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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______ to______

Commission File Number: 001-39493

 

SPIRE GLOBAL, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

85-1276957

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

8000 Towers Crescent Drive

Suite 1100

Vienna, Virginia 22182

(Address of principal executive offices) (Zip Code)

(202) 301-5127

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A common stock, par value of $0.0001 per share

 

SPIR

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

 

The registrant had outstanding 24,317,560. shares of Class A common stock and 1,507,325 shares of Class B common stock as of April 30, 2024.

 

 


 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

5

 

 

 

Item 1.

Unaudited Condensed Consolidated Financial Statements

5

 

Condensed Consolidated Balance Sheets

5

 

Condensed Consolidated Statements of Operations

6

 

Condensed Consolidated Statements of Comprehensive Loss

7

 

Condensed Consolidated Statements of Changes in Stockholders’ Equity

8

 

Condensed Consolidated Statements of Cash Flows

9

 

Notes to Unaudited Condensed Consolidated Financial Statements

10

Item 2.

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

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

43

Item 4.

Controls and Procedures

44

 

 

 

PART II.

OTHER INFORMATION

47

 

 

 

Item 1.

Legal Proceedings

47

Item 1A.

Risk Factors

47

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

48

Item 3.

Defaults Upon Senior Securities

48

Item 4.

Mine Safety Disclosures

48

Item 5.

Other Information

48

Item 6.

Exhibits

49

Signatures

50

 

 

2


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

our ability to meet our financial covenants in the future;
the sufficiency of our working capital in the future;
changes in our growth, strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, and plans;
our ability to remedy identified material weaknesses;
the implementation, market acceptance, and success of our business model;
the ability to develop new offerings, services, solutions and features and bring them to market in a timely manner and make enhancements to our business;
the quality and effectiveness of and advancements in our technology and our ability to accurately and effectively use data and engage in predictive analytics;
overall level of customer demand for our products and offerings;
expectations and timing related to product launches;
expectations of achieving and maintaining profitability;
projections of total addressable markets, market opportunity, and market share;
our ability to acquire data sets, software, equipment, satellite components, and regulatory approvals from third parties;
our expectations concerning relationships with third parties;
our ability to acquire or develop products or technologies we believe could complement or expand our platform or to expand our products and offerings internationally;
our ability to obtain and protect patents, trademarks, licenses and other intellectual property rights;
our ability to utilize potential net operating loss carryforwards;
developments and projections relating to our competitors and industries, such as the projected growth in demand for space-based data;
our ability to acquire new customers and partners or obtain renewals, upgrades, or expansions from our existing customers;
our ability to compete with existing and new competitors in existing and new markets and offerings;
our ability to retain or recruit officers, key employees or directors;
the conversion or planned repayment of our debt obligations;
our future capital requirements and sources and uses of cash;
our ability to obtain funding for our operations;
our business, expansion plans, and opportunities;
our expectations regarding regulatory approvals and authorizations;
the expectations regarding the effects of existing and developing laws and regulations, including with respect to regulations around satellites, intellectual property law, and privacy and data protection;
global and domestic economic conditions, including currency exchange rate fluctuations, inflation, rising interest rates and geopolitical uncertainty and instability, and their impact on demand and pricing for our offerings in affected markets; and
the impact of global health crises on global capital and financial markets, general economic conditions in the United States, and our business and operations.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this

 

3


 

Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to expectations as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to rely upon these statements.

 

 

4


 

PART I—FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

Spire Global, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

51,985

 

 

$

29,144

 

Marketable securities

 

 

12,003

 

 

 

11,726

 

Accounts receivable, net (including allowance of $271 and $586 as of
   March 31, 2024 and December 31, 2023, respectively)

 

 

12,346

 

 

 

9,911

 

Contract assets

 

 

5,205

 

 

 

6,215

 

Other current assets

 

 

12,241

 

 

 

12,340

 

Total current assets

 

 

93,780

 

 

 

69,336

 

Property and equipment, net

 

 

71,853

 

 

 

71,209

 

Operating lease right-of-use assets

 

 

14,324

 

 

 

14,921

 

Goodwill

 

 

50,051

 

 

 

51,155

 

Customer relationships

 

 

18,467

 

 

 

19,363

 

Other intangible assets

 

 

11,994

 

 

 

12,660

 

Other long-term assets, including restricted cash

 

 

7,503

 

 

 

8,181

 

Total assets

 

$

267,972

 

 

$

246,825

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

5,869

 

 

$

8,012

 

Accrued wages and benefits

 

 

2,147

 

 

 

1,829

 

Contract liabilities, current portion

 

 

22,617

 

 

 

23,165

 

Other accrued expenses

 

 

11,309

 

 

 

8,540

 

Total current liabilities

 

 

41,942

 

 

 

41,546

 

Long-term debt

 

 

115,016

 

 

 

114,113

 

Contingent earnout liability

 

 

265

 

 

 

220

 

Deferred income tax liabilities

 

 

1,058

 

 

 

1,069

 

Warrant liability

 

 

10,672

 

 

 

5,988

 

Operating lease liabilities, net of current portion

 

 

12,488

 

 

 

13,079

 

Other long-term liabilities

 

 

1,221

 

 

 

272

 

Total liabilities

 

 

182,662

 

 

 

176,287

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Common stock, $0.0001 par value, 1,000,000,000 Class A and 15,000,000 Class
    B shares authorized,
24,315,589 Class A and 1,507,325 Class B shares issued
    and outstanding at March 31, 2024;
21,097,351 Class A and 1,507,325 Class B shares
    issued and outstanding at December 31, 2023

 

 

3

 

 

 

2

 

Additional paid-in capital

 

 

519,400

 

 

 

477,624

 

Accumulated other comprehensive loss

 

 

(6,234

)

 

 

(4,485

)

Accumulated deficit

 

 

(427,859

)

 

 

(402,603

)

Total stockholders’ equity

 

 

85,310

 

 

 

70,538

 

Total liabilities and stockholders’ equity

 

$

267,972

 

 

$

246,825

 

 

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

 

5


 

Spire Global, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Revenue

 

$

25,688

 

 

$

24,168

 

Cost of revenue

 

 

12,546

 

 

 

10,360

 

Gross profit

 

 

13,142

 

 

 

13,808

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

9,909

 

 

 

9,663

 

Sales and marketing

 

 

5,118

 

 

 

6,850

 

General and administrative

 

 

9,818

 

 

 

11,770

 

Loss on decommissioned satellites

 

 

178

 

 

 

 

Total operating expenses

 

 

25,023

 

 

 

28,283

 

Loss from operations

 

 

(11,881

)

 

 

(14,475

)

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

454

 

 

 

565

 

Interest expense

 

 

(5,053

)

 

 

(4,578

)

Change in fair value of contingent earnout liability

 

 

(45

)

 

 

76

 

Change in fair value of warrant liabilities

 

 

(4,202

)

 

 

746

 

Issuance of stock warrants

 

 

(2,399

)

 

 

 

Foreign exchange (loss) gain

 

 

(1,538

)

 

 

1,024

 

Other expense, net

 

 

(551

)

 

 

(762

)

Total other expense, net

 

 

(13,334

)

 

 

(2,929

)

Loss before income taxes

 

 

(25,215

)

 

 

(17,404

)

Income tax provision

 

 

41

 

 

 

269

 

Net loss

 

$

(25,256

)

 

$

(17,673

)

Basic and diluted net loss per share(1)

 

$

(1.16

)

 

$

(0.98

)

Weighted-average shares used in computing basic and diluted net loss per share(1)

 

 

21,813,045

 

 

 

18,096,363

 

(1) The shares of the Company's common stock and the per share amounts for the three months ended March 31, 2023 have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1).

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

 

6


 

Spire Global, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Net loss

 

$

(25,256

)

 

$

(17,673

)

Other comprehensive (loss) gain:

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,747

)

 

 

(1,589

)

Net unrealized (loss) gain on investments
   (net of tax)

 

 

(2

)

 

 

44

 

Comprehensive loss

 

$

(27,005

)

 

$

(19,218

)

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

 

7


 

Spire Global, Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(In thousands, except share amounts)

(Unaudited)

 

 

 

Common Stock

 

 

Additional
Paid in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2023

 

 

 

22,604,676

 

 

$

2

 

 

$

477,624

 

 

$

(4,485

)

 

$

(402,603

)

 

$

70,538

 

Release of Restricted Stock Units
   and Performance Stock Units

 

 

 

204,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of stock options

 

 

 

37,536

 

 

 

 

 

 

267

 

 

 

 

 

 

 

 

 

267

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

3,628

 

 

 

 

 

 

 

 

 

3,628

 

Issuance of common stock under
    Securities Purchase Agreements

 

 

 

2,976,191

 

 

 

1

 

 

 

37,881

 

 

 

 

 

 

 

 

 

37,882

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25,256

)

 

 

(25,256

)

Foreign currency translation
   adjustments

 

 

 

 

 

 

 

 

 

 

 

 

(1,747

)

 

 

 

 

 

(1,747

)

Net unrealized loss on
   investments (net of tax)

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Balance, March 31, 2024

 

 

 

25,822,914

 

 

$

3

 

 

$

519,400

 

 

$

(6,234

)

 

$

(427,859

)

 

$

85,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

 

Shares(1)

 

 

Amount(1)

 

 

Capital(1)

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2022

 

 

 

19,467,183

 

 

 

2

 

 

 

455,765

 

 

 

(6,997

)

 

 

(338,647

)

 

 

110,123

 

Release of Restricted Stock Units

 

 

 

261,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

2,646

 

 

 

 

 

 

 

 

 

2,646

 

Conversion of warrants to common stock

 

 

 

34,728

 

 

 

 

 

 

286

 

 

 

 

 

 

 

 

 

286

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,673

)

 

 

(17,673

)

Foreign currency translation
   adjustments

 

 

 

 

 

 

 

 

 

 

 

(1,589

)

 

 

 

 

 

(1,589

)

Net unrealized gain on
   investments (net of tax)

 

 

 

 

 

 

 

 

 

 

 

44

 

 

 

 

 

 

44

 

Balance, March 31, 2023

 

 

 

19,763,064

 

 

$

2

 

 

$

458,697

 

 

$

(8,542

)

 

$

(356,320

)

 

$

93,837

 

(1) The shares of the Company's common stock have been retroactively adjusted to reflect the 1-for-8 reverse stock split (Note 1).

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

 

8


 

 

Spire Global, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(25,256

)

 

$

(17,673

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

6,837

 

 

 

3,916

 

Stock-based compensation

 

 

3,628

 

 

 

2,646

 

Amortization of operating lease right-of-use assets

 

 

809

 

 

 

224

 

Amortization of debt issuance costs

 

 

900

 

 

 

554

 

Change in fair value of warrant liabilities

 

 

4,202

 

 

 

(746

)

Change in fair value of contingent earnout liability

 

 

45

 

 

 

(76

)

Issuance of stock warrants

 

 

2,399

 

 

 

 

Loss on decommissioned satellites and impairment of assets

 

 

432

 

 

 

 

Other, net

 

 

(20

)

 

 

(104

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(2,564

)

 

 

97

 

Contract assets

 

 

624

 

 

 

(855

)

Other current assets

 

 

392

 

 

 

117

 

Other long-term assets

 

 

516

 

 

 

410

 

Accounts payable

 

 

(1,508

)

 

 

(604

)

Accrued wages and benefits

 

 

343

 

 

 

323

 

Contract liabilities

 

 

775

 

 

 

1,259

 

Other accrued expenses

 

 

973

 

 

 

(548

)

Operating lease liabilities

 

 

(872

)

 

 

(230

)

Net cash used in operating activities

 

 

(7,345

)

 

 

(11,290

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of short-term investments

 

 

(10,920

)

 

 

(13,908

)

Maturities of short-term investments

 

 

10,800

 

 

 

11,600

 

Purchase of property and equipment

 

 

(8,564

)

 

 

(4,649

)

Net cash used in investing activities

 

 

(8,684

)

 

 

(6,957

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from Securities Purchase Agreements, net

 

 

37,881

 

 

 

 

Proceeds from long-term debt

 

 

 

 

 

19,886

 

Proceeds from exercise of stock options

 

 

267

 

 

 

 

Net cash provided by financing activities

 

 

38,148

 

 

 

19,886

 

Effect of foreign currency translation on cash, cash equivalents and restricted cash

 

 

711

 

 

 

(1,846

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

22,830

 

 

 

(207

)

Cash, cash equivalents and restricted cash

 

 

 

 

 

 

Beginning balance

 

 

29,641

 

 

 

47,569

 

Ending balance

 

$

52,471

 

 

$

47,362

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Cash paid for interest

 

$

3,983

 

 

$

3,827

 

Income taxes paid

 

$

15

 

 

$

451

 

Noncash operating, investing and financing activities

 

 

 

 

 

 

Property and equipment purchased but not yet paid

 

$

2,135

 

 

$

2,299

 

Right-of-use assets obtained in exchange for lease liabilities

 

$

353

 

 

$

1,007

 

Conversion of warrants to Class A common stock

 

$

 

 

$

286

 

 

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

 

9


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

1.
Nature of Business

 

Spire Global, Inc. (“Spire” or the “Company”), founded in August 2012, is a global provider of space-based data and analytics that offers its customers unique datasets and insights about earth from the ultimate vantage point. The Company collects this space-based data through its proprietary constellation of multi-purpose nanosatellites. By designing, manufacturing, integrating and operating its own satellites and ground stations, the Company has unique end-to-end control and ownership over its entire system. The Company offers the following three data solutions to customers: Maritime, Aviation and Weather. As a fourth solution, the Company is providing “space-as-a-service” through its Space Services solution.

The Company is headquartered in Vienna, Virginia and has several wholly owned operating subsidiaries in the United States, United Kingdom, Luxembourg, Singapore, Australia, Germany, and Canada.

On August 16, 2021, Spire Global Subsidiary, Inc. (formerly known as Spire Global, Inc.) (“Legacy Spire”) closed its previously announced merger with NavSight Holdings, Inc. (“NavSight”), a special purpose acquisition company. As a result, Legacy Spire continued as the surviving corporation and a wholly owned subsidiary of NavSight (the “Merger,” and such consummation, the “Closing”). NavSight then changed its name to Spire Global, Inc. and Legacy Spire changed its name to Spire Global Subsidiary, Inc.

On September 14, 2022, the Company entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC, as sales agent (the “Agent”). In accordance with the terms of the Equity Distribution Agreement, the Company may offer and sell its Class A common stock, having an aggregate offering price of up to $85,000 from time to time through the Agent pursuant to a registration statement on Form S-3, which became effective on September 26, 2022. Under the Equity Distribution Agreement, the Company sold (i) 2,166,389 shares of its Class A common stock during the year ended December 31, 2023 for gross proceeds of $8,235 and (ii) no shares during the three months ended March 31, 2024.

On March 24, 2023, the Company, was notified by the New York Stock Exchange (“NYSE”) that the Company was not in compliance with Rule 802.01C of the NYSE’s Listed Company Manual (“Rule 802.01C”) relating to the minimum average closing price of the Company’s Class A common stock, par value of $0.0001 per share, required over a consecutive 30 trading-day period. On August 31, 2023, the Company effected a reverse stock split at a ratio of 1-for-8 (the “Reverse Stock Split”) of its common stock. In connection with the Reverse Stock Split, every eight shares of the Company’s Class A and Class B common stock issued and outstanding as of the effective date were automatically combined into one share of Class A or Class B common stock, as applicable. On September 25, 2023, the Company received formal notice from the NYSE that the Company had regained compliance with Rule 802.01C.

On February 4, 2024, the Company and Signal Ocean Ltd (“Signal Ocean”) entered into a securities purchase agreement (the “SPA”) for the issuance and sale of 833,333 shares of the Company’s Class A common stock to Signal Ocean at a price of $12.00 per share (the “Private Placement”). The Private Placement closed on February 8, 2024, resulting in gross proceeds to the Company of $10.0 million.

On March 21, 2024, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with institutional investors (the “Investors”), pursuant to which the Company issued and sold in a registered direct offering (the “Offering”), (i) an aggregate of 2,142,858 shares of Class A common stock and (ii) warrants exercisable for an aggregate of 2,142,858 shares of Class A common stock ("Securities Purchase Agreement Warrants") to the Investors. Each share of Class A common stock and accompanying Securities Purchase Agreement Warrant to purchase one share of Class A common stock was sold at an offering price of $14.00. The aggregate gross proceeds to the Company from the Offering totaled $30,000 before deducting the placement agent’s fees and related offering expenses. The Securities Purchase Agreement Warrants have an exercise price equal to $14.50 per share of Class A common stock, are exercisable for a term beginning on March 25, 2024 and will expire on July 3, 2024.

On March 21, 2024, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Alliance Global Partners (“A.G.P” or the “Placement Agent”), pursuant to which the Company engaged A.G.P as the exclusive placement agent in connection with the Offering. The Company paid A.G.P a cash fee equal to 6% of the gross proceeds from the sale of shares and Securities Purchase Agreement Warrants to the Investors, or $1,800, in March 2024. The Company agreed to pay a cash fee equal to 4% of the gross exercise price paid in cash with respect to the exercise of the Securities Purchase Agreement Warrants.

The par value of the common stock remains $0.001 per share after the Reverse Stock Split. All share and per share information has been retroactively adjusted to reflect the impact of the Reverse Stock Split for applicable periods presented.

2.
Summary of Significant Accounting Policies

 

Basis of Presentation

The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and regulations of the U.S. Securities and Exchange Commission (the "SEC") for interim financial reporting.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to rules and regulations applicable to interim financial reporting. The unaudited condensed consolidated

 

10


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of its financial position, results of operations and cash flows for the periods indicated. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included within the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The information as of December 31, 2023 included on the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. All intercompany accounts and transactions have been eliminated in consolidation.

Results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2024.

 

Reverse Stock Split

For the three months ended, and as of, March 31, 2023, reported share amounts, including issued and outstanding shares, per share amounts, and reported issued and outstanding warrants and other securities convertible into common stock in these condensed consolidated financial statements and accompanying notes have been retroactively adjusted for the Reverse Stock Split by applying the Reverse Stock Split ratio. The number of authorized shares of common stock was not impacted by the Reverse Stock Split, and therefore has not been retroactively adjusted.

Liquidity Risks and Uncertainties

Since inception, the Company has been engaged in developing its product offerings, raising capital, and recruiting personnel. The Company’s operating plan may change as a result of many factors currently unknown and there can be no assurance that the current operating plan will be achieved in the time frame anticipated by the Company, and it may need to seek additional funds sooner than planned. If adequate funds are not available to the Company on a timely basis, it may be required to delay, limit, reduce, or terminate certain commercial efforts, or pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of the Company’s stockholders.

The Company has a history of operating losses and negative cash flows from operations since inception. During the three months ended March 31, 2024, net loss was $25,256, cash used in operations was $7,345 and the Company received net proceeds of $9,825 from the Private Placement and $28,056 from the Offering. The Company held cash and cash equivalents of $51,985, excluding restricted cash of $486, and investment in short-term marketable securities of $12,003 as of March 31, 2024. The Company currently believes that it will meet its minimum liquidity covenant, as well as all other financial covenants under the Blue Torch Financing Agreement (as amended, and as defined below in Note 6), at each applicable measurement point over the period of at least one year from the issuance of the March 31, 2024 condensed consolidated financial statements, and that it will have sufficient working capital to operate for a period of at least one year from the issuance of the March 31, 2024 condensed consolidated financial statements, in each case based on the Company's current cash and cash equivalents balance and expected future financial results.

The Company’s assessment of the period of time through which its financial resources will be adequate to support its operations and meet its financial covenants is a forward-looking statement and involves risks and uncertainties. The Company’s actual results could vary as a result of many factors, including its growth rate, subscription renewal activity, the timing and extent of spending to support its infrastructure and research and development efforts and the expansion of sales and marketing activities. The Company may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. The Company has based its estimates on assumptions that may prove to be wrong, and it could use its available capital resources sooner than it currently expects. The Company may be required to seek additional equity or debt financing or seek waivers of or amendments to contractual obligations. Future liquidity and cash requirements will depend on numerous factors, including market penetration, the introduction of new products, and potential acquisitions of related businesses or technology. In the event that additional financing is required from outside sources, the Company may not be able to raise it on acceptable terms or at all. If the Company is unable to raise additional capital when desired, unable to meet the minimum liquidity covenant or other financial covenants under the Blue Torch Financing Agreement or if it cannot expand its operations or otherwise capitalize on its business opportunities because it lacks sufficient capital, its business, results of operations, and financial condition would be adversely affected.

Macroeconomic and Geopolitical

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

The U.S. dollar exhibited a modest decrease in strength against the local functional currencies of our foreign subsidiaries for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. This had a marginal positive impact on our revenue, as about one-third of the Company's sales are conducted in foreign currencies. Conversely, it had a marginal unfavorable impact on our expenses, given that a majority of the Company's workforce resides in countries other than the United States.

The macroeconomic environment has caused existing or potential customers to re-evaluate their decision to purchase the Company's offerings, at times resulting in additional customer discounts, extended payment terms, longer sales cycles, and a few contract cancellations.

 

11


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

Increasing interest rates in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 resulted in higher interest expenses, as the Company’s credit facility is based on a floating interest rate. The Russian invasion of Ukraine and the continued conflict created additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers and negatively impacted the availability of launch windows and our constellation replenishment efforts.

If any of these factors continue or worsen, and/or if new macroeconomic or geopolitical issues arise, the Company's results and financial condition could be further negatively impacted. The Company cannot predict the timing, strength, or duration of any economic slowdown, downturn, instability, or recovery, generally or within any particular industry or geography. Any downturn of the general economy or industries in which the Company operates would adversely affect its business, financial condition, and results of operations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management’s significant estimates include assumptions in revenue recognition, allowance for credit losses, valuation of certain assets and liabilities acquired from the acquisition of exactEarth in November 2021 (the “Acquisition”), realizability of deferred income tax assets, and fair value of equity awards, contingent earnout liabilities and warrant liabilities. Actual results could differ from those estimates.

Based on an evaluation of the lifespans of its in-service satellites and on current capabilities to extend the useful life of in-service satellites via software updates, the Company changed the estimated useful life of its capitalized satellites and related launch costs from three to four years for depreciation purposes. The Company determined it was appropriate to make this change beginning June 2023. The change in estimated useful life did not have a material impact for the three months ended March 31, 2024.

In November 2023, the Company updated the estimated useful lives for 43 capitalized satellites and related launch costs based on updated de-orbit dates. This change represents a change in accounting estimate and the impact of the change was an increase in loss from continuing operations before income taxes of approximately $3,009, or $0.14 per basic and diluted share for the three months ended March 31, 2024.

Cash, Cash Equivalents, Marketable Securities and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash included in Other long-term assets, including restricted cash on the condensed consolidated balance sheets, represents amounts pledged as guarantees or collateral for financing arrangements and lease agreements, as contractually required.

The Company invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. The Company’s investment policy generally requires securities to be investment grade and limits the amount of credit exposure to any one issuer. The Company’s investments in marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive loss. Interest on securities classified as available-for-sale is included in Interest income on the condensed consolidated statements of operations.

The following table shows components of cash, cash equivalents, and restricted cash reported on the condensed consolidated balance sheets and in the condensed consolidated statements of cash flows as of the dates indicated:

 

 

 

March 31,

 

 

December 31,

 

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

51,985

 

 

$

29,144

 

Restricted cash included in Other long-term assets

 

 

486

 

 

 

497

 

 

$

52,471

 

 

$

29,641

 

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents and restricted cash, marketable securities, and accounts receivable. The Company typically has cash accounts in excess of Federal Deposit Insurance Corporation insurance coverage limits. The Company has not experienced any losses on such accounts, and management believes that the Company’s risk of loss is remote.

The Company has a concentration of contractual revenue arrangements with various government agencies. Entities under common control are reported as a single customer. As of March 31, 2024, the Company had one customer (Customer A noted below) that accounted for 16% of the Company’s total accounts receivable. As of December 31, 2023, the Company did not have any customers that accounted for more than 10% of the Company’s total accounts receivable.

 

12


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

The following customers represented 10% or more of the Company’s total revenue for each of the following periods:

 

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Customer A

 

*

 

 

 

11

%

Customer B(1)

 

 

29

%

 

 

29

%

* Revenue from this customer was less than 10% of total revenue during the period.

(1) Consists of multiple U.S. government agencies, of which two and one government agencies represented greater than 10% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

Related Parties

In conjunction with the Company's acquisition of exactEarth in November 2021, Myriota Pty Ltd ("Myriota"), an existing Spire customer, became a related party as a result of exactEarth's approximately 13% ownership of Myriota at the time of acquisition. As of March 31, 2024, the Company had 11.5% ownership of Myriota. As of March 31, 2024 and December 31, 2023, $1,876 and $2,216, respectively, of investment in Myriota were included in Other long-term assets, including restricted cash on the condensed consolidated balance sheets. The Company accounts for this investment using the equity method of accounting. The Company's share of earnings or losses on the investment is recorded on a one month lag, due to the timing of receiving financial statements from Myriota, as a component of Other expense, net in the condensed consolidated statements of operations. The Company generated $121 and $203 in revenue from Myriota for the three months ended March 31, 2024 and 2023, respectively, and had $52 of accounts receivable from Myriota as of March 31, 2024 and had no accounts receivable from Myriota as of December 31, 2023.

Accounting Pronouncements Recently Adopted

In March 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases – Common Control Arrangements (Topic 842), to improve the accounting for amortizing leasehold improvements associated with arrangements between entities under common control. The amendment requires that leasehold improvements be amortized by the lessee over the useful life of the leasehold improvements to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset through a lease. Additionally, leasehold improvements should be accounted for as a transfer between entities under common control through an adjustment to equity when the lessee no longer controls the use of the underlying asset. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2023, with early adoption permitted. The adoption of ASU 2023-01 as of January 1, 2024 did not impact the Company’s condensed consolidated financial statements.

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The amendments in this ASU are intended to facilitate consistency in the application of accounting guidance upon the formation of entities qualifying as joint ventures ("JVs"). This ASU generally requires the use of business combinations accounting at the JV formation date, which would result in the contributed assets/liabilities being revalued to fair value and potentially result in the recognition of goodwill and other intangibles on the JV’s financial statements. However, this ASU does not alter the ongoing accounting for the JV’s operations. This guidance is effective for JVs with formation dates on or after January 1, 2025. The adoption of ASU 2023-05 as of January 1, 2024 did not impact the Company’s condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosures (Topic 280), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclosure multiple segment measures of profit or loss, provide new segment disclosure requirements for entities within a single reportable segment, and contain other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and will be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures (Topic 740), to further enhance income tax disclosures to enable investors to better assess how an entity’s operations, related tax risks, tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. The improvements primarily relate to the disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The other amendments improve the effectiveness and comparability of disclosures by adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with SEC regulations. The ASU is effective for public business entities for annual reporting periods beginning after December 15, 2024. Early adoption is permitted and should be applied prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

 

13


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

In March 2024, the SEC adopted final rules under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to provide certain climate-related information in their annual reports and registration statements. The rules will require disclosure of material climate-related risks, how the board of directors and management oversee and manage such risks, and the actual and potential impact of such risks on the registrant. It will also require disclosure about material climate-related targets and goals, and the financial impact of severe weather events and other natural conditions in the notes to audited financial statements. The disclosures will be required at the earliest in reports for the year ended December 31, 2025 (or potentially later depending on the Company's filer status at the time). The Company is currently evaluating the impact on the Company's disclosures.

3.
Revenue, Contract Assets, Contract Liabilities and Remaining Performance Obligations

 

Disaggregation of Revenue

Revenue from subscription-based contracts was $16,925, or 66% of total revenue, for the three months ended March 31, 2024, and was $18,812, or 78% of total revenue, for the three months ended March 31, 2023. Revenue from non-subscription-based contracts was $8,763, or 34% of total revenue, for the three months ended March 31, 2024, and was $5,356, or 22% of total revenue, for the three months ended March 31, 2023.

The following revenue disaggregated by geography was recognized:

 

 

 

Three Months Ended March 31, 2024

 

 

Three Months Ended March 31, 2023

 

Americas (1)

 

$

14,249

 

 

 

56

%

 

$

12,807

 

 

 

53

%

EMEA(2)

 

 

9,264

 

 

 

36

%

 

 

8,703

 

 

 

36

%

Asia Pacific

 

 

2,175

 

 

 

8

%

 

 

2,658

 

 

 

11

%

Total

 

$

25,688

 

 

 

100

%

 

$

24,168

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
U.S. represented 48% and 50% for the three months ended March 31, 2024 and 2023, respectively.
(2)
United Kingdom represented 14% for each of the three months ended March 31, 2024 and 2023.

 

Contract Assets

As of March 31, 2024 and December 31, 2023, contract assets were $5,205 and $6,215, respectively, on the condensed consolidated balance sheets.

Changes in contract assets for the three months ended March 31, 2024 and 2023 were as follows:

 

 

2024

 

 

2023

 

Balance as of December 31

 

$

6,215

 

 

$

3,353

 

Contract assets recorded during the period

 

 

3,948

 

 

 

3,306

 

Reclassified to accounts receivable

 

 

(4,929

)

 

 

(2,451

)

Other

 

 

(29

)

 

 

5

 

Balance as of March 31

 

$

5,205

 

 

$

4,213

 

Contract Liabilities

As of March 31, 2024, contract liabilities were $23,830, of which $22,617 was reported in contract liabilities, current portion, and $1,213 was reported in other long-term liabilities on the Company’s condensed consolidated balance sheets. At December 31, 2023, contract liabilities were $23,428, of which $23,165 was reported in contract liabilities, current portion, and $263 was reported in other long-term liabilities on the Company’s condensed consolidated balance sheets.

Changes in contract liabilities for the three months ended March 31, 2024 and 2023 were as follows:

 

 

2024

 

 

2023

 

Balance as of December 31

 

$

23,428

 

 

$

16,628

 

Contract liabilities recorded during the period

 

 

10,709

 

 

 

7,978

 

Revenue recognized during the period

 

 

(10,102

)

 

 

(6,719

)

Other

 

 

(205

)

 

 

104

 

Balance as of March 31

 

$

23,830

 

 

$

17,991

 

 

 

14


Spire Global, Inc.

Notes to Condensed Consolidated Financial Statements

(In thousands, except shares and per share data, unless otherwise noted)

(Unaudited)

Remaining Performance Obligations

The Company has performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue. These commitments for future services exclude (i) contracts with an original term of one year or less, and (ii) cancellable contracts. As of March 31, 2024, the amount not yet recognized as revenue from these commitments was $195,678. The Company expects to recognize 42% of these future commitments over the next 12 months, 20% over the next 13 to 24 months, 17% over the next 25 to 36 months, and the remaining 21% thereafter as the performance obligations are met.

4.
Balance Sheet Components

 

Other current assets consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Technology and other prepaid contracts

 

$

4,394

 

 

$

4,149

 

Notes receivable

 

 

4,500

 

 

 

4,500

 

Prepaid insurance

 

 

956

 

 

 

1,476

 

Deferred contract costs

 

 

542

 

 

 

487

 

Other receivables

 

 

1,621

 

 

 

1,237

 

Other

 

 

228

 

 

 

491

 

Other current assets

 

$

12,241

 

 

$

12,340

 

 

Property and equipment, net consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

2024

 

 

2023

 

Satellites in-service

 

$

53,496

 

 

$

59,751

 

Internally developed software

 

 

2,134

 

 

 

2,138

 

Ground stations in-service

 

 

4,440

 

 

 

4,444

 

Leasehold improvements

 

 

5,794

 

 

 

5,800

 

Machinery and equipment

 

 

4,069

 

 

 

4,787

 

Computer equipment

 

 

1,833

 

 

 

1,908

 

Computer software and website development

 

 

99

 

 

 

99

 

Furniture and fixtures

 

 

1,329

 

 

 

1,336

 

 

 

73,194

 

 

 

80,263

 

Less: Accumulated depreciation and amortization

 

 

(37,219

)

 

 

(36,326

)

 

 

35,975

 

 

 

43,937

 

Satellite, launch and ground station work in progress

 

 

28,955

 

 

 

22,208

 

Finished satellites not yet placed in-service

 

 

6,923

 

 

 

5,064

 

Property and equipment, net

 

$

71,853

 

 

$

71,209

 

 

Depreciation and amortization expense related to property and equipment for the three months ended March 31, 2024 and 2023 was $5,957 and $3,037, respectively.

 

The Company recorded a $178 loss on decommissioned satellites for the three months ended March 31, 2024. There were no satellites decommissioned or impaired in the three months ended March 31, 2023.

Other accrued expenses consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Operating lease liabilities, current

 

$

3,425

 

 

$

3,506

 

Warrant liability, current

 

 

1,917

 

 

 

 

Professional services

 

 

1,359

 

 

 

913

 

Third-party operating costs

 

 

683

 

 

 

1,088

 

Corporate and sales tax

 

 

546

 

 

 

245

 

Accrued interest

 

 

911