Spire Global, Inc. 10-K

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. We had a loss of $4.3 million due to changes in foreign currency exchange rates for fiscal year 2024 and a gain of $1.5 million due to changes in foreign currency exchange rates for fiscal year 2023. A hypothetical 10% strengthening or weakening of the U.S. Dollar relative to the currencies in which our revenue and expenses are denominated would have resulted in an increase or decrease in our reported fiscal year 2024 pre-tax loss of approximately $3.5 million. Interest rate sensitivity We had cash and cash equivalents totaling $19.2 million and no short-term marketable securities as of December 31, 2024. 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 2024 or 2023. However, a higher rate of inflation in the future may have a negative impact on our operational and capital expenditures, which we may not be able to pass along as cost increases to our customers. 86 Item 8. Financi al Statements and Supplemental Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 88 Consolidated Balance Sheets as of December 31, 2024 and 2023 89 Consolidated Statements of Operations for the years ended December 31, 2024 and 2023 90 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2024 and 2023 90 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023 91 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 92 Notes to Consolidated Financial Statements 93 87 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, 2024 and 2023, 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, 2024 and 2023, 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. 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 31, 2025 We have served as the Company’s auditor since 2019. 88 Spire Global, Inc. Consolidated Balance Sheets (In thousands, except share and per share amounts) December 31, 2024 2023 Assets Current assets Cash and cash equivalents $ 19,206 $ 29,136 Marketable securities — 11,726 Accounts receivable, net (including allowance of $ 148 and $ 586 as of December 31, 2024 and December 31, 2023, respectively) 11,926 9,911 Contract assets 785 4,718 Other current assets 3,278 16,848 Assets classified as held for sale 56,963 — Total current assets 92,158 72,339 Property and equipment, net 63,338 60,446 Operating lease right-of-use assets 11,074 14,921 Goodwill 14,735 51,155 Customer relationships — 19,363 Other intangible assets 10,161 12,660 Other long-term assets, including restricted cash 2,109 8,380 Total assets $ 193,575 $ 239,264 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 11,592 $ 8,012 Accrued wages and benefits 3,335 1,829 Long-term debt, current portion 93,936 — Contract liabilities, current portion 22,037 31,178 Other accrued expenses 13,026 8,326 Liabilities associated with assets classified as held for sale 7,667 — Total current liabilities 151,593 49,345 Long-term debt 4,618 114,113 Contract liabilities, non-current 23,489 17,923 Contingent earnout liability 1,455 220 Deferred income tax liabilities 860 804 Warrant liability 13,641 5,988 Operating lease liabilities, net of current portion 9,598 13,079 Other long-term liabilities 8 8 Total liabilities 205,262 201,480 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, 25,711,165 Class A and 1,507,325 Class B shares issued and outstanding at December 31, 2024; 21,097,351 Class A and 1,507,325 Class B shares issued and outstanding at December 31, 2023 3 2 Additional paid-in capital 536,184 477,624 Accumulated other comprehensive loss ( 9,770 ) ( 4,556 ) Accumulated deficit ( 538,104 ) ( 435,286 ) Total stockholders’ equity ( 11,687 ) 37,784 Total liabilities and stockholders’ equity $ 193,575 $ 239,264 The accompanying notes are an integral part of these consolidated financial statements. 89 Spire Global, Inc. Consolidated Statements of Operations (In thousands, except share and per share amounts) Year Ended December 31, 2024 2023 Revenue $ 110,451 $ 97,612 Cost of revenue 70,560 59,024 Gross profit 39,891 38,588 Operating expenses: Research and development 29,188 27,650 Sales and marketing 22,220 25,754 General and administrative 49,744 41,999 Loss on decommissioned satellites 3,447 747 Allowance for current expected credit loss on notes receivable 4,026 1,218 Total operating expenses 108,625 97,368 Loss from operations ( 68,734 ) ( 58,780 ) Other income (expense): Interest income 1,547 2,332 Interest expense ( 20,358 ) ( 19,036 ) Change in fair value of contingent earnout liability ( 1,235 ) 129 Change in fair value of warrant liabilities ( 5,254 ) ( 1,597 ) Issuance of stock warrants ( 2,399 ) — Foreign exchange (loss) gain ( 4,314 ) 1,524 Other expense, net ( 1,912 ) ( 2,272 ) Total other expense, net ( 33,925 ) ( 18,920 ) Loss before income taxes ( 102,659 ) ( 77,700 ) Income tax provision (benefit) 159 ( 142 ) Net loss $ ( 102,818 ) $ ( 77,558 ) Basic and diluted net loss per share $ ( 4.26 ) $ ( 3.96 ) Weighted-average shares used in computing basic and diluted net loss per share 24,159,770 19,580,006 The accompanying notes are an integral part of these consolidated financial statements. Spire Global, Inc. Consolidated Statements of Comprehensive Loss (In thousands) Year Ended December 31, 2024 2023 Net loss $ ( 102,818 ) $ ( 77,558 ) Other comprehensive gain (loss): Foreign currency translation adjustments ( 5,213 ) 2,318 Net unrealized (loss) gain on investments (net of tax) ( 1 ) 34 Comprehensive loss $ ( 108,032 ) $ ( 75,206 ) The accompanying notes are an integral part of these consolidated financial statements. 90 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 Amount Capital Loss Deficit Equity Balance, December 31, 2022 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 — — — — ( 77,558 ) ( 77,558 ) Foreign currency translation adjustments — — — 2,318 — 2,318 Net unrealized gain on investments (net of tax) — — — 34 — 34 Balance, December 31, 2023 22,604,676 $ 2 $ 477,624 $ ( 4,556 ) $ ( 435,286 ) $ 37,784 Release of Restricted Stock Units 1,444,087 — — — — — Issuance of common stock under Employee Stock Purchase Plan 146,829 — 895 — — 895 Exercise of stock options 46,707 335 335 Stock compensation expense — — 19,449 — — 19,449 Issuance of common stock under Securities Purchase Agreements 2,976,191 1 37,881 — — 37,882 Net loss — — — — ( 102,818 ) ( 102,818 ) Foreign currency translation adjustments — — — ( 5,213 ) — ( 5,213 ) Net unrealized gain on investments (net of tax) — — — ( 1 ) — ( 1 ) Balance, December 31, 2024 27,218,490 $ 3 $ 536,184 $ ( 9,770 ) $ ( 538,104 ) $ ( 11,687 ) The accompanying notes are an integral part of these consolidated financial statements. 91 Spire Global, Inc. Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2024 2023 Cash flows from operating activities Net loss $ ( 102,818 ) $ ( 77,558 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 21,729 18,228 Stock-based compensation 19,449 12,978 Amortization of operating lease right-of-use assets 4,843 2,928 Amortization of debt issuance costs 4,500 2,337 Change in fair value of warrant liabilities 5,254 1,597 Change in fair value of contingent earnout liability 1,235 ( 129 ) Issuance of stock warrants 2,399 — Loss on decommissioned satellites and disposal of assets 4,023 1,024 Other, net ( 301 ) ( 505 ) Changes in operating assets and liabilities: Accounts receivable, net ( 5,034 ) 4,144 Contract assets 3,119 ( 1,647 ) Other current assets 12,445 ( 9,803 ) Other long-term assets 1,954 1,680 Accounts payable 2,649 1,371 Accrued wages and benefits 937 ( 2,747 ) Contract liabilities 2,748 13,693 Other accrued expenses 7,136 ( 1,116 ) Operating lease liabilities ( 4,720 ) ( 2,782 ) Net cash used in operating activities ( 18,453 ) ( 36,307 ) Cash flows from investing activities Purchases of short-term investments ( 30,147 ) ( 40,116 ) Maturities of short-term investments 42,497 52,500 Purchase of property and equipment ( 26,581 ) ( 17,352 ) Net cash used in investing activities ( 14,231 ) ( 4,968 ) Cash flows from financing activities Proceeds from Securities Purchase Agreements, net 37,881 — Proceeds from long-term debt — 19,886 Proceeds from issuance of common stock under the Equity Distribution Agreement, net — 7,866 Payments on long-term debt ( 20,113 ) ( 4,500 ) Payments of debt issuance costs — ( 75 ) Proceeds from exercise of stock options 335 3 Proceeds from employee stock purchase plan 895 727 Net cash provided by financing activities 18,998 23,907 Effect of foreign currency translation on cash, cash equivalents and restricted cash 3,737 ( 568 ) Net decrease in cash, cash equivalents and restricted cash ( 9,949 ) ( 17,936 ) Cash, cash equivalents and restricted cash Beginning balance 29,633 47,569 Ending balance $ 19,684 $ 29,633 Supplemental disclosure of cash flow information Cash paid for interest $ 14,149 $ 16,157 Income taxes paid $ 210 $ 47 Noncash operating, investing and financing activities Property and equipment purchased but not yet paid $ 2,264 $ 2,745 Right-of-use assets obtained in exchange for lease liabilities $ 490 $ 5,868 Accrued long-term debt issuance costs $ — $ 1,800 Conversion of warrants to Class A common stock $ — $ 286 Issuance of stock warrants with long-term debt (Note 7) $ — $ 2,579 The accompanying notes are an integral part of these consolidated financial statements. 92 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (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 and Climate. 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 (i) 2,166,389 shares of its Class A common stock during the year ended December 31, 2023 for gross proceeds of $ 8,235 and (ii) no shares during the year ended December 31, 2024. 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. 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 “2024 Private Placement”). The 2024 Private Placement closed on February 8, 2024, resulting in gross proceeds to the Company of $ 10,000 . On March 21, 2024, the Company entered into a Securities Purchase Agreement with institutional investors (the “Investors”), pursuant to which the Company issued and sold in a registered direct offering (the “Offering”), (i) an aggregate of 2,142,858 shares of Class A common stock and (ii) warrants exercisable for an aggregate of 2,142,858 shares of Class A common stock (“Securities Purchase Agreement Warrants”) to the Investors. Each share of Class A common stock and accompanying Securities Purchase Agreement Warrant to purchase one share of Class A common stock was sold at an offering price of $ 14.00 . The aggregate gross proceeds to the Company from the Offering totaled $ 30,000 before deducting the placement agent’s fees and related offering expenses. The Securities Purchase Agreement Warrants had an exercise price equal to $ 14.50 per share of Class A common stock, were exercisable for a term beginning on March 25, 2024, and expired on July 3, 2024, with no warrants exercised. On March 21, 2024, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Alliance Global Partners (“A.G.P” or the “Placement Agent”), pursuant to which the Company engaged A.G.P as the exclusive placement agent in connection with the Offering. The Company paid A.G.P a cash fee equal to 6 % of the gross proceeds from the sale of shares and Securities Purchase Agreement Warrants to the Investors, or $ 1,800 , in March 2024. The Company agreed to pay a cash fee equal to 4 % of the gross exercise price paid in cash with respect to the exercise of the Securities Purchase Agreement Warrants, which are now expired. 93 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) On November 13, 2024, 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 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. Refer to Note 2, Summary of Significant Accounting Policies, for a detailed discussion. 2. 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. 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, 2024, net loss was $ 102,818 , cash used in operations was $ 18,453 and the Company received net proceeds of $ 28,056 from the Offering and $ 9,825 from the 2024 Private Placement. The Company held cash and cash equivalents of $ 19,206 , excluding restricted cash of $ 478 as of December 31, 2024. The Company’s ability to continue as a going concern for the next 12 months from the date of issuance 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). Based on the Company’s current cash and cash equivalents and expected future financial results, if the Transactions do not close, the Company will not have sufficient liquidity to continue operations for at least the next twelve months from the issuance of these consolidated financial statements. On November 13, 2024, the Company entered into the Purchase Agreement with Buyer, pursuant to which the Company agreed to complete 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 certain 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. Buyer removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court. The District of Delaware initially selected a March 4, 2025 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. There is no assurance as to what action the Delaware Court of Chancery will take with respect to the proceeding initiated by the Company 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. 94 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 delay in the closing of the Transactions, on March 14, 2025, the Company closed a private placement of Class A common stock and pre-funded warrants for gross proceeds of $ 40,000 , before deducting offering expenses. The Company may 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, 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 issuance 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 geopolitical conflicts like the Russian invasion of Ukraine, Israel's war with Hamas and the increased tensions between China and the United States. The U.S. Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The U.S. Dollar's decrease had a positive impact on the Company's revenue, as approximately one-third of the Company's sales are conducted in foreign currencies. Conversely, the decrease in the value of the U.S. Dollar had an unfavorable impact on the Company's expenses, given that a majority of the Company's workforce resides in countries other than 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, and longer sales cycles. Particularly, government agency delays in approving appropriations bills negatively impacted the timeliness of some of the Company’s U.S. federal government orders. Additionally, recent changes to tariffs could cause interruptions in our supply chain or increase spending to meet our obligations. Increasing interest rates in the fiscal year ended December 31, 2024 resulted in higher interest expenses, as our credit facility is based on a floating interest rate. 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 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 95 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 beginning June 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 a decrease in loss from continuing operations before income taxes of approximately $ 627 , or $ 0.03 per basic and diluted share for the year ended December 31, 2024, and 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, each of which has defined its functional currency as the local currency of the country in which it operates, translate their assets and liabilities into U.S. dollars at the exchange rate as of each 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 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. 96 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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, 2024 2023 Cash and cash equivalents $ 19,206 $ 29,136 Restricted cash included in Other long-term assets 478 497 $ 19,684 $ 29,633 Accounts Receivable and Notes Receivable 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 fo r 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 expenses for credit losses of $ 26 and $ 640 on accounts receivables for the years ended December 31, 2024 and 2023, 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. The Company recorded allowances for current expected credit loss of $ 4,026 and $ 1,218 on the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively. 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 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 a $ 4,500 note receivable and a $ 744 accrued interest balance outstanding as of December 31, 2024 and had a $ 4,500 note receivable and a $ 238 accrued interest balance outstanding as of December 31, 2023. The entire balance as of each of December 31, 2024 and 2023 was with one customer for which the Company established a $ 5,244 and $ 1,218 allowance for current expected credit l oss as of December 31, 2024 and 2023, respectively (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. The Company had one customer that represented 10 % or more of the Company's total revenue during each of the years ended December 31, 2024 and 2023; specifically, such customer represented 24 % and 28 % of total revenue for the years ended December 31, 2024 and 2023, respectively. The one customer 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, 2024 and 2023. The following table represents 10% or more of the Company’s total accounts receivable: As of December 31, 2024 2023 Customer A 13 % * Customer B 13 % * * No one customer accounted for more than 10 % of the Company's total accounts receivable. 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 97 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) had one vendor for the years ended December 31, 2024 and 2023, 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. Assets Held for Sale The Company classifies long-lived assets or disposal groups as held for sale in the period when all of the following conditions have been met: • the Company has approved and committed to a plan to sell the asset or disposal group; • the asset or disposal group is available for immediate sale in its present condition; • an active program to locate a buyer and other actions required to complete the sale have been initiated; • the sale of the asset or disposal group is probable to be completed within one year; • the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and • it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell and recognize any loss in the period in which the held for sale criteria are met. Gains are not recognized until the date of sale. We cease depreciation and amortization for long-lived assets, or assets within a disposal group, upon their designation as held for sale and subsequently assess fair value less any costs to sell at each reporting period until the asset or disposal group is no longer classified as held for sale. Property and Equipment 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. 98 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 The following table summarizes the Company's long-lived assets by geography: December 31, 2024 2023 EMEA (1) 62 % 62 % Americas (2) 38 % 38 % Total 100 % 100 % (1) United Kingdom re presented 43 % and Luxembourg represented 10 % for the year ended December 31, 2024 and United Kingdom represented 36 %, Germany represented 14 %, and Luxembourg represented 12 % for the year ended December 31, 2023. (2) U.S. represented 27 % and 17 % and Canada represented 11 % and 21 % for the years ended December 31, 2024 and 2023, 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, 2024 and 2023. 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 2024 indicated that the fair value significantly exceeded the carrying value of goodwill. 99 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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. 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 years ended December 31, 2024 and 2023. 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 $ 3,447 on decommissioned satellites and $ 576 on other long-lived assets for the year ended December 31, 2024, and $ 747 on decommissioned satellites and $ 277 on other long-lived assets for the year ended December 31, 2023. 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, 2024 and 2023. 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. 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. In November 2022, the Company announced the commencement of an exchange offer (the "Offer") and consent solicitation relating to all holders of the Common Stock Warrants to receive 0.2 shares of Class A common stock in exchange for each 100 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) outstanding Common Stock Warrant tendered by the holder. On December 19, 2022, a total of 2,069,561 Common Stock 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 Public 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”). 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. 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 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 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. 101 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 and Climate: 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. 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. The Company performs an identification and evaluation of material rights 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 features that may decrease the transaction price, such as service-level credits when agreed upon service levels are not met. Service-level credits have not historically been material to the related arrangements. The Company allocates service-level credits to the accounting period(s) that correspond with the month(s) of service during which the service levels were not met. Space Services contracts 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). 102 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 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 Solutions 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 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 103 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 $ 691 and $ 926 , as of December 31, 2024 and 2023, respectively, of which $ 408 and $ 487 , respectively, were classified as current. The Company recognized $ 547 a nd $ 490 as amortization of deferred contract costs in sales and marketing expense during the years ended December 31, 2024 and 2023, respectively. Cost of Revenue Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure and high-power computing costs, third-party operating and royalty costs associated with delivering 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. The launch costs capitalized as cost to fulfill the contract related to such arrangements were $ 0 and $ 7,585 a s of December 31, 2024 and December 31, 2023, respectively. Costs associated with Space Services Contracts performance obligations will generally be recognized as incurred. Research and Development Costs 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 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 104 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 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 was $ 626 and $ 1,103 for the years ended December 31, 2024 and 2023, 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, 2024 and 2023. 105 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 $ 807 and $ 1,838 during the years ended December 31, 2024 and 2023, 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. • 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 106 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 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 10.6 % ownership of Myriota. As of December 31, 2024, the Company's investment in Myriota, in the amount of $ 858 , 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, net in the consolidated statements of operations. The Company generated $ 642 and $ 897 in revenue from Myriota during the years ended December 31, 2024 and 2023, respectively, and had $ 52 of accounts receivable as of December 31, 2024 and no accounts receivable as of December 31, 2023, from Myriota. 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. 107 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) Accounting Pronouncements Recently Adopted In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 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 adoption of ASU 2023-01 as of January 1, 2024, did not impact the Company’s 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 adoption of ASU 2023-05 as of January 1, 2024, did not impact the Company’s consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities within a single reportable segment, and contain other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and will be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this ASU for its 2024 annual period with the comparative periods updated to reflect additional disclosures. See Note 15 for further details. Accounting Pronouncements Not Yet Adopted 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. In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their annual reports and registration statements. The rules will require disclosure of material climate-related risks, how the board of directors and management oversee and manage such risks, and the actual and potential impact of such risks on the registrant. It will also require disclosure about material climate-related targets and goals, and the financial impact of severe weather events and other natural conditions in the notes to audited financial statements. In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges. The disclosure requirements will apply at the earliest to reports for the Company's fiscal year ended December 31, 2025 (or potentially later depending on the Company's filer status at the time), pending resolution of the stay. The Company is currently evaluating the impact on the Company's disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is currently evaluating the impact on the Company's disclosures. 108 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 3. Revenue, Contract Assets, Contract Liabilities and Remaining Performance Obligations Disaggregation of Revenue Revenue from subscription-based contracts was $ 77,170 , representing 70 % of total revenue for the year ended December 31, 2024. Revenue from subscription-based contracts was $ 71,754 , representing 74 % of total revenue for the year ended December 31, 2023. Revenue from non-subscription-based contracts was $ 33,281 , representing 30 % of total revenue for the year ended December 31, 2024. Revenue from non-subscription-based contracts was $ 25,858 , representing 26 % of total revenue for the year ended December 31, 2023. The following revenue disaggregated by geography was recognized: Year Ended December 31, 2024 Year Ended December 31, 2023 Americas (1) $ 62,711 57 % $ 48,652 50 % EMEA (2) 39,706 36 % 35,458 36 % Asia Pacific 8,034 7 % 13,502 14 % Total $ 110,451 100 % $ 97,612 100 % (1) U.S. represented 43 % and 41 % for the years ended December 31, 2024 and 2023, respectively, and Canada represented 14 % for the year ended December 31, 2024. (2) United Kingdom represented 12 % and 13 % for the years ended December 31, 2024 and 2023, respectively. Contract Assets At December 31, 2024, contract assets of $ 785 were reported in contract assets on the Company's consolidated balance sheets. 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 Changes in contract assets were as follows: 2024 2023 Balance as of January 1 $ 4,917 $ 2,881 Contract assets recorded during the year 659 4,917 Reclassified to accounts receivable ( 4,696 ) ( 2,927 ) Other ( 95 ) 46 Balance as of December 31 $ 785 $ 4,917 Contract Liabilities At December 31, 2024, contract liabilities were $ 45,526 , of which $ 22,037 was reported in contract liabilities, current portion, and $ 23,489 was reported in other long-term liabilities on the Company’s consolidated balance sheets. 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. Changes in contract liabilities were as follows: 2024 2023 Balance as of January 1 $ 49,101 $ 34,873 Contract liabilities recorded during the year 32,757 34,409 Revenue recognized during the period ( 35,569 ) ( 20,549 ) Other ( 763 ) 368 Balance as of December 31 $ 45,526 $ 49,101 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 109 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) less, and (ii) cancellable contracts. As of December 31, 2024, the amount not yet recognized as revenue from these commitments was $ 216,436 . The Company expects to recognize its remaining performance obligations as of December 31, 2024, over the following periods: December 31, 2024 1 to 12 months $ 67,901 31 % 13 to 24 months 39,700 18 % 25 to 36 months 31,896 15 % 37 to 48 months 25,627 12 % Remaining 51,312 24 % Total $ 216,436 100 % 4. Other Balance Sheet Components Other current assets consisted of the following: December 31, 2024 2023 Technology and other prepaid contracts $ 838 $ 9,874 Notes receivable — 3,344 Other receivables 648 1,476 Prepaid insurance 1,076 487 Deferred contract costs 297 1,238 Other 419 429 Other current assets $ 3,278 $ 16,848 Property and equipment, net consisted of the following: December 31, 2024 2023 Satellites in-service $ 32,768 $ 59,751 Internally developed software 1,760 2,138 Ground stations in-service 4,978 4,444 Leasehold improvements 5,707 5,800 Machinery and equipment 5,479 4,787 Computer equipment 1,327 1,908 Computer software and website development 99 99 Furniture and fixtures 1,335 1,336 53,453 80,263 Less: Accumulated depreciation and amortization ( 25,748 ) ( 36,326 ) 27,705 43,937 Satellite, launch, and ground station work in progress 27,624 16,483 Finished satellites not yet placed in-service 8,009 26 Property and equipment, net $ 63,338 $ 60,446 Depreciation and amortization expense related to property and equipment was $ 18,501 and $ 14,711 for the years ended December 31, 2024 and 2023, respectively. There was a loss from decommissioned satellites of $ 3,447 and $ 747 for the years ended December 31, 2024 and 2023, respectively. 110 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) Other accrued expenses consisted of the following: December 31, 2024 2023 Operating lease liabilities, current $ 3,260 $ 3,506 Professional services 2,622 913 Accrued operating costs 1,829 1,088 Accrued interest 1,709 853 Legal matters 1,479 — Software 792 754 Corporate and sales tax 120 285 Other 1,215 927 Other accrued expenses $ 13,026 $ 8,326 5. Goodwill and Intangible Assets The following table summarizes changes in goodwill balance: Balance at December 31, 2023 $ 51,155 Impact of foreign currency translation ( 4,008 ) Assets classified as held for sale ( 32,412 ) Balance at December 31, 2024 $ 14,735 Intangible assets consisted of the following: December 31, 2024 Gross Carrying Amount Accumulated Amortization Developed technology $ 12,270 $ ( 3,153 ) Trade names 2,080 ( 1,282 ) Patents 393 ( 345 ) FCC licenses 480 ( 282 ) $ 15,223 $ ( 5,062 ) 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 ) As of December 31, 2024, the weighted-average amortization period for developed technology was 8.9 years, trade names was 1.9 years, and patents and FCC licenses was 5.6 years. Amortization expense related to intangible assets was $ 3,228 and $ 3,518 for the years ended December 31, 2024 and 2023, respectively. The Company did no t recognize any impairment charges during the years ended December 31, 2024 and 2023. The patents asset balance included $ 0 and $ 57 of capitalized patent costs as of December 31, 2024 and 2023, respectively, that began amortization upon the issuance of an official patent right to the Company. 111 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) As of December 31, 2024, the expected future amortization expense of intangible assets is as follows: Fiscal year ending December 31, Future Amortization Expense 2025 $ 1,493 2026 1,451 2027 1,062 2028 1,058 2029 1,056 Thereafter 4,041 $ 10,161 6. Assets Held for Sale On November 13, 2024, the Company entered into the Purchase Agreement to sell its maritime business to Buyer for $ 233,500 subject to certain adjustments. The following table summarizes the carrying values of the assets and liabilities classified as held for sale in the Company's consolidated balance sheets as of December 31, 2024: December 31, 2024 Assets: Accounts receivable, net $ 2,591 Contract assets 927 Other current assets 1,002 Property, plant and equipment, net 106 Goodwill 32,412 Customer relationships, net 16,281 Other non-current assets 3,644 Total assets classified as held for sale $ 56,963 Liabilities: Accounts payable $ 787 Accrued wages and benefits 402 Other accrued expenses 1,014 Contract liabilities, current portion 5,444 Contract liabilities, non-current portion 20 Total liabilities associated with assets classified as held for sale $ 7,667 Net assets held for sale $ 49,296 The Company's satellite and ground station networks, including operations, and maritime contracts associated with the U.S. federal government will be retained by the Company at closing and are not included in the amounts presented above. The Company expects the transaction, which is subject to customary closing conditions and regulatory approvals, to close during the second quarter of 2025. 7. Long-Term Debt Long-term debt consisted of the following: December 31, 2024 2023 Blue Torch term loan $ 98,446 $ 117,996 Other 4,618 5,128 Total long-term debt 103,064 123,124 Less: Debt issuance costs ( 4,510 ) ( 9,011 ) Less: Current portion of long-term debt ( 93,936 ) — Non-current portion of long-term debt $ 4,618 $ 114,113 112 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) The Company recorded $ 20,347 and $ 19,032 of interest expense, which included amortization of deferred issuance costs of $ 4,477 and $ 2,337 from long-term debt for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, the scheduled principal payments of long-term debt was as follows: Fiscal year ending December 31, Future Principal Payments 2025 (1) $ 98,446 2026 308 2027 308 2028 308 2029 308 Thereafter 3,387 Total debt payments $ 103,065 (1) As of December 31, 2024, the Company was not in compliance with its leverage ratio and minimum liquidity financial covenants under the Blue Torch Financing Agreement; therefore, the debt is reflected as a current liability. 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, 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 would have occurred on or prior to the first anniversary of the closing date, a make-whole amount equal to the amount of interest that would have otherwise been payable through the maturity date of the Blue Torch Credit Facility. 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 12.6571 % as of December 31, 2024. Principal on the term loan is only payable at maturity and interest on the term loan is due and payable quarterly for Term SOFR borrowings. 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 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 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 113 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) $ 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 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 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. On April 8, 2024, the Company entered into Amendment No. 3 to Financing Agreement (the “Third Amendment”) with Blue Torch and the Lenders, which amends the Blue Torch Financing Agreement to (i) increase the maximum debt to EBITDA leverage ratio for the monthly periods ending June 30, 2024, July 31, 2024, and August 31, 2024, and to decrease the maximum permitted ratio thereafter, and (ii) amend the minimum liquidity covenant to require liquidity of at least $ 20,000 at all times, commencing on April 8, 2024, which represents a $ 10,000 decrease from the requirement in effect immediately prior to the effective date of the Third Amendment. On April 8, 2024, in accordance with the terms of the Third Amendment, the Company made a prepayment to Blue Torch of $ 10,000 in principal, plus an early termination fee of $ 200 . 114 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) On August 27, 2024, the Company entered into Waiver and Amendment No. 4 to Financing Agreement (the “Fourth Amendment”) with Blue Torch and the Lenders, which amends the Blue Torch Financing Agreement to (i) waive events of default under the Blue Torch Financing Agreement arising out of the maximum debt to EBITDA leverage ratio being greater than the ratio permitted by the Blue Torch Financing Agreement and the failure to deliver the financial statements for the fiscal quarter ended June 30, 2024 required by the Blue Torch Financing Agreement, (ii) amend the financial covenants in the Blue Torch Financing Agreement to provide immediate covenant relief from the leverage ratios set forth in the Blue Torch Financing Agreement and extend the duration of the annualized recurring revenue (ARR) leverage ratio through December 31, 2024, and (iii) provide for a fourth amendment fee. The fourth amendment fee is in an amount equal to three and a half percent (3.50%) of the aggregate outstanding principal balance of the term loans on the effective date of the Fourth Amendment, bears interest from the date of the Fourth Amendment at Adjusted Term SOFR for a 3-month interest period plus the applicable margin under the Blue Torch Financing Agreement, and shall be paid-in-kind and added to the principal balance of the term loans. On August 27, 2024, in accordance with the terms of the Fourth Amendment, the Company made a prepayment to Blue Torch of $ 10,000 in principal, plus an early termination fee of $ 100 . On November 11, 2024, the Company and Blue Torch entered into a forbearance agreement (the “Forbearance Agreement”), pursuant to which each of the lenders party to the Blue Torch Financing Agreement agreed not to exercise their default-related rights and remedies with respect to certain events of default related to the failure to deliver quarterly financial information as of and for the periods ended June 30, 2024 that was required to be provided to the lenders by October 31, 2024, the leverage ratio being greater than required as of June 30, 2024 and our anticipated failure to file the financial statements for the fiscal quarter ended September 30, 2024 with the SEC by November 15, 2024 (collectively, the “Specified Defaults”), until the earliest to occur of (A) the occurrence of any other event of default other than the Specified Defaults, (B) the date on which Blue Torch delivered a notice terminating the forbearance period, which notice could have been delivered at any time upon or after the occurrence of an additional event of default or any breach of the Forbearance Agreement or (C) 11:59 p.m. Eastern Time on December 24, 2024. As the Company was not in compliance with its leverage ratio and minimum liquidity financial covenants and SEC periodic filing requirement non-financial covenant under the Blue Torch Financing Agreement, the balance due was reflected as a current liability in the consolidated balance sheets as of December 31, 2024. 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 . Related to the SIF loan agreement, $ 4,618 and $ 5,128 was included in long-term debt, non-current on the consolidated balance sheets as of December 31, 2024 and 2023, respectively. 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 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 $ 4,454 and $ 4,172 for the years ended December 31, 2024 and 2023, respectively. Aggregate variable lease expenses and short-term lease expenses were $ 1,274 and $ 613 , for the years ended December 31, 2024 and 2023, respectively. 115 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) The following table provides the required information regarding the Company's leases for which the Company is the lessee: December 31, 2024 2023 Assets ROU assets $ 11,074 $ 14,921 Liabilities Current $ 3,260 $ 3,506 Non-current 9,598 13,079 Total lease liabilities $ 12,858 $ 16,585 Weighted-average remaining lease term (years) 4.8 5.4 Weighted-average discount rate 9 % 8 % As of December 31, 2024, the maturity of operating leases liabilities are as follows: Fiscal year ending December 31, 2025 $ 4,195 2026 3,599 2027 2,498 2028 1,829 2029 1,551 Thereafter 1,928 Total lease payments 15,600 Less: Interest on lease payments ( 2,742 ) Present value of lease liabilities $ 12,858 Operating cash flows paid were $ 4,720 and $ 2,782 included in the measurement of operating lease liabilities for the years ended December 31, 2024 and 2023, respectively, and were included in net cash used in operating activities in the consolidated statements of cash flows. Amortization of ROU assets was $ 4,843 and $ 2,928 for the years ended December 31, 2024 and 2023, respectively. 116 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (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, 2024 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents: Money market funds $ 3,157 $ — $ — $ 3,157 $ 3,157 $ — $ — $ 3,157 Long-term liabilities: Credit Agreement Warrants $ — $ 13,641 $ — $ 13,641 Contingent earnout liability — — 1,455 1,455 $ — $ 13,641 $ 1,455 $ 15,096 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 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 bonds, 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. 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 117 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 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”). T he Warrant Amendment was approved because consents were received from holders of more than 65 % of the Company’s outstanding Public Warrants. 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 the 2022 Blue Torch 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 . Additionally, in connection with the closing of the financing, the Company issued the Urgent Warrants 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 . 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 the 2023 Blue Torch 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 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, December 31, 2024 2023 Fair value of the Company’s Class A common stock $ 14.07 $ 7.82 Exercise price $ 5.44 - 16.08 $ 5.44 - 16.08 Risk-free interest rate 4.48 % 3.88 % Expected volatility factor 96.0 % 55.0 % Expected dividend yield — % — % Remaining contractual term (in years) 7.4 - 8.7 8.5 - 9.7 Securities Purchase Agreement Warrants On March 21, 2024, the Company entered into a Securities Purchase Agreement with the Investors, pursuant to which the Company issued and sold in the Offering, (i) an aggregate of 2,142,858 shares of Class A common stock and (ii) Securities Purchase Agreement Warrants exercisable for an aggregate of 2,142,858 shares of Class A common stock to the Investors. Each share of Class A common stock and accompanying Securities Purchase Agreement Warrant to purchase one share of Class A common stock was sold at an offering price of $ 14.00 . The aggregate gross proceeds to the Company from the Offering totaled $ 30,000 before deducting the placement agent’s fees and related offering expenses. The Securities Purchase Agreement Warrants had an exercise price equal to $ 14.50 per share of Class A common stock, were exercisable for a term beginning on March 25, 2024 and expired on July 3, 2024, with no warrants exercised. The warrant liability relating to the Securities Purchase Agreement Warrants was reversed as of June 30, 2024, since the Company's per share market value as of June 30, 2024, was below the exercise price of such warrants. 118 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 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, December 31, 2024 2023 Fair value of the Company’s Class A common stock $ 14.07 $ 7.82 Risk-free interest rate 4.22 % 4.09 % Expected volatility factor 96.0 % 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, 2023 $ 220 Change in fair value of contingent earnout liability 1,235 Fair value as of December 31, 2024 $ 1,455 Cash and Cash Equivalents and Marketable Securities The following tables summarize the Company's cash, cash equivalents and available-for-sale securities by significant marketable securities category: December 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 16,049 $ — $ — $ 16,049 Cash equivalents: Money market funds 3,157 — — 3,157 $ 19,206 $ — $ — $ 19,206 December 31, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Cash $ 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 ) $ 11,726 119 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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, 2024 and 2023. 10. Commitments and Contingencies 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 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, 2024 and 2023. The Company recognized $ 4,952 and $ 5,059 in cost of revenue in the consolidated statements of operations for costs incurred to acquire exclusive access rights to data generated from satellites for the years ended December 31, 2024 and 2023, respectively. The following table summarizes the operational fees commitment under the A&R L3Harris Agreement, which includes the fixed payment obligations to L3Harris: Future Payment Obligations Fiscal year ending December 31, 2025 $ 4,300 2026 4,300 2027 4,300 2028 4,300 2029 4,300 Thereafter 6,889 $ 28,389 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. Stockholder Litigation On August 20, 2024, the Company and two of its executive officers were named as defendants in a purported federal securities law class action filed in the United States District Court for the Eastern District of Virginia, captioned Michal Bousso v. Spire Global, Inc. et al., Court File No. 1:24-cv-1458 (the "Bousso Lawsuit"). On October 14, 2024, a second plaintiff filed a similar lawsuit against the Company and three current or former executive officers, also in the United States District Court for the Eastern District of Virginia, captioned Kohei Tagawa v. Spire Global, Inc. et al., Court File No. 1:24-cv-1810 (the “Tagawa Lawsuit”). On November 22, 2024, the court consolidated the Bousso Lawsuit and the Tagawa Lawsuit, appointed Michal Bousso as lead plaintiff, and renamed the case to “In re Spire Global, Inc. Securities Litigation,” Master File No. 1:24-cv-1458-MSN-WEF (the “Master Securities Lawsuit”). On December 23, 2024, the plaintiff filed an amended complaint in the Master Securities Lawsuit, which alleges violations of Sections 10(b) and 20(a) of the Exchange Act (and Rule 10b-5 thereunder), 120 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) arising from or relating to our announcements in August 2024 that certain of the Company's previously issued audited and unaudited financial statements should not be relied upon. Plaintiff alleges that the Company and the individual defendants made false or misleading statements relating to (1) how revenue was recognized for pre-space services for certain space contracts, and (2) how costs for certain contracts were characterized. The plaintiff seeks to represent a class of shareholders who purchased or otherwise acquired our common stock between May 11, 2022 and August 14, 2024. The plaintiff seeks damages and other relief, including attorneys' fees and costs. The defendants are vigorously defending this lawsuit. On January 22, 2025, the defendants moved to dismiss the amended complaint in its entirety. The court in the Master Securities Lawsuit held argument on the Company’s motion to dismiss on March 14, 2025. After hearing argument from both sides, the court issued its order on the record dismissing the Master Securities Lawsuit without prejudice. The court granted the plaintiff 30 days to consider whether to amend. On September 5, 2024, a stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, purportedly on behalf of the Company against certain of its officers and directors and the Company (as a nominal defendant), captioned Lawrence Hollin v. Platzer et al. , Court File No. 1:24-cv-01558 (the “ Hollin Lawsuit”). On September 10, 2024, a second stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, also purportedly on behalf of the Company against certain of its officers and directors and the Company (as a nominal defendant), captioned Richard Cobb v. Platzer et al. , Court File No. 1:24-cv-01596 (the “ Cobb Lawsuit”). On November 12, 2024, a third stockholder derivative lawsuit was filed in the United States District Court for the Eastern District of Virginia, also purportedly on behalf of the Company against certain of its officers and directors and the Company (as a nominal defendant) captioned L. Robert Oros v. Platzer et al. , 1:24-cv-02020 (the “ Oros Lawsuit”). On November 14, 2024, the Court consolidated the Hollin Lawsuit and the Cobb Lawsuit and renamed the case to In re Spire Global, Inc. Stockholder Derivative Litigation , No. 1:24-cv-01596 (the “Master Derivative Case”). On December 2, 2024, the Court consolidated the Oros Lawsuit into the Master Derivative Case. The lawsuits in the Master Derivative Case arise out of the same subject matter as the Master Securities Lawsuit, and they allege some or all of the following claims: (1) breach of fiduciary duty; (2) gross mismanagement; (3) waste of corporate assets; (4) unjust enrichment; (5) as against the director defendants, violations of Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder; (6) as against the officer defendants, contribution under Sections 10(b) and 21D of the Exchange Act; and (7) aiding and abetting. Each of the lawsuits in the Master Derivative Case seeks damages and other relief, including attorneys' fees and costs. The Master Derivative Case is currently stayed pending the motion to dismiss in the Master Securities Lawsuit. Share Purchase Agreement Litigation As previously disclosed, on November 13, 2024, we entered into a Purchase Agreement with the Buyer, pursuant to which the Company agreed to complete 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 certain 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. The Company believes all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied. Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing. Buyer has cited various reasons for declining to close, which the Company has rejected. There is currently no governmental order in effect prohibiting closing and, in the Purchase Agreement, Buyer agreed to “use best efforts, and to take any and all actions necessary, to eliminate each and every impediment that is asserted” by relevant government entities so as to enable the parties to consummate the Transactions promptly. the Company believes that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met. As a result of the foregoing, 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. Buyer removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court. The District of Delaware initially selected a March 4 trial date, but on February 26, 2025, the court 121 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 the Company and there is no assurance as to whether or not the Transactions will be consummated on the terms contemplated or at all. Whether or not the Transactions are consummated as required, the Company reserves all of its rights under the Purchase Agreement and in law and equity, including the right to seek damages and other remedies from Buyer. The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time. Except as disclosed above, the Company is not currently a party to any legal proceedings that, if determined adversely to the Company, would, in the Company's opinion, have a material adverse effect on its business, results of operations, financial condition, or cash flows. Future litigation may be necessary to defend the Company, its partners, and its customers by determining the scope, enforceability, and validity of third-party proprietary rights, or to establish the Company's proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Note Receivable The Company has outstanding a $ 4,500 note receivable plus accrued interest of $ 744 issued to a Space Services customer as of December 31, 2024. The note and accrued interest were 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, the customer did not pay the note and accrued interest when it was 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 $ 5,244 as of December 31, 2024. 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 (the “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 period or (ii) the fair market value of Class A common stock on the exercise date. As of December 31, 2024, 572,038 and 596,830 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 Aggregate Intrinsic Value ('000) (in years) Options outstanding as of December 31, 2023 2,198,552 $ 17.11 5.0 Granted 33,901 $ 10.17 Exercised ( 46,707 ) $ 7.17 Forfeited, canceled, or expired ( 207,189 ) $ 21.94 Options outstanding as of December 31, 2024 1,978,557 $ 16.72 4.5 $ 2,619 Vested and expected to vest at December 31, 2024 1,978,557 $ 16.72 4.5 $ 2,619 Exercisable at December 31, 2024 1,937,993 $ 16.70 4.4 $ 2,487 122 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) The aggregate intrinsic value of options exercised was $ 251 and $ 1 during the years ended December 31, 2024 and 2023, respectively. The aggregate fair value of options vested was $ 3,024 and $ 3,729 during the years ended December 31, 2024 and 2023, respectively. The Company received $ 335 and $ 3 in cash proceeds from options exercised during the years ended December 31, 2024 and 2023, respectively. There were 33,901 and 61,446 options granted during the years ended December 31, 2024 and 2023, respectively. The weighted-average grant date fair value of options granted was $ 5.15 and $ 2.77 for the years ending December 31, 2024 and 2023, respectively. The following table summarizes RSU activity under the 2021 Plan: Number of RSUs Weighted Average Grant Date Fair Value per Share Outstanding as of December 31, 2023 1,847,583 $ 10.17 RSUs granted 3,403,896 $ 11.00 RSUs vested ( 1,444,087 ) $ 10.74 RSUs forfeited ( 1,030,236 ) $ 11.69 Outstanding as of December 31, 2024 2,777,156 $ 10.32 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 applicable grant vesting term, generally three to four years. The aggregate fair value of RSUs vested was $ 15,526 and $ 14,294 during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, there was $ 23,792 of total unrecognized compensation expense related to options and RSUs expected to be recognized over a weighted-average period of 1.89 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: Year Ended December 31, 2024 2023 Cost of revenue $ 389 $ 197 Research and development 5,194 3,474 Sales and marketing 3,717 2,707 General and administrative 10,149 6,600 $ 19,449 $ 12,978 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 . The fair value of stock options was estimated using the following assumptions at the date of the grant: Year Ended December 31, 2024 2023 Risk-free interest rate 4.3 % 4.1 % Expected volatility factor 49.9 % 51.8 % 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, 2024 and 2023. 123 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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 Loss before income taxes consisted of the following: Year Ended December 31, 2024 3023 Domestic loss $ ( 77,658 ) $ ( 61,371 ) Foreign loss ( 25,001 ) ( 16,329 ) Loss before income taxes $ ( 102,659 ) $ ( 77,700 ) The income tax provision consists of the following: Year Ended December 31, 2024 2023 Current income tax provisions: Federal $ — $ — State 66 — Foreign 41 ( 176 ) Current income tax provision 107 ( 176 ) Deferred income tax expense: Federal — — State — — Foreign 52 34 Deferred income tax expense 52 34 Total income tax provision (benefit) $ 159 $ ( 142 ) The following table presents a reconciliation of the federal statutory rate of 21 % to effective tax rate: Year Ended December 31, 2024 2023 U.S. federal tax benefit at statutory rate 21.0 % 21.0 % State income taxes, net of federal benefit 3.6 % 2.6 % Foreign rate differential ( 0.1 )% 0.4 % Contingent earnout ( 0.3 )% 0.0 % Stock-based compensation ( 3.2 )% ( 1.4 )% UK R&D expenditure 0.5 % 1.0 % GILTI inclusion ( 1.5 )% ( 2.2 )% Outside basis difference in foreign subsidiary 1.8 % 0.0 % Deferred tax adjustments 1.5 % ( 4.7 )% Non-deductible expenses and other ( 1.6 )% ( 0.4 )% Change in valuation allowance, net ( 21.9 )% ( 16.2 )% Effective tax rate ( 0.2 )% 0.1 % 124 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) For fiscal years 2024 and 2023, 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, 2024 2023 Deferred tax assets Net operating loss carryforward $ 103,462 $ 98,300 Research and development credit carryforward 5,599 4,560 Interest expense limitation carryforward 12,467 5,141 Stock-based compensation 1,971 1,709 Property and equipment 7,493 6,030 Investment in subsidiary 1,732 — Operating lease liabilities 1,371 1,891 Sec 174 Capitalized R&D 10,700 8,416 Intangibles 239 233 Other accruals 14,321 12,619 Gross deferred tax assets 159,355 138,899 Less: Valuation allowance ( 141,877 ) ( 121,009 ) Net deferred tax assets 17,478 17,890 Deferred tax liabilities Intangibles ( 11,864 ) ( 13,165 ) Operating lease right-of-use assets ( 1,263 ) ( 1,785 ) Foreign property and equipment and intangibles ( 313 ) ( 708 ) Other accruals ( 4,898 ) ( 3,036 ) Gross deferred tax liabilities ( 18,338 ) ( 18,694 ) Net deferred tax liabilities $ ( 860 ) $ ( 804 ) As of December 31, 2024, the Company had accumulated undistributed earnings generated by its foreign subsidiaries of $ 13,379 . 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, 2023 was $ 121,009 , which increased to $ 141,877 as of December 31, 2024. The increase in the valuation allowance of $ 20,868 is mostly related to current year losses. At December 31, 2024, the Company had $ 273,897 of federal net operating losses available to reduce future taxable income, which will begin to expire in 2032 . Approximately $ 191,372 of federal net operating loss included above can be carried forward indefinitely. The Company also had federal research and development tax credit carryforwards of $ 5,010 , which will begin to expire in 2032, and federal interest limitation carryforwards of $ 48,033 which can be carried forward indefinitely. At December 31, 2024, the Company had $ 227,662 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 $ 30,698 , 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 125 Spire Global, Inc. Notes to Consolidated Financial Statements December 31, 2024 and 2023 (In thousands, except shares and per share data, unless otherwise noted) 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, 2024, the Company had $ 162,979 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 $ 589 , 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, Australia, 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 The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Year Ended December 31, 2024 2023 Numerator: Net loss $ ( 102,818 ) $ ( 77,558 ) Denominator: Weighted-average shares used in computing basic and diluted net loss per share 24,159,770 19,580,006 Basic and diluted net loss per share $ ( 4.26 ) $ ( 3.96 ) The Company has two classes 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. Potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would reduce 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. The Company excluded the following potential shares of Class A common stock, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the years ended December 31, 2024 and 2023 because including them would have had an anti-dilutive effect: Fiscal Year Ended December 31, 2024 2023 Stock options and 2021 ESPP 1,986,790 2,212,165 RSUs 2,777,156 1,847,583 Credit Agreement Warrants 1,058,940 1,058,940 5,822,886 5,118,688 126 15. Information on Segment Reporting The Company operates as one reportable and operating segment, which derives revenue from the sale of subscription-based data, insights, predictive analytics and related project-based services to global customers across a range of industries. All of the segment’s activities are interrelated, and each activity is dependent upon and supportive of the other. Accordingly, all significant operating decisions are based upon analysis of the Company at the consolidated level. The accounting policies of the segment are the same as those described in Note 2. The Company’s chief operating decision maker ("CODM") who is the Company's chief executive officer, who regularly reviews consolidated net loss as reported on the consolidated statements of operations, along with other financial information presented on a consolidated basis, for purposes of making operating decisions, assessing financial performance and allocating resources. The CODM measures performance and how to allocate resources for the segment primarily based on net loss, revenue growth, and gross margin. The CODM's objective is to make resource allocation decisions that optimize the Company's consolidated financial results by monitoring actual results compared to forecasted results. The measure of segment assets is reported as total assets on the consolidated balance sheet and total capital expenditures for additions to long-lived assets, which were $ 26,581 and $ 17,352 , for the years ended December 31, 2024 and 2023, respectively. The following table includes segment revenue and significant segment expenses: Year Ended December 31, 2024 2023 Revenue $ 110,451 $ 97,612 Less: Employee expense (a) 79,643 75,531 Equipment and software expenses 32,241 27,449 Depreciation and amortization 21,729 18,229 Interest expense 20,358 19,036 Professional services 17,558 9,907 Facilities expense 10,417 9,445 Change in fair value of contingent liability and warrant liabilities 6,489 1,467 Other operating and marketing expenses 5,767 7,687 Allowance for current credit loss on notes receivable 4,026 1,218 Loss on decommissioned satellites and disposal of assets 4,023 873 Contactor expense 2,602 2,922 Issuance of stock warrants 2,399 — Other segment items (b) 6,017 1,406 Segment net loss $ ( 102,818 ) $ ( 77,558 ) (a) Employee expense included stock-based compensation expense of $ 19,449 and $ 12,978 for the years ended December 31, 2024 and 2023, respectively. (b) Other segment items included in segment net loss includes foreign exchange (loss) gain, equity investment loss, income tax provision (benefit), travel and meals expenses, and interest income. 16. Subsequent Events On March 12, 2025, the Company entered into a securities purchase agreement with the purchasers named therein for the private placement (the “2025 Private Placement”) of (i) 4,843,750 shares of Class A common stock at a purchase price of $ 8.00 per share and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 156,250 shares of Class A common stock at a purchase price of $ 7.9999 per Pre-Funded Warrant. The Pre-Funded Warrants have an exercise price of $ 0.0001 per share of Class A common stock, are exercisable immediately, and will terminate when exercised in full. The aggregate gross proceeds for the 2025 Private Placement were $ 40,000 , before deducting offering expenses. The 2025 Private Placement closed on March 14, 2025. On March 12, 2025, the Company and Blue Torch entered into the Waiver and Amendment No. 5 to Financing Agreement (the “Fifth Amendment”) to, among other things, (a) waive events of default under the Blue Torch Financing Agreement arising out of the maximum debt to EBITDA leverage ratio being greater than the ratio permitted by the Blue Torch Financing Agreement, the failure to deliver financial projections for the 2025 fiscal year and liquidity being lower than permitted by the Blue Torch Financing Agreement, (b) amend the financial covenants in the Blue Torch Financing Agreement to replace the maximum debt to EBITDA ratio with a minimum EBITDA covenant and provide relief on the recurring revenue leverage ratio set forth in the 127 Blue Torch Financing Agreement, (c) amend the Blue Torch Financing Agreement to permit the Company to obtain subordinate financing secured by related liens on such junior indebtedness, (d) increase the applicable margin by 2.50 % in the form of PIK interest which will be fully earned, paid-in-kind and added to the principal balance of the term loans, and (e) provide for a fifth amendment fee and extension fees. As of March 31, 2025, the Company is still working with Blue Torch to agree on the final minimum EBITDA covenant. The fifth amendment fee is equal to $ 2,500 which will be paid in kind by adding such fee to the principal amount after which it will bear interest from the date of the Fifth Amendment at the Adjusted Term SOFR for a 3-month interest period plus the applicable margin under the Blue Torch Financing Agreement. The Fifth Amendment also provides for an extension fee equal to $ 1,000 , but if the Blue Torch Financing Agreement is terminated and all obligations are paid in full prior to April 30, 2025, the extension fee will be waived. If the Blue Torch Financing Agreement is not terminated and all obligations are paid in full on or before April 30, 2025, the extension fee will be added to the principal balance of the term loans on such date, and an additional extension fee in an equal amount will be added to the principal balance of the term loans on each date that is 30 days after April 30, 2025 until the Blue Torch Financing Agreement is terminated and all obligations are paid in full. The Fifth Amendment also requires the Company to engage a liquidity management advisor reasonably satisfactory to Blue Torch no later than March 21, 2025, and the Company did so on March 21, 2025. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.