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Item 7. Management’s Discussion and Analysis

2026-03-19 compared with 2025-03-31 · 295 added, 491 removed, 194 unchanged (80% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023 and the related notes appearing elsewhere in this Form 10-K.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and the related notes appearing in Part II, Item 8 of this Annual Report on Form 10-K.

In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

Our actual results could differ materially from those anticipated by these forward-looking statements as a result of many factors.

We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Our fiscal years ended December 31, 2024 and 2023 are referred to herein as fiscal year 2024 and fiscal year 2023, respectively.

Unless the context otherwise requires, all references to “the Company,” “we,” “us,” or “our” and similar terms refer to Spire and its subsidiaries.

Spire is a global provider of space-based data, analytics and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world.

Spire builds, owns, and operates a fully deployed satellite constellation.

We believe it is one of the world’s largest “listening” constellations, observing the Earth in real time using radio frequency technology.

The data acquired by our multipurpose satellites provide global weather intelligence, ship and plane movements, and spoofing and jamming detection to better predict how their patterns impact economies, global security, business operations and the environment.

We also offer space-as-a-service solutions that empower customers to leverage our established infrastructure to put their business in space.

We provide customers these solutions through an application programming interface (“API”) infrastructure.

Spire also offers research and development services (“R&D Services”) to third parties, for the advancement of contracted satellite technologies.

In addition to providing R&D Services, we grant the counterparty a license to the developed intellectual property.

Our platform applies our value-add insights and predictive analytics to this proprietary data to create commercially valuable datasets.

We offer three data solutions to our customers, which vary in complexity and price and can be delivered in near real-time via our API that can be easily integrated into our customers’ business operations:

Precise space-based data used for highly accurate ship monitoring, ship safety, and route optimization.

Precise space-based data used for highly accurate aircraft monitoring, aircraft safety, and route optimization.

• Weather and Climate:

Precise space-based data used for highly accurate weather forecasting.

We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Annual Report on Form 10-K, including those set forth in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references to “the Company,” “we,” “us,” or “our” and similar terms refer to Spire and its subsidiaries.

We are a global provider of space-based data, analytics, and space services, offering unique datasets and powerful insights about Earth so that organizations can make decisions with confidence in a rapidly changing world.

We build, own, and operate a fully deployed constellation of multi-purpose nanosatellites that observe the Earth in real time using RF technology.

The data acquired by our satellites provide global weather intelligence, aircraft and ship movements, and spoofing and jamming

detection to help predict how these patterns affect economies, global security, business operations, and the environment.

Additionally, we deliver space-based intelligence through a mission-ready satellite network and military-grade analytics.

Our platform supports persistent signal monitoring, source detection, and asset tasking across any global region of interest.

We also offer Space Services solutions that enable our customers to deploy and scale their own constellation, by leveraging our proven space platform, global ground station network, end-to-end manufacturing facility, and extensive launch partnership network.

We operate in the “listening” (radio frequency) satellite market.

We do not operate in the “looking” (imagery) or “talking” (communications) satellite markets.

Our Data Solution Offerings

Our proprietary constellation of Low Earth Multi-Use Receiver (“LEMUR”) satellites collects and transmits data to our proprietary global ground station network.

The data is then autonomously moved from ground stations to proprietary data warehouses for cleansing, standardization, fusion and analysis.

Our customers receive proprietary data, analysis, and predictive data and solutions delivered seamlessly in real and near real-time.

For each data solution, we have the capability to offer customers a variety of features and additional value.

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• Clean data :

Clean and structured data directly from our proprietary nanosatellites;

Clean and structured data directly from our proprietary satellites;

• Smart data:

Clean data fused with third-party datasets and proprietary analysis to enhance value and provide insights;

• Predictive solutions :

Big data, AI, and ML algorithms applied to fused data sets to create predictive analytics and insights;

• Solutions :

• Predictive data :

Big data, artificial intelligence (“AI”), and machine learning (“ML”) algorithms applied to fused data sets to create predictive analytics and insights;

• Data Solutions:

Data-driven actionable recommendations to solve specific business problems, utilizing the full spectrum of our data analytics suite.

These value-add data features allow customers to solve various use cases and provide a path to expand throughout the customer’s relationship.

As our fourth solution, we are also pioneering an innovative business model through our Space Services solution.

We leverage our fully deployed infrastructure and large-scale operations to enable our customers to obtain customized data through our API.

Our Space Services offering provides our customers with fast, scalable, and reliable access to space.

Our solutions are offered to customers across numerous industries and we not only have the opportunity to upsell within each one, but we also have the opportunity to cross-sell among all our solutions.

We provide our solutions to global customers either through a subscription or based on a specific project.

We currently sell directly to end customers and utilize reseller partners when beneficial.

We monetize our proprietary solutions across a broad and growing range of current and target governments and industries including agriculture, logistics, financial services, insurance, aviation operations, energy, and academia, among others.

The solutions we provide include space reconnaissance, aviation, weather and climate, and space services.

• Space Reconnaissance:

Mission critical satellite data supporting intelligence, and national security operations;

Insights for highly accurate aircraft monitoring, safety and route optimization;

• Weather and Climate:

Data, insights, and predictive AI analytics for advanced weather forecasts that power high impact decisions:

• Space Services:

Low risk, quick delivery development life cycle and proprietary infrastructure providing space-as-a-service;

Precise space-based data used for highly accurate ship monitoring, ship safety, and route optimization, the majority of which was sold in the Maritime Transaction.

We also offer research and development services (“R&D Services”) to third parties, for the advancement of contracted satellite technologies.

In addition to providing R&D Services, we grant the counterparty a license to the developed intellectual property.

Highlights for the Year Ended December 31, 2025

• We announced the successful two-way laser communication between our satellites in space.

• We announced the launch of AI weather models built on NVIDIA Omniverse Blueprint for Earth-2.

• We completed the sale of our maritime business and eliminated all debt for the company.

• We announced that Myriota Pty Ltd expanded its agreement with us to scale its Internet of Things constellation with 16 more satellites.

• We announced the launch of our new space-based radio frequency intelligence capabilities for defense and security.

• We were awarded a $2.5 million nine-month National Oceanic and Atmospheric Administration (“NOAA”) contract for satellite weather data.

• We were awarded an $11.2 million one-year NOAA contract for global navigation satellite system RO data.

• We were awarded a €3 million renewal contract from European Organisation for the Exploitation of Meteorological Satellites for satellite weather data, covering a one-year term.

• We were awarded a contract by Deloitte to deliver advanced satellite capabilities, expanding their on-orbit cyber and data operations,

• We were selected by the Missile Defense Agency for a scalable homeland innovative enterprise layered defense indefinite delivery, indefinite quantity contract.

Recent Developments

Sale of Maritime Business

On November 13, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”).

The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.

The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.

The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.

The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.

We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied.

Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.

Buyer has cited various reasons for declining to close, including a review of the Transactions by the UK Competition and Markets Authority.

We have rejected these reasons.

We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.

As a result of the foregoing, on February 10, 2025, we filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement.

In the complaint, we also requested a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing.

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 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.

Private Placement

On March 12, 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with the purchasers named therein (the “Purchasers”) for the private placement (the “2025 Private Placement”) of (i) 4,843,750 shares of our Class A common stock at a purchase price of $8.00 per share (the “Shares”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 156,250 shares of Class A common stock (the “Warrant Shares”) 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 $40.0 million, before deducting offering expenses.

The 2025 Private Placement closed on March 14, 2025.

In addition, on March 12, 2025, we and the Purchasers also entered into a registration rights agreement, pursuant to which we agreed to file a registration statement with the Securities and Exchange Commission on or before April 30, 2025, for purposes of registering the resale of the Shares and the Warrant Share and to have such registration statement declared effective no later than June 30, 2025.

Fifth Amendment to Blue Torch Financing Agreement

On March 12, 2025, we and Blue Torch Finance LLC (“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 our financing agreement (the “Blue Torch Financing Agreement”) that we entered into with Blue Torch in June 2022 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 Blue Torch Financing Agreement, (c) amend the Blue Torch Financing Agreement to permit us 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.

The Fifth Amendment fee is equal to $2.50 million which will be paid in kind by adding such fee to the principal amount after which it bears 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 $1.0 million, 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 us to engage a liquidity management advisor reasonably satisfactory to Blue Torch no later than March 21, 2025, and we did so on March 21, 2025.

Highlights from Fiscal Year 2024

• Full year 2024 revenue was $110.5 million, an increase of 13% from fiscal year 2023.

• We were awarded a $9.4 million contract in January 2024 and another $3.8M contract in September 2024 by the National Oceanic and Atmospheric Administration (“NOAA”) for Satellite Weather and Climate Data (“RO”).

• We began a collaboration with Signal Ocean to drive digitalization of the maritime economy and Signal Ocean made a $10 million strategic investment in the Company.

• We were awarded €8.4 million by the European Maritime Safety Agency (EMSA) for the provision of SAT-AIS data services.

• We began collaborating with NVIDIA to enhance artificial intelligence (“AI”)-driven weather prediction.

• We announced a space services deal to scale constellation for HANCOM InSpace.

• We signed a Memorandum of Cooperation with Thales and the European Satellite Services Provider (ESSP) to develop a space-based air traffic surveillance service.

Phase A of the contract was signed and is effective as of June 28, 2024.

• We joined the Russell 3000 Index on June 27, 2024.

• We announced a contract with the Government of Canada for ship tracking data in July 2024.

• We signed a multi-year agreement with a government customer to manufacture satellites and provide geolocation data.

• We and OroraTech were awarded a NASA contract for wildfire monitoring.

• We launched seven LEMUR satellites on SpaceX Transporter-11 mission.

• We announced a mission to explore the power of AI in space with Mission Control, showcasing how AI can be reliably used onboard satellites over a long period of time to generate actionable insights in real-time.

• We announced on November 13, 2024, that we entered into the Purchase Agreement with Buyer, pursuant to which we agreed to sell our maritime business to Buyer for a purchase price of $233.5 million, subject to certain adjustments.

The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.

Macroeconomic and Geopolitical Impact

Over the past two years, we have been impacted by the macroeconomic environment, such as fluctuations in foreign currencies, increasing interest rates and geopolitical conflicts like the Russian invasion of Ukraine, Israel's war with Hamas and the increased tensions between China and the United States.

Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for the fiscal year ended December 31, 2024, as compared to the fiscal year ended December 31, 2023.

Dollar's decrease had a positive impact on our revenue, as approximately one-third of our sales are conducted in foreign currencies.

Conversely, the decrease in the value of the U.S.

Dollar had an unfavorable impact on our expenses, given that a majority of our 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 our 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 our 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, our results and financial condition could be further negatively impacted.

We 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 we operate would adversely affect our business, financial condition, and results of operations.

Key Factors Affecting Our Performance

On April 25, 2025, we completed the sale of our maritime business to Kpler Holding SA for approximately $238.9 million.

The sale did not include any portion of our satellite network or operations.

As part of the transaction, a portion of the proceeds was used to settle a prior dispute with L3Harris pursuant to a settlement agreement providing for the full and complete resolution and release of all disputes asserted in connection with the A&R L3 Harris Agreement between exactEarth and L3 Harris, and to repay all outstanding obligations under our financing agreements, including the Blue Torch and SIF loan facilities.

For additional information, see Note 6 and Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Key Factors Affecting Our Financial Performance

We believe that our current and future performance depends on many factors, including, but not limited to, those described below.

While these areas present significant opportunity, they also present risks that we must manage to achieve successful results.

For additional information about these risks, see the section titled “Risk Factors.” If we are unable to address these risks, our business and results of operations could be adversely affected.

For additional information, see “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

If we are unable to address these risks, our business and results of operations could be adversely affected.

Expansion of and Further Penetration of Our Customer Base

We employ a “land and expand” business model that focuses on efficiently acquiring new customers (“land”) and then growing our relationships with these customers over time (“expand”).

We have the capability to offer customers additional data sets and a variety of enhanced features that potentially grow the value of the services for which our customers contract with us.

Our future revenue growth and our path to profitability are dependent upon our ability to continue to land new customers and then expand adoption of our solutions within their organizations.

We track our progress landing new customers by measuring the number of ARR Solution Customers (as defined below) we have from one fiscal year to the next.

The number of ARR Solution Customers decreased to 621 as of December 31, 2024, from 745 as of December 31, 2023.

We track our increases and decreases in our customer contract values by measuring our ARR Net Retention Rate (as defined below).

Our ARR Net Retention Rate was 93% for fiscal year 2024 and 98% for fiscal year 2023.

We have the ability to offer customers additional data sets and a variety of enhanced features that potentially grow the value of the services for which our customers contract with us.

Our future revenue growth and profitability are dependent upon our ability to continue to land new customers and then expand adoption of our solutions within their organizations.

Expansion into New Industries and Geographies

As our solutions grow, we continue to focus on further penetration of our initial industries including maritime, aviation, logistics, and government (civil and defense/intelligence).

We believe our technology and solutions give us the ability to expand into additional industries, including energy, financial services, agriculture, transportation, and insurance, and also into additional geographies, including Latin America, Africa, and the Middle East.

As our solutions grow, we continue to focus on further penetration of current and target governments and industries including agriculture, logistics, financial services, insurance, aviation operations, energy and academia, among others.

We are also investing sales and marketing resources into additional geographies.

Our revenue growth is dependent upon our ability to continue to expand into new industries and geographies.

The costs associated with these expansions may adversely affect our results of operations.

Impact of the Solar Cycle on our Assets' Remaining Life

A stronger solar cycle has the potential to impact some of our satellites, accelerating their deorbiting and shortening their useful lives.

The solar cycle is the cycle that the Sun’s magnetic field goes through approximately every 11 years.

In 2019, NOAA, NASA, and the International Space Environment Services panel forecasted that Solar Cycle 25 (December 2019 to approximately 2030) would be relatively weak after a relatively weak Solar Cycle 24 (December 2008 to December 2019).

Subsequently, NOAA noted that Solar Cycle 24 was the weakest cycle in 100 years with sunspots reaching a maximum of 116 – below the average of 179.

In October of 2023, NOAA updated their projection for the strength and duration of Solar Cycle 25, stating that the cycle is expected to be more intense than Cycle 24, and predicting that the peak of the cycle would be earlier, by the end of 2024.

A stronger solar cycle has accelerated the deorbiting of our satellites sooner than expected or planned.

Our ability to minimize the solar cycle impact, our ability to replenish our existing constellation in a timely manner and the costs associated with these actions may adversely affect our results of operations.

Investment in Growth

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We intend to continue to add headcount to our global sales and marketing teams to acquire new customers and to increase sales to existing customers.

We also intend to continue to add headcount as needed to our research and development teams and otherwise invest to improve and innovate our nanosatellite, ground station and data analytics technologies.

For fiscal year 2024, our spending on research and development increased by $1.5 million, or 6%, from fiscal year 2023.

We also intend to add headcount as needed to our research and development teams to increase satellite design, manufacturing and checkout speed as well as improve latency, reliability and satellite life.

The costs of these investments may adversely affect our results of operations, but we believe that these investments will contribute to our long-term growth.

Our business strategy may include acquiring other complementary solutions, technologies, or businesses that we believe will allow us to continue on our path to profitability, reduce the time or costs required to develop new technologies, incorporate enhanced functionality into and complement our existing solution offerings, augment our engineering workforce and enhance our technological capabilities.

Impact of Foreign Exchange Rates

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The functional currencies of our foreign operating subsidiaries is the local currency in which each subsidiary operates, including the Euro, the British Pound, the Singapore Dollar and the Canadian Dollar.

Dollar exhibited a decrease in strength against the local functional currencies of our foreign subsidiaries for fiscal year 2024 as compared to fiscal year 2023.

Dollar's decrease had a positive impact on our revenue, as approximately one-third of our sales are conducted in foreign currencies.

Conversely, the decrease in the value of the U.S.

Dollar had an unfavorable impact on our expenses, given that a majority of our workforce resides in countries other than the United States.

Approximately 31% of our revenues were generated in currencies other than the U.S.

Dollar for each of the years ended December 31, 2024 and 2023.

Dollar weakened against these local functional currencies for the year ended December 31, 2025 compared with the year ended December 31, 2024.

Approximately one-third of our sales are denominated in foreign currencies, so a weaker U.S.

Dollar generally has a positive effect on revenue.

Conversely, operating expenses are primarily incurred outside the U.S., so a weaker U.S.

Dollar increases expenses.

For additional information, see Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The financial statements of these subsidiaries are translated into U.S.

dollars using exchange rates in effect at each balance sheet date for assets and liabilities and average exchange rates during the period for revenues and expenses.

Dollars using exchange rates in effect at each balance sheet date for assets and liabilities and average exchange rates during the period for revenue and expenses.

To the extent we experience significant currency fluctuations, our results of operations may be impacted.

Macroeconomic and Geopolitical Impact

The macroeconomic environment may cause existing or potential customers to re-evaluate their decision to purchase our offerings, at times resulting in additional customer discounts, extended payment terms, and longer sales cycles.

In particular, delays in approving appropriations bills and recent government funding disruptions have and may continue to negatively affect the timing of certain U.S.

federal government orders.

Negative macroeconomic conditions, including elevated inflation, interest rate volatility, credit market disruptions, trade restrictions and tariffs, and geopolitical tensions, civil unrest, or armed conflicts, have and may continue to affect customer purchasing patterns, occasionally resulting in selective project delays or extended sales cycles.

Although imposition of tariffs or other trade restrictions have not had a material impact on our business, they could create future supply-chain disruptions or cost pressures.

For additional information, see “Risk Factors— Risks Related to Our Industry and Business—Uncertain macroeconomic and geopolitical conditions have negatively impacted, and may continue to impact, our business, financial condition, and results of operations .” in Part I, Item 1A of this Annual Report on Form 10-K.

Key Business Metrics

We review the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions:

• ARR Customers

• ARR Solution Customers

• ARR Net Retention Rate

Annual Recurring Revenue

We define ARR as our expected annualized revenue from customers that are under contracts with us at the end of the reporting period with a binding and renewable agreement for our subscription solutions or customers that are under a binding multi-year contract that can range from components of our Space Services solution to a project-based customer solution.

Customers with Space Services Contracts are considered recurring when there is a multi-year binding agreement that has a renewable component in the contract.

Customers are also considered recurring when they have multiple contracts over multiple years.

Customer contracts for data trials and one-time transactions are excluded from the calculation of ARR.

The increase in our ARR in fiscal year 2024 was primarily driven by increasing the amount of ARR business with our existing customers.

Our ARR has fluctuated from period to period in the past due in part to the timing of some of our Space Services Contracts, including when engagements start and stop.

We expect our ARR to continue to fluctuate from period to period in the future.

ARR is a leading indicator and accordingly, will tend to outpace the impact on our revenue as we recognize the contract value of various agreements over time.

The following table summarizes our ARR at each fiscal year end for the periods indicated.

As of December 31,

(dollars in thousands)

Number of ARR Customers and ARR Solution Customers

We define an ARR Customer as an entity that has a contract with us or through our reseller partners contracts, that is either a binding and renewable agreement for our subscription solutions, or a binding multi-year contract as of the measurement date independent of the number of solutions the entity has under contract.

A single organization with separate subsidiaries, segments, or divisions may represent multiple customers, as we treat each entity that is invoiced separately as an individual customer.

In cases where customers subscribe to our platform through our reseller partners, each end customer that meets the above definition is counted separately as an ARR Customer.

All entities that have contracts for data trials and one-time transactions are excluded from the calculation of ARR Customers.

We define an ARR Solution Customer similarly to an ARR Customer, but we count every solution the customer has with us separately.

As a result, the count of ARR Solution Customers exceeds the count of ARR Customers at each year end, as some customers contract with us for multiple solutions.

Our multiple solutions customers are those that are under contract for at least two of our solutions:

Maritime, Aviation, Weather and Climate, and Space Services.

All entities that have contracts for data trials and one-time transactions are excluded from the calculation of ARR Solution Customers.

The decrease in each of our ARR Customers and ARR Solution Customers in fiscal year 2024 was driven by our move to de-emphasize sales to customers with very low ARR or revenue.

We expect this strategy to ultimately increase our ARR and revenue per customer, increase our ARR in total, and reduce our customer count as we drive towards the most efficient use of our resources.

The following table summarizes the number of our ARR Customers and ARR Solution Customers at the end of fiscal years 2024 and 2023.

As of December 31,

ARR Customers

ARR Solution Customers

ARR Net Retention Rate

We calculate our ARR Net Retention Rate for a particular fiscal period end by dividing (i) our ARR from those ARR Customers at that fiscal period end that were also customers as of the last day of the prior fiscal period end by (ii) the ARR from all customers as of the last day of the prior fiscal period.

This calculation measures the overall impact from increases in customer

contract value (upsells), the decreases in customer contract value (downsells) and the decreases in customer value resulting from customers that have chosen not to renew their contracts with us (lost customers).

The following table summarizes our ARR Net Retention Rate for each of fiscal years 2024 and 2023:

Year Ended December 31,

ARR Net Retention Rate

Our ARR Net Retention Rate can be impacted from period to period by large increases or decreases in customer contract value and large decreases in contract value from customers that have not renewed their contracts with us.

An ARR Net Retention Rate greater than 100% is an indication that we are growing the value of the solutions our customers are purchasing from us at current fiscal year ended versus the prior fiscal year end.

An ARR Net Retention Rate less than 100% is an indication that the value of the solutions our customers are purchasing from us declined at current fiscal year end versus the prior fiscal year end.

Our ARR Net Retention Rate decreased by 5% for fiscal year 2024 driven primarily by the reduced value of NOAA's RO weather award as compared to the value of the corresponding award in fiscal year 2023.

We primarily use remaining performance obligations (“RPO”) and Adjusted EBITDA to help us evaluate our business, identify trends, and make strategic decisions.

For further information regarding Adjusted EBITDA, see “Non-GAAP Financial Measures” below.

Remaining Performance Obligations

RPO represents the total amount of contracted revenue that has not yet been recognized, which includes contract liabilities and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.

As of December 31, 2025, we expect to recognize our RPO over the following future periods (in thousands):

December 31, 2025

1 to 12 months (1)

13 to 24 months

25 to 36 months

37 to 48 months

(1) In March 2026, we received notice from our customer to suspend work under a contract.

The contract has not been terminated, and our customer has until August 29, 2026 to either cancel the suspension or terminate the contract.

Contracted future revenue related to this contract is included in the remaining performance obligations disclosed above.

As a result, approximately $15.3 million of revenue previously expected to be recognized within the next 12 months may be delayed to future periods or may not be recognized.

Components of Results of Operations

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Our subscription fees are typically billed either monthly or quarterly in advance.

For additional information related to our revenue recognition, see Notes 2 and 3 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Cost of Revenue

Cost of revenue consists primarily of personnel costs, depreciation, hosted infrastructure costs, high-power computing costs, third-party operating and royalty costs associated with delivering our data and services, to our customers, and costs associated with R&D Services Contracts.

In addition, cost of revenue includes the amortization of purchased intangibles associated with our acquisition of exactEarth in November 2021 (the “Acquisition”).

Personnel costs are primarily related to the cost of our employees supporting and managing our constellation operations including satellite operations, ground station control, and launch management.

Personnel costs also include the cost of our employees supporting and managing projects for our research and development services.

Costs associated with the manufacture and launch of our satellites, including personnel costs, are capitalized and depreciated upon placement in service, typically over a four-year expected useful life.

As satellites reach the end of their expected useful life, they are generally replaced with replenishment satellites to maintain our constellation at optimal performance.

Costs associated with the acquisition and development of new ground stations, including the bill of materials and labor to install the ground station, are capitalized and depreciated upon placement in service typically over a four-year to ten-year expected useful life.

We anticipate ongoing capital spending to repair and replenish ground stations as they reach the end of their expected useful life to keep our ground station network at optimal performance.

Our proprietary ground station network is primarily located in third-party locations where we incur lease and other operational charges.

Cost of revenue also includes royalties associated with third-party data sets that we integrate into our data solutions.

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, allocated overhead costs and amortization of purchased intangibles (e.g., customer relationships and developed technology).

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.

Operating Expenses

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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, travel-related expenses, allowance for current expected credit losses, and amortization of purchased intangible backlog associated with the Acquisition.

Commission costs on new customer contract bookings are considered costs of obtaining customer contracts.

Commission costs for multi-year deals are considered contract acquisition costs and are deferred and then amortized over the period of the contract.

Commission costs on contracts completed with a term of twelve months or less are expensed in the period incurred.

General and Administrative .

General and administrative expenses consist of employee-related expenses for personnel in our executive, finance and accounting, facilities, legal, human resources, and management information systems functions, as well as other administrative employees.

In addition, general and administrative expenses include fees related to third-party legal counsel, corporate insurance, fees related to accounting, tax and audit costs, office facilities costs, software subscription costs, and other corporate costs.

Loss on Decommissioned Satellites.

Loss on decommissioned satellites consists of the write-off of the remaining capitalized costs associated with the manufacture and launch of our satellites prior to the end of the satellite’s useful life.

We contract with third-party companies to launch, carry, and deploy our satellites into space.

A loss could result from a third-party launch or deployer failure, a technical failure of the satellite, or the deorbit or decommissioning of a satellite before the end of the satellite’s useful life.

A technical failure could include a satellite that is not able to communicate with our network of ground stations or fulfill its intended technical mission for a duration greater than one month.

The loss amount is presented net of any insurance proceeds received.

Due to the nature of these events, we cannot predict the magnitude or frequency of future satellite deorbit and launch failure losses.

We sometimes purchase launch insurance when financially practical;

however, the proceeds from these insurance policies will typically only cover a portion of our launch loss.

We incurred a $3.4 million loss on decommissioned satellites in fiscal year 2024 and a $0.7 million loss on decommissioned satellites in fiscal year 2023.

In addition, general and administrative expenses include costs related to external legal fees, corporate insurance, accounting, tax and audit fees, office facilities, software subscription, and other corporate.

Loss on Decommissioned Satellites and Other Assets Write-offs.

Loss on decommissioned satellites consists of the write-off of remaining capitalized costs related to the manufacture and launch of satellites that are deorbited, decommissioned, or otherwise fail before the end of their useful lives.

Other assets write-offs primarily consist of assets not placed into service and deemed obsolete without future economic benefit.

Allowance for Current Expected Credit Loss on Notes Receivable.

Allowance for current expected credit loss on notes receivable consists of allowance for current expected credit loss recorded on a note receivable and accrued interest issued to a Space Services customer.

Allowance for current expected credit loss on notes receivable consists of the reserve recorded for expected credit losses on a note receivable and related accrued interest due from a Space Services customer.

Other Income (Expense)

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Interest expense primarily includes interest costs associated with our debt and amortization of deferred financing costs.

Gain on Sale of a Business.

The gain on the sale of our maritime business reflects the excess of the sale proceeds over the net book value of the assets sold, net of transaction costs and other related adjustments.

Loss on Extinguishment of Debt.

Loss on extinguishment of debt includes applicable premium, exit fee, legal fees, and other fees associated with the payoff of existing debt.

Change in Fair Value of Contingent Earnout Liability.

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Foreign exchange gain/loss consists of the net effect of realized and unrealized foreign currency gains and losses resulting from changes in the currency exchange rates for transactions denominated in non-functional currency relative to each subsidiary’s functional currency.

We use the local currency as our functional currency for our subsidiaries in Luxembourg, the United Kingdom, Singapore, Australia, Germany, and Canada.

We use the local currency as our functional currency for our subsidiaries in Luxembourg, the United Kingdom, Singapore, Germany, and Canada.

Other Expense, Net.

Other expense, net consists primarily of tax credits, grant income, share of equity investment loss, and write-off of certain prepaid assets.

Other expense, net consists primarily of tax credits, grant income, share of equity investment loss, write-off of certain prepaid assets, and liquidated damages paid to investors in the 2025 Private Placement (as defined in “Liquidity and Capital Resources” below).

Income Tax Provision

Provision for income taxes consists of federal income taxes in the United States and income taxes in certain foreign jurisdictions.

We do not provide for income taxes on undistributed earnings of our foreign subsidiaries since we intend to invest these earnings outside of the United States permanently.

The provision for income taxes consists of federal income taxes in the U.S.

and income taxes in certain foreign jurisdictions.

We do not provide for income taxes on undistributed earnings of our foreign subsidiaries since we intend to invest these earnings outside of the U.S.

We account for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are recognized based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted rates and laws that will be in effect when the differences are expected to reverse.

Results of Operations

Fiscal Year 2024 Compared to Fiscal Year 2023

The following tables set forth selected consolidated statements of operations data for each of the periods indicated:

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General and administrative

Loss on decommissioned satellites

Loss on decommissioned satellites and other assets write-offs

Allowance for current expected credit loss on notes receivable

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Interest expense

Gain on sale of a business

Loss on extinguishment of debt

Change in fair value of contingent earnout liability

1 unchanged sentence

Issuance of stock warrants

Foreign exchange (loss) gain

Foreign exchange gain (loss)

Other expense, net

Total other expense, net

Loss before income taxes

Income tax provision (benefit)

(1) Includes stock-based compensation as follows:

Total other income (expense), net

Income (loss) before income taxes

Income tax provision

Net income (loss)

Year Ended December 31,

(in thousands)

Cost of revenue

Research and development

Sales and marketing

General and administrative

Total stock-based compensation

(dollars in thousands)

Total revenue decreased by $38.9 million, or 35%, for the year ended December 31, 2025 compared with 2024.

The decline was primarily driven by a $24.6 million reduction following the Maritime Transaction.

Revenue also decreased by $9.6 million due to revenue recognized in 2024 upon the satisfaction of a performance obligation for a Space Services customer, with no comparable revenue recognized in 2025.

In addition, revenue decreased by $2.7 million due to lower activity under NASA’s earth observation weather data award and by approximately $1.9 million as a result of reduced purchases of space-based data.

Our diversification across government and commercial customers worldwide strengthens our business by providing multiple sources of demand and reducing reliance on any single customer or geographic region.

The following tables present revenue disaggregated between government and commercial customers and by geographic region.

Revenue by customer type:

Year Ended December 31,

(dollars in thousands)

Total revenue increased $12.8 million, or 13%, primarily driven by increased ARR business combined with growth in revenue recognized for Space Services Contracts.

For fiscal year 2024, we derived 57% of our revenue from the Americas;

36% of our revenue from Europe, the Middle East and Africa (“EMEA”);

and 7% of our revenue from Asia Pacific (“APAC”).

For fiscal year 2023 we derived 50% of our revenue from the Americas, 36% of our revenue from EMEA, and 14% of our revenue from APAC.

For fiscal year 2024, we derived 70% of our revenue from subscription arrangements, compared to 74% for fiscal year 2023.

This percentage mix can fluctuate significantly from period to period driven primarily by the timing of non-subscription revenue recognition in our contracts.

Total revenue

Revenue by geographic region:

Year Ended December 31,

(dollars in thousands)

Total revenue

Cost of Revenue

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(dollars in thousands)

Total cost of revenue

Headcount (at end of year)

(1) Includes headcount relating to R&D Services Contracts.

R&D Services Contracts expenses are included in cost of revenue.

Cost of revenue increased $11.5 million, or 20%, primarily driven by an increase in satellite operation expense of $4.4 million, an increase in depreciation expense of $3.6 million, an increase in personnel expenses of $1.9 million, and an increase in downlink data service expenses of $1.7 million, partially offset by a decrease in other miscellaneous expenses of $0.1 million.

The increase in satellite operation expense was driven by recognition of launch costs associated with a Space Services Contract.

The increase in depreciation expense was primarily driven by a reset of the estimated useful lives of our satellites to account for the impact of increased solar activity related to the current solar cycle.

The increase in personnel costs was driven by increased work related to R&D Services Contracts during the period, which causes a greater proportion of costs to be allocated to cost of revenue.

The increase in downlink data service expenses was primarily driven by the purchase of supplemental data to support a radio frequency geolocation contract.

Gross margin for fiscal years 2024 and 2023 was 36% and 40%, respectively.

The decrease was driven primarily by the higher expenses described above.

Our gross margin can fluctuate significantly from period to period driven primarily by the timing of the revenue as well as the timing of our technology investments to support future growth.

We expect cost of revenue, including depreciation and amortization expenses, third-party operating costs and royalties, and high-powered computing costs, to increase in absolute dollars as our business grows.

Cost of revenue

Cost of revenue decreased by $28.2 million, or 40%, for the year ended December 31, 2025, compared with 2024.

This decrease was primarily due to lower satellite operations expense of $8.5 million, depreciation expense of $7.8 million, personnel costs of $7.7 million, and software expense of $3.9 million.

The reduction in satellite operations expense was primarily due to launch-related costs recognized in 2024 in connection with a Space Services contract that did not recur in 2025.

The decrease in depreciation expense reflects accelerated depreciation recorded in 2024 due to increased solar activity during the current solar cycle, which shortened the estimated useful lives of certain satellites and resulted in those satellites becoming fully depreciated during 2024.

These events did not recur in 2025.

Personnel costs declined due to lower R&D Services activity in 2025.

The decrease in software expense was primarily attributable to the Maritime Transaction.

Gross margin for the years ended December 31, 2025 and 2024 was 41% and 36%, respectively.

This increase was primarily driven by the reduction in cost of revenue described above.

Operating Expenses

Operating expenses consist of our research and development, our sales and marketing, and our general and administrative expenses.

Operating expenses consist of our research and development, our sales and marketing, our general and administrative expenses, loss on decommissioned satellites and other assets write-offs, and allowance for current expected credit loss on notes receivable.

As we continue to invest in our growth, including through hiring additional personnel, we expect our operating expenses to increase in absolute dollars as revenue grows;

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Percentage of total revenue

Headcount (at end of year)

(1) Includes headcount relating to R&D Services Contracts.

R&D Services Contracts expenses are included in cost of revenue.

Research and development expenses increased $1.5 million, or 6%, primarily driven by an increase in personnel costs of $2.2 million, partially offset by a decrease in travel and entertainment expenses of $0.4 million and a decrease in other miscellaneous operating expenses of $0.3 million.

The increase in personnel costs was driven by overall growth in headcount.

The decrease in travel and entertainment expenses was driven by reduced travel within the period.

We expect research and development expenses to increase in absolute dollars in future periods primarily due to higher headcount as we continue to invest in the development of our solutions offerings and new technologies;

however, we expect research and development expenses to decrease as a percentage of revenue in future periods as our revenue growth exceeds our increase in research and development spend.

Research and development expenses increased $7.4 million, or 25%, for the year ended December 31, 2025, compared with 2024.

This increase was due to higher personnel costs of $7.4 million and equipment expenses of $1.4 million, partially offset by a $1.3 million decrease in professional services.

The increase in personnel costs was driven by lower R&D Services activity, which reduced the proportion of costs allocated to cost of revenue.

The increase in equipment expenses was related to software and web hosting, which increased due to greater platform development during the period.

Sales and Marketing

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Percentage of total revenue

Headcount (at end of year)

Sales and marketing expenses decreased $3.5 million, or 14%, primarily driven by a decrease in personnel costs of $1.5 million, a decrease in marketing expenses of $0.8 million, a decrease in bonus and commission expenses of $0.8 million, and a decrease in bad debt expenses of $0.6 million, partially offset by an increase in other miscellaneous operating expenses of $0.2 million.

The decrease in personnel costs was driven by an overall reduction in headcount and attrition savings throughout the year.

The decrease in marketing expenses was driven by lower advertising and event spend compared to the prior year period.

The decrease in bonus and commission expenses was primarily driven by lower bonus accruals for management.

The decrease in bad debt expenses was driven by cash collections and recovery efforts.

We expect sales and marketing expenses to generally grow in absolute dollars in the future, primarily due to increased employee-related expenses as we grow our headcount, to support our sales and marketing efforts and our continued expansion of our sales capacity across our solutions;

however, we expect sales and marketing expenses as a percentage of revenue to decrease in future periods as our revenue growth exceeds our increases in sales and marketing spend.

Sales and marketing expenses decreased $7.4 million, or 32%, for the year ended December 31, 2025, compared with 2024.

This decrease was driven by a $5.9 million reduction in personnel costs and a $0.6 million reduction in professional services expenses.

The decline in personnel costs was due to lower headcount following the Maritime Transaction and lower stock-based compensation.

The decrease in professional services was primarily due to reduced spending on public relations and external marketing support due to the Maritime Transaction and the transition of public relations activities in-house.

General and Administrative

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General and administrative

Percentage of total revenues

Headcount (at end of year)

General and administrative expenses increased $7.7 million, or 18%, primarily driven by an increase in professional services expenses of $6.4 million and an increase in stock-based compensation expense of $3.7 million, partially offset by a decrease in insurance costs of $1.2 million, a decrease in severance expenses of $1.0 million and a decrease in other miscellaneous operating expenses of $0.2 million.

The increase in professional services fees was driven by higher third-party accounting, legal and other consulting services relating to the restatement.

The increase in stock-based compensation expense was driven by higher stock grants which resulted in a higher total value of stock-based awards recognized in the current year.

The decrease in business insurance costs was driven by an improvement in annual rates particularly on directors and officers insurance.

The decrease in severance expenses was driven by lower severance payouts in the current year compared to the prior year.

We expect our general and administrative expenses to generally grow in absolute dollars in future periods as our employee-related expenses increase to support our revenue growth;

however, we expect our general and administrative expenses as a percentage of revenue to decrease as revenue growth exceeds our increases in general and administrative spend.

Loss on Decommissioned Satellites

Percentage of total revenue

General and administrative expenses increased $14.3 million, or 29%, for the year ended December 31, 2025, compared with 2024.

This increase was due to higher professional services expenses of $7.7 million and increased personnel costs of $6.3 million.

The increase in professional services expenses was primarily due to higher third-party accounting, legal, and consulting fees associated with the Maritime Transaction and legal proceedings.

For additional information regarding legal proceedings, see Part I, Item 3 of this Annual Report on Form 10-K.

The increase in personnel costs was driven by higher stock-based compensation expense of $3.0 million due to employee separations, an increase of $2.1 million in bonus expense, and an increase of $1.1 million in severance expense, which were all related to the Maritime Transaction.

Loss on Decommissioned Satellites and Other Assets Write-offs

Year Ended December 31,

(dollars in thousands)

Loss on decommissioned satellites

Percentage of total revenues

We recognized a non-cash expense of $3.4 million and $0.7 million in fiscal years 2024 and 2023, respectively, on decommissioned satellites prior to the ends of their useful lives.

Loss on decommissioned satellites and other assets write-offs

Percentage of total revenue

Loss on decommissioned satellites and other assets write-offs increased $5.7 million, or 165%, for the year ended December 31, 2025, compared with 2024.

Of this increase, $2.9 million was due to a non-cash charge recorded in 2025 resulting from the disposal of obsolete construction-in-process materials, for which there was no comparable expense in 2024.

In addition, losses on decommissioned satellites increased by $2.8 million, driven by the deorbiting of three satellites and the decision to discontinue support for three underperforming satellites in 2025.

Due to the nature of these events, we cannot predict the magnitude or frequency of future decommissioning losses.

While we sometimes purchase launch insurance when financially practical, the proceeds from these policies will typically only cover a portion of our loss in the event of an unplanned satellite deorbit or launch failure.

Allowance for Current Expected Credit Loss on Notes Receivable

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Allowance for current expected credit loss on notes receivable

Percentage of total revenues

Allowance for current expected credit loss on notes receivable increased by $2.8 million relating to a note receivable of $4.5 million and accrued interest of $0.7 million issued to a Space Services customer.

Percentage of total revenue

Allowance for current expected credit loss on notes receivable decreased by $4.0 million, or 100%, for the year ended December 31, 2025, compared with 2024.

This decrease reflects that the notes receivable had been fully reserved as of December 31, 2024, and no additional credit loss expense was recorded in 2025.

Other Income (Expense)

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Interest expense

Gain on sale of a business

Loss on extinguishment of debt

Change in fair value of contingent earnout liability

1 unchanged sentence

Issuance of stock warrants

Foreign exchange (loss) gain

Foreign exchange gain (loss)

Other expense, net

*Not meaningful

Interest income decreased by $0.8 million, or 34%, primarily as a result of converting short-term marketable securities to cash and cash equivalents to be used for working capital purposes.

Interest expense increased by $1.3 million, or 7%, primarily as a result of incurring higher amortized debt issuance costs associated with the Blue Torch term loan.

Change in fair value of contingent earnout liability increased year over year by $1.4 million driven by the mark-to-market adjustments in fiscal year 2024 to reflect the fair market valuation of the underlying stock price.

During fiscal year 2023 the contingent earnout liability remained relatively flat, resulting in a moderate $0.1 million gain.

For additional information, see Notes 2 and 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Change in fair value of warrant liabilities was a loss of $5.3 million for fiscal year 2024 compared to a loss of $1.6 million in fiscal year 2023.

The $5.3 million loss for fiscal year 2024 was primarily driven by mark-to-market adjustments to reflect the fair market valuation of the underlying stock price.

This was also impacted by the issuance of new warrants and reduction in the exercise price of the Blue Torch warrants in connection with the Waiver and Amendment (as defined below).

For additional information, see Notes 2, 7, and 9 to our consolidated financial statements included in this Annual Report on Form 10-K.

Issuance of stock warrants was a net loss of $2.4 million for fiscal year 2024, compared to no such expense for fiscal year 2023, as a result of a definitive Securities Purchase Agreement with institutional investors that included the issuance of common stock warrants in March 2024.

We recognized a foreign exchange loss of $4.3 million for the year ended December 31, 2024, compared to a foreign exchange gain of $1.5 million for the year ended December 31, 2023, a change of 383%.

The $4.3 million loss for the year ended December 31, 2024, was primarily due to the remeasurement of intercompany balances between our Luxembourg entity and the U.S.

entity denominated in U.S.

The weakening of the U.S.

Dollar for year ended December 31, 2024, relative to the Euro at December 31, 2023, triggered the remeasurement and unrealized losses.

The gain of $1.5 million for the year ended December 3, 2023, was primarily due to the remeasurement of intercompany balances between our United Kingdom entity and the U.S.

Interest income increased by $0.9 million, or 57%, for the year ended December 31, 2025, compared with 2024.

This increase was due to a higher average balance of marketable securities during the year ended December 31, 2025 compared to the year ended December 31, 2024.

Prior to the Maritime Transaction, we did not hold marketable securities, and such balances increased following the closing.

The average balance of marketable securities was $48.4 million and $11.4 million for the years ended December 31, 2025 and 2024, respectively.

Interest expense decreased by $12.9 million, or 64%, for the year ended December 31, 2025, compared with 2024, due to the repayment of our outstanding debt on April 25, 2025.

Gain on sale of a business was $154.3 million for the year ended December 31, 2025, with no comparable amount recognized for the year ended December 31, 2024.

The gain was driven by the excess of proceeds from the Maritime Transaction over the net book value of the assets sold, net of transaction costs and other related adjustments.

For additional information, see Note 6 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Loss on extinguishment of debt was $12.0 million for the year ended December 31, 2025, with no comparable amount recognized for the year ended December 31, 2024.

The loss resulted from the repayment and termination of our existing debt facilities, including approximately $10.5 million related to the Blue Torch credit facility and $1.5 million related to the SIF loan, and included applicable premiums, exit fees, legal fees, and other associated costs.

For additional information, see Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Change in fair value of contingent earnout liability was a gain of $1.5 million for the year ended December 31, 2025 compared to a loss of $1.2 million for the year ended December 31, 2024, representing an improvement of $2.7 million year-over-year.

The gain in 2025 was primarily due to a decrease in the liability’s fair value resulting from a decline in the price of our Class A common stock, while the loss in 2024 was driven by an increase in the liability’s fair value resulting from a higher stock price and volatility.

The liability is scheduled to expire in August 2026, and the probability of achieving the earnout target is considered to be zero.

For additional information, see Note 9 to our consolidated financial statements in Part II, Item 8 of this Annual Report.

Change in fair value of warrant liabilities was a gain of $3.2 million for the year ended December 31, 2025 compared to a loss of $5.3 million for the year ended December 31, 2024, representing an improvement of $8.5 million year-over-year.

The gain in 2025 was primarily due to a decrease in the liability’s fair value resulting from a decline in the price of our Class A common stock.

In addition, all warrants other than the Urgent Warrants were exercised on or before June 20, 2025;

as a result, those warrants no longer impact changes in fair value of warrant liabilities subsequent to that date.

The loss in 2024 was primarily due to the increase in the price of our Class A common stock related to warrants issued to Blue Torch.

For additional information regarding our warrants and the definition of Urgent Warrants, see Note 9 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Issuance of stock warrant expense decreased by $2.4 million, or 100%, for the year ended December 31, 2025, compared with 2024.

The expense recorded in 2024 related to warrants issued in connection with a definitive Securities Purchase Agreement with institutional investors, and no comparable expense was recognized in 2025.

We recognized a foreign exchange gain of $10.6 million for the year ended December 31, 2025, compared to a loss of $4.3 million for the year ended December 31, 2024, representing a year-over-year improvement of $14.9 million.

The gain in 2025

was primarily driven by the remeasurement of intercompany balances denominated in U.S.

dollars held by our Luxembourg, Germany, and U.K.

entities and owed to our U.S.

entity resulting from the weakening of the U.S.

dollar relative to the Euro and British Pound Sterling.

The loss in 2024 was primarily due to the remeasurement of intercompany balances between our Luxembourg entity and the U.S.

entity denominated in U.S.

The weakening of the U.S.

Dollar for the year ended December 31, 2024, relative to the British Pound Sterling at December 31, 2023, triggered the remeasurement and unrealized gains.

Other expense, net decreased by $0.4 million, or 16%, primarily due to a $1.1 million loss in Virgin Orbit launch prepayment recorded in the year ended December 31, 2023 that did not recur.

dollars, resulting from the strengthening of the U.S.

dollar relative to the Euro.

Other expense, net decreased $0.3 million, or 14% for the year ended December 31, 2025, compared to 2024.

This decrease was due to an increase of $0.4 million in tax credits, a decrease of $0.4 million in equity investment losses, a decrease of $0.4 million in loss on asset disposals, and a decrease of $0.3 million related to the Maritime Transaction.

These net decreases to other expense were partially offset by expense of $1.2 million in liquidated damages related to the 2025 Private Placement.

For additional information regarding the 2025 Private Placement, see Note 12 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Year Ended December 31,

(dollars in thousands)

Income tax provision (benefit)

Income tax provision of $0.2 million during the year ended December 31, 2024 increased from an income tax benefit of $0.1 million during the year ended December 31, 2023, primarily driven by higher income in our United Kingdom subsidiary.

Income tax provision

Income tax provision was $3.6 million for the year ended December 31, 2025, compared to $0.2 million for the year ended December 31, 2024, reflecting an increase primarily due to taxable income recognized on the gain on the sale of the maritime business.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

We believe the tax changes included in the OBBBA will not materially impact our income tax provision.

Non-GAAP Financial Measures

We believe that in addition to our results determined in accordance with GAAP, non-GAAP Adjusted EBITDA is useful in evaluating our business, results of operations and financial condition.

We believe that this non-GAAP financial measure may be helpful to investors because it provides consistency and comparability with past financial performance and facilitates period to period comparisons of operations, as this eliminates the effects of certain variables from period to period for reasons that we do not believe reflect our underlying business performance.

We believe that in addition to our results determined in accordance with Generally Accepted Accounting Principles (“GAAP”), non-GAAP earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is useful in evaluating our business, results of operations, and financial condition.

We believe that this non-GAAP financial measure may be helpful to investors because it provides consistency and comparability with past financial performance and facilitates period-to-period comparisons of operations, as this eliminates the effects of certain variables that we do not believe reflect our underlying business performance.

In addition to our GAAP measures, we use this non-GAAP financial measure internally for budgeting and resource allocation purposes and in analyzing our financial results.

For the reasons set forth below, we believe that excluding the following items provides information that is helpful in understanding our results of operations, evaluating our future prospects, comparing our financial results across accounting periods, and comparing our financial results to our peers, many of which provide similar non-GAAP financial measures.

• Loss on decommissioned satellites.

We exclude loss on decommissioned satellites because if there was no loss, the expense would be accounted for as depreciation and would also be excluded as part of our EBITDA calculation.

• Other expense, net.

We exclude other (expense) income, net because it includes unusual items that do not reflect the underlying operational results of our business.

Examples of such expenses include prepayment penalties on outstanding debt and vendor dispute legal settlements.

• Stock-based compensation.

We exclude stock-based compensation expenses primarily because they are non-cash expenses that we exclude from our internal management reporting processes.

We also find it useful to exclude these expenses when we assess the appropriate level of various operating expenses and resource allocations when budgeting, planning, and forecasting future periods.

Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under Financial Accounting Standards Board ("FASB") ASC Topic 718, Stock Compensation (“ASC 718”), we believe excluding stock-based compensation expenses allows investors to make meaningful comparisons between our recurring core business results of operations and those of other companies.

• Change in fair value of warrant liabilities and contingent earnout liabilities.

Spire excludes this as it does not reflect the underlying cash flows or operational results of the business.

• Issuance of stock warrants.

We exclude this as it does not reflect the underlying cash flows or operational results of the business.

• Foreign exchange gain/loss.

We are exposed to foreign currency gains or losses on outstanding foreign currency denominated receivables and payables related to certain customer sales agreements, product costs, and other operating expenses.

As we do not actively hedge these currency exposures, changes in the underlying currency rates relative to the U.S.

Dollar may result in realized and unrealized foreign currency gains and losses between the time these receivables and payables arise and the time that they are settled in cash.

Since such realized and unrealized foreign currency gains and losses are the result of macro-economic factors and can vary significantly from one period to the next, we believe that exclusion of such realized and unrealized gains and losses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.

• Other acquisition accounting amortization.

We incur amortization expense for purchased data rights in connection with the acquisition of exactEarth and certain technologies.

Amortization of this asset is a non-cash expense that can be significantly affected by the inherent subjective nature of the assigned value and useful life.

We exclude this amortization expense for our internal management reporting processes because it has already been incurred and is a non-cash expense.

Our management also finds it useful to exclude this charge when assessing the appropriate level of various operating expenses and resource allocations when budgeting, planning and forecasting future periods.

It is important to note that

while this expense is excluded for purposes of non-GAAP presentation, the revenue of the acquired companies is reflected in the non-GAAP measures and that the assets contribute to revenue generation.

• Mergers and acquisition related expenses.

We exclude these expenses as they are transaction costs and expenses associated with the transaction that are generally infrequent in nature and not reflective of the underlying operational results of our business.

Examples of these types of expenses include legal, accounting, regulatory, other consulting services, severance, and other employee costs.

• Other unusual and infrequent costs.

We exclude these as they are unusual items that do not reflect the ongoing operational results of our business.

Examples of these types of expenses include accounting, legal and other professional fees associated with the financial restatement, the Transactions, and customer contract enforcement.

We define EBITDA as net income (loss), plus depreciation and amortization expense, plus interest expense, and plus the provision for (or minus benefit from) income taxes.

• Adjusted EBITDA.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any loss on decommissioned satellites, change in fair value of warrant liabilities, change in fair value of contingent earnout liability, issuance of common stock warrants, other (expense) income, net, stock-based compensation, foreign exchange gain/loss, other acquisition accounting amortization, mergers and acquisition related expenses, and other unusual and infrequent costs.

We define EBITDA as net income (loss), plus depreciation and amortization expense, plus interest, net, and plus income tax provision.

EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted for any gain on sale of a business, loss on extinguishment of debt, change in fair value of contingent earnout liability, change in fair value of warrant liabilities, issuance of stock warrants, foreign exchange (gain) loss, other expense, net, stock-based compensation, mergers and acquisition related expenses, loss on decommissioned satellites and other assets write-offs, other unusual and infrequent costs, and other acquisition accounting amortization.

We believe Adjusted EBITDA can be useful in providing an understanding of the underlying results of operations and trends, an enhanced overall understanding of our financial performance and prospects for the future.

While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance.

Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as capital expenditures and related depreciation, principal and interest payments, and tax payments.

Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income (loss) as it does not take into account certain requirements, such as capital expenditures and related depreciation, interest payments, tax benefits, stock-based compensation, other unusual and infrequent costs, and other acquisition accounting amortization.

Adjusted EBITDA is not a presentation made in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation.

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Investors should read this discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and the related notes thereto also included within.

The following table outlines the reconciliation from net loss to Adjusted EBITDA for the periods indicated:

• Gain on sale of a business.

We exclude this as a material unusual item that does not reflect the ongoing operational results of our business.

• Loss on extinguishment of debt.

We exclude this item because these charges are not indicative of the ongoing servicing of our debt and do not reflect the core operating performance of our business.

• Change in fair value of warrant liabilities and contingent earnout liabilities.

We exclude these non-cash gains and losses because they do not reflect the underlying operating performance of the business.

• Issuance of stock warrants.

We exclude these charges because they are non-cash in nature and do not reflect the underlying operating performance of the business.

• Foreign exchange (gain) loss.

We incur foreign currency gains and losses on foreign currency denominated receivables and payables.

As we do not hedge these currency exposures, realized and unrealized foreign currency gains and losses result from fluctuations in exchange rates.

Since such gains and losses are driven by macroeconomic factors and can vary significantly between periods, we believe their exclusion is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis.

• Other expense, net.

We exclude other expense, net because it includes non-operating items and other gains and losses that are not reflective of our core operating performance and may fluctuate between periods, such as debt prepayment penalties, legal settlements, equity investment losses, and gains or losses on asset disposals.

• Stock-based compensation.

We exclude these expenses primarily because they are non-cash charges used when we assess operating expenses and budgeting.

Moreover, because of varying valuation methodologies and the award types under ASC Topic 718, we believe excluding stock-based compensation expenses allows investors to better compare our recurring core business results of operations and those of other companies.

• Loss on decommissioned satellites and other assets write-offs.

We exclude these charges because they represent the accelerated write-off of assets that would otherwise be accounted for as depreciation and would be excluded as part of our EBITDA calculation.

• Other unusual and infrequent costs.

We exclude these items because they are not reflective of our ongoing operating results.

Examples include accounting, legal and other professional fees associated with the financial restatement;

legal fees related to the SEC subpoena received in July 2025, and a Space Services customer dispute, and liquidated damages associated with the Registration Rights Agreement entered into with the purchasers in the 2025 Private Placement (as defined in “Liquidity and Capital Resources” below).

• Other acquisition accounting amortization.

We exclude non-cash amortization of purchased data rights and certain purchased technologies as these expenses are the result of acquisition accounting and are not indicative of our core operating performance.

The following table outlines the reconciliation from net income (loss) to Adjusted EBITDA for the periods indicated:

Year Ended December 31,

(in thousands)

Net income (loss)

Depreciation & amortization

Interest, net

Income tax provision

Adjustments to EBITDA:

Gain on sale of a business

Loss on extinguishment of debt

Change in fair value of contingent earnout liability

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Issuance of stock warrants

Foreign exchange loss (gain)

Foreign exchange (gain) loss

Other expense, net

Stock-based compensation

Mergers and acquisition related expenses

Loss on decommissioned satellites

Loss on decommissioned satellites and other assets write-offs

Other unusual and infrequent costs

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• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

• Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our former debt;

• Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;

• Adjusted EBITDA does not reflect decommissioned satellites and does not reflect the cash capital expenditure requirements for the replacements of lost satellites.

• Adjusted EBITDA does not reflect decommissioned satellites and other assets write-offs and does not reflect the cash capital expenditure requirements for the replacements of lost satellites.

While these expenses could occur in a given year, the existence and magnitude of these costs could vary greatly and are unpredictable.

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Liquidity and Capital Resources

Our principal sources of liquidity to fund our operations are from cash and cash equivalents, which totaled $19.2 million as of December 31, 2024, mainly from net proceeds from borrowings under the Blue Torch Credit Facility (as defined below), proceeds from the 2024 Private Placement and Offering (each as defined below), and the sale of common stock under the Equity Distribution Agreement with Canaccord Genuity LLC, as sales agent (the "Equity Distribution Agreement").

Of the $19.2 million total cash and cash equivalents, approximately $14.4 million of which was held outside of the United States and the remaining $4.8 million was held in the United States.

These amounts compare to cash and cash equivalents and marketable securities of $40.9 million as of December 31, 2023, of which $29.1 million was in cash and cash equivalents and the remaining $11.7 million was in short-term marketable securities, which can be converted to cash with minimal transaction costs.

Of the $40.9 million total cash and cash equivalents and marketable securities, $13.7 million was held outside of the United States.

As of December 31, 2025, our principal sources of liquidity to fund our operations are from cash and cash equivalents of $24.8 million and marketable securities of $57.0 million, primarily attributable to proceeds of $109.5 million from the Maritime Transaction and proceeds of $37.3 million from the 2025 Private Placement (as defined below).

Of the $24.8 million of cash and cash equivalents, approximately $13.9 million was held outside of the U.S., with the remaining $10.9 million held in the U.S.

These amounts compare to cash and cash equivalents of $19.2 million as of December 31, 2024, of which $14.4 million was held outside of the U.S.

and the remaining $4.8 million was held in the U.S.

The cash and cash equivalent amounts are exclusive of restricted cash, which totaled $0.5 million as of each of December 31, 2025 and 2024.

Since our inception, we have been in an operating cash flow deficit as we have made significant investments in our technology infrastructure, built out our research and development foundation, grown sales and marketing resources to drive revenue, and scaled general and administrative functions to enable operating effectiveness.

On February 4, 2024, we entered into a securities purchase agreement for the issuance and sale of 833,333 shares of our Class A common stock to Signal Ocean Ltd at a price of $12.00 per share (the “2024 Private Placement”).

The 2024 Private Placement closed on February 8, 2024, resulting in gross proceeds to us of $10.0 million.

On March 21, 2024, we entered into a Securities Purchase Agreement with institutional investors (the “Investors”), pursuant to which we 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 us from the Offering totaled $30.0 million 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, we also entered into a placement agency agreement (the “Placement Agency Agreement”) with Alliance Global Partners (“A.G.P” or the “Placement Agent”), pursuant to which we engaged A.G.P as the exclusive placement agent in connection with the Offering.

We 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 $1.8 million, in March 2024.

We 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.

Our 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 our ability to obtain sufficient cash to meet our obligations, including the repayment of all amounts owed pursuant to the Blue Torch Financing Agreement (as amended, and as defined below), which is scheduled to mature on June 13, 2026.

Based on our current cash and cash equivalents and expected future financial results, if the Transactions do not close, we will not have sufficient liquidity to continue operations for at least the next twelve months from the issuance of the accompanying consolidated financial statements.

We entered into the Purchase Agreement with Buyer, pursuant to which we agreed to complete the Transactions.

The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.

The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.

The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.

The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.

We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied.

Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.

Buyer has cited various reasons for declining to close, including a review of the Transactions by the UK Competition and Markets Authority.

We have rejected these reasons.

We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.

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 set a trial date of May 28-30, 2025.

The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time.

We intend 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, we closed the 2024 Private Placement of Class A common stock and Pre-Funded Warrants for gross proceeds of $40.0 million, before deducting offering expenses.

We 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 our business, results of operations, and financial condition.

There is no assurance that we will be successful in achieving any of the foregoing.

Due to our projected cash needs, including amounts owed pursuant to the Blue Torch Financing Agreement, there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of the accompanying consolidated financial statements.

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Blue Torch Credit Agreement

On June 13, 2022, we, as borrower, and certain of our subsidiaries, as guarantors, entered into a financing agreement (the “Blue Torch Financing Agreement”) with Blue Torch, as administrative agent and collateral agent, and certain lenders (the “Lenders”).

The Blue Torch Financing Agreement provides for, among other things, a term loan facility in an aggregate principal amount of

up to $120.0 million (the “Blue Torch Credit Facility”).

A portion of the proceeds of the term loan was used to repay our then-existing $70.0 million 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, upon which we must repay the outstanding principal amount of any outstanding loans thereunder, together with all accrued but unpaid interest, fees, and other obligations owing under the Blue Torch Credit Facility.

Subject to certain exceptions, prepayments of the Blue Torch Credit Facility were subject to early termination fees in an amount equal to 3.0% of the principal prepaid if prepayment would have occurred on or prior to the first anniversary of the closing date, 2.0% of principal prepaid if prepayment would have occurred after the first anniversary of the closing date but on or prior to the second anniversary of the closing date and, 1.0% of principal prepaid if prepayment occurs after the second anniversary of the closing date but on or prior to the third anniversary of the closing date, plus if prepayment would have occurred on or prior to the first anniversary of the closing date, a make-whole amount equal to the amount of interest that would have otherwise been payable through the maturity date of the Blue Torch Credit Facility.

The $120.0 million term loan was available and drawn at closing, of which $19.7 million was placed in an escrow account by Blue Torch with such amount to be released upon our achieving certain metrics related to annualized recurring revenue and a total annualized recurring revenue leverage ratio.

These metrics were achieved and the $19.7 million was released from the escrow account and delivered to us in February 2023.

The term loan accrues interest at a floating rate, to be based, at our election, on either a reference rate or a 3-month Term Secured Overnight Financing Rate ("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%.

We elected the Term SOFR rate which was 12.6571% as of December 31, 2024.

Principal on the term loan is only payable at maturity and interest on the term loan is due and payable quarterly for Term SOFR borrowings.

We are also required to pay other customary fees and costs in connection with the Blue Torch Credit Facility, including a commitment fee in an amount equal to $2.4 million on the closing date, a $0.3 million agency fee annually and an exit fee in an amount equal to $1.8 million upon termination of the Blue Torch Financing Agreement.

Our obligations under the Blue Torch Financing Agreement are or will be guaranteed by certain of our domestic and foreign subsidiaries meeting materiality thresholds set forth in the Blue Torch Financing Agreement.

Such obligations, including the guarantees, are secured by substantially all of our personal property and that of our subsidiary guarantors, including pursuant to a Security Agreement entered into on June 13, 2022 among us, Spire Global Subsidiary, Inc., Austin Satellite Design, LLC and Blue Torch.

As of the closing date, such subsidiary guarantors were Spire Global Subsidiary, Inc., Austin Satellite Design, LLC, Spire Global Canada Subsidiary Corp., and exactEarth Ltd.

The Blue Torch Financing Agreement contains customary affirmative and negative covenants limiting our ability and the ability of our subsidiaries to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock, and make investments, in each case subject to certain exceptions.

We 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.

As of December 31, 2024, we were not in compliance with all applicable financial covenants under the Blue Torch Financing Agreement.

The Blue Torch Financing Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other indebtedness, inaccuracy of representations and warranties, covenant defaults, change of control defaults, judgment defaults, and bankruptcy and insolvency defaults.

If an event of default exists, Blue Torch as agent on behalf of the Lenders may require immediate payment of all obligations under the Blue Torch Financing Agreement and may exercise certain other rights and remedies provided for under the Blue Torch Financing Agreement, the other loan documents and applicable law.

Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Blue Torch Financing Agreement at a per annum rate equal to 2.00% above the applicable interest rate.

A default interest rate of 16.61448% was applied on our outstanding obligations from November 1, 2024 to March 11, 2025.

On June 13, 2022, in connection with the Blue Torch Financing Agreement, we issued warrants to affiliates of the Lenders to purchase shares of Class A common stock (the “2022 Blue Torch Warrants”), which were exercisable for an aggregate of 437,024 shares of our Class A common stock with a per share exercise price of $16.08.

In addition, on June 13, 2022, in connection with the closing of the financing, we paid Urgent Capital LLC, a Delaware limited liability company, a fee for introducing us to the Lenders, for the purpose of loan financing, in the amount equal to $0.6 million in cash and a warrant to purchase shares of Class A common stock (the “GPO Warrant” and, collectively with the 2022 Blue Torch Warrants and the 2023 Blue Torch Warrants (as defined below), the “Credit Agreement Warrants”), which is exercisable for an aggregate of 24,834 shares of our Class A common stock with a per share exercise price of $16.08.

On September 27, 2023, we entered into the Waiver and Amendment No.

2 to Financing Agreement (the “Waiver and Amendment”) with Blue Torch and the Lenders, which amends the Blue Torch Financing Agreement to (a) waive an event of default under the Blue Torch Financing Agreement arising out of the total annualized recurring revenue leverage ratio being greater than the permitted ratio, (b) amend the financial covenants to provide covenant relief from the maximum debt to annualized recurring revenue leverage ratio and the maximum debt to EBITDA leverage ratio set forth in the Blue Torch Financing Agreement for future periods, and (c) provide for a second amendment exit fee.

The second amendment exit fee is $1.8 million (which is an amount equal to one and a half percent (1.50%) of the aggregate outstanding principal balance of the term loans on the effective date of the Waiver and Amendment), bears interest from the date of the Waiver and Amendment at Adjusted Term SOFR for a 3-month interest period plus the applicable margin under the Financing Agreement, and is payable to Blue Torch by us in cash upon the termination of the Blue Torch Financing Agreement, either as a result of acceleration of the loans or at the final maturity date.

The Waiver and Amendment required a repayment by the Company of $2.5 million of the outstanding principal balance of the term loans on October 2, 2023, with a prepayment premium of $0.05 million.

The Waiver and Amendment also requires additional reporting if our liquidity level is less than $35.0 million at any time during a month and revises the minimum liquidity covenant to require liquidity of at least $30.0 million at all times, commencing on September 30, 2023 which in both cases represent a $5.0 million incremental change from the original requirements.

On September 27, 2023, in connection with the Waiver and Amendment, we 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.

We also concurrently issued new warrants to those affiliates that are exercisable for an additional 597,082 shares of the Company’s Class A common stock at a per share exercise price of $5.44 (the “2023 Blue Torch Warrants").

The Credit Agreement Warrants may be exercised on a cashless basis.

The Credit Agreement Warrants are exercisable for a term beginning on the date of issuance and ending on the earlier to occur of ten years from the date of issuance or the consummation of certain of our acquisitions as set forth in the Credit Agreement Warrants.

The 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 December 29, 2023, we pre-paid $2.0 million on our outstanding balance to maintain compliance with the maximum debt to annualized recurring revenue leverage ratio financial covenant, which otherwise would have been short by $2.0 million as of December 31, 2023 due to the delay in the award of the $9.4 million RO sales order by NOAA.

On April 8, 2024, we 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 $20.0 million at all times, commencing on April 8, 2024, which represents a $10.0 million 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, we made a repayment to Blue Torch of $10.0 million in principal, plus an early termination fee of $0.2 million.

On August 27, 2024, we entered into the 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, we made a prepayment to Blue Torch of $10.0 million in principal, plus an early termination fee of $0.1 million.

On November 11, 2024, we 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.

On March 12, 2025, we and Blue Torch entered into 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 Blue Torch Financing Agreement, (c) amend the Blue Torch Financing Agreement to permit us 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.

The fifth amendment fee is equal to $2.5 million which will be paid in kind by adding such fee to the principal amount after which it bears 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.

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 us to engage a liquidity management advisor reasonably satisfactory to Blue Torch no later than March 21, 2025, and we did so on March 21, 2025.

Government Loan

As part of the Acquisition in November 2021, we assumed a loan agreement with the Strategic Innovation Fund ("SIF") which was recorded at fair value of the debt.

As of December 31, 2024, $4.6 million was included in long-term debt, non-current on our consolidated balance sheets related to the SIF loan agreement.

Under this agreement and subsequent amendment, we were eligible to receive funding for certain expenditures incurred from February 13, 2018 to May 12, 2023, up to a maximum of $5.7 million.

The loan is repayable in 15 annual payments beginning February 28, 2026 and has a stated interest rate of zero.

For additional detail regarding the terms associated with our financing arrangements, see Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

We monitor our cash balances, anticipated revenue, operating expenses, and capital expenditures, and we prepare a going concern assessment to ensure we have sufficient resources for at least the next twelve months.

Our key assumptions include timely customer collections, expected costs, and access to financing.

Changes in these assumptions could materially affect our liquidity.

We believe our current cash balances and expected inflows are sufficient to meet our operational and capital needs for the next twelve months.

2025 Private Placement

On March 12, 2025, we entered into a Securities Purchase Agreement (the “2025 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 had an exercise price of $0.0001 per share of Class A common stock, were exercisable immediately, and remained outstanding until fully exercised.

The aggregate net proceeds for the 2025 Private Placement were $37.3 million, after deducting offering expenses.

The 2025 Private Placement closed on March 14, 2025.

As of December 31, 2025, all Pre-Funded Warrants had been exercised on a cashless basis.

Maritime Transaction

On April 25, 2025, we completed the sale of our maritime business to Kpler Holding SA for approximately $238.9 million.

The sale did not include any portion of our satellite network or operations.

For additional details regarding the terms associated with our financing arrangements, see Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Equity Distribution Agreement

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In accordance with the terms of the Equity Distribution Agreement, we may offer and sell shares of our Class A common stock having an aggregate offering price of up to $85.0 million from time to time through the agent pursuant to a registration statement on Form S-3, which became effective on September 26, 2022.

In June 2023, we sold approximately 2.2 million shares of our Class A common stock through this arrangement, resulting in net proceeds of $7.9 million.

As of December 31, 2024, approximately $76.8 million of shares were remaining, but had not yet been sold, under the Equity Distribution Agreement.

The following table summarizes our net cash used in operating activities, net cash used in investing activities, and net cash provided by financing activities for the periods indicated:

As of December 31, 2025, approximately $76.8 million of shares remained unsold;

however, due to late filings of our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2024, September 30, 2024, June 30, 2025, and September 30, 2025, and the expiration of the applicable registration statement, no further sales can be made under the agreement.

The following table summarizes our net cash used in operating activities, net cash provided by (used in) investing activities, and net cash (used in) provided by financing activities for the periods indicated:

Year Ended December 31,

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Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Cash Flows from Operating Activities

Our largest source of operating cash inflows is cash collections from our customers.

Our primary uses of cash from operating activities are for employee-related expenditures, expenses related to our technology infrastructure, expenses related to our computing infrastructure (including computing power, database storage and content delivery costs), building infrastructure costs (including leases for office space), fees for third-party services, and marketing program costs.

Our primary uses of cash from operating activities are for employee-related expenditures, expenses related to our technology infrastructure (including ground stations costs), expenses related to our computing infrastructure (including computing power, database storage and content delivery costs), building infrastructure costs (including leases for office space), fees for third-party services, and marketing program costs.

Net cash used in operating activities was $59.8 million for the year ended December 31, 2025.

This reflected our net loss of $102.8 million, adjustments for non-cash items of $63.1 million and a net decrease of $21.2 million in net operating assets.

Non-cash items primarily consisted of $21.7 million of depreciation and amortization expense, $19.4 million of stock-based compensation expense, $5.3 million change in fair value of warrant liabilities, $4.8 million of amortization of operating lease right-of-use assets, $4.5 million of debt issuance amortization costs, a $4.0 million loss on decommissioned satellites and disposal of assets, $2.4 million related to issuance of stock warrants, and a $1.2 million change in fair value of contingent earnout liability, partially offset by $0.3 million of other, net.

Changes in operating assets and liabilities primarily included a $12.4 million decrease in other current assets, a $7.1 million increase in other accrued expenses, a $3.1 million decrease in contract assets, a $2.7 million increase in contract liabilities, a $2.6 million increase in accounts payable, a $2.0 million decrease in other long-term assets, and a $0.9 million increase in accrued wages and benefits, partially offset by a $5.0 million increase in accounts receivable, net, and a $4.7 million decrease in operating lease liabilities.

This reflected our net income of $51.3 million, adjustments for non-cash items of $124.9 million, and a net decrease of $13.7 million in operating assets and liabilities.

Non-cash items primarily consisted of a $154.3 million gain on sale of a business, $23.7 million of transaction costs related to the sale of a business, and a $3.2 million change in fair value of warrant liabilities, partially offset by $18.7 million of stock-based compensation expense, $12.4 million of depreciation and amortization expense, a $12.0 million loss on extinguishment of debt, a $9.3 million loss on decommissioned satellites and other assets write-offs, and $3.1 million of amortization of operating lease right-of-use assets.

Changes in operating assets and liabilities primarily included an $8.9 million decrease in accounts receivable, net, due to lower sales following the sale of the maritime business, a $5.1 million increase in other accrued expenses, and a $2.9 million increase in contract liabilities, partially offset by a $2.9 million increase in other current assets and a $2.4 million decrease in operating lease liabilities.

Net cash used in operating activities was $18.5 million for the year ended December 31, 2024.

This reflected our net loss of $103.4 million, adjustments for non-cash items of $63.7 million and a net decrease of $21.2 million in net operating assets.

Non-cash items primarily consisted of $18.2 million of depreciation and amortization expense, $13.0 million of stock-based compensation expense, $2.9 million of amortization of operating lease right-of-use assets, $2.3 million of debt issuance amortization costs, $1.6 million change in fair value of warrant liabilities, and a $1.0 million loss on decommissioned satellites and disposal of assets, partially offset by $0.5 million of other, net, and a $0.1 million change in fair value of contingent earnout liability.

Changes in operating assets and liabilities primarily included a $13.7 million increase in contract liabilities, a $4.1 million decrease in accounts receivable, net, a $1.7 million decrease in other long-term assets, and a $1.4 million increase in accounts payable, partially offset by a $9.8 million increase in other current assets, a $2.8 million decrease in operating lease liabilities, a $2.7 million decrease in accrued wages and benefits, a $1.6 million increase in contract assets, and a $1.1 million decrease in other accrued expenses.

Non-cash items primarily consisted of $21.7 million of depreciation and amortization expense, $20.0 million of stock-based compensation expense, $5.3 million change in fair value of warrant liabilities, $4.8 million of amortization of operating lease right-of-use assets, $4.2 million of other, net, a $4.0 million loss on decommissioned satellites and other assets write-offs, $2.4 million related to issuance of stock warrants, and a $1.2 million change in fair value of contingent earnout liability.

Changes in operating assets and liabilities primarily included a $12.4 million decrease in other current assets, a $8.1 million increase in other accrued expenses, a $3.1 million decrease in contract assets, a $2.7 million increase in contract liabilities, a $2.6 million increase in accounts payable, and a $2.0 million decrease in other long-term assets, partially offset by a $5.0 million increase in accounts receivable, net, and a $4.7 million decrease in operating lease liabilities.

Cash Flows from Investing Activities

Cash flows from investing activities primarily relate to cash used for business acquisitions, the procurement, development, and deployment of capital assets, including satellites and related launch costs, ground stations, machinery and equipment, furniture, computer equipment and software, and leasehold improvements.

The following table summarizes our net cash used in investing activities relating to capital expenditures by source of spend:

Cash flows from investing activities primarily relate to proceeds from the sale of a business and maturities of short-term investments, as well as purchases of short-term investments and capital assets.

The following table summarizes our net cash used in investing activities for capital expenditures, broken down by source of spend:

Year Ended December 31,

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Customer funded (Space Services)

Net cash used in investing activities was $14.2 million for the year ended December 31, 2024.

The net cash used in investing activities was driven by purchases of $30.1 million in short-term investments and $26.6 million of investment in property and equipment, partially offset by $42.5 million in maturities of short-term investments.

Total capital expenditures

Net cash provided by investing activities was $151.2 million for the year ended December 31, 2025.

This primarily reflected the proceeds from the sale of the maritime business, net of cash of $238.9 million, and $65.5 million of maturities of short-term investments, partially offset by purchases of $120.5 million of short-term investments and $32.8 million of property and equipment.

Net cash used in investing activities was $14.2 million for the year ended December 31, 2024.

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Cash Flows from Financing Activities

Cash flows from financing activities relate primarily to net proceeds from the issuance of long term debt, convertible notes, and Class A common stock.

Cash flows from financing activities primarily relate to proceeds from the issuance of Class A common stock and payments on long-term debt and related fees.

Net cash used in financing activities was $74.9 million for the year ended December 31, 2025.

The net cash used in financing activities was driven by payments on long-term debt of $105.7 million and applicable premium, exit fees, legal and other fees of $9.1 million, partially offset by $37.3 million of proceeds from the 2025 Private Placement, proceeds from the exercise of stock options of $1.8 million, and proceeds from our employee stock purchase plan of $0.8 million.

Net cash provided by financing activities was $19.0 million for the year ended December 31, 2024.

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and certain institutional investors of $37.9 million, proceeds from our employee stock purchase plan of $0.9 million, and proceeds from exercise of stock options of $0.3 million, partially offset by payments on long-term debt of $20.1 million.

Net cash provided by financing activities was $23.9 million for the year ended December 31, 2023.

The net cash provided by financing activities was driven by $19.9 million of proceeds from long-term debt, $7.9 million of proceeds from issuance of common stock, and $0.7 million of proceeds from the employee stock purchase plan, partially offset by $4.5 million of long-term debt repayments, and $0.1 million of payments of debt issuance costs.

For additional information regarding the terms of our credit facilities and notes, see Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

For additional information regarding the terms of our former credit facilities and notes, see Note 7 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

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Certain of our contracts contain multiple project-based solutions and services promised to a customer over various phases (e.g., scoping, development, manufacturing, testing, launch, and/or satellite operations), which we assess at contract inception to determine which of the solutions and services promised in a contract are distinct in order to identify individual performance obligations.

For contracts with more than one performance obligation, the transaction price is allocated among the performance obligations using the relative standalone selling price (“SSP”) of each obligation.

Judgment is required to determine the SSP for each distinct performance obligation.

SSP is generally estimated using cost plus a reasonable margin based on value added to the customer.

For certain project-based performance obligations, primarily our R&D Services Contracts, we recognize revenue over time using the percentage-of-completion method, using an input measure, specifically the cost incurred to date over the total expected cost of the contract.

We have determined this method to be the most direct and reasonable measure of progress as it reflects the results achieved and value transferred to the customer.

We recognize revenue for other contracts over time, such as data subscriptions and the data delivery for Space Services Contracts.

For these contracts we use straight-line, time-based measures such as months data subscription delivered or operational satellite days delivered.

For contracts containing multiple performance obligations, we allocate the transaction price based on the relative standalone selling price (“SSP”) of each performance obligation.

Determining SSP requires significant judgment, particularly where observable standalone sales do not exist.

In these cases, SSP is generally estimated using a cost-plus margin approach, which requires us to estimate expected costs and apply an appropriate margin that reflects market conditions, value delivered to the customer, and entity-specific factors.

For certain project-based performance obligations, primarily for our R&D Services, we recognize revenue over time using the percentage-of-completion method, using an input measure, specifically the cost incurred to date over the total expected cost of the contract.

This approach requires significant estimates, including total contract costs, labor hours and project timelines.

Revisions to these estimates are recognized on a cumulative catch-up basis and may materially impact revenue and profitability in the period of change.

From time to time, we revise our estimates of total costs for these contracts.

For the year ended December 31, 2025, changes in estimated total costs for contracts recognized under the percent-of-completion method resulted in revenue reductions of $1.6 million.

We recognize revenue over time for our data subscription services and the data delivery associated with Space Services contracts.

For these services we generally use straight-line, time-based measures such as subscription service periods or operational satellite days delivered.

For Space Services involving satellites in varying sizes and different operational commencement dates, the output measure of progress is measured based on satellite days consumed and a weighting factor determined based on the contract value of different satellites.

We have certain contracts which are satisfied at a point in time, primarily for the delivery of discrete quantities of data or upon delivery of a completed study or report.

For such contracts, we recognize revenue upon delivery of the related data, study or report.

Business Combinations and Valuation of Goodwill and Acquired Intangible Assets

We allocate the purchase price of acquired companies to tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The purchase price allocation process requires management to make significant estimates and assumptions with respect to the valuation of intangible assets.

Examples of critical estimates and assumptions in valuing certain of the intangible assets we have acquired or may acquire in the future 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.

These factors are also considered in determining the useful life of the acquired intangible assets.

These estimates are based in part on historical experience, market conditions and information obtained from management of the acquired companies and are inherently uncertain.

Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recorded.

The Company estimates the fair value of its one reporting unit based on its consolidated market capitalization using the 30-day trading volume-weighted average price (“VWAP”) and the stock price on the date of valuation as two independent data points.

The results of the annual impairment test performed in the fourth quarter of fiscal year 2024 indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by more than 3600% based on the 30-day trading VWAP and by more than 5000% based on the stock price on the date of valuation.

Therefore, the Company concluded there was no impairment of goodwill during the fourth quarter of 2024.

There also was no goodwill impairment recorded during the year ended December 31, 2023.

If the Company’s market capitalization continues to decline, and if macroeconomic conditions worsen, the Company’s reporting unit may be at risk for future goodwill impairments.

The Company continues to monitor for potential impairment should impairment indicators arise.

Contingent Earnout Liability

In connection with the reverse recapitalization that was part of the Merger, eligible Spire equity holders are entitled to receive additional shares of our Class A common stock upon the achievement of certain earnout triggering events.

In accordance with ASC 815-40, the earnout shares are not indexed to the Class A common stock and therefore are accounted for as a liability and an offset to additional paid-in capital on the consolidated balance sheets at the reverse recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense) in the consolidated statements of operations.

The contingent earnout liability is categorized as a Level 3 fair value measurement using the Monte Carlo model 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.

Warrant Liability

We generally classify warrants for the purchase of shares of our Class A common stock as liabilities on our 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 us 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 our consolidated balance sheets until the warrants are exercised or expire.

Stock-Based Compensation

We have an equity incentive plan under which we grant stock-based awards to employees and non-employees.

We account for stock-based awards in accordance with ASC 718, which requires the measurement and recognition of compensation expense, based on estimated fair values, for all stock-based awards made to employees and non-employees for stock options.

We recognize the cost of stock-based awards granted to our employees and non-employees based on the estimated grant-date fair value of the awards.

For restricted stock units ("RSU") with service-based vesting conditions, the fair value is calculated based upon the Company’s closing stock price on the date of grant using the intrinsic value method.

We determine the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the following assumptions:

• Common Stock Valuation—Prior to the closing date of the Merger, determining the fair value of the shares of common stock underlying our stock-based awards, which were not publicly traded, involved significant judgment and had historically been determined with the help of an independent third-party valuation firm.

For awards granted subsequent to the closing date of the Merger, the fair value of our Class A common stock is based on the closing price of our Class A common stock, as reported on the NYSE, on the date of grant of the related stock-based award.

• Expected Term—Because of the lack of sufficient historical data, we use the simple average of the vesting period and the contractual term to estimate the period the stock options are expected to be outstanding.

• Expected Volatility—We determine the expected stock price volatility based on the historical volatility of our Class A common stock and the historical volatilities of an industry peer group.

• Expected Dividend Yield—The dividend rate used is zero as we have never paid any cash dividends on our Class A common stock and do not anticipate doing so in the foreseeable future.

• Risk-Free Interest Rate—The interest rates used are based on the implied yield available on U.S.

Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Accounting Pronouncements Recently Adopted and Not Yet Adopted

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and new accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart our Business Startups Act (the "JOBS Act").

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we are (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for recently adopted accounting pronouncements and new accounting pronouncements not yet adopted as of the date of this Annual Report on Form 10-K.

Smaller Reporting Company Status

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.

We are currently permitted to comply with the disclosure obligations applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

However, based on our fiscal year 2024 revenue and our non-affiliate float as of June 30, 2025, we will no longer be a smaller reporting company and will no longer be permitted to provide scaled disclosure beginning with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

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What changed 10-K

Item 7. Management’s Discussion and Analysis