SPIR 10-K & 10-Q changes, risk factors and insider trading

These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

We may require additional capital to support business growth, and this capital might not be available on company favorable terms, if at all, or may be available only by diluting existing stockholders or putting excessive debt leverage and insolvency risk on the business.

Historically, we have funded our operations and capital expenditures primarily through equity issuances, debt and cash generated from our operations. Although we currently anticipate that our existing cash and cash equivalents and marketable securities will be sufficient to meet our cash needs for at least the next 12 months, we may require additional financing in the future, and we may not be able to obtain debt or equity financing on favorable terms, if at all. If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. If we obtain debt financing, the terms of such debt financing may include restrictive covenants, including restrictions on our ability to incur additional indebtedness, require us to maintain certain financial covenants, or restrict our ability to pay dividends and our operational flexibility or profitability. If we need additional capital and cannot raise it on acceptable terms, or at all, we may not be able to, among other things, develop new products, technologies and services, enhance our operating infrastructure, expand the markets in which we operate and potentially acquire complementary businesses and technologies or otherwise grow our business or respond to competitive pressures.

Apart from a gain recognized in the second quarter of 2025 related to the sale of our maritime business, we have incurred net losses since our inception and have not generated net income from ongoing operations. We expect to continue incurring net losses in the near term as we invest in the growth of our business.

Uncertain macroeconomic and geopolitical conditions have negatively impacted, and may continue to impact, our business, financial condition, and results of operations.

Negative macroeconomic conditions in the U.S. or abroad, including elevated inflation, interest rate volatility, credit market disruptions, trade restrictions, the imposition of tariffs, changes in economic policy, delays in U.S federal budget appropriations, or geopolitical tensions, civil unrest, and armed conflicts may impact our infrastructure, including both ground stations and assets in space, and such conflicts have led and may in the future lead to decreased spending on our offerings and services and lengthen our sales cycles. These conditions can make it more difficult for us and our customers to forecast and plan business activities, and have caused and may in the future cause customers to delay or cancel projects, renegotiate contracts, or face challenges in making timely payments, which could require us to increase our allowance for doubtful accounts. In addition, the imposition of international sanctions, as well as related global conflicts and security concerns have at times led to scheduling shifts or launch cancellations by third-party satellite launch providers, which delayed our revenue recognition for certain sales contracts. If those conflicts escalate further, or if new or increased sanctions or geopolitical tensions emerge, our operations, business relationships, and financial results could be further adversely affected. Further the U.S.' imposition and suspension of tariffs on a variety of countries, and retaliatory measures or other changes to trade policies, could impact trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies and any further increases in existing tariff rates, could have a material adverse effect on our business, financial condition, and results of operations.

If any of these factors continue or worsen, and/or if new macroeconomic or geopolitical issues arise, our results of operations and financial condition could be further negatively impacted. Any downturn of the general economy or industries in which we operate would adversely affect our business, financial condition, and results of operations.

We rely on a limited number of government customers to provide a significant portion of our revenue.

We have historically derived a significant portion of our revenue from contracts with governmental customers. Approximately 43% of revenue for the year ended December 31, 2025, was generated by three government customers. There can be no assurance that any contract with the government of any jurisdiction will not be terminated or suspended in the future, as such terminations or suspensions generally may be done at any time, with or without cause. For example, on March 2, 2026, we received from Public Services and Procurement Canada a Stop Work Order Notice, suspending work effectively immediately until further notice, pursuant to that certain contract, dated January 20, 2025, relating to the design and development of the WildFireSat constellation of satellites for the Canadian Space Agency. The Public Services and Procurement Canada has until August 29, 2026 to either cancel the stop order or terminate the contract, in whole or in part. See the risk factor titled, “Our contracts with government entities are subject to a number of risks and uncertainties” for additional information. Loss of one or more of our government customers, any significant decrease in sales to these customers, a full or partial government shutdown, or delays in government appropriations has in the past, and in the future could adversely affect our business, financial condition, and results of operations.

We face competition and could face pricing pressure from, and lose market share to, our competitors, including as a result of rapid technological changes in the satellite industry or new service solutions, which could adversely affect our business.

The industries in which we operate are fragmented, highly competitive, and characterized by rapid technological changes, evolving customer requirements, and frequent product and service innovations. We may face competition from companies using new service solutions, innovative technologies, including artificial intelligence, and equipment, including new low Earth orbit constellations, expansions of existing geostationary satellite systems, or other technologies. These developments could render our offerings less competitive or obsolete and require significant capital expenditures to maintain and enhance our platform features and services. Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages including, but not limited to, access to greater resources. Increasing competition, an inability to respond to rapid industry change or adopt effective pricing strategies, or other pressures could compromise our ability to compete, reduce revenue, and impact margins.

Our business model of delivering data and analytics gathered from a custom constellation of satellites in space is still relatively new and has only recently gained market traction. Moreover, many established businesses are aggressively competing against us and have offerings with functionalities similar to those offered by us. We expect competition to increase as other established and emerging companies enter this market, as customer requirements evolve, and as new offerings and technologies are introduced. If we are unable to anticipate or effectively react to these competitive and technological challenges, our competitive position would weaken, and our business, financial condition, and results of operations would be adversely affected.

Our quarterly results of operations fluctuate, in part, because of the resource-intensive nature of our sales efforts and the length and variability of our sales cycle for certain of our offerings, such as our project-based services, and for certain of our customers, such as government departments and agencies. The length of our sales cycle, from initial contact with our sales team to a contractual commitment from a customer, can also vary substantially from customer to customer and our sales cycle may lengthen as we continue to focus our sales efforts on large enterprises and on our Space Services. In addition, our results of operations depend, in part, on subscription renewals from customers and increasing sales and upgrades to our existing customers, which may also be reduced or delayed. If a customer does not renew on time or as expected, or if we fail to cost-effectively acquire new customers or obtain renewals, upgrades, or expansions from our existing customers, our business, financial condition, and results of operations would be adversely affected. In addition, we may in the future make changes to our subscription model, which may affect the length of our sales cycle and our ability to predict the length of our sales cycle or the anticipated size of potential subscriptions.

We depend on our sales force to obtain new customers and to drive additional sales to existing customers. We believe that there is significant competition for sales personnel with the skills and technical knowledge that we require, and our ability to grow revenue depends, in part, on our ability to recruit, train, and retain sufficient numbers of sales personnel. If we are unable to attract, retain, motivate and adequately train sufficient numbers of effective sales personnel, if our sales personnel do not reach significant levels of productivity in a timely manner, or if our sales personnel are not successful in converting potential customers into new customers or increasing sales to our existing customer base, our business, financial condition, and results of operations would be adversely affected.

Our customers may depend on our technical support services to resolve issues relating to our platform. If we do not succeed in helping our customers quickly resolve issues or provide effective ongoing education related to our platform, our reputation could be harmed. To the extent that we are unsuccessful in hiring, training, and retaining adequate customer support resources, our ability to provide adequate and timely support to our customers, and our customers’ satisfaction with our platform, will be adversely affected. Our failure to provide and maintain high quality customer support would harm our reputation and brand and adversely affect our business, financial condition, and results of operations.

Our growth strategy depends, in part, on our continued international expansion. We are continuing to adapt to and develop strategies to address international markets, and to grow our manufacturing footprints in the U.S. and abroad, but there is no guarantee that such efforts will be successful. Efforts to expand our platform in certain countries may be complicated, constrained, or prohibited due to regulatory and legal requirements we must comply with in the U.S. or other jurisdictions that may conflict with one another. Our international sales and operations are subject to a number of risks, including, but not limited to: higher costs of doing business, greater difficulty enforcing and collecting on contracts, differing laws and regulations, foreign exchange fluctuations, recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture and employee programs across all of our offices, difficulty obtaining regulatory or legal approvals, maintaining effective trade controls compliance, ensuring compliance with prohibitions on foreign national involvement in certain contracts, and other items. These and other factors could harm our ability to generate revenue outside of the U.S. and/or could result in increased expenses and liabilities, and consequently, adversely affect our business, financial condition, and results of operations.

Our business could be adversely affected by weather, climate, and other large-scale disruptive events.

We are vulnerable to a wide range of large-scale disruptive events, including natural disasters such as tsunamis, hurricanes, floods, wildfires, earthquakes, extreme weather events, and water shortages, as well as pandemics, acts of war or terrorism, political crises, power outages, and infrastructure failures. These events may impact our operations, the operations of our suppliers or launch partners, or critical infrastructure, including launch sites and manufacturing facilities. The frequency and severity of extreme weather events have increased and may continue to rise, potentially disrupting our launch schedules, supply chains, or our ability to fulfill customer contracts. These events could materially and adversely affect our business, financial condition, and results of operations.

Risks Related to our Technology, Research and Development, Technical Infrastructure, and Operations.

Satellites use highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks while in orbit, including, but not limited to, failure to perform or performance at reduced levels of service because of major events, technological malfunctions, satellite deficiencies, or other performance failures.

Satellites in low earth orbit have a limited life cycle and could become compromised over their designated operational life span. We anticipate that our satellites will have an expected end-of-commercial-service life of three to four years. It is possible that the actual commercial service lives of our satellites will be shorter than anticipated and there can be no assurance as to the actual useful life of a satellite or its individual components. Certain of our satellites are nearing the end of their expected useful lives. As they do so, the performance of each satellite could start to decline. We can offer no assurance that satellites will maintain their prescribed orbits or remain operational, and we may not have replacement satellites that are immediately available. In particular, the strength, timing, and intensity of the solar cycle may impact the longevity and operations of our satellites. The solar cycle, which occurs approximately every 11 years, governs fluctuations in the sun's magnetic activity. Increased solar activity leads to heightened atmospheric drag on satellites, accelerating their orbital decay and causing earlier deorbiting, which can render satellites inoperative or result in complete loss due to burn-up during re-entry into the lower atmosphere. Our ability to mitigate these solar cycle effects and maintain timely replenishment of our constellation may adversely affect our business financial condition and results of operations.

Exposure of our satellites to an unanticipated catastrophic event, such as a solar flare, meteor shower, coronal mass ejection, electrostatic storm, or collision with other objects could reduce the performance of, or completely destroy, the affected satellite and/or constellation. Other anomalies that may affect the actual commercial service lives of our satellites include mechanical, electrical or other failures due to manufacturing error or defect; equipment degradation during the satellite’s lifetime; deficiencies of control or communications software; insufficient hardware quality, durability, or reliability; attacks by malicious actors, including cyber-related events; and governmental discontinuation for periods of time the access to or operation of a satellite for any particular area on the Earth or restricting permission to transmit certain data.

We have experienced, and may in the future experience, some of these catastrophic events or anomalies. The effects of these catastrophic events and anomalies include, but are not limited to, failure of the satellite, degraded communications performance, reduced power available to the satellite, battery overcharging or undercharging and limitations on satellite communications capacity and data collection. Some of these effects may be increased during periods of greater message traffic and could result in our system requiring more than one attempt to send messages before they get through to our satellites. This could lead to increased messaging latencies or other adverse outcomes for the end user and reduced throughput for our system. Any single anomaly could materially and adversely affect our ability to utilize a satellite. Anomalies may also reduce the expected capacity, commercial operation and/or useful life of a satellite, thereby reducing the amount of space data collected, which, if material, could impact revenue or create additional expenses due to the need to provide replacement or back-up satellites or satellite capacity earlier than planned. In addition, if a satellite experiences an anomaly or malfunction, our backup satellite capacity may be insufficient to meet our customers’ needs or avoid service interruptions, and we may need to potentially blackout or reduce service to certain customers, which would adversely affect our relationships with our customers and result in loss of revenue.

Satellites have certain redundant systems, which can fail partially or in their entirety, and accordingly satellites may operate for extended periods without all redundant systems in operation, but with single points of failure. The failure of satellite components could cause damage to or loss of the use of a satellite before the end of its expected useful life. Satellites can temporarily go out of service and be recovered, or cease to function for reasons beyond our control, including the quality of design and construction, the supply of the battery, the expected gradual environmental degradation of solar panels, the durability of various satellite components and the orbits and space environments in which the satellites are placed and operated.

Most, if not all, failures cannot be corrected once the satellites are placed in orbit and may result in loss of customers, customer disputes, monetary losses, delays, and impairment of services.

Satellites are subject to significant launch risks, including, but not limited to, launch delays, launch failures, and damage or destruction during launch, the occurrence of which can materially and adversely affect our business, financial condition, and results of operations.

We are dependent on third-party launch service providers. Currently, the number of companies who offer launch services is limited, and if this sector fails to grow or experiences consolidation among current providers, we may not be able to secure space on a launch vehicle or may incur higher prices for such space. This could cause delays in our ability to meet our customers' needs or an increase in the price of our offers, adversely affecting our business, financial condition, and results of operations. The technology related to launch capabilities is evolving rapidly as existing launch providers iterate on their existing capabilities and new providers enter the market. Our launch partners may encounter launch, deployment, or in-orbit delays or failures, leading to damage or complete loss of our satellites, including customer assets. If a launch is delayed, which is common in our industry, our timing for the recognition of revenue tied to customer acceptance of project-based deliverables may similarly be delayed.

In addition, the loss of, or damage to, a satellite due to a launch failure could result in significant increased expenses from earlier than expected replacement satellites and delays in anticipated revenue. Any significant delay in the commencement of service of a satellite could delay or potentially permanently reduce the revenue anticipated to be generated by that satellite. In addition, if the loss of satellites was material, we might not be able to accommodate customers with sufficient data to meet minimum service level agreements until replacement satellites are available, which we may be unable to obtain in a timely manner. Appropriate launch windows for satellites in our industry are limited and may become more so as additional satellite networks and other spacecraft are launched and/or as space debris becomes more common. Coordinating with partners and regulators to reserve launch windows and prepare for launches may as a result become more difficult over time. An extended launch delay, limited availability of launch windows, delays in regulatory approvals, satellite damage or destruction during launch deployment, a launch failure, launch underperformance, or incorrect orbital placement could have a material adverse effect on our business, financial condition, and results of operations.

The ongoing operations of our satellite constellation and data services rely on the functionality of our ground stations. We have in the past experienced and may in the future experience technical difficulties or mechanical issues with our ground stations, which may negatively impact service in the region covered by that ground station. Our ground stations are often located in remote regions of the world and not easily accessible and can be subject to restrictions on travel. Further, we rely, at times, on third parties to perform maintenance on and repair our ground stations. We may experience a partial or total loss of one or more of our ground stations due to disasters such as tsunamis, tornados, floods, hurricanes, other extreme or unusual weather events, earthquakes, fires, acts of war or terrorism, or other catastrophic events. A failure at one or more of our ground stations could cause a delayed, partial, or complete loss of service for our customers. We may experience a failure in the necessary equipment at our ground stations, or in the communication links between our ground stations. Additionally, our ground stations are located on property that is not owned by us. A failure at any of our ground stations, facilities, or in the communications links between our facilities, or in our ability to maintain and access our ground stations and underlying leases for any reason, could adversely affect our business, financial condition, and results of operations.

We rely on third parties for our supply of certain of our data, equipment, satellite components, software, and operational services, and any failure, delay, or interruption with these third parties could adversely affect our business, financial condition, and results of operations.

We purchase equipment and satellite components from third-party suppliers, and we depend on those suppliers to deliver and support our operations at the contracted specifications in order for us to continue to meet our service and contractual commitments to our customers. We may experience difficulty implementing, operating and maintaining equipment and satellite components, or when providing services using this equipment, if these suppliers do not meet their obligations to deliver and support the equipment and satellite components or if our arrangements with these third parties are terminated or modified resulting in delays, added expense, reduced quality of our data, or an inability to maintain or expand our business. This may lead to service interruptions or degradations in the services offered to our customers, which could cause our revenue to decline materially and could adversely affect our ability to market our services and generate future revenue and profit.

Further, our suppliers may become capacity-constrained or could face financial or other difficulties as a result of broader geopolitical, climate or economic events or conditions. We may experience operational delays and may have to evaluate replacement suppliers for our satellite components, equipment, and operational services. If we fail to effectively address these issues, we could suffer delays, which could reduce our ability to launch new satellites and manage and operate our business.

We also rely on a number of third-party data, software, cloud, and other service providers to manage and operate our business, including data obtained from third party satellites. The services provided by these third parties are critical to our ability to operate and maintain our business. For example, we outsource substantially all of the infrastructure relating to our platform to Amazon Web Services (“AWS”) and therefore our platform depends, in significant part, on the virtual cloud infrastructure hosted in AWS. Our customers need to be able to access our platform at any time, without interruption or degradation of performance. Any disruption in these services, including as a result of a prolonged AWS service disruption affecting our platform or a termination of our end-user license agreement with AWS, or an inability to obtain these services on commercially reasonable terms or at all, could adversely affect our business, financial condition, and results of operations.

We primarily manufacture our satellites in-house at a single manufacturing facility in the United Kingdom. Any impairment to this manufacturing facility, or our inability to grow manufacturing capabilities at other facilities, would materially affect our business, financial condition, and results of operations.

We primarily manufacture our satellites in-house at a single manufacturing facility in the United Kingdom. The availability of our services depends on the continuing operation of our satellite manufacturing infrastructure and operations. Any impairment such as downtime, damage to, or failure of our manufacturing facility could result in interruptions in our production of satellites, which could materially affect our business. Our manufacturing facility may become capacity-constrained or could face financial difficulties as a result of a surge in demand for additional satellites, a natural disaster, or other event. Our manufacturing site is vulnerable to damage or interruption from floods, fires, power loss, or aging infrastructure. An infrastructure failure could result in the destruction of satellites under construction or inventory, manufacturing delays, or additional costs incurred, and we do not maintain back-up manufacturing facilities or operations. We may not be able to replace or supplement the satellite manufacturing process through the growth of our manufacturing capability at other facilities or with third-party manufacturers, and even if we are able to do so, there could be a substantial period of time in which new satellites would not be manufactured.

Further, any new facility or relationship may involve higher costs and delays in development and delivery. We may also encounter technical challenges in successfully replicating the manufacturing processes in another facility or with a third party. The occurrence of any of the foregoing could result in lengthy interruptions in our production and launch of our satellites, which could materially affect our business, financial condition, and results of operations.

Our success depends, in part, upon our ability to obtain, maintain, protect, and enforce our intellectual property rights, including our proprietary technology, know-how, and our brand. We also incorporate technology and terrestrial data sets from third parties into our platform, and our inability to maintain rights and access to such technology and data sets would harm our business and results of operations. We rely on a combination of patents, copyrights, trademarks, service marks, trade secret laws, and contractual provisions in an effort to obtain, establish, maintain and protect these rights. However, if we fail to protect or enforce our intellectual property rights or trade secrets adequately, our competitors might gain access to our proprietary technology and develop and commercialize similar services or technologies, we may not have access to the technology or data that we need, and our business, financial condition, results of operations, or prospects could be adversely affected. There can be no guarantee that others will not infringe on our trademarks or patents, independently develop offerings that are similar to our intellectual property or trade secrets, duplicate any of our offerings, or design around our patents or other intellectual property rights. Enforcing intellectual property claims can be difficult, expensive and time consuming, and the outcome is unpredictable. In addition, we may be required to license additional technology from third parties to develop and market new features, which may not be on commercially reasonable terms, or at all, and could adversely affect our ability to compete.

Furthermore, claims by others that we infringed their proprietary technology or other intellectual property rights would harm our business. Our success depends, in part, on our ability to develop and commercialize our services without infringing, misappropriating, or otherwise violating the intellectual property rights of third parties. However, we may not be aware if our services are infringing, misappropriating, or otherwise violating third-party intellectual property rights, including with respect to technology and data obtained by others for use by us, and such third parties may bring claims alleging such infringement, misappropriation, or violation. Defending against such claims can be difficult, expensive and time consuming, and the outcome is unpredictable, which could materially affect our business, financial condition, and results of operations.

Our technology includes software modules licensed to us by third-party authors under open source licenses, and we expect to continue to incorporate such open source software in our platform in the future. We also contribute to the open source developer community. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification, or other contractual protections regarding infringement claims or the quality or reliability of the code. Our inclusion of open source software in some of our technology may also require release of the source code, enabling others to compete more effectively. In addition, the public availability of such open source software may make it easier for others to compromise our services and technology.

The terms of many open source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that these licenses could be construed to impose unanticipated conditions or restrictions on our platform. There is also a risk that we and our customers could be subject to lawsuits by parties claiming ownership of what we believe to be open source software.

Issues in the use of AI, including machine learning, in our geospatial data and analytics platforms may negatively affect our business.

AI is enabled by or integrated into some of our geospatial data and analytics platforms and is a growing element of our business offerings. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms may be flawed. Datasets may be insufficient, of poor quality, or contain biased information. Inappropriate or controversial data practices by engineers and end-users of our systems could impair the acceptance of AI solutions and the use of our products. If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, and brand or reputational harm, and our business could be negatively affected. Additionally, AI technologies are subject to evolving laws, regulations, guidance, and industry standards, which may expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual, or other rights. Our enablement, integration or other use of AI may expose us to claims, demands, and proceedings and subject us to competitive harm, legal liability and brand or reputational harm, and our business could be negatively affected.

Our future success depends, in part, on our ability to continue to attract and retain our management team and highly skilled personnel. The industry in which we operate is generally characterized by significant competition for personnel as well as high employee attrition. We may not be successful in attracting, retaining, training, or motivating qualified personnel to fulfill our current or future needs. Certain of our employees, including those in the U.S., work for us on an at-will basis, while employees in other jurisdictions may be subject to local employment laws, regulations, and contractual arrangements that may provide different rights and protections, and there is no assurance that any such employee will remain with us and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all. We may also face risks related to labor relations and employee unionization, particularly in jurisdictions with strong worker protections, that could adversely affect our business. Our global workforce subjects us to varying labor, employment, and immigration laws and regulations in the jurisdictions in which we operate, which may increase the complexity and cost of managing our personnel and limit our flexibility in responding to business needs. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team fails to work together effectively and to execute our plans and strategies, including as a result of recent executive transitions, our business, financial condition, and results of operations could be adversely affected.

Risks Related to Legal, Regulatory, Compliance, and Other Matters

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.

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;

Aviation: 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; and Maritime: 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.

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, 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.

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 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.

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.

We continue investing in growing our business and capitalizing on our market opportunities while balancing the uncertainties from the macro-economic environment and geopolitical factors. 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 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 reporting currency is the U.S. Dollar. 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.

The U.S. 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 revenue and expenses. To the extent we experience significant currency fluctuations, our results of operations may be impacted.

We successfully established a satellite manufacturing facility in Munich to support sovereign space-based intelligence capabilities.

We signed a Memorandum of Understanding (MoU) with Schaeffler AG, with the intent to build a sovereign European space hardware and mission business before the end of this decade.

We signed a Memorandum of Understanding (MoU) with Diehl Defence, a leading German systems integrator for air defense and guided missile systems, to advance space-based early warning and reconnaissance capabilities.

We successfully shipped 10 satellites to Vandenberg Space Force Base in June for a subsequent launch in early July. As of July, we have launched 29 satellites across three missions in 2026.

Gain on Sale of a Business. The gain on the sale of our maritime business primarily 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.

Total revenue decreased $9.2 million, or 21%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This decrease was primarily driven by a decrease in revenue of $13.1 million due to the Maritime Transaction, partially offset by an increase in revenue of $2.2 million from additional RFGL data purchases and $1.5 million in weather data purchases.

The increase in personnel costs was driven by higher R&D Services activity, which increased the proportion of salaries and benefits attributed to cost of revenue. The increase in depreciation expense is due to satellites in service.

Gross margin was 34% and 49% for the three months ended June 30, 2026 and 2025, respectively. The decrease was primarily driven by the increase in cost of revenue described above, as well as the impacts associated with the termination for convenience of a contract with the Canadian Space Agency to design and develop the WildFireSat constellation of satellites to monitor wildfires in Canada. We have a right to submit, and have submitted, a settlement proposal with respect to costs arising from the termination of this contract in accordance with the Procedures Information Guide provided by Public Works and Government Services Canada and the recoverability of amounts under this proposal may impact our gross margin in future periods.

Cost of revenue decreased $3.6 million, or 14%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This decrease was due to a decrease of $6.7 million in satellite operations costs, partially offset by an increase of $2.3 million in personnel costs and an increase of $0.7 million in professional fees.

The increase in personnel costs was driven by higher R&D services activity, which increased the proportion of salaries and benefits attributed to cost of revenue.

Research and development expenses decreased $2.0 million or 10%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This decrease was driven by a decrease of $1.9 million in personnel costs driven by higher R&D Services activity and a decrease of $0.3 million in equipment expenses.

Sales and marketing expenses decreased $3.6 million, or 36%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This decrease was driven by a decrease of $3.8 million in personnel costs following the Maritime Transaction, partially offset by an increase of $0.2 million in external consulting for marketing support.

The decrease in personnel costs was driven by lower stock-based compensation of $3.0 million and lower bonus and severance payments of $2.0 million, in each case primarily related to the Maritime Transaction.

The increase in professional fees was primarily due to legal proceedings. See Part II, Item I of this Quarterly Report on Form 10-Q for additional information. The increase in facilities expense is due to the early lease termination of a building in Canada.

General and administrative expenses decreased $2.6 million, or 7%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This decrease was due to a decrease of $4.8 million in personnel costs, partially offset by an increase of $1.1 million in professional fees, an increase of $0.8 million in facilities expense, and an increase of $0.2 million in travel and expenses.

The decrease in personnel costs was driven by lower stock-based compensation of $3.2 million and lower bonus and severance payments of $1.8 million, in each case primarily related to the Maritime Transaction.

The increase in professional fees was primarily due to legal proceedings. See Part II, Item I of this Quarterly Report on Form 10-Q for additional information. The increase in facilities expense is due to the early lease termination of a building in Canada.

Loss on decommissioned satellites and other assets write-offs decreased $4.8 million, or 77%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. The loss for the six months ended June 30, 2026 was primarily due to the deorbiting of two satellites and the Company’s decision to stop supporting one underperforming satellite. The loss for the six months ended June 30, 2025 was primarily due to the Company’s decision to stop supporting three underperforming satellites and the deorbiting of three satellites.

Gain on sale of a business was $154.3 million for the three months ended June 30, 2025, with no comparable amount for the three months ended June 30, 2026. 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.

Loss on extinguishment of debt was $12.0 million for the three months ended June 30, 2025, with no comparable amount for the three months ended June 30, 2026. The loss resulted from the repayment and termination of our 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.

Interest income increased by $0.6 million, or 89%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025. This increase was primarily due to higher average balances held in marketable securities as a result of the proceeds received via the close of the Maritime Transaction on April 25, 2025.

Interest expense decreased by $7.4 million, or 100%, for the six months ended June 30, 2026, compared with the six months ended June 30, 2025, due to the repayment of our outstanding debt on April 25, 2025.

Gain on sale of a business was $154.3 million for the six months ended June 30, 2025, with no comparable amount for the six months ended June 30, 2026. The gain was driven by the excess of proceeds from the sale of the maritime business over the net book value of the assets sold, net of transaction costs and other related adjustments.

Loss on extinguishment of debt was $12.0 million for the six months ended June 30, 2025, with no comparable amount for the six months ended June 30, 2026. The loss resulted from the repayment and termination of our 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.

There was no change in fair value of contingent earnout liability for the six months ended June 30, 2026. For the six months ended June 30, 2025, we recorded a gain of $0.8 million. The gain in the six months ended June 30, 2025 was primarily due to a decrease in fair value resulting from a decrease in the price of our Class A common stock. The liability is scheduled to expire in August 2026, and the probability of achieving the earnout target is considered to be zero.

Change in fair value of warrant liabilities was a loss of $0.3 million for the six months ended June 30, 2026, compared to a gain of $3.0 million for the six months ended June 30, 2025. The gain in the six months ended June 30, 2025 was primarily due to a decrease in fair value resulting from a decrease 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. For additional information regarding our warrants and the definition of Urgent Warrants, see Note 8 to our consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We recognized a foreign exchange loss of $2.2 million for the six months ended June 30, 2026, compared to a gain of $10.8 million for the six months ended June 30, 2025, representing a year-over-year change of $13.0 million. The loss in the six months ended June 30, 2026 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 strengthening of the U.S. dollar relative to the Euro and the British Pound Sterling. The gain in 2025 was primarily driven by the remeasurement of intercompany balances denominated in U.S. dollars held by our Luxembourg and U.K. entities and owed to our U.S. entity. The weakening of the U.S. Dollar for the period ended June 30, 2025, relative to the Euro and British Pound Sterling at December 31, 2024, triggered the remeasurement and unrealized gain.

Other income (expense), net improved $0.7 million, or 139% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This improvement was primarily due to a decrease in equity investment losses.

Provision for income taxes for the six months ended June 30, 2026 was primarily due to the increase in pre-tax book income for our U.K. and Canadian entities. The provision for income taxes for the six months ended June 30, 2025 was primarily due to taxable income recognized from the gain on the sale of the maritime business.