Spire Global Provides Update on New Contracts and Revenue Recognition Review of Certain Prior Contracts; Receives NYSE Notice Regarding Late Form 10-Q Filing
Spire announces multi-million-dollar contracts with U.S. Air Force, UK Space Agency and NASA
The Company expects to report second quarter results and restate impacted historical financials within six-month period
Spire Global, Inc. (NYSE:SPIR) ("Spire" or the "Company") announces new multi-million-dollar contracts, the receipt of an NYSE notice regarding its late Form 10-Q filing and the Company's decision to restate certain historical financials following its review of the technical revenue recognition accounting for certain contracts.
Underscoring Spire's mission to improve life on Earth with data from space, the Company has been awarded new contracts focused on improving national security, weather forecasting and climate research:
- $14M Air Force contract: Spire has been awarded a $14 million contract by the Air Force Research Laboratory (AFRL) under the SBIR Phase II STRATFI program. Over the next 48 months, Spire agreed to develop and deploy a cluster of satellites designed to detect and track moving objects on Earth with the goal of enhancing situational awareness for U.S. defense operations. This project is expected to leverage advanced sensing technologies, including radio frequency, electro optical infrared, and multi-spectral imagery sensors, to deliver cutting-edge space-based Surveillance, Reconnaissance, and Tracking capabilities.
- £3.5M UK Space Agency grant: The Company has been awarded a £3.5 million grant by the UK Space Agency (UKSA) to develop and demonstrate hyperspectral microwave sensing technology in orbit. Over the three-year project period, Spire expects to collaborate with the Met Office, STFC RAL Space, and STAR-Dundee to enhance global weather forecasting. This initiative will deploy a small satellite equipped with advanced microwave sounders, which is expected to offer high-quality vertical resolution and data accuracy, ultimately improving weather prediction and climate understanding.
- $6.7M NASA contract renewal: Spire has been awarded a $6.7 million, 12-month contract renewal from NASA under the Commercial Smallsat Data Acquisition (CSDA) Program. This marks the second consecutive year of increased contract value, allowing Spire to continue delivering its comprehensive Earth observation data, including GNSS radio occultation, GNSS Reflectometry, and space weather measurements. Spire's data will support U.S. government-funded research with the objective of enhancing global weather forecasting, atmospheric profiling, and climate research.
On August 21, 2024, the Company received notice from the New York Stock Exchange (the "NYSE") that the Company is not in compliance with the NYSE's continued listing standards as set forth in Section 802.01E of the NYSE Listed Company Manual due to the Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the "Form 10-Q") with the Securities and Exchange Commission (the "SEC"). Under the NYSE's rules, the Company can regain compliance with this NYSE listing standard by filing the Form 10-Q with the SEC before February 19, 2025.
The delay in the filing of the Form 10-Q is due to the Company requiring additional time to prepare and complete its financial statements for the three and six months ended June 30, 2024 as further described in the Company's Form 12b-25 filed with the SEC on August 14, 2024 and in the Company's Current Report on Form 8-K filed with the SEC on August 27, 2024.
The Company has retained technical accounting experts to help examine and make recommendations regarding the potential existence of embedded leases of identifiable assets in certain contracts in the Company's "Space as a Service" business (the "Contracts") and the recognition of revenue and related costs for pre-space mission activities under such Contracts.
The Company is reviewing the potential existence of embedded leases of identifiable assets in the Contracts at this time. Separately from this ongoing review, the Company has determined that its accounting for these Contracts, including primarily revenue and cost recognition timing for pre-space mission activities, need to be revised to remove certain previously recorded pre-space mission activity revenue from the period in which pre-space mission activities were performed under the Contracts, and instead, record that revenue over the period in which data is delivered.
In connection with this evaluation, on August 23, 2024, the audit committee of the board of directors of the Company, after discussion with the Company's management and with PricewaterhouseCoopers LLP, concluded that the Company's previously issued consolidated financial statements for the annual and interim periods within the fiscal years ended December 31, 2023 and 2022, and for the quarter ended March 31, 2024 (collectively, the "Affected Periods") will need to be restated.
While the Company's review is ongoing, at the time of issuing this press release, the type of Contracts that the Company has identified for re-evaluation and restatement resulted in recognized revenue currently estimated to be $10 to $15 million on an annual basis. Depending on the results of the review, additional financial measures such as gross profit could also be impacted. However, the Company believes that the restatement of its revenue recognition for these Contracts will not impact its overall cash flows for any period.
The Company is working to complete its review and these restatements as soon as practicable and to file the Form 10-Q within the six-month period provided by the NYSE. The Company will make a subsequent announcement to schedule the date and time of its earnings release and conference call for the second quarter and six months ended June 30, 2024.
About Spire Global, Inc.
Spire (NYSE:SPIR) 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 that observes the Earth in real time using radio frequency technology. The data acquired by Spire's satellites provides 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. Spire also offers Space as a Service solutions that empower customers to leverage its established infrastructure to put their business in space. Spire has nine offices across the U.S., Canada, UK, Luxembourg, Germany and Singapore. To learn more, visit spire.com.
Forward-Looking Statements
This press release 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 the Company's anticipated 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," "project," "potential," "seek" or "continue" or the negative of these words or other similar terms or expressions that concern the Company's expectations, strategy, plans or intentions. Forward-looking statements contained in this press release include, but are not limited to, statements about recent contracts entered into by the Company, including the ability to complete the services and realize the anticipated value under such agreements; the preparation of the Company's condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024; the annual and interim periods affected by the matters discussed above and subject to restatement; the cause of the delay in preparing and filing the Form 10-Q; the timing to restate the Company's financial statements for the Affected Periods and to file the Form 10-Q; and the potential scope and impact of the issues discussed above, which are estimates as of the date hereof.
The Company cautions you that the foregoing list may not contain all of the forward-looking statements made in this press release. You should not rely upon forward-looking statements as predictions of future events. Factors that may cause future results to differ materially from the Company's current expectations include, among other things, the performance of Spire and its partners under the contracts discussed above, the timing and nature of the resolution of the issues discussed in this press release, any further delay in the filing of required periodic reports, the timing and results of the Company's review of the effectiveness of internal control over financial reporting and related disclosure controls and procedures, whether a restatement of financial results will be required for other accounting issues and adverse effects on the Company related to the disclosures made in this press release. For other risk factors affecting the Company, see "Risk Factors" in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Moreover, the Company operates in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. The Company 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 the Company 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 press release relate only to expectations as of the date on which the statements are made. The Company undertakes no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. The Company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the forward-looking statements.
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