ 8,838 $ 2 $ — $ 8,840 Commercial paper 1,395 — — 1,395 U.S. government and agency securities 1,492 — ( 1 ) 1,491 $ 11,725 $ 2 $ ( 1 ) $ 11,726 December 31, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 39,919 $ — $ — $ 39,919 Cash equivalents: Money market funds 5,180 — — 5,180 Commercial paper 2,098 — ( 1 ) 2,097 $ 47,197 $ — $ ( 1 ) $ 47,196 Marketable Securities: U.S. treasury bills and bonds $ 1,495 $ — $ ( 1 ) $ 1,494 Corporate securities 7,771 — ( 26 ) 7,745 Commercial paper 2,578 — ( 2 ) 2,576 U.S. government and agency securities 11,272 — ( 3 ) 11,269 $ 23,116 $ — $ ( 32 ) $ 23,084 The following table represents amortized cost and estimated fair value of marketable securities, by contractual maturity: December 31, 2023 Amortized Cost Fair Value Due in one year or less $ 11,725 $ 11,726 In accordance with the Company's investment policy, investments are placed in investment grade securities with high credit quality issuers, and generally limit the amount of credit exposure to any one issuer. The Company evaluates securities for impairment at the end of each reporting period. The Company did not record any impairment charges related to its available-for-sale securities during the years ended December 31, 2023 and 2022. 10. Commitments and Contingencies (As Restated) L3Harris Commitment In conjunction with the Acquisition, the Company acquired the agreement (the "L3Harris Agreement") with L3Harris Technologies, Inc. ("L3Harris") to receive satellite automatic identification system ("S-AIS") data from the L3Harris AppStar payloads on-board Iridium NEXT Constellation, Iridium's Real-Time Second-Generation satellite constellation with 58 AppStar 126 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) payloads. Under the Amended and Restated L3Harris Agreement dated January 21, 2020 (the "A&R L3Harris Agreement"), the Company incurs a fixed fee of $ 358 per month. The A&R L3Harris Agreement expires on August 7, 2031. Under the A&R L3Harris Agreement, the Company will pay a 30 % share of S-AIS data revenues for the portion of exactEarth annual S-AIS data revenue which is in excess of $ 16,000 . No revenue share was owed to L3Harris under the A&R L3Harris Agreement, with respect to AIS Analytics sales, during the years ended December 31, 2023 and 2022. The Company recognized $ 5,059 and $ 5,045 in cost of revenue in the consolidated statements of operations for the exclusive access rights to data generated from satellites for the years ended December 31, 2023 and 2022, respectively. The following table summarizes the operational fees commitment under the A&R L3Harris Agreement, which includes the fixed payments to L3Harris: Years ending December 31, 2024 $ 4,300 2025 4,300 2026 4,300 2027 4,300 2028 4,300 Thereafter 11,189 $ 32,689 Litigation At times, the Company is party to various claims and legal actions arising in the normal course of business. Although the ultimate outcome of these matters is not presently determinable, management believes that the resolution of all such pending matters, based on an assessment of the current facts and circumstances, will not have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows; however, there can be no assurance that the ultimate resolution of these matters will not have a material impact on the Company’s consolidated financial statements in any period. Note Receivable (As Restated) The Company has outstanding a $ 4,500 note receivable plus accrued interest of $ 238 issued to a Space Services customer as of December 31, 2023. The note and accrued interest are due in October 2024. The Company is aware that the customer has been using cash in its operations and its available cash is low. Given the customer's financial performance, there is an indication that it will not have sufficient cash available to repay the note when it is due. The customer has announced that it has secured a financing arrangement with its principal shareholder that would provide it sufficient funds to repay the note and the customer has asserted to the Company its intention to repay the note. The Company believes that a loss of the entire principal value and accrued interest is reasonably possible but not probable. The Company recorded a provision for the current expected credit loss of $ 1,218 as of December 31, 2023. 11. Stock-Based Compensation In connection with the Closing, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and the 2021 Employee Stock Purchase Plan (“2021 ESPP”). The number of shares available for issuance under the 2021 Plan is increased on the first day of each fiscal year, beginning on January 1, 2022, in an amount equal to the lesser of (i) 2,994,000 shares of Class A common stock, (ii) a number of shares of Class A common stock equal to 5 % of the total number of shares of all of Class A common stock outstanding as of the last day of the immediately preceding fiscal year, or (iii) such number of shares of Class A common stock as the Company’s board of directors or its designated committee may determine no later than the last day of the immediately preceding fiscal year. The 2021 Plan permits the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards to employees, directors, or consultants under the 2021 Plan. Under the 2021 ESPP, the Company can grant stock options to employees to purchase shares of Class A common stock at a purchase price which equals 85 % of the lower of (i) the fair market value of Class A common stock on the first trading day of the offering 127 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) period or (ii) the fair market value of Class A common stock on the exercise date. As of December 31, 2023, 717,543 and 532,686 shares were available for grant under the 2021 Plan and 2021 ESPP, respectively. The following table summarizes stock option activity under the Company's equity compensation plans: Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Options outstanding as of December 31, 2022 2,389,622 $ 18.52 6.1 Granted 61,446 $ 5.37 Exercised ( 500 ) $ 7.04 Forfeited, canceled, or expired ( 252,016 ) $ 27.62 Options outstanding as of December 31, 2023 2,198,552 $ 17.11 5.0 Vested and expected to vest at December 31, 2023 2,198,552 $ 17.11 5.0 Exercisable at December 31, 2023 1,901,002 $ 16.91 4.6 The aggregate intrinsic value of options exercised during 2023 and 2022, was $ 1 and $ 483 , respectively. The aggregate fair value of options vested during 2023 and 2022 was $ 3,729 and $ 6,072 , respectively. The Company received $ 3 and $ 806 in cash proceeds from options exercised during the years ended December 31, 2023 and 2022, respectively. The weighted-average grant date fair value of options granted for the years ending December 31, 2023 and 2022 was $ 2.77 and $ 0.95 , respectively. The aggregate intrinsic value of options outstanding as of December 31, 2023 and 2022 was $ 387 and $ 200 , respectively. The aggregate intrinsic value of options exercisable as of December 31, 2023 and 2022 was $ 236 and $ 200 , respectively. The following table summarizes stock RSU activity under the 2021 Plan: Number of RSUs Weighted Average Grant Date Fair Value per Share Outstanding as of December 31, 2022 1,547,256 $ 19.60 RSUs granted 1,447,101 $ 5.60 RSUs vested ( 781,557 ) $ 17.97 RSUs forfeited ( 365,217 ) $ 15.70 Outstanding as of December 31, 2023 1,847,583 $ 10.17 For RSUs with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant, and the stock-based compensation expense is recognized over the four-year vesting period. As of December 31, 2023, there was $ 19,407 of total unrecognized compensation expense related to options and RSUs expected to be recognized over a weighted average-period of 2.17 years. The following table summarizes the components of total stock-based compensation expense based on roles and responsibilities of the employees within the consolidated statements of operations: Years Ended December 31, 2023 2022 Cost of revenue $ 197 $ 232 Research and development 3,474 3,154 Sales and marketing 2,707 2,822 General and administrative 6,600 5,283 $ 12,978 $ 11,491 The fair value of stock-based compensation for stock options was estimated using the Black-Scholes option-pricing model requiring the use of subjective valuation assumptions and inputs, including the expected stock price volatility. The Company’s options have characteristics significantly different from those of traded options, and changes in input assumptions can materially affect the fair value estimates. Stock-based compensation expense for options is recognized over their respective vesting period, which ranges from one to four years . 128 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The fair value of stock options was estimated using the following assumptions at the date of the grant: Year Ended December 31, 2023 2022 Risk-free interest rate 4.1 % 2.9 % Expected volatility factor 51.8 % 58.3 % Expected option life 5.5 years 5.5 years Expected dividend yield — — 12. Stockholders’ Equity In August 2021, the Company’s Board of Directors approved the amended and restated certificate of incorporation which states the Company’s authority to issue 1,000,000,000 shares of Class A and 15,000,000 shares of Class B common stock with a par value of $ 0.0001 per share. The total number of shares of preferred stock authorized to be issued is 100,000,000 shares, par value $ 0.0001 per share, and no ne was outstanding as of December 31, 2023 and 2022. Common Stock Shares of Class A common stock have both economic and voting rights. Shares of Class B common stock have no economic rights, but do have voting rights. Each holder of shares of Class A common stock will be entitled to one vote for each share of common stock held at all meetings of shareholders and each holder of shares of Class B common stock will be entitled to nine votes for each share of common stock held at all meetings of shareholders. Prior to the Closing of the Merger, voting, dividend and liquidation rights of the holders of the common stock were subject to and qualified by the rights, powers, and preferences of the holders of the preferred stock. The holders of the common stock were entitled to one vote for each share of common stock held at all meetings of shareholders. Dividends were issued to common stockholders only after holders of the preferred stock received funds legally available in the amount equal to 8 % of the original issuance price per annum on each outstanding share of preferred stock. In the event of liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of common stock would receive payment on a pro rata basis on the number of shares held by each such holder, after the rights of the holders of the preferred stock have been satisfied. 13. Income Taxes (As Restated) Loss before income taxes consisted of the following: Year Ended December 31, 2023 2022 (As Restated) (As Restated) Domestic loss $ ( 61,371 ) $ ( 77,740 ) Foreign loss ( 16,329 ) ( 20,987 ) Loss before income taxes $ ( 77,700 ) $ ( 98,727 ) The income tax provision consists of the following: Year Ended December 31, 2023 2022 (As Restated) (As Restated) Current income tax provisions: Federal $ — $ — State — — Foreign ( 176 ) 386 Current income tax provision ( 176 ) 386 Deferred income tax expense: Federal — — State — — Foreign 34 ( 101 ) Deferred income tax expense 34 ( 101 ) Total income tax (benefit) provision $ ( 142 ) $ 285 129 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The following table presents a reconciliation of the federal statutory rate of 21 % to effective tax rate: Year Ended December 31, 2023 2022 (As Restated) (As Restated) U.S. federal tax benefit at statutory rate 21.0 % 21.0 % State income taxes, net of federal benefit 2.6 % 4.2 % Foreign rate differential 0.4 % 1.1 % Contingent earnout 0.0 % 2.1 % Stock-based compensation ( 1.4 )% ( 0.7 )% UK R&D expenditure 1.0 % — GILTI inclusion ( 2.2 )% — Deferred tax adjustments ( 4.7 )% — Non-deductible expenses and other ( 0.4 )% 2.6 % Change in valuation allowance, net ( 16.2 )% ( 30.5 )% Effective tax rate 0.1 % ( 0.2 )% For 2023 and 2022, our effective tax rate differs from the amount computed by applying the statutory federal and state income tax rates to net loss before income tax, primarily as the result of state income taxes, R&D credits, foreign income taxes and changes in our valuation allowance. The significant components of deferred tax assets (liabilities) are as follows: Year Ended December 31, 2023 2022 (As Restated) (As Restated) Deferred tax assets Net operating loss carryforward $ 98,300 $ 97,737 Research and development credit carryforward 4,560 6,402 Interest expense limitation carryforward 5,141 — Stock-based compensation 1,709 1,836 Property and equipment 6,030 3,533 Operating lease liabilities 1,891 1,965 Sec 174 Capitalized R&D 8,416 3,424 Intangibles 233 56 Other accruals 12,619 7,947 Gross deferred tax assets 138,899 122,900 Less: Valuation allowance ( 121,009 ) ( 106,966 ) Net deferred tax assets 17,890 15,934 Deferred tax liabilities Intangibles ( 13,165 ) ( 13,945 ) Operating lease right-of-use assets ( 1,785 ) ( 1,950 ) Foreign property and equipment and intangibles ( 708 ) ( 771 ) Other accruals ( 3,036 ) — Gross deferred tax liabilities ( 18,694 ) ( 16,666 ) Net deferred tax liabilities $ ( 804 ) $ ( 732 ) As of December 31, 2023, the Company had accumulated undistributed earnings generated by its foreign subsidiaries of $ 10,719 . Th e Company continues to assert that all its foreign earnings are to be permanent income reinvested and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs. As such, the Company has not recognized a deferred tax liability related to unremitted foreign earnings. Realization of the deferred tax assets is dependent upon the generation of future taxable income, if any, the amount and timing of which is uncertain. The Company could not conclude that it was more likely than not that tax benefits from operating losses would be realized and, accordingly, has provided a full valuation allowance against its Spire Global United States, Australia, Germany, Singapore, Luxembourg, exactEarth Canada and UK deferred tax assets. There is no valuation allowance on Spire Global UK. The valuation allowance as of December 31, 2022 was $ 106,966 , which increased to $ 121,009 as of December 31, 2023. The increase in the valuation allowance of $ 14,043 is mostly related to current year losses. 130 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) At December 31, 2023, the Company had $ 248,665 of federal net operating losses available to reduce future taxable income, which will begin to expire in 2032 . Approximately $ 166,140 of federal net operating loss included above can be carried forward indefinitely. The Company also had federal research and development tax credit carryforwards of $ 3,922 , which will begin to expire in 2032, and federal interest limitation carryforwards of $ 20,486 which can be carried forward indefinitely. At December 31, 2023, the Company had $ 81,656 of post-apportioned state net operating losses, which can be carried forward for periods that vary from five years to indefinitely. The Company also had state interest limitation carryforwards of $ 10,337 , which can be carried forward indefinitely. The federal and state net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383, respectively, of the Internal Revenue Code of 1986, as amended, and similar provisions under state law. Under those sections of the Internal Revenue Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income or tax liability may be limited. In general, an “ownership change” will occur if there is a cumulative change in ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. The Company has not yet undertaken an analysis of whether the Merger constitutes an “ownership change” for purposes of Internal Revenue Code Section 382 and Section 383. The Company may experience ownership changes in the future as a result of subsequent shifts in its stock ownership. As of December 31, 2023, the Company had $ 160,689 of foreign net operating losses available to reduce future taxable income, which will begin to expire in 2030 and can vary from seven years to indefinitely based on each applicable foreign jurisdiction. The Company also had research and development tax credit carryforwards in Canada of $ 639 , which will begin to expire in 2029 . Unrecognized Tax Benefits The Company does not have any significant uncertain tax positions. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties, if any, as a component of income tax expense on the consolidated statements of operations. The Company is subject to taxation in the United States, Canada, Germany, Luxembourg, Singapore and the United Kingdom. The Company has not been audited by the Internal Revenue Service or any state or foreign tax authority. The Company is subject to audit by the Internal Revenue Service for income tax returns filed since inception due to net operating loss carryforwards. The Company is subject to audit in Singapore and the United Kingdom from tax years 2018 and 2019, respectively, and in Luxembourg from tax year 2020 and in Australia from tax year 2018. 14. Net Loss per Share (As Restated) The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Years Ended December 31, 2023 2022 (As Restated) (As Restated) Numerator: Net loss $ ( 77,558 ) $ ( 99,012 ) Denominator: Weighted-average shares used in computing basic and diluted net loss per share 19,580,006 17,484,927 Basic and diluted net loss per share $ ( 3.96 ) $ ( 5.66 ) The Company has two types of common stock, Class A and Class B. Class B common stock has no economic rights, therefore has been excluded from the computation of basic and diluted net loss per share. The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. 131 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022 (In thousands, except shares and per share data, unless otherwise noted) The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the years ended December 31, 2023 and 2022 because including them would have had an anti-dilutive effect: Fiscal Year Ended December 31, 2023 2022 Stock options and 2021 ESPP to purchase Class A common stock 2,212,165 2,408,998 Public and Private Warrants — 192,936 RSUs 1,847,583 1,547,530 Credit Agreement Warrants 1,058,940 461,858 5,118,688 4,611,322 132 15. Subsequent Events On February 4, 2024, the Company and Signal Ocean Ltd (“Signal Ocean”) entered into a securities purchase agreement for the issuance and sale of 833,333 shares of the Company’s Class A common stock to Signal Ocean at a price of $ 12.00 per share (the “Private Placement”). The Private Placement closed on February 8, 2024, resulting in gross proceeds to the Company of $ 10,000 . 16. Restatement of Quarterly Financial Information (Unaudited) The following tables present the effect of the restatement on the Company's previously reported: unaudited condensed consolidated balance sheets as of March 31, 2023, June 30, 2023, and September 30, 2023; unaudited condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three months ended March 31, 2023, the three and six months ended June 30, 2023, the three and nine months ended September 30, 2023, and the three months ended December 31, 2023; and unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023, the six months ended June 30, 2023, and the nine months ended September 30, 2023. The values as previously reported were derived from the previously filed Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, and September 30, 2023. These restatements resulted in a reclassification between cash flows from operating activities and cash flows from investing activities, but they do not impact cash flows from financing activities or the net decrease in cash, cash equivalents and restricted cash in the unaudited condensed consolidated statements of cash flows for the periods presented. The restatements only impact net loss and accumulated other comprehensive loss in the unaudited condensed consolidated statements of changes in stockholders’ equity in the periods presented. As of March 31, 2023 As of June 30, 2023 As of September 30, 2023 Unaudited Condensed Consolidated Balance Sheets Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Cash and cash equivalents (i) $ 46,952 $ - $ 46,952 $ 43,144 $ ( 59 ) $ 43,085 $ 29,936 $ ( 52 ) $ 29,884 Contract assets (ii) $ 4,213 $ ( 540 ) $ 3,673 $ 4,899 $ ( 671 ) $ 4,228 $ 4,489 $ ( 1,454 ) $ 3,035 Other current assets (iii) $ 8,949 $ ( 1,301 ) $ 7,648 $ 8,176 $ ( 203 ) $ 7,973 $ 8,401 $ 4,929 $ 13,330 Total current assets $ 99,629 $ ( 1,841 ) $ 97,788 $ 97,764 $ ( 933 ) $ 96,831 $ 81,643 $ 3,423 $ 85,066 Property and equipment, net (iv) $ 58,147 $ 598 $ 58,745 $ 62,964 $ ( 3,971 ) $ 58,993 $ 69,610 $ ( 9,366 ) $ 60,244 Other long-term assets, including restricted cash (v) $ 9,175 $ - $ 9,175 $ 9,083 $ - $ 9,083 $ 8,399 $ 199 $ 8,598 Total assets $ 263,502 $ ( 1,243 ) $ 262,259 $ 268,363 $ ( 4,904 ) $ 263,459 $ 256,009 $ ( 5,744 ) $ 250,265 Contract liabilities, current portion (vi) $ 17,444 $ 6,027 $ 23,471 $ 21,854 $ 5,390 $ 27,244 $ 22,763 $ 9,871 $ 32,634 Other accrued expenses (vii) $ 7,596 $ ( 122 ) $ 7,474 $ 9,317 $ ( 148 ) $ 9,169 $ 9,650 $ ( 318 ) $ 9,332 Total current liabilities $ 36,418 $ 5,905 $ 42,323 $ 40,447 $ 5,242 $ 45,689 $ 42,759 $ 9,553 $ 52,312 Contract liabilities, non-current (viii) $ - $ 13,683 $ 13,683 $ - $ 12,437 $ 12,437 $ - $ 13,049 $ 13,049 Deferred income tax liabilities (ix) $ 794 $ ( 285 ) $ 509 $ 817 $ ( 90 ) $ 727 $ 780 $ ( 167 ) $ 613 Other long-term liabilities (x) $ 556 $ ( 547 ) $ 9 $ 413 $ ( 404 ) $ 9 $ 761 $ ( 752 ) $ 9 Total liabilities $ 169,665 $ 18,756 $ 188,421 $ 174,830 $ 17,185 $ 192,015 $ 178,523 $ 21,683 $ 200,206 Accumulated other comprehensive loss (xi) $ ( 8,542 ) $ 64 $ ( 8,478 ) $ ( 4,208 ) $ 80 $ ( 4,128 ) $ ( 5,989 ) $ 284 $ ( 5,705 ) Accumulated deficit (xii) $ ( 356,320 ) $ ( 20,063 ) $ ( 376,383 ) $ ( 372,586 ) $ ( 22,169 ) $ ( 394,755 ) $ ( 390,381 ) $ ( 27,711 ) $ ( 418,092 ) Total stockholders’ equity $ 93,837 $ ( 19,999 ) $ 73,838 $ 93,533 $ ( 22,089 ) $ 71,444 $ 77,486 $ ( 27,427 ) $ 50,059 Total liabilities and stockholders’ equity $ 263,502 $ ( 1,243 ) $ 262,259 $ 268,363 $ ( 4,904 ) $ 263,459 $ 256,009 $ ( 5,744 ) $ 250,265 Description of restatement adjustments in the condensed consolidated balance sheets: 133 (i) The $ 59 and $ 52 decreases in cash and cash equivalents as of June 30, 2023 and September 30, 2023, respectively, are related to the cash remeasurement adjustment for cash balances from certain foreign subsidiaries. (ii) The $ 540 , $ 671 and $ 1,454 decreases in contract assets as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (iii) Adjustments to other current assets: a. The $ 1,301 decrease in other current assets as of March 31, 2023 is related to the fixed asset advance reclassified to property and equipment, net. b. The $ 203 decrease in other current assets as of June 30, 2023 resulted from a decrease of $ 1,478 from advances for fixed assets that have been reclassified from other current assets to property and equipment, partially offset by an increase of $ 1,275 from prepaid launch costs for customer-controlled satellites for one specific contract that have been reclassified from property and equipment to other current assets. c. The $ 4,929 increase in other current assets as of September 30, 2023 resulted from an increase of $ 5,985 from prepaid launch costs for customer-controlled satellites for one specific contract that have been reclassified from property and equipment to other current assets, partially offset by $ 1,056 of advances for fixed assets that have been reclassified from other current assets to property and equipment. (iv) Adjustments to property and equipment: a. The $ 598 increase in property and equipment as of March 31, 2023, resulted from an increase of $ 1,301 from advances for fixed assets that have been reclassified from other current assets to property and equipment, partially offset by $ 703 of construction costs for customer-controlled satellites for one specific contract being expensed as cost of revenue rather than capitalized into property and equipment. b. The $ 3,971 decrease in property and equipment as of June 30, 2023 resulted from a decrease of $ 4,174 from construction costs for customer-controlled satellites being expensed for one specific contract as cost of revenue rather than capitalized into property and equipment and a decrease of $ 1,275 from prepaid launch costs for such satellites that have been reclassified from property and equipment to other current assets, partially offset by an increase of $ 1,478 from advances for fixed assets that have been reclassified from other current assets to property and equipment. c. The $ 9,366 decrease in property and equipment as of June 30, 2023 resulted from a decrease of $ 5,985 from prepaid launch costs for such satellites that have been reclassified from property and equipment to other current assets and a decrease of $ 4,437 from construction costs for customer-controlled satellites for one specific contract being expensed as cost of revenue rather than capitalized into property and equipment, partially offset by an increase of $ 1,056 from advances for fixed assets that have been reclassified from other current assets to property and equipment. (v) The $ 199 increase in other long-term assets, including restricted cash as of September 30, 2023, is related to the correction of revenue recognition for Space Services and R&D Services Contracts. (vi) The $ 6,027 , $ 5,390 , and $ 9,871 increases in contract liabilities, current portion as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to the correction of correct revenue recognition for Space Services and R&D Services Contracts, impacting contract liabilities, non-current. (vii) The $ 122 decrease in other accrued expense as of March 31, 2023 resulted from a decrease of $ 172 from a customer deposit balance reclassified to contract liabilities, noncurrent, partially offset by an increase of $ 50 for the Delaware franchise tax accrual. The $ 148 decrease in other accrued expenses as of June 30, 2023 resulted from a decrease of $ 168 for a customer deposit balance reclassified to contract liabilities, non-current, partially offset by an increase of $ 20 from the Delaware franchise tax accrual . The $ 318 decrease in other accrued expenses as of September 30, 2023 resulted from a decrease of $ 348 from a customer deposit balance reclassified to contract liabilities, non-current, partially offset by an increase of $ 30 from Delaware franchise tax accrual . (viii) Adjustments to contract liabilities, non-current: a. The $ 13,683 increase in contract liabilities, non-current as of March 31, 2023 resulted from an increase of $ 12,965 related to the correction of revenue recognition for Space Services and R&D Services Contracts, a $ 546 balance of contract liabilities, non-current that was historically included within other long-term liabilities, and a $ 172 increase for a customer deposit balance reclassified from other accrued expense . 134 b. The $ 12,437 increase in contract liabilities, non-current as of June 30, 2023, resulted from an increase of $ 11,865 related to correction of revenue recognition for Space Services and R&D Services Contracts, a $ 404 balance of contract liabilities, non-current that was historically included within other long-term liabilities, and a $ 168 increase for a customer deposit balance reclassified from other accrued expense. c. The $ 13,049 increase in contract liabilities, non-current as of September 30, 2023, resulted from an increase of $ 11,949 related to the correction of revenue recognition for Space Services and R&D Services Contracts, a $ 752 balance of contract liabilities, non-current that was historically included within other long-term liabilities, and a $ 348 increase for a customer deposit balance reclassified from other accrued expense. (ix) The $ 285 , $ 90 and $ 167 decreases in deferred income tax liabilities as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to impact to income tax provision as a result of the revenue adjustments. (x) The $ 547 , $ 404 , and $ 752 decreases in other long-term liabilities as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, represent the non-current contract liabilities balance that was historically included in other long-term liabilities but is now presented in its own line (see restatement adjustment description in (viii)). (xi) The $ 64 , $ 80 , and $ 284 decreases in accumulated other comprehensive loss as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to the misstatements’ impact on cumulative foreign currency translation loss. (xii) The $ 20,063 , $ 22,169 , and $ 27,711 increases in accumulated deficit as of March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to the cumulative adjustments made in the condensed consolidated statements of operations. 135 Three Months Ended March 31, 2023 Three Months Ended June 30, 2023 Three Months Ended September 30, 2023 Unaudited Condensed Consolidated Statements of Operations Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Revenue (i) $ 24,168 $ ( 951 ) $ 23,217 $ 26,493 $ 1,572 $ 28,065 $ 27,317 $ ( 5,191 ) $ 22,126 Cost of revenue (ii) $ 10,360 $ 3,009 $ 13,369 $ 9,633 $ 5,612 $ 15,245 $ 9,555 $ 3,085 $ 12,640 Gross profit $ 13,808 $ ( 3,960 ) $ 9,848 $ 16,860 $ ( 4,040 ) $ 12,820 $ 17,762 $ ( 8,276 ) $ 9,486 Research and development (iii) $ 9,663 $ ( 2,345 ) $ 7,318 $ 9,752 $ ( 2,097 ) $ 7,655 $ 10,538 $ ( 2,607 ) $ 7,931 General and administrative (iv) $ 11,770 $ 53 $ 11,823 $ 10,899 $ ( 181 ) $ 10,718 $ 11,049 $ 174 $ 11,223 Total operating expenses $ 28,283 $ ( 2,292 ) $ 25,991 $ 27,852 $ ( 2,278 ) $ 25,574 $ 28,736 $ ( 2,433 ) $ 26,303 Loss from operations $ ( 14,475 ) $ ( 1,668 ) $ ( 16,143 ) $ ( 10,992 ) $ ( 1,762 ) $ ( 12,754 ) $ ( 10,974 ) $ ( 5,843 ) $ ( 16,817 ) Foreign exchange loss (v) $ 1,024 $ ( 11 ) $ 1,013 $ ( 435 ) $ ( 51 ) $ ( 486 ) $ ( 1,829 ) $ ( 11 ) $ ( 1,840 ) Other (expense) income, net (vi) $ ( 762 ) $ 451 $ ( 311 ) $ ( 1,038 ) $ ( 92 ) $ ( 1,130 ) $ ( 620 ) $ 233 $ ( 387 ) Total other (expense) income, net $ ( 2,929 ) $ 440 $ ( 2,489 ) $ ( 5,061 ) $ ( 143 ) $ ( 5,204 ) $ ( 6,743 ) $ 222 $ ( 6,521 ) Loss before income taxes $ ( 17,404 ) $ ( 1,228 ) $ ( 18,632 ) $ ( 16,053 ) $ ( 1,905 ) $ ( 17,958 ) $ ( 17,717 ) $ ( 5,621 ) $ ( 23,338 ) Income tax provision (vii) $ 269 $ ( 246 ) $ 23 $ 213 $ 201 $ 414 $ 78 $ ( 79 ) $ ( 1 ) Net loss $ ( 17,673 ) $ ( 982 ) $ ( 18,655 ) $ ( 16,266 ) $ ( 2,106 ) $ ( 18,372 ) $ ( 17,795 ) $ ( 5,542 ) $ ( 23,337 ) Basic and diluted net loss per share (1) $ ( 0.98 ) $ ( 0.05 ) $ ( 1.03 ) $ ( 0.88 ) $ ( 0.11 ) $ ( 0.99 ) $ ( 0.86 ) $ ( 0.26 ) $ ( 1.12 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 18,096,363 - 18,096,363 18,468,949 - 18,468,949 20,756,394 - 20,756,394 (1) The shares of the Company's common stock and the per share amounts for the three months ended March 31, 2023 and June 30, 2023 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). Description of restatement adjustments in the condensed consolidated statements of operations: (i) The $ 951 decrease in revenue for the three months ended March 31, 2023, the $ 1,572 increase in revenue for the three months ended June 30, 2023 and the $ 5,191 decrease in revenue for the three months ended September 30, 2023, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) Adjustments to cost of revenue: a. The $ 3,009 increase in cost of revenue for the three months ended March 31, 2023 resulted from an increase of $ 2,345 from costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 642 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 22 from the reclassification of supply chain department costs from general and administrative expense to cost of revenue. b. The $ 5,612 increase in cost of revenue for the three months ended June 30, 2023 resulted from an increase of $ 3,456 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, an increase of $ 2,097 from costs associated with R&D 136 Services Contracts being reclassified from research and development expense to cost of revenue, and an increase of $ 59 from the reclassification of supply chain department costs from general and administrative expense to cost of revenue. c. The $ 3,085 increase in cost of revenue for the three months ended September 30, 2023 resulted from an increase of $ 2,607 from costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 407 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 71 from the reclassification of supply chain department costs from general and administrative expense to cost of revenue. (iii) The $ 2,345 , $ 2,097 , and $ 2,607 decreases in research and development for the three months ended March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to costs associated with R&D Services Contracts being reclassified from research and development to cost of revenue. (iv) Adjustments to general and administrative: a. The $ 53 increase in general and administrative for the three months ended March 31, 2023 resulted from an increase of $ 451 from the other state taxes reclassified from other expense, net, partially offset by a decrease of $ 376 from the Delaware franchise tax accrual and reclassification and a decrease of $ 22 for supply chain department costs reclassified to cost of revenue. b. The $ 181 decrease in general and administrative for the three months ended June 30, 2023 resulted from a decrease of $ 92 for the other state taxes reclassified from other expense, net, a decrease of $ 59 for the supply chain department costs reclassified to cost of revenue, and a decrease of $ 30 for the Delaware franchise tax accrual and reclassification. c. The $ 174 increase in general and administrative expense for the three months ended September 30, 2023 resulted from an increase of $ 235 from vendor dispute settlement reclassified from other expense, net and an increase of $ 12 from Delaware franchise tax accrual and reclassification, partially offset by a decrease of $ 71 from supply chain department costs reclassified to cost of revenue and a decrease of $ 2 from the other state taxes reclassified from other expense, net. (v) The $ 11 , $ 51 , and $ 11 additional foreign exchange losses for the three months ended March 31, 2023, June 30, 2023 and September 30 , 2023, respectively, are related to the correction of revenue and cash remeasurement adjustment. (vi) Adjustments to other expense, net: a. The $ 451 decrease in other expense, net for the three months ended March 31, 2023 is related to the other state taxes reclassified to general and administrative. b. The $ 92 increase in other expense, net for the three months ended June 30, 2023 is related to the reclassification of other state tax to general and administrative expense. c. The $ 233 decrease in other expense, net for the three months ended September 30 2023 resulted from a decrease of $235 from a vendor dispute settlement reclassified to general and administrative, partially offset by an increase of $ 2 for the other state taxes reclassified to general and administrative. (vii) The $ 246 decrease, $ 201 increase and $ 79 decrease in income tax provision for the three months ended March 31, 2023, June 30, 2023 and September 30, 2023, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. 137 Six Months Ended June 30, 2023 Nine Months Ended September 30, 2023 Three Months Ended December 31, 2023 Unaudited Condensed Consolidated Statements of Operations Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Revenue (i) $ 50,661 $ 621 $ 51,282 $ 77,978 $ ( 4,570 ) $ 73,408 $ 27,725 $ ( 3,521 ) $ 24,204 Cost of revenue (ii) $ 19,993 $ 8,621 $ 28,614 $ 29,548 $ 11,706 $ 41,254 $ 12,886 $ 4,884 $ 17,770 Gross profit $ 30,668 $ ( 8,000 ) $ 22,668 $ 48,430 $ ( 16,276 ) $ 32,154 $ 14,839 $ ( 8,405 ) $ 6,434 Research and development (iii) $ 19,415 $ ( 4,442 ) $ 14,973 $ 29,953 $ ( 7,049 ) $ 22,904 $ 8,970 $ ( 4,224 ) $ 4,746 General and administrative (iv) $ 22,669 $ ( 128 ) $ 22,541 $ 33,718 $ 46 $ 33,764 $ 8,776 $ ( 541 ) $ 8,235 Allowance for current expected credit loss on notes receivable (v) $ - $ - $ - $ - $ - $ - $ - $ 1,218 $ 1,218 Total operating expenses $ 56,135 $ ( 4,570 ) $ 51,565 $ 84,871 $ ( 7,003 ) $ 77,868 $ 23,047 $ ( 3,547 ) $ 19,500 Loss from operations $ ( 25,467 ) $ ( 3,430 ) $ ( 28,897 ) $ ( 36,441 ) $ ( 9,273 ) $ ( 45,714 ) $ ( 8,208 ) $ ( 4,858 ) $ ( 13,066 ) Foreign exchange loss (vi) $ 589 $ ( 62 ) $ 527 $ ( 1,240 ) $ ( 73 ) $ ( 1,313 ) $ 2,740 $ 97 $ 2,837 Other (expense) income, net (vii) $ ( 1,800 ) $ 359 $ ( 1,441 ) $ ( 2,420 ) $ 592 $ ( 1,828 ) $ ( 143 ) $ ( 301 ) $ ( 444 ) Total other income (expense), net $ ( 7,990 ) $ 297 $ ( 7,693 ) $ ( 14,733 ) $ 519 $ ( 14,214 ) $ ( 4,502 ) $ ( 204 ) $ ( 4,706 ) Loss before income taxes $ ( 33,457 ) $ ( 3,133 ) $ ( 36,590 ) $ ( 51,174 ) $ ( 8,754 ) $ ( 59,928 ) $ ( 12,710 ) $ ( 5,062 ) $ ( 17,772 ) Income tax provision (viii) $ 482 $ ( 45 ) $ 437 $ 560 $ ( 124 ) $ 436 $ ( 488 ) $ ( 90 ) $ ( 578 ) Net loss $ ( 33,939 ) $ ( 3,088 ) $ ( 37,027 ) $ ( 51,734 ) $ ( 8,630 ) $ ( 60,364 ) $ ( 12,222 ) $ ( 4,972 ) $ ( 17,194 ) Basic and diluted net loss per share (1) $ ( 1.86 ) $ ( 0.17 ) $ ( 2.03 ) $ ( 2.71 ) $ ( 0.45 ) $ ( 3.16 ) $ ( 0.58 ) $ ( 0.24 ) $ ( 0.82 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 18,283,958 - 18,283,958 19,117,078 - 19,117,078 20,953,695 - 20,953,695 (1) The shares of the Company's common stock and the per share amounts for the six months ended June 30, 2023 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). Description of restatement adjustments in the condensed consolidated statements of operations: (i) The $ 621 increase in revenue for the six months ended June 30, 2023, the $ 4,570 decrease for the nine months ended September 30, 2023 and the $ 3,521 decrease in revenue for the three months ended December 31, 2023, respectively, relates to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) Adjustments to cost of revenue: a. The $ 8,621 increase in cost of revenue for the six months ended June 30, 2023 resulted from an increase of $ 4,442 from costs associated with R&D Services Contracts being reclassified from research and development to cost of revenue, an increase of $ 4,100 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 79 from the reclassification of supply chain department costs from general and administrative to cost of revenue. 138 b. The $ 11,706 increase in cost of revenue for the nine months ended September 30, 2023 resulted from an increase of $ 7,049 from costs associated with R&D Services Contracts being reclassified from research and development to cost of revenue, an increase of $ 4,507 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 150 from the reclassification of supply chain department costs from general and administrative to cost of revenue. c. The $ 4,884 increase in cost of revenue for the three months ended December 31, 2023 resulted from an increase of $ 4,224 from costs associated with R&D Services Contracts being reclassified from research and development to cost of revenue, an increase of $ 412 from construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, and an increase of $ 248 from the reclassification of supply chain department costs from general and administrative to cost of revenue. (iii) The $ 4,442 , $ 7,049 , and $ 4,224 decreases in research and development expense for the for the six months ended June 30, 2023, the nine months ended September 30, 2023, and the three months ended December 31, 2023, respectively, is related to costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue. (iv) Adjustments to general and administrative: a. The $ 128 decrease in general and administrative for the six months ended June 30, 2023 resulted from a decrease of $ 408 from the Delaware franchise tax accrual and reclassification and a decrease of $ 79 from the supply chain department costs reclassified to cost of revenue, partially offset by an increase of $ 359 from the other state taxes reclassified from other expense, net. b. The $ 46 increase in general and administrative for the nine months ended September 30, 2023 resulted from increases of $ 357 and $ 235 from the other state taxes and vendor dispute settlement reclassified from other expense, net, respectively, partially offset by a decrease of $ 396 from the Delaware franchise tax accrual and reclassification and a decrease of $ 150 from the supply chain department costs reclassified to cost of revenue. c. The $ 541 decrease in general and administrative expense for the three months ended December 31, 2023 resulted from a decrease of $ 301 from the other state taxes reclassified from other expense, net, and a decrease of $ 248 from the supply chain department costs reclassified to cost of revenue, partially offset by an increase of $ 8 from the Delaware franchise tax accrual and reclassification. (v) The $ 1,218 increase in allowance for current expected credit loss on notes receivable for the three months ended December 31, 2023 is related to the allowance for current expected credit loss related to a $ 4,500 note receivable issued to a customer. (vi) The $ 62 decrease, $ 73 decrease, and $ 97 increase in foreign exchange loss for the six months ended June 30, 2023, nine months ended September 30, 2023, and three months ended December 31, 2023, respectively, are related to the correction of revenue and cash remeasurement adjustment. (vii) Adjustments to other expense, net: a. The $ 359 decrease and $ 301 increase in other expense, net for the six months ended June 30, 2023 and three months ended December 31, 2023, respectively, are related to the other state taxes reclassified to general and administrative. b. The $ 592 decrease in other expense, net for the nine months ended September 30, 2023 resulted from $ 357 of other state taxes and a $ 235 vendor dispute settlement reclassified to general and administrative expense. (viii) The $ 45 decrease, $ 124 decrease and $ 90 decrease in income tax provisions for the six months ended June 30, 2023, nine months ended September 30, 2023, and three months ended December 31, 2023, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. 139 Three Months Ended March 31, 2023 Three Months Ended June 30, 2023 Three Months Ended September 30, 2023 Unaudited Condensed Consolidated Statements of Comprehensive Loss Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 17,673 ) $ ( 982 ) $ ( 18,655 ) $ ( 16,266 ) $ ( 2,106 ) $ ( 18,372 ) $ ( 17,795 ) $ ( 5,542 ) $ ( 23,337 ) Foreign currency translation adjustments (i) $ ( 1,589 ) $ ( 25 ) $ ( 1,614 ) $ 4,341 $ 16 $ 4,357 $ ( 1,779 ) $ 204 $ ( 1,575 ) Comprehensive loss $ ( 19,218 ) $ ( 1,007 ) $ ( 20,225 ) $ ( 11,932 ) $ ( 2,090 ) $ ( 14,022 ) $ ( 19,576 ) $ ( 5,338 ) $ ( 24,914 ) Six Months Ended June 30, 2023 Nine Months Ended September 30, 2023 Three Months Ended December 31, 2023 Unaudited Condensed Consolidated Statements of Comprehensive Loss Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 33,939 ) $ ( 3,088 ) $ ( 37,027 ) $ ( 51,734 ) $ ( 8,630 ) $ ( 60,364 ) $ ( 12,222 ) $ ( 4,972 ) $ ( 17,194 ) Foreign currency translation adjustments (ii) $ 2,752 $ ( 9 ) $ 2,743 $ 973 $ 195 $ 1,168 $ 1,505 $ ( 355 ) $ 1,150 Comprehensive loss $ ( 31,150 ) $ ( 3,097 ) $ ( 34,247 ) $ ( 50,726 ) $ ( 8,435 ) $ ( 59,161 ) $ ( 10,718 ) $ ( 5,327 ) $ ( 16,045 ) Description of restatement adjustments in the condensed consolidated statements of comprehensive loss: (i) The $ 25 foreign currency translation loss, $ 16 foreign currency translation gain, and $ 204 foreign currency translation gain for the three months ended March 31, 2023, June 30, 2023, and September 30, 2023, respectively, are related to the foreign currency translation impact of consolidated statements of operations adjustments (i) to (v) above. (ii) The $ 9 foreign currency translation loss, $ 195 foreign currency translation gain and $ 355 foreign currency translation loss for the six months ended June 30, 2023, the nine months ended September 30, 2023, and the three months ended December 31, 2023, respectively, are related to the foreign currency translation impact of consolidated statements of operations adjustments (i) to (v) above. Three Months Ended March 31, 2023 Six Months Ended June 30, 2023 Nine Months Ended September 30, 2023 Unaudited Condensed Consolidated Statements of Cash Flows Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 17,673 ) $ ( 982 ) $ ( 18,655 ) $ ( 33,939 ) $ ( 3,088 ) $ ( 37,027 ) $ ( 51,734 ) $ ( 8,630 ) $ ( 60,364 ) Other, net (i) $ ( 110 ) $ ( 240 ) $ ( 350 ) $ ( 281 ) $ 8 $ ( 273 ) $ ( 448 ) $ ( 78 ) $ ( 526 ) Change in contract assets (ii) $ ( 855 ) $ 68 $ ( 787 ) $ ( 1,506 ) $ 199 $ ( 1,307 ) $ ( 1,146 ) $ 801 $ ( 345 ) Other current assets (iii) $ 117 $ ( 805 ) $ ( 688 ) $ 263 $ ( 1,917 ) $ ( 1,654 ) $ ( 177 ) $ ( 7,219 ) $ ( 7,396 ) Change in contract liabilities (iv) $ 1,259 $ 895 $ 2,154 $ 5,467 $ ( 819 ) $ 4,648 $ 6,977 $ 4,014 $ 10,991 Other accrued expenses (v) $ ( 548 ) $ ( 372 ) $ ( 920 ) $ 766 $ ( 407 ) $ 359 $ ( 536 ) $ ( 589 ) $ ( 1,125 ) Net cash used in operating activities $ ( 11,290 ) $ ( 1,436 ) $ ( 12,726 ) $ ( 22,591 ) $ ( 6,024 ) $ ( 28,615 ) $ ( 27,733 ) $ ( 11,701 ) $ ( 39,434 ) Purchase of property and equipment (vi) $ ( 4,649 ) $ 1,436 $ ( 3,213 ) $ ( 12,677 ) $ 6,024 $ ( 6,653 ) $ ( 23,694 ) $ 11,701 $ ( 11,993 ) Net cash used in investing activities $ ( 6,957 ) $ 1,436 $ ( 5,521 ) $ ( 10,122 ) $ 6,024 $ ( 4,098 ) $ ( 19,946 ) $ 11,701 $ ( 8,245 ) Effect of foreign currency translation on cash, cash equivalents and restricted cash (vii) $ ( 1,846 ) $ - $ ( 1,846 ) $ 597 $ ( 59 ) $ 538 $ 2,343 $ ( 52 ) $ 2,291 Cash, cash equivalents and restricted cash - Ending balance $ 47,362 $ - $ 47,362 $ 43,627 $ ( 59 ) $ 43,568 $ 30,407 $ ( 52 ) $ 30,355 140 Description of restatement adjustments in the condensed consolidated statements of cash flows: (i) The $ 240 , $ 8 , and $ 78 adjustments to change in other, net for the three months ended March 31, 2023, six months ended June 30, 2023, and nine months ended September 30, 2023, respectively, represent the change in deferred income tax liabilities related to the impact to income tax provision as a result of the revenue adjustments. (ii) The $ 68 , $ 199 , and $ 801 adjustments to change in contract assets for the three months ended March 31, 2023, six months ended June 30, 2023, and nine months ended September 30, 2023, respectively, are related to the impact to short-term and long-term balances of contract assets from the correction of revenue recognition for Space Services and R&D Services Contracts. (iii) Adjustments to change in other current assets: a. The $ 805 increase in other current assets for the three months ended March 31, 2023, is related to the net change in advances for fixed assets balance reclassified from other current assets into property and equipment. b. The $ 1,917 increase in other current assets for the six months ended June 30, 2023 resulted from an increase of $ 1,274 in prepaid launch costs for customer-controlled satellites for one specific contract that is capitalized into other current assets instead of property and equipment and an increase of $ 643 from the net change in advances for fixed assets balance reclassified out of other current assets into property and equipment. c. The $ 7,219 increase in other current assets for the nine months ended September 30, 2023 resulted from an increase of $ 5,985 in prepaid launch costs for customer-controlled satellites for one specific contract that is capitalized into other current assets instead of property and equipment, and an increase of $ 1,234 of net change in advances for fixed assets that were reclassified out of other current assets into property and equipment. (iv) Adjustments to change in contract liabilities: a. The $ 895 adjustment to change in contract liabilities for the three months ended March 31, 2023 is related to the correction of revenue recognition for Space Services and R&D Services Contracts. b. The $ 819 adjustment to change in contract liabilities for the six months ended June 30, 2023 is related to the correction of revenue recognition for Space Services and R&D Services Contracts. c. The $ 4,014 adjustment to change in contract liabilities for the nine months ended September 30, 2023 resulted from a $ 3,838 impact in contract liabilities from the correction of revenue recognition for Space Services and R&D Services Contracts and $ 176 from the change in the customer deposit balance reclassified from other accrued expense to contract liabilities, non-current. (v) The $ 372 adjustment to change in other accrued expense for the three months ended March 31, 2023 is related to the Delaware franchise tax accrual. The $ 407 adjustment to change in other accrued expense for the six months ended June 30, 2023 is related to the Delaware franchise tax accrual. The $ 589 adjustment to change in other accrued expense for the nine months ended September 20, 2023 resulted from a $ 413 adjustment from Delaware franchise tax accrual and a $ 176 customer deposit reclassification. (vi) Adjustment to purchase of property and equipment: a. The $ 1,436 decrease in purchase of property and equipment for the three months ended March 31, 2023 resulted from a decrease of $ 825 from noncash addition to property and equipment from the prior period advances that was incorrectly reflected as current period’s cash purchase and a decrease of $ 611 in costs incurred to build the customer-controlled satellites for one specific contract being expensed rather than capitalized into the Company's property and equipment. b. The $ 6,024 decrease in purchase of property and equipment for the six months ended June 30, 2023 resulted from a decrease of $ 4,101 in costs incurred to build the customer-controlled satellites being for one specific contract being expensed rather than capitalized into the Company's property and equipment, a decrease of $ 1,275 from prepaid launch costs for the customer-controlled satellites being reclassified into other current assets rather than capitalized into the Company's property and equipment, and a decrease of $ 648 from noncash addition to property and equipment from the prior period advances that were incorrectly reflected as current period’s cash purchase. c. The $ 11,701 decrease in purchase of property and equipment for the nine months ended September 30, 2023 resulted from a decrease of $ 5,985 prepaid launch costs for the customer-controlled satellites for one specific contract being reclassified into other current assets rather than capitalized into the Company's property and equipment, a decrease of $ 4,646 in costs incurred to design/build the customer-controlled satellites being expensed 141 rather than capitalized into the Company's property and equipment and a decrease of $ 1,070 from noncash addition to property and equipment from the prior period advances that was incorrectly reflected as current period’s cash purchase. (vii) The $ 59 and $ 52 decreases in cash and cash equivalents as of June 30, 2023 and September 30, 2023, respectively, are related to the cash remeasurement adjustment for cash balances from certain foreign subsidiaries, which resulted in a $ 59 and $ 52 change in effect of foreign currency translation on cash, cash equivalents and restricted cash for the six months ended June 30, 2023 and the nine months ended September 30, 2023, respectively. The following tables present the effects of the restatement on the Company's previously reported: unaudited condensed consolidated balance sheets as of March 31, 2022, June 30, 2022, and September 30, 2022; unaudited condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three months ended March 31, 2022, the three and six months ended June 30, 2022, the three and nine months ended September 30, 2022, and the three months ended December 31, 2022; and unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022, the six months ended June 30, 2022, and the nine months ended September 30, 2022. The values as previously reported were derived from the previously filed Quarterly Reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022, and September 30, 2022. The definitions of the amounts for each column are the same definitions stated in Note 2, and the descriptions of the restatements for certain rows are the same descriptions stated in Note 2. These restatements result in a reclassification between cash flows from operating activities and cash flows from investing activities, but they do not impact cash flows from financing activities or the net decrease in cash, cash equivalents and restricted cash in the unaudited condensed consolidated statements of cash flows for the periods presented. The restatements only impact net loss and accumulated other comprehensive loss in the unaudited condensed consolidated statements of changes in stockholders’ equity in the periods presented. As of March 31, 2022 As of June 30, 2022 As of September 30, 2022 Unaudited Condensed Consolidated Balance Sheets Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Contract assets (i) $ 3,630 $ ( 616 ) $ 3,014 $ 4,402 $ ( 936 ) $ 3,466 $ 3,360 $ ( 146 ) $ 3,214 Total current assets $ 111,494 $ ( 616 ) $ 110,878 $ 120,371 $ ( 936 ) $ 119,435 $ 109,456 $ ( 146 ) $ 109,310 Property and equipment, net (ii) $ 52,071 $ - $ 52,071 $ 55,073 $ - $ 55,073 $ 52,708 $ ( 38 ) $ 52,670 Other long-term assets, including restricted cash (iii) $ 11,767 $ 120 $ 11,887 $ 11,114 $ 106 $ 11,220 $ 9,936 $ 164 $ 10,100 Total assets $ 283,378 $ ( 496 ) $ 282,882 $ 288,921 $ ( 830 ) $ 288,091 $ 266,615 $ ( 20 ) $ 266,595 Contract liabilities, current portion (iv) $ 6,483 $ 4,909 $ 11,392 $ 12,080 $ 5,657 $ 17,737 $ 14,244 $ 6,050 $ 20,294 Other accrued expenses (v) $ 7,742 $ 143 $ 7,885 $ 8,301 $ 164 $ 8,465 $ 7,881 $ 220 $ 8,101 Total current liabilities $ 26,042 $ 5,052 $ 31,094 $ 28,527 $ 5,821 $ 34,348 $ 32,796 $ 6,270 $ 39,066 Contract liabilities, non-current (vi) $ - $ 7,900 $ 7,900 $ - $ 8,785 $ 8,785 $ - $ 10,432 $ 10,432 Deferred income tax liabilities (vii) $ 813 $ ( 19 ) $ 794 $ 757 $ ( 8 ) $ 749 $ 700 $ ( 44 ) $ 656 Other long-term liabilities (viii) $ 1,761 $ ( 1,753 ) $ 8 $ 1,148 $ ( 1,140 ) $ 8 $ 541 $ ( 533 ) $ 8 Total liabilities $ 100,177 $ 11,180 $ 111,357 $ 142,898 $ 13,458 $ 156,356 $ 144,275 $ 16,125 $ 160,400 Accumulated other comprehensive income (loss) (ix) $ 2,591 $ 99 $ 2,690 $ 296 $ 181 $ 477 $ ( 4,676 ) $ 257 $ ( 4,419 ) Accumulated deficit (x) $ ( 261,028 ) $ ( 11,775 ) $ ( 272,803 ) $ ( 299,293 ) $ ( 14,469 ) $ ( 313,762 ) $ ( 321,104 ) $ ( 16,402 ) $ ( 337,506 ) Total stockholders’ equity $ 183,201 $ ( 11,676 ) $ 171,525 $ 146,023 $ ( 14,288 ) $ 131,735 $ 122,340 $ ( 16,145 ) $ 106,195 Total liabilities and stockholders’ equity $ 283,378 $ ( 496 ) $ 282,882 $ 288,921 $ ( 830 ) $ 288,091 $ 266,615 $ ( 20 ) $ 266,595 Description of restatement adjustments in the condensed consolidated balance sheets: 142 (i) The $ 616 , $ 936 and $ 146 decreases in contract assets as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) The $ 38 decrease in property and equipment as of September 30, 2022 is related to construction costs for customer-controlled satellites being expensed as cost of revenue rather than capitalized into property and equipment. (iii) The $ 120 , $ 106 , and $ 164 increases in other long-term assets, including restricted cash, as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (iv) The $ 4,909 increase in contract liabilities, current, as of March 31, 2022 resulted from an increase of $ 4,740 related to the correction of revenue recognition for Space Services and R&D Services Contracts and an increase of $ 169 from a customer deposit balance reclassified from other accrued expense. The $ 5,657 and $ 6,050 increases in contract liabilities, current as of June 30, 2022 and September 30, 2022, respectively, resulted from the correction of revenue recognition for Space Services and R&D Services Contracts. (v) The $ 143 increase in other accrued expenses as of March 31, 2022 resulted from an increase of $ 312 for Delaware franchise tax accrual, partially offset by a decrease of $ 169 from a customer deposit balance reclassified to contract liabilities, non-current. The $ 164 increase in other accrued expenses as of June 30, 2022 resulted from an increase of $ 329 from the Delaware franchise tax accrual, partially offset by a decrease of $ 165 from a customer deposit balance reclassified to contract liabilities, non-current. The $ 220 increase in other accrued expenses as of June 30, 2022 resulted from an increase of $ 379 from the Delaware franchise tax accrual, partially offset by a decrease of $ 159 from a customer deposit balance reclassified to contract liabilities, non-current. (vi) Adjustments to contract liabilities, non-current: a. The $ 7,900 increase in contract liabilities, non-current as of March 31, 2022 resulted from an increase of $ 6,147 related to the correction of revenue recognition for Space Services and R&D Services Contracts and a $ 1,753 balance of contract liabilities, non-current that was historically included within other long-term liabilities. b. The $ 8,785 increase in contract liabilities, non-current as of June 30, 2022 resulted from an increase of $ 7,480 related to the correction of revenue recognition for Space Services and R&D Services Contracts, a $ 1,140 balance of contract liabilities, non-current that was historically included within other long-term liabilities, and a $ 165 increase from a customer deposit balance reclassified from other accrued expense. c. The $ 10,432 increase in contract liabilities, non-current as of September 30, 2022 resulted from an increase of $ 9,740 related to the correction of revenue recognition for Space Services and R&D Services Contracts and a $ 533 balance of contract liabilities, non-current that was historically included within other long-term liabilities, and a $ 159 increase from a customer deposit balance reclassified from other accrued expense. (vii) The $ 19 , $ 8 and $ 44 decreases in deferred income tax liabilities as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. (viii) The $ 1,753 , $ 1,140 , and $ 533 decreases in other long-term liabilities as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the contract liabilities, non-current balance that was historically included in other long-term liabilities but now has been presented in its own line (see restatement adjustment description (vi)). (ix) The $ 99 , $ 181 , and $ 257 increases in accumulated other comprehensive income as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the misstatements’ impact on cumulative foreign currency translation loss. (x) The $ 11,775 , $ 14,469 , and $ 16,402 increases in accumulated deficit as of March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the cumulative adjustments made in the consolidated statements of operations. 143 Three Months Ended March 31, 2022 Three Months Ended June 30, 2022 Three Months Ended September 30, 2022 Unaudited Condensed Consolidated Statements of Operations Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Revenue (i) $ 18,070 $ ( 2,321 ) $ 15,749 $ 19,395 $ ( 2,692 ) $ 16,703 $ 20,418 $ ( 1,883 ) $ 18,535 Cost of revenue (ii) $ 9,846 $ 3,950 $ 13,796 $ 9,573 $ 3,346 $ 12,919 $ 10,198 $ 3,061 $ 13,259 Gross profit $ 8,224 $ ( 6,271 ) $ 1,953 $ 9,822 $ ( 6,038 ) $ 3,784 $ 10,220 $ ( 4,944 ) $ 5,276 Research and development (iii) $ 8,657 $ ( 3,886 ) $ 4,771 $ 8,225 $ ( 3,291 ) $ 4,934 $ 8,879 $ ( 3,055 ) $ 5,824 General and administrative (iv) $ 12,684 $ 31 $ 12,715 $ 11,274 $ 46 $ 11,320 $ 9,903 $ 16 $ 9,919 Total operating expenses $ 28,246 $ ( 3,855 ) $ 24,391 $ 26,227 $ ( 3,245 ) $ 22,982 $ 26,576 $ ( 3,039 ) $ 23,537 Loss from operations $ ( 20,022 ) $ ( 2,416 ) $ ( 22,438 ) $ ( 16,405 ) $ ( 2,793 ) $ ( 19,198 ) $ ( 16,356 ) $ ( 1,905 ) $ ( 18,261 ) Foreign exchange loss (v) $ - $ - $ - $ - $ - $ - $ ( 2,806 ) $ ( 1 ) $ ( 2,807 ) Other (expense) income, net (vi) $ ( 1,169 ) $ 101 $ ( 1,068 ) $ ( 2,876 ) $ 111 $ ( 2,765 ) $ ( 660 ) $ ( 66 ) $ ( 726 ) Total other income (expense), net $ 8,520 $ 101 $ 8,621 $ ( 21,798 ) $ 111 $ ( 21,687 ) $ ( 5,401 ) $ ( 67 ) $ ( 5,468 ) Loss before income taxes $ ( 11,502 ) $ ( 2,315 ) $ ( 13,817 ) $ ( 38,203 ) $ ( 2,682 ) $ ( 40,885 ) $ ( 21,757 ) $ ( 1,972 ) $ ( 23,729 ) Income tax provision (vii) $ 290 $ ( 20 ) $ 270 $ 62 $ 12 $ 74 $ 54 $ ( 39 ) $ 15 Net loss $ ( 11,792 ) $ ( 2,295 ) $ ( 14,087 ) $ ( 38,265 ) $ ( 2,694 ) $ ( 40,959 ) $ ( 21,811 ) $ ( 1,933 ) $ ( 23,744 ) Basic and diluted net loss per share (1) $ ( 0.68 ) $ ( 0.13 ) $ ( 0.81 ) $ ( 2.19 ) $ ( 0.15 ) $ ( 2.35 ) $ ( 1.25 ) $ ( 0.11 ) $ ( 1.36 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 17,409,317 - 17,409,317 17,460,934 - 17,460,934 17,492,871 - 17,492,871 1) The shares of the Company's common stock and the per share amounts for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). Description of restatement adjustments in the condensed consolidated statements of operations: (i) The $ 2,321 , $ 2,692 , and $ 1,883 decreases in revenue for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) Adjustments to cost of revenue: a. The $ 3,950 increase in cost of revenue for the three months ended March 31, 2022 resulted from an increase of $ 3,886 in costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, and an increase of $ 64 for the reclassification of supply chain department costs from general and administrative expense to cost of revenue. b. The $ 3,346 increase in cost of revenue for the three months ended June 30, 2022 resulted from an increase of $ 3,291 in costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, and an increase of $ 55 for the reclassification of supply chain department costs from general and administrative expense to cost of revenue. c. The $ 3,061 increase in cost of revenue for the three months ended September 30, 2022 resulted from an increase of $ 3,055 in costs associated with R&D Services Contracts being reclassified from research and development to cost 144 of revenue and an increase of $ 37 in construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment, partially offset by a decrease of $31 from a reclassification between general and administrative expense and cost of revenue. (iii) The $ 3,886 , $ 3,291 , and $ 3,055 decreases in research and development expense for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to costs associated with R&D Services Contracts being reclassified from research and development to cost of revenue. (iv) Adjustments to general and administrative: a. The $ 31 increase in general and administrative for the three months ended March 31, 2022 resulted from an increase of $ 128 from the other state taxes reclassified from other expense, net, partially offset by a decrease of $ 64 related to the supply chain department costs reclassified to cost of revenue and a decrease of $ 33 related to the Delaware franchise tax accrual. b. The increase of $ 46 in general and administrative expense for the three months ended June 30, 2022 resulted from an increase of $ 86 from the other state taxes reclassified from other expense, net and an increase of $ 15 related to the Delaware franchise tax accrual, partially offset by a decrease of $ 55 related to the supply chain department costs reclassified to cost of revenue. c. The increase of $ 16 in general and administrative expense for the three months ended September 30, 2022 resulted from an increase of $ 51 related to the Delaware franchise tax accrual and an increase of $ 31 related to the supply chain department costs reclassified to cost of revenue, partially offset by a decrease of $ 66 from the other state tax reclassified from other expense, net. (v) The $ 1 foreign exchange loss for the six months ended September 30, 2022 is related to the correction of revenue and cash remeasurement adjustment. (vi) Adjustments to other expense, net: a. The $ 101 decrease in other expense, net for the three months ended March 31, 2022 resulted from a decrease of $ 128 from the other state tax reclassified to general and administrative expense, partially offset by an increase of $ 27 related to foreign currency gain or loss impact of the revenue and cash remeasurement adjustment. b. The $ 111 decrease in other expense, net for the three months ended June 30, 2022 resulted from a decrease of $ 86 from the other state tax reclassified to general and administrative expense and a decrease of $ 25 related to foreign currency gain or loss impact of the revenue and cash remeasurement adjustment. c. The $ 66 increase in other expense, net for the three months ended September 30, 2022 is related to the other state tax reclassification to general and administrative expense. (vii) The $ 20 decrease, $ 12 increase and $ 39 decrease in income tax provisions for the three months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. 145 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended December 31, 2022 Unaudited Condensed Consolidated Statements of Operations Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Revenue (i) $ 37,465 $ ( 5,013 ) $ 32,452 $ 57,883 $ ( 6,896 ) $ 50,987 $ 22,385 $ ( 2,605 ) $ 19,780 Cost of revenue (ii) $ 19,419 $ 7,296 $ 26,715 $ 29,617 $ 10,357 $ 39,974 $ 10,710 $ 2,942 $ 13,652 Gross profit $ 18,046 $ ( 12,309 ) $ 5,737 $ 28,266 $ ( 17,253 ) $ 11,013 $ 11,675 $ ( 5,547 ) $ 6,128 Research and development (iii) $ 16,882 $ ( 7,177 ) $ 9,705 $ 25,761 $ ( 10,232 ) $ 15,529 $ 9,392 $ ( 2,848 ) $ 6,544 General and administrative (iv) $ 23,958 $ 77 $ 24,035 $ 33,861 $ 93 $ 33,954 $ 10,970 $ ( 32 ) $ 10,938 Total operating expenses $ 54,473 $ ( 7,100 ) $ 47,373 $ 81,049 $ ( 10,139 ) $ 70,910 $ 27,986 $ ( 2,880 ) $ 25,106 Loss from operations $ ( 36,427 ) $ ( 5,209 ) $ ( 41,636 ) $ ( 52,783 ) $ ( 7,114 ) $ ( 59,897 ) $ ( 16,311 ) $ ( 2,667 ) $ ( 18,978 ) Foreign exchange loss $ - $ - $ - $ ( 6,346 ) $ ( 2 ) $ ( 6,348 ) $ - $ - $ - Other (expense) income, net (v) $ ( 4,045 ) $ 212 $ ( 3,833 ) $ ( 1,165 ) $ 147 $ ( 1,018 ) $ 4,599 $ ( 2 ) $ 4,597 Total other income (expense), net $ ( 13,278 ) $ 212 $ ( 13,066 ) $ ( 18,679 ) $ 145 $ ( 18,534 ) $ ( 1,316 ) $ ( 2 ) $ ( 1,318 ) Loss before income taxes $ ( 49,705 ) $ ( 4,997 ) $ ( 54,702 ) $ ( 71,462 ) $ ( 6,969 ) $ ( 78,431 ) $ ( 17,627 ) $ ( 2,669 ) $ ( 20,296 ) Income tax provision (vi) $ 352 $ ( 8 ) $ 344 $ 406 $ ( 47 ) $ 359 $ ( 84 ) $ 10 $ ( 74 ) Net loss $ ( 50,057 ) $ ( 4,989 ) $ ( 55,046 ) $ ( 71,868 ) $ ( 6,922 ) $ ( 78,790 ) $ ( 17,543 ) $ ( 2,679 ) $ ( 20,222 ) Basic and diluted net loss per share (1) $ ( 2.87 ) $ ( 0.29 ) $ ( 3.16 ) $ ( 4.12 ) $ ( 0.40 ) $ ( 4.51 ) $ ( 1.00 ) $ ( 0.15 ) $ ( 1.15 ) Weighted-average shares used in computing basic and diluted net loss per share (1) 17,435,268 - 17,435,268 17,454,680 - 17,454,680 17,572,199 - 17,572,199 (1) The shares of the Company's common stock and the per share amounts for the six months ended June 30, 2022 and nine months ended September 30, 2022 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1). Description of restatement adjustments in the condensed consolidated statements of operations: (i) The $ 5,013 , $ 6,896 , and $ 2,605 decreases in revenue for the six months ended June 30, 2022, the nine months ended September 30, 2022 and the three months ended December 31, 2022, respectively, are related to the correction of revenue recognition for Space Services and R&D Services Contracts. (ii) Adjustments to cost of revenue: a. The $ 7,296 increase in cost of revenue for the six months ended June 30, 2022 resulted from an increase of $ 7,177 in costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue and an increase of $ 119 from the reclassification of supply chain department costs from general and administrative expense to cost of revenue. b. The $ 10,357 increase in cost of revenue for the nine months ended September 30, 2022 resulted from an increase of $ 10,232 in costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 91 from the reclassification of supply chain department and other costs from general and administrative expense to cost of revenue, and an increase of $ 34 in construction costs for customer-controlled satellites being expensed to cost of revenue rather than capitalized into property and equipment. 146 c. The $ 2,942 increase in cost of revenue for the three months ended December 31, 2022 resulted from an increase of $ 2,848 in costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue, an increase of $ 77 from the reclassification of supply chain department and other costs from general and administrative expense to cost of revenue, and an increase of $ 17 in construction costs for customer-controlled satellites for one specific contract being expensed to cost of revenue rather than capitalized into property and equipment. (iii) The $ 7,177 , $ 10,232 , and $ 2,848 decreases in research and development expense for the for the six months ended June 30, 2022, the nine months ended September 30, 2022, and the three months ended December 31, 2022, respectively, are related to costs associated with R&D Services Contracts being reclassified from research and development expense to cost of revenue. (iv) Adjustments to general and administrative: a. The $ 77 increase in other expense, net for the six months ended June 30, 2022 resulted from an increase of $ 214 from the other state tax reclassified from other expense, net, partially offset by a decrease of $ 119 related to the supply chain department costs reclassified to cost of revenue and a decrease of $ 18 related to the Delaware franchise tax accrual and reclassification. b. The $ 93 increase in other expense, net for the nine months ended September 30, 2022 resulted from an increase of $ 149 from the other state tax reclassified from other expense, net and an increase of $ 35 related to the Delaware franchise accrual and reclassification, partially offset by a decrease of $ 91 related to the supply chain department costs reclassified to cost of revenue. c. The $ 32 decrease in other expense, net for the six months ended June 30, 2022 resulted from a decrease of $ 77 related to the supply chain department costs reclassified to cost of revenue and a decrease of $ 2 from the other state tax reclassified from other expense, net, partially offset by an increase of $ 47 related to the Delaware franchise tax accrual and reclassification. (v) Adjustment to other expense, net: a. The $ 212 decrease in other expense, net for the six months ended June 30, 2022 resulted from a decrease of $ 214 from the other state tax reclassified to general and administrative expense, partially offset by an increase of $ 2 related to foreign currency gain or loss impact of the revenue and cash remeasurement adjustment. b. The $ 147 decrease in other expense, net for the nine months ended September 30, 2022 resulted from a decrease of $ 149 for the other state tax reclassified to general and administrative expense, partially offset by an increase of $ 2 related to foreign currency gain or loss impact of the revenue and cash remeasurement adjustment. c. The $ 2 increase in other expense, net for the three months ended December 31, 20223 is related to the reclassification of other state tax from other expense to general and administrative expense. (vi) The $ 8 decrease, $ 47 decrease and $ 10 increase in income tax provisions for the three months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively, are related to the impact to income tax provision as a result of the revenue adjustments. 147 Three Months Ended March 31, 2022 Three Months Ended June 30, 2022 Three Months Ended September 30, 2022 Unaudited Condensed Consolidated Statements of Comprehensive Loss Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 11,792 ) $ ( 2,295 ) $ ( 14,087 ) $ ( 38,265 ) $ ( 2,694 ) $ ( 40,959 ) $ ( 21,811 ) $ ( 1,933 ) $ ( 23,744 ) Foreign currency translation adjustments (i) $ 1,859 $ 49 $ 1,908 $ ( 2,212 ) $ 82 $ ( 2,130 ) $ ( 4,969 ) $ 76 $ ( 4,893 ) Comprehensive loss $ ( 9,933 ) $ ( 2,246 ) $ ( 12,179 ) $ ( 40,560 ) $ ( 2,612 ) $ ( 43,172 ) $ ( 26,783 ) $ ( 1,857 ) $ ( 28,640 ) Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Three Months Ended December 31, 2022 Unaudited Condensed Consolidated Statements of Comprehensive Loss Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 50,057 ) $ ( 4,989 ) $ ( 55,046 ) $ ( 71,868 ) $ ( 6,922 ) $ ( 78,790 ) $ ( 17,543 ) $ ( 2,679 ) $ ( 20,222 ) Foreign currency translation adjustments (ii) $ ( 353 ) $ 131 $ ( 222 ) $ ( 5,322 ) $ 207 $ ( 5,115 ) $ ( 2,374 ) $ ( 168 ) $ ( 2,542 ) Comprehensive loss $ ( 50,493 ) $ ( 4,858 ) $ ( 55,351 ) $ ( 77,276 ) $ ( 6,715 ) $ ( 83,991 ) $ ( 19,864 ) $ ( 2,847 ) $ ( 22,711 ) Description of restatement adjustments in the condensed consolidated statements of comprehensive loss: (i) The $ 49 , $ 82 and $ 76 of foreign currency translation gains for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022, respectively, are related to the foreign currency translation impact of consolidated statements of operations adjustments (i) to (v) above. (ii) The $ 131 of foreign currency translation gain, $ 207 of foreign currency translation gain, and $ 168 of foreign currency translation loss for the six months ended June 30, 2022, the nine months ended September 30, 2022, and the three months ended December 31, 2022, respectively, are related to the foreign currency translation impact of consolidated statements of operations adjustments (i) to (v) above. Three Months Ended March 31, 2022 Six Months Ended June 30, 2022 Nine Months Ended September 30, 2022 Unaudited Condensed Consolidated Statements of Cash Flows Notes As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated Net loss $ ( 11,792 ) $ ( 2,295 ) $ ( 14,087 ) $ ( 50,057 ) $ ( 4,989 ) $ ( 55,046 ) $ ( 71,868 ) $ ( 6,922 ) $ ( 78,790 ) Other, net (i) $ - $ ( 19 ) $ ( 19 ) $ ( 16 ) $ ( 8 ) $ ( 24 ) $ 79 $ ( 45 ) $ 34 Change in contract assets (ii) $ ( 1,531 ) $ 687 $ ( 844 ) $ ( 2,390 ) $ 1,033 $ ( 1,357 ) $ ( 1,445 ) $ 163 $ ( 1,282 ) Change in contract liabilities (iii) $ ( 962 ) $ 1,653 $ 691 $ 4,378 $ 3,968 $ 8,346 $ 6,423 $ 6,712 $ 13,135 Other accrued expenses (iv) $ 1,077 $ ( 26 ) $ 1,051 $ 1,828 $ ( 4 ) $ 1,824 $ 1,636 $ 53 $ 1,689 Net cash used in operating activities $ ( 14,991 ) $ - $ ( 14,991 ) $ ( 32,494 ) $ - $ ( 32,494 ) $ ( 42,708 ) $ ( 39 ) $ ( 42,747 ) Purchase of property and equipment (v) $ ( 4,243 ) $ - $ ( 4,243 ) $ ( 12,485 ) $ - $ ( 12,485 ) $ ( 15,946 ) $ 39 $ ( 15,907 ) Net cash used in investing activities $ ( 4,262 ) $ - $ ( 4,262 ) $ ( 33,103 ) $ - $ ( 33,103 ) $ ( 38,342 ) $ 39 $ ( 38,303 ) Description of restatement adjustments in the condensed consolidated statements of cash flows: (i) The $ 19 , $ 8 , and $ 45 adjustments to change in other, net for the three months ended March 31, 2022, six months ended June 30, 2022, and nine months ended September 30, 2022, respectively, represent the change in deferred income tax liabilities related to the impact to income tax provision as a result of the revenue adjustments. (ii) The $ 687 , $ 1,033 , and $ 163 adjustments to change in contract assets for the three months ended March 31, 2022, six months ended June 30, 2022, and nine months ended September 30, 2022, respectively, are related to the impact to current and non-current balances of contract assets from the correction of revenue recognition for Space Services and R&D Services Contracts. (iii) The $ 1,653 , $ 3,968 , and $ 6,712 increases in contract liabilities for the three months ended March 31, 2022, six months ended June 30, 2022, and nine months ended September 30, 2022, respectively, are related to the impact to current and 148 non-current balances of contract liabilities from the correction of revenue recognition for Space Services and R&D Services Contracts. (iv) The $ 26 decrease, $ 4 decrease, and $5 3 increase in other accrued expenses for the three months ended March 31, 2022, six months ended June 30, 2022, and nine months ended September 30, 2022, respectively, are related to Delaware franchise tax accrual. (v) The $ 39 decrease in purchase of property and equipment for the nine months ended September 30, 2022, is related to costs incurred to build the customer-controlled satellites for one specific contract being expensed rather than capitalized into the Company's property and equipment. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.