As filed with the Securities and Exchange Commission on May 13, 2021.

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

NavSight Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware		6770		85-1276957
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

12020 Sunrise Valley Drive

Suite 100

Reston, Virginia 20191

(571) 500-2236

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Robert Coleman

Chief Executive Officer

NavSight Holdings, Inc.

12020 Sunrise Valley Drive

Suite 100

Reston, Virginia 20191

(571) 500-2236

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

William N. Haddad, Esq. Wallace Christner, Esq. Venable LLP 1270 Avenue of the Americas New York, NY 10020 (212) 307-5500		Ananda Martin, Esq. General Counsel and Corporate Secretary Spire Global, Inc. 8000 Towers Crescent Drive Suite 1225 Vienna, Virginia 22182 (202) 301-5127		Andrew T. Hill, Esq. Ethan P. Lutske, Esq. Richa Sharma, Esq. Wilson Sonsini Goodrich & Rosati, P.C. 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the Business Combination described in the enclosed proxy statement/prospectus/information statement have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

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 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered		Amount to be Registered		Proposed Maximum Offering Price per Share		Proposed Maximum Aggregate Offering Price(2)		Amount of Registration Fee(3)
Class A Common Stock, par value $0.0001 per share		134,000,000(1)		$9.90		$1,326,600,000.00		$144,732.06

(1)

Based on the estimated maximum number of shares of Class A common stock, par value $0.0001 per share (“NavSight Class A Common Stock”), of the registrant (“NavSight”) to be issued, or issuable, to the holders of common stock (including common stock resulting from the exercise of warrants to purchase common stock of Spire Global, Inc. (“Spire”) and the conversion of existing convertible promissory notes) and preferred stock or are subject to options of Spire that are to be assumed by NavSight upon consummation of the Business Combination described herein, including shares issuable under certain earnout provisions pursuant to the Business Combination Agreement and as described herein.

(2)

Pursuant to Rules 457(c) and 457(f)(1) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is calculated as the product of (i) 134,000,000 shares of NavSight Class A Common Stock, the maximum number of shares of NavSight Class A Common Stock that may be issued in the Business Combination in exchange for cancelled shares of Spire Common Stock, Spire Preferred Stock, or are subject to options or other equity-based awards that are to be assumed by NavSight in the Business Combination (calculated as shown in note (1) above) and (ii) $9.90, the average of the high and low trading prices of NavSight Class A Common Stock on May 10, 2021 (within five business days prior to the date of this registration statement).

(3)

Calculated pursuant to Rule 457 of the Securities Act by calculating the product of (i) the proposed maximum aggregate offering price and (ii) 0.0001091. All securities being registered will be issued by NavSight Holdings, Inc., the continuing entity following the business combination, which will be renamed Spire Global, Inc.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 

The information in this preliminary proxy statement/prospectus/information statement is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/prospectus/information statement until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus/information statement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY - SUBJECT TO COMPLETION, DATED                     , 2021

PROXY STATEMENT FOR

SPECIAL MEETING OF STOCKHOLDERS OF

NAVSIGHT HOLDINGS, INC.

(A DELAWARE CORPORATION)

PROSPECTUS FOR SHARES OF CLASS A COMMON STOCK OF NAVSIGHT HOLDINGS, INC., THE CONTINUING ENTITY, WHICH WILL BE RENAMED “SPIRE GLOBAL, INC.” IN CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN

The board of directors of NavSight Holdings, Inc., a Delaware corporation “NavSight,” “we,” or “our” and, following the Closing, as described below, “New Spire”), has unanimously approved (i) the merger of NavSight Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of NavSight (“Merger Sub”) with and into Spire Global, Inc., a Delaware corporation (“Spire,” and such merger, the “Merger”), with Spire surviving the Merger as a wholly owned subsidiary of NavSight, pursuant to the terms of the Business Combination Agreement, dated as of February 28, 2021 (the “Business Combination Agreement”), by and among NavSight, Merger Sub, Spire and certain of Spire’s stockholders (the “Founders”) (the Merger and the other transactions contemplated by the Business Combination Agreement are collectively herein referred to as the “Business Combination”), attached to this proxy statement/prospectus/information statement as Annex A, as more fully described elsewhere in this proxy statement/prospectus/information statement; and (ii) the other transactions contemplated by the Business Combination Agreement. In connection with the Business Combination, NavSight will change its name to “Spire Global, Inc.”

As a result of and upon the closing of the Business Combination (the “Closing”), among other things, (i) each share of outstanding capital stock of Spire (the “Spire Capital Stock”), including shares of Spire Capital Stock issued pursuant to the conversion of Spire Notes immediately prior to Closing, will be cancelled and converted into (a) the right to receive at Closing a number of shares of New Spire Class A Common Stock equal to the “Per Share Closing Consideration” calculated in accordance with the Business Combination Agreement and (b) the contingent earnout right to receive a number of shares of New Spire Class A Common Stock equal to the “Per Share Earnout Consideration,” payable in four equal tranches if the trading price of the New Spire Class A Common Stock is greater than or equal to $13.00, $16.00, $19.00, or $22.00 for any 20 trading days within any 30 consecutive trading day period on or prior to the date that is five years following the date of the Business Combination Agreement, as adjusted based on the formula set forth in the Business Combination Agreement with respect to the portion of earnout value allocated to holders of options to purchase shares of Spire Common Stock (“Spire Options”) assumed by NavSight, (ii) all outstanding Spire Options will be assumed and converted into option awards that are exercisable for shares of New Spire Class A Common Stock pursuant to the “Option Exchange Ratio” calculated in accordance with the Business Combination Agreement, (iii) all Spire Warrants (as defined below) outstanding as of immediately prior to the Closing Date will either be cancelled and “net” exercised in exchange for shares of New Spire Class A Common Stock, or assumed by New Spire and converted into warrants that are exercisable for a number of shares of Class A Common Stock determined by reference to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement, and (iv) the Founders (as defined in the Business Combination Agreement) are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. Based on the aggregate number of shares of Spire Capital Stock and shares issuable pursuant to the exercise of vested Spire Options, Spire Warrants and conversion of Spire Notes outstanding as of March 31, 2021 (assuming, in the case of the Spire Notes, that the Closing occurs on August 1, 2021), the Per Share Closing Consideration would be 1.726 and the Option Exchange Ratio would be 1.850, on the terms and subject to the conditions set forth in the Business Combination Agreement. The estimated Per Share Closing Consideration set forth herein will differ from the actual Per Share Closing Consideration. For additional information on the Business Combination Agreement, the calculations of the Per Share Closing Consideration and the Option Exchange Ratio and consideration being paid to the stockholders of Spire, see the section titled “BCA Proposal—Business Combination Agreement” in the accompanying proxy statement/prospectus/information statement.

In connection with the execution of the Business Combination Agreement, NavSight entered into subscription agreements with certain accredited investors (the “PIPE Subscription Agreements”), pursuant to which such investors have agreed to purchase at the Closing an aggregate of 24,500,000 shares of New Spire Class A Common Stock at $10.00 per share for an aggregate purchase price of $245,000,000 (together, the “PIPE Investment”), which includes 1,000,000 shares of New Spire Class A Common Stock that Robert Coleman and Jack Pearlstein, directors and officers of NavSight, have agreed to purchase. The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummation of the Business Combination.

NavSight’s units, NavSight Class A Common Stock and NavSight’s public warrants are currently listed on the New York Stock Exchange under the symbols “NSH.U,” “NSH” and “NSH.WS,” respectively. NavSight will apply to list the New Spire Class A Common Stock and public warrants on the New York Stock Exchange under the symbols “SPIR” and “SPIR.WS,” respectively, upon the Closing. Upon the Closing, NavSight’s units will separate into the component securities and will no longer trade as a separate security.

 

 

This proxy statement/prospectus/information statement provides stockholders of NavSight with detailed information about the proposed business combination and other matters to be considered at the special meeting of stockholders of NavSight. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in the section titled “Risk Factors” beginning on page 21 of this proxy statement/prospectus/information statement.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement/prospectus/information statement is dated             , 2021, and is first being mailed to NavSight’s stockholders on or about             , 2021.

NAVSIGHT HOLDINGS, INC.

12020 Sunrise Valley Drive

Suite 100

Reston, Virginia 20191

Dear NavSight Holdings, Inc. Stockholders:

You are cordially invited to attend the special meeting of stockholders (including any adjournments, postponements, or other delays thereof, the “special meeting”) of NavSight Holdings, Inc., a Delaware corporation (“NavSight”), at                     , on                     , 2021, virtually via live webcast at                     , or at such other time, on such other date and at such other place to which the meeting may be adjourned, postponed, or otherwise delayed.

At the special meeting, NavSight stockholders will be asked to consider and vote upon a proposal, which is referred to herein as the “BCA Proposal,” to approve and adopt the Business Combination Agreement, dated as of February 28, 2021 (as the same may be amended, the “Business Combination Agreement”), by and among NavSight, NavSight Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of NavSight (“Merger Sub”), Spire Global, Inc., a Delaware corporation (“Spire”), and the Founders (as defined in the Business Combination Agreement), a copy of which is attached to the accompanying proxy statement/prospectus/information statement as Annex A. The Business Combination Agreement provides that, among other things, (i) Merger Sub will merge with and into Spire, the separate corporate existence of Merger Sub will cease, and Spire will continue as the surviving corporation in the Merger and a wholly owned subsidiary of NavSight (the “Merger” and together with other transactions contemplated by the Business Combination Agreement, the “Business Combination”) and (ii) NavSight will change its name to “Spire Global, Inc.” (“New Spire”), in accordance with the terms and subject to the conditions of the Business Combination Agreement, as more fully described elsewhere in the accompanying proxy statement/prospectus/information statement.

You will also be asked to consider and vote upon (i) four separate proposals to approve material differences between the current certificate of incorporation and the current bylaws of NavSight (as may be amended from time to time, the “Organizational Documents”) and the proposed certificate of incorporation and the proposed bylaws of New Spire (collectively, the “Organizational Documents Proposals”), (ii) a proposal to elect five directors who, upon consummation of the Business Combination, will be the directors of New Spire (the “Director Election Proposal”), (iii) a proposal to approve for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, the issuance of more than 20% of the issued and outstanding shares of New Spire Common Stock pursuant to the Business Combination Agreement, including the issuance of New Spire Class A Common Stock in the Merger (including the Earnout (as defined below)), the issuance of shares of New Spire Class A Common Stock to certain accredited investors pursuant to the PIPE Investment (as defined below), and the sale and issuance of shares of New Spire Class B Common Stock to the Founders (the “Stock Issuance Proposal”), (iv) a proposal to approve and adopt the Spire Global, Inc. 2021 Equity Incentive Plan (the “Equity Incentive Plan Proposal”), (v) a proposal to approve and adopt the Spire Global, Inc. 2021 Employee Stock Purchase Plan (the “ESPP Proposal”) and (vi) a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the special meeting (the “Adjournment Proposal”). The Business Combination will be consummated only if the BCA Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, and the ESPP Proposal (collectively, the “Condition Precedent Proposals”) are approved at the special meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these Proposals is more fully described in the accompanying proxy statement/prospectus/information statement, which each stockholder is encouraged to read carefully and in its entirety.

As further described in the accompanying proxy statement/prospectus/information statement, subject to the terms and conditions of the Business Combination Agreement, as a result of and upon the closing of the transactions contemplated by the Business Combination Agreement and all related documents (the “Closing”), among other things, (i) each share of outstanding capital stock of Spire (the “Spire Capital Stock”) including shares of Spire Capital Stock issued pursuant to the conversion of Spire Notes immediately prior to Closing, will be cancelled and converted into (a) the right to receive a number of shares of New Spire Class A Common Stock equal to the “Per Share Closing Consideration” calculated in accordance with the Business Combination Agreement and (b) the contingent earnout right to receive a number of shares of New Spire Class A Common Stock equal to the “Per Share Earnout Consideration,” payable in four equal tranches if the trading price of the New Spire Class A Common Stock is greater than or equal to $13.00, $16.00, $19.00, or $22.00 for any 20 trading days within any 30 consecutive trading day period on or prior to the date that is five years following the date of the Business Combination Agreement, as adjusted based on the formula set forth in the Business Combination Agreement with respect to the portion of earnout value allocated to holders of Spire Options assumed by NavSight pursuant to the

Business Combination, (ii) all outstanding Spire Options will be assumed and converted into option awards that are exercisable for shares of New Spire Class A Common Stock pursuant to the “Option Exchange Ratio” calculated in accordance with the Business Combination Agreement, (iii) all Spire Warrants outstanding as of immediately prior to the Closing will either be cancelled and “net” exercised in exchange for shares of New Spire Class A Common Stock or assumed by New Spire and converted into warrants that are exercisable for a number of shares of Class A Common Stock determined by reference to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement, and (iv) the Founders (as defined in the Business Combination Agreement) are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. Based on the aggregate number of shares of Spire Capital Stock and shares issuable pursuant to the exercise of vested Spire Options, Spire Warrants and conversion of Spire Notes outstanding as of March 31, 2021 (assuming, in the case of the Spire Notes, that the Closing occurs on August 1, 2021), the Per Share Closing Consideration would be 1.726 and the Option Exchange Ratio would be 1.850, on the terms and subject to the conditions set forth in the Business Combination Agreement. The estimated Per Share Closing Consideration set forth herein will differ from the actual Per Share Closing Consideration. For additional information on the Business Combination Agreement, the calculations of the Per Share Closing Consideration and the Option Exchange Ratio and consideration being paid to the stockholders of Spire, see the section titled “BCA Proposal—Business Combination Agreement” in the accompanying proxy statement/prospectus/information statement.

In connection with the Business Combination, certain related agreements have been, or will be entered into on or prior to the date of the Closing of the Business Combination (the “Closing Date”), including (i) the Voting and Support Agreements, (ii) the Voting and Non-Redemption Agreements, (iii) the Investor Rights Agreement, and (iv) the PIPE Subscription Agreements. For additional information, see the section titled “BCA Proposal—Related Agreements” in the accompanying proxy statement/prospectus/information statement.

Pursuant to the Organizational Documents, a holder (a “Public Stockholder”) of shares of NavSight Class A Common Stock sold as part of the Units in its initial public offering (“Public Shares”), which excludes shares held by Six4 Holdings, LLC, a Delaware limited liability company (the “Sponsor”), may request that NavSight redeem all or a portion of such Public Stockholder’s Public Shares for cash if the Business Combination is consummated. To the extent holders of Units have not already elected to separate their respective Units, they must elect to separate the Units into the underlying Public Shares and warrants included in the Units sold in NavSight’s initial public offering, each of which is exercisable for one share of NavSight Class A Common Stock, in accordance with its terms (“Public Warrants”) prior to exercising redemption rights with respect to the public shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public Stockholders may elect to redeem their Public Shares even if they vote “for” the BCA Proposal or any other Condition Precedent Proposal. If the Business Combination is consummated, and if a Public Stockholder properly exercises its right to redeem all or a portion of the Public Shares that it holds and timely delivers its shares to AST, NavSight’s transfer agent, Spire will redeem such Public Shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our IPO (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the trust account and not previously released to NavSight to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses). For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding Public Share. If a Public Stockholder exercises its redemption rights in full, then it will be electing to exchange its Public Shares for cash and will no longer own Public Shares. For additional information regarding the procedures for exercising redemption rights, see the section titled “Special Meeting of NavSight—Redemption Rights” in the accompanying proxy statement/prospectus/information statement.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

The Initial Stockholders have agreed (i) not to redeem or transfer all or any portion of their respective NavSight Common Stock and (ii) to vote all of their respective shares of NavSight Common Stock, representing in the aggregate 20% of the outstanding voting power of NavSight, in favor of the Proposals, including approval of Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, regardless of how the Public Stockholders vote, in each case, subject to the terms and conditions contemplated by the Voting and Non-Redemption Agreements, each dated as of February 28, 2021, the form of which is attached as Annex F to this proxy statement/prospectus/information statement (the “Voting and Non-Redemption Agreement”). The shares held by the Initial Stockholders will be excluded from the pro rata calculation used to determine the per-share redemption price.

Additionally, certain Spire Stockholders entered into Voting and Support Agreements, the form of which is attached to this proxy statement/prospectus/information statement as Annex G, pursuant to which such stockholders agreed to vote all of their respective shares of Spire Capital Stock in favor of the Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, representing in the aggregate, approximately 33% of the outstanding shares of Spire Capital Stock, on an as-converted to Spire Common Stock basis, and approximately 22% of the outstanding shares of Spire Preferred Stock, on an as-converted to Spire Common Stock basis, as of March 31, 2021.

The Business Combination Agreement provides that the obligations of Spire to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the Trust Account, after deducting the amount required to satisfy NavSight’s obligations to its stockholders (if any) that exercise their rights to redeem their Public Shares pursuant to the Organizational Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the Trust Account and (ii) transaction expenses of Spire or NavSight) (such amount, the “Trust Amount”), plus the amount of the PIPE Investment actually received by NavSight at or prior to the Closing Date (as defined herein) is at least equal to $225,000,000 (the “Minimum Cash Condition”). This condition is for the sole benefit of Spire. If such condition is not met, and such condition is not or cannot be waived under the terms of the Business Combination Agreement, then the Business Combination Agreement could terminate, and the proposed Business Combination may not be consummated. In addition, pursuant to the Organizational Documents, in no event will NavSight redeem Public Shares in an amount that would cause NavSight’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

The Business Combination Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus/information statement (including the absence of a material adverse effect on Spire and the approval of the Business Combination Agreement and the transactions contemplated thereby, by (i) the affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Spire Capital Stock voting as a single class and on an as-converted basis and (ii) the affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Spire Preferred Stock, voting as a single class and on an as-converted basis.

NavSight is providing the accompanying proxy statement/prospectus/information statement and accompanying proxy card to NavSight’s stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournments of the special meeting. Information about the special meeting, the Business Combination and other related business to be considered by NavSight’s stockholders at the special meeting is included in the accompanying proxy statement/prospectus/information statement. Whether or not you plan to virtually attend the special meeting, all of NavSight’s stockholders are urged to read the accompanying proxy statement/prospectus/information statement, including the Annexes and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in the section titled “Risk Factors” beginning on page 21 of this proxy statement/prospectus/information statement.

After careful consideration, the board of directors of NavSight has unanimously approved the Business Combination and unanimously recommends that stockholders vote “FOR” adoption of the Business Combination Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other Proposals presented to NavSight’s stockholders in the accompanying proxy statement/prospectus/information statement. When you consider the recommendation of these Proposals by the board of directors of NavSight, you should keep in mind that NavSight’s directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. For additional information regarding these considerations, see the section titled “BCA Proposal—Interests of NavSight’s Directors and Executive Officers in the Business Combination” in the accompanying proxy statement/prospectus/information statement.

The approval of each of the Proposals requires the affirmative vote of a majority of the shares represented virtually or by proxy and entitled to vote thereon and who vote at the special meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the special meeting.

Your vote is very important. Whether or not you plan to virtually attend the special meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement/prospectus/information statement to make sure that your shares are represented at the special meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the special meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Condition Precedent Proposals are approved at the special meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in the accompanying proxy statement/prospectus/information statement.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the special meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the special meeting. If you are a stockholder of record and you virtually attend the special meeting and wish to vote, you may withdraw your proxy and vote virtually.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO NAVSIGHT’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of NavSight’s board of directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

Sincerely,

Robert Coleman

Chief Executive Officer and Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus/information statement is dated                     , 2021 and is first being mailed to stockholders on or about                     , 2021.

 

NAVSIGHT HOLDINGS, INC.

12020 Sunrise Valley Drive

Suite 100

Reston, Virginia 20191

NOTICE OF SPECIAL MEETING

TO BE HELD ON                     , 2021

TO THE STOCKHOLDERS OF NAVSIGHT HOLDINGS, INC.:

NOTICE IS HEREBY GIVEN that a special meeting (the “special meeting”) of NavSight Holdings, Inc., a Delaware corporation (“NavSight”), will be held at             ,             , on             , 2021 virtually via live webcast at             . You are cordially invited to attend the special meeting, which will be held for the following purposes:

 

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Proposal No. 1—The BCA Proposal—to consider and vote upon a proposal to approve the Business Combination Agreement, dated as of February 28, 2021 (the “Business Combination Agreement”), by and among NavSight, NavSight Merger Sub, Inc., Spire Global, Inc., and the Founders (as defined in the Business Combination Agreement), a copy of which is attached to this proxy statement/prospectus/information statement as Annex A. The Business Combination Agreement provides that, as a result of and upon the closing of the transactions contemplated by the Business Combination agreement and all related documents (the “Closing”), among other things, (i)(a) Merger Sub will merge with and into Spire, the separate corporate existence of Merger Sub will cease, and Spire will continue as the surviving corporation in the Merger and a wholly owned subsidiary of NavSight and (b) NavSight will change its name to “Spire Global, Inc.,” (ii) each share of outstanding Spire Capital Stock, including shares of Spire Capital Stock issued pursuant to the conversion of Spire Notes immediately prior to Closing, will be cancelled and converted into a number of shares of New Spire Class A Common Stock equal to the “Per Share Closing Consideration” calculated in accordance with the Business Combination Agreement and (b) the contingent earnout right to receive a number of shares of New Spire Class A Common Stock equal to the “Per Share Earnout Consideration,” payable in four equal tranches if the trading price of New Spire Class A Common Stock is greater than or equal to $13.00, $16.00, $19.00, or $22.00 for any 20 trading days within any 30 consecutive trading day period on or prior to the date that is five years following the date of the Business Combination Agreement, as adjusted based on the formula set forth in the Business Combination Agreement with respect to the portion of earnout value allocated to holders of Spire Options assumed by NavSight pursuant to the Business Combination, (iii) all outstanding Spire Options will be assumed and converted into option awards that are exercisable for shares of New Spire Class A Common Stock pursuant to the “Option Exchange Ratio” calculated in accordance with the Business Combination Agreement, (iv) all Spire Warrants outstanding as of immediately prior to the Closing Date will either be cancelled and “net” exercised in exchange for shares of New Spire Class A Common Stock, or assumed by New Spire and converted into warrants that are exercisable for a number of shares of Class A Common Stock determined by reference to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement, and (v) the Founders (as defined in the Business Combination Agreement) are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. Based on the aggregate number of shares of Spire Capital Stock and shares issuable pursuant to the exercise of vested Spire Options, Spire Warrants and conversion of Spire Notes outstanding as of March 31, 2021 (assuming, in the case of the Spire Notes, that the Closing occurs on August 1, 2021), the Per Share Closing Consideration would be 1.726 and the Option Exchange Ratio would be 1.850, on the terms and subject to the conditions set forth in the Business Combination Agreement. The estimated Per Share Closing Consideration set forth herein will differ from the actual Per Share Closing Consideration (the “BCA Proposal”);

 

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Organizational Documents Proposals—to consider and vote upon the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve the following material differences between the current certificate of incorporation and the current bylaws of NavSight (as may be amended from time to time, the “Organizational Documents”) and the proposed new certificate of incorporation (“Proposed Certificate of Incorporation”) and the proposed new bylaws (“Proposed Bylaws”) of NavSight, which will be renamed “Spire Global, Inc.” in connection with the Business Combination (NavSight after the Business Combination, including after such change of name, as applicable, is referred to herein as “New Spire”):

 

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Proposal No. 2—Organizational Documents Proposal A—to authorize an increase in the authorized shares of NavSight Common Stock and NavSight Preferred Stock (this proposal is referred to herein as “Organizational Documents Proposal A”);

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Proposal No. 3—Organizational Documents Proposal B—to authorize certain changes to NavSight’s dual class structure, including providing that the New Spire Class B Common Stock will have nine votes per share on each matter properly submitted to stockholders entitled to vote (this proposal is referred to herein as “Organizational Documents Proposal B”);

 

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Proposal No. 4—Organizational Documents Proposal C—to provide that the New Spire Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term (this proposal is referred to herein as “Organizational Documents Proposal C”); and

 

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Proposal No. 5—Organizational Documents Proposal D —to authorize all other changes in connection with the replacement of the Organizational Documents with the Proposed Certificate of Incorporation and Proposed Bylaws (copies of which are attached to this proxy statement/prospectus/information statement as Annex B and Annex C, respectively), including (i) changing New Spire’s name to “Spire Global, Inc.,” (ii) eliminating the waiver of corporate opportunity doctrine under the DGCL, and (iii) adopting Delaware as the exclusive forum for certain stockholder litigation, all of which the NavSight Board believes is necessary to adequately address the needs of New Spire after the Business Combination (this proposal is referred to herein as the “Organizational Documents Proposal D”);

 

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Proposal No. 6—Director Election Proposal—to consider and vote upon a proposal, assuming the BCA Proposal and the Organizational Documents Proposals are approved, to elect five directors who, upon consummation of the Business Combination, will be the directors of New Spire (this proposal is referred to herein as the “Director Election Proposal”);

 

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Proposal No. 7—The Stock Issuance Proposal—to consider and vote upon a proposal to approve for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, the issuance of more than 20% of the issued and outstanding shares of New Spire Common Stock pursuant to the transactions contemplated by the Business Combination Agreement, including the issuance of New Spire Class A Common Stock in the Merger (including the Earnout), the issuance of shares of New Spire Class A Common Stock to certain accredited investors pursuant to the PIPE Investment, and the sale and issuance of shares of New Spire Class B Common Stock to the Founders (this proposal is referred to herein as the “Stock Issuance Proposal”);

 

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Proposal No. 8—The Equity Incentive Plan Proposal—to consider and vote upon a proposal to approve the Spire Global, Inc. 2021 Equity Incentive Plan (this proposal is referred to herein as the “Equity Incentive Plan Proposal”);

 

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Proposal No. 9—The ESPP Proposal—to consider and vote upon a proposal to approve the Spire Global, Inc. 2021 Employee Stock Purchase Plan (this proposal is referred to herein as the “ESPP Proposal”); and

 

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Proposal No. 10—The Adjournment Proposal—to consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more Proposals at the special meeting (this proposal is referred to herein as the “Adjournment Proposal”).

Each of Proposals No. 1 through 9 is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus/information statement.

These items of business are described in this proxy statement/prospectus/information statement, which we encourage you to read carefully and in its entirety before voting.

Only holders of record of shares at the close of business on             , 2021 are entitled to notice of and to vote and have their votes counted at the special meeting and any adjournment of the special meeting. The special meeting will also be held virtually and will be conducted via live webcast at the following address:             .

This proxy statement/prospectus/information statement and accompanying proxy card is being provided to NavSight’s stockholders in connection with the solicitation of proxies to be voted at the special meeting and at any adjournment of the special meeting. Whether or not you plan to virtually attend the special meeting, all of NavSight’s stockholders are urged to read this proxy statement/prospectus/information statement, including the Annexes and the documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in the section titled “Risk Factors” beginning on page 21 of this proxy statement/prospectus/information statement.

After careful consideration, the board of directors of NavSight has unanimously approved the Business Combination and unanimously recommends that stockholders vote “FOR” adoption of the Business Combination Agreement, and approval of the transactions contemplated thereby, including the Business Combination, and “FOR” all other Proposals presented to NavSight’s stockholders in this proxy statement/prospectus/information statement. When you consider the recommendation of these Proposals by the board of directors of NavSight, you should keep in mind that NavSight’s directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. For additional information regarding these considerations, see the section titled “BCA Proposal—Interests of NavSight’s Directors and Executive Officers in the Business Combination” in this proxy statement/prospectus/information statement.

Pursuant to the Organizational Documents, a holder of Public Shares (as defined herein) (a “Public Stockholder”) may request of NavSight that New Spire redeem all or a portion of its Public Shares for cash if the Business Combination is consummated. As a holder of Public Shares, you will be entitled to receive cash for any Public Shares to be redeemed only if you:

 

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(a) hold Public Shares, or (b) if you hold Public Shares through Units, you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares;

 

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submit a written request to American Stock Transfer & Trust Company, LLC (“AST”), NavSight’s transfer agent, that New Spire redeem all or a portion of your Public Shares for cash; and

 

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deliver your Public Shares to AST physically or electronically through The Depository Trust Company (“DTC”).

Holders must complete the procedures for electing to redeem their Public Shares in the manner described above prior to                     , on                     , 2021 (two business days before the special meeting) in order for their shares to be redeemed.

To the extent holders of Units have not already done so, they must elect to separate the Units into the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. If holders hold their Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the Units into the underlying Public Shares and Public Warrants, or if a holder holds Units registered in its own name, the holder must contact AST directly and instruct them to do so. Public Stockholders may elect to redeem Public Shares regardless of if or how they vote in respect of the BCA Proposal. If the Business Combination is not consummated, the Public Shares will be returned to the respective holder, broker or bank.

If the Business Combination is consummated, and if a Public Stockholder properly exercises its right to redeem all or a portion of the Public Shares that it holds and timely delivers its shares to AST, New Spire will redeem such Public Shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our IPO (the “trust account”), calculated as of two business days prior to the consummation of the

Business Combination, including interest earned on the funds held in the trust account and not previously released to NavSight to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses). For illustrative purposes, as of March 31, 2021, this would have amounted to approximately $10.00 per issued and outstanding Public Share. If a Public Stockholder exercises its redemption rights in full, then it will be electing to exchange its Public Shares for cash and will no longer own Public Shares. For additional information regarding the procedures for exercising redemption rights, see the section titled “Special Meeting of NavSight—Redemption Rights” in this proxy statement/prospectus/information statement.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the Public Shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Six4 Holdings, LLC, a Delaware limited liability company and stockholder of NavSight (the “Sponsor”), and each independent director of NavSight have agreed (i) not to redeem or transfer all or any portion of their respective NavSight Common Stock and (ii) to vote all of their respective shares of NavSight Common Stock, representing in the aggregate 20% of the outstanding voting power of NavSight, in favor of the Proposals, including approval of Business Combination Agreement and the transactions contemplated thereby, including the Business Combination, regardless of how the Public Stockholders vote, in each case, subject to the terms and conditions contemplated by the Voting and Non-Redemption Agreements, each dated as of February 28, 2021, the form of which is attached to this proxy statement/prospectus/information statement as Annex F (the “Voting and Non-Redemption Agreement”). The shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price.

The Business Combination Agreement provides that the obligations of Spire to consummate the Merger are conditioned on, among other things, that as of the Closing, the amount of cash available in the trust account, after deducting the amount required to satisfy NavSight’s obligations to its stockholders (if any) that exercise their rights to redeem their Public Shares pursuant to the Organizational Documents (but prior to the payment of any (i) deferred underwriting commissions being held in the trust account and (ii) transaction expenses of Spire or NavSight) (such amount, the “Trust Amount”) plus the amount of the PIPE Investment actually received by NavSight at or prior to the Closing Date (as defined herein) is at least equal to $225,000,000 (the “Minimum Cash Condition”). This condition is for the sole benefit of Spire. If such condition is not met, and such condition is not or cannot be waived under the terms of the Business Combination Agreement, then the Business Combination Agreement could terminate, and the proposed Business Combination may not be consummated. In addition, pursuant to the Organizational Documents, in no event will NavSight redeem Public Shares in an amount that would cause New Spire’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

The Business Combination Agreement is also subject to the satisfaction or waiver of certain other closing conditions as described in the accompanying proxy statement/prospectus/information statement (including the absence of a material adverse effect on Spire and the approval of the Business Combination Agreement and the transactions contemplated thereby, by the (i) affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Spire Capital Stock voting as a single class and on an as-converted basis and (ii) the affirmative vote or written consent of the holders of at least a majority of the voting power of the outstanding Spire preferred stock, voting as a single class and on an as-converted basis.

The approval of each of the Proposals requires the affirmative vote of a majority of the shares represented virtually or by proxy and entitled to vote thereon and who vote at the special meeting. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the special meeting.

Your vote is very important. Please vote as soon as possible by following the instructions in this proxy statement/prospectus/information statement to make sure that your shares are represented at the special meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are

represented and voted at the special meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Condition Precedent Proposals are approved at the special meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus/information statement.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the Proposals presented at the special meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the special meeting, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and will not be voted. An abstention or broker non-vote will be counted towards the quorum requirement but will not count as a vote cast at the special meeting. If you are a stockholder of record and you virtually attend the special meeting and wish to vote, you may withdraw your proxy and vote virtually.

Your attention is directed to the remainder of the proxy statement/prospectus/information statement following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. You are encouraged to read this proxy statement/prospectus/information statement carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your shares, please contact D.F. King & Co, Inc. (“D.F. King”), our proxy solicitor, by calling (800) 207-3158 or banks and brokers can call collect at (212) 269-5550, or by emailing NSH@dfking.com.

Thank you for your participation. We look forward to your continued support.

By Order of the Board of Directors of NavSight Holdings, Inc.,

            , 2021

Robert Coleman

Chief Executive Officer and Chairman of the Board of Directors

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO NAVSIGHT’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

 

TABLE OF CONTENTS

 

REFERENCES TO ADDITIONAL INFORMATION			i
TRADEMARKS			i
SELECTED DEFINITIONS			i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			v
QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF NAVSIGHT			vi
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT			1
SELECTED HISTORICAL FINANCIAL INFORMATION OF NAVSIGHT			17
SELECTED HISTORICAL FINANCIAL INFORMATION OF SPIRE			18
MARKET PRICE AND DIVIDEND INFORMATION			20
RISK FACTORS			21
SPECIAL MEETING OF NAVSIGHT			80
BCA PROPOSAL			86
ORGANIZATIONAL DOCUMENTS PROPOSAL A—APPROVAL OF AUTHORIZATION OF CHANGE TO AUTHORIZED CAPITAL STOCK, AS SET FORTH IN THE PROPOSED ORGANIZATIONAL DOCUMENTS			124
ORGANIZATIONAL DOCUMENTS PROPOSAL B—APPROVAL OF PROPOSAL REGARDING DUAL CLASS STOCK, AS SET FORTH IN THE PROPOSED ORGANIZATIONAL DOCUMENTS			125
ORGANIZATIONAL DOCUMENTS PROPOSAL C—APPROVAL OF PROPOSAL REGARDING ESTABLISHMENT OF A CLASSIFIED BOARD OF DIRECTORS, AS SET FORTH IN THE PROPOSED ORGANIZATIONAL DOCUMENTS			128
ORGANIZATIONAL DOCUMENTS PROPOSAL D—APPROVAL OF OTHER CHANGES IN CONNECTION WITH ADOPTION OF THE PROPOSED ORGANIZATIONAL DOCUMENTS			130
DIRECTOR ELECTION PROPOSAL			132
STOCK ISSUANCE PROPOSAL			133
EQUITY INCENTIVE PLAN PROPOSAL			135
ESPP PROPOSAL			143
ADJOURNMENT PROPOSAL			148
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS			149
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			156
INFORMATION ABOUT NAVSIGHT			173
NAVSIGHT’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			186
INFORMATION ABOUT SPIRE			189
SPIRE’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			205
MANAGEMENT OF NEW SPIRE FOLLOWING THE BUSINESS COMBINATION			224
EXECUTIVE COMPENSATION			230
BENEFICIAL OWNERSHIP OF SECURITIES			237
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			240
DESCRIPTION OF NEW SPIRE SECURITIES			245
SHARES ELIGIBLE FOR FUTURE SALE			258
FUTURE STOCKHOLDER PROPOSALS AND NOMINATIONS			259
STOCKHOLDER COMMUNICATIONS			259
LEGAL MATTERS			260
EXPERTS			260
DELIVERY OF DOCUMENTS TO STOCKHOLDERS			260
WHERE YOU CAN FIND MORE INFORMATION			260
INDEX TO FINANCIAL STATEMENTS			F-1

Annexes

 

Annex A		Business Combination Agreement
Annex B		Form of Proposed Certificate of Incorporation
Annex C		Form of Proposed Bylaws
Annex D		2021 Equity Incentive Plan
Annex E		2021 Employee Stock Purchase Plan
Annex F		Form of Voting and Non-Redemption Agreement
Annex G		Form of Voting and Support Agreement
Annex H		Form of PIPE Subscription Agreement
Annex I		Investor Rights Agreement
Annex J		Delaware General Corporation Law Section 262
Annex K		Appraisal Rights of Spire Stockholders

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus/information statement incorporates important business and financial information that is not included in or delivered with this proxy statement/prospectus/information statement. This information is available for you to review through the SEC’s website at www.sec.gov.

You may request copies of this proxy statement/prospectus/information statement and any of the documents incorporated by reference into this proxy statement/prospectus/information statement or other publicly available information concerning NavSight, without charge, by written request to Secretary at NavSight Holdings, Inc., 12020 Sunrise Valley Drive, Suite 100, Reston, Virginia 20191, or by telephone request at (571) 500-2236; or D.F. King, NavSight’s proxy solicitor, by calling (800) 207-3158 or banks and brokers can call collect at (212) 269-5550, or by emailing NSH@dfking.com, or from the SEC through the SEC website at the address provided above.

In order for NavSight’s stockholders to receive timely delivery of the documents in advance of the special meeting of NavSight to be held on                     , 2021, you must request the information no later than                     , 2021, five business days prior to the date of the special meeting.

TRADEMARKS

This document contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus/information statement may appear without the ^® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. NavSight does not intend its use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement/prospectus/information statement or the context otherwise requires, references to:

“2012 Plan” are to the Spire Global, Inc. 2012 Stock Option and Grant Plan, as amended, supplemented or modified from time to time.

“2019 Spire Notes” are to subordinated convertible promissory notes issued by Spire from July 2019 through October 2020 in the aggregate principal amount of $42,883,674, all of which will automatically convert into shares of New Spire Class A Common Stock immediately prior to the Closing.

“2021 Plan” are to the Spire Global, Inc. 2021 Equity Incentive Plan attached to this proxy statement/prospectus/information statement as Annex D.

“2021 Spire Notes” are to subordinated convertible promissory notes issued by Spire from January 2021 through February 2021 in the aggregate principal amount of $20,000,000, all of which will automatically convert into shares of New Spire Class A Common Stock immediately prior to the Closing.

“AST” are to American Stock Transfer & Trust Company, LLC.

“Business Combination” are to the transactions contemplated by the Business Combination Agreement.

“Business Combination Agreement” are to the Business Combination Agreement, dated as of February 28, 2021, as may be amended from time to time, among Spire, NavSight, Merger Sub, and the Founders.

“Code” are to the Internal Revenue Code of 1986, as amended.

“Condition Precedent Approvals” are to approval at the special meeting of the Condition Precedent Proposals.

“Condition Precedent Proposals” are to the BCA Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal, the Equity Incentive Plan Proposal, and the ESPP Proposal.

 

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“Closing” are to the closing of transactions contemplated by the Business Combination Agreement and all related documents, including the Merger, the PIPE Investment, and the Founders’ purchase of New Spire Class B Common Stock.

“Closing Date” are to the date on which the Closing occurs.

“Current NavSight Certificate of Incorporation” are to NavSight’s amended and restated certificate of incorporation as currently in effect.

“Current NavSight Bylaws” are to NavSight’s amended and restated bylaws as currently in effect.

“DGCL” are to the General Corporation Law of the State of Delaware.

“Effective Time” are to the time at which the Merger becomes effective upon the filing of a certificate of merger with Delaware.

“ESPP” are to the Spire Global, Inc. 2021 Employee Stock Purchase Plan attached to this proxy statement/prospectus/information statement as Annex E.

“Exchange Act” are to the Securities Exchange Act of 1934, as amended.

“Founders” are to Peter Platzer, Spire’s Chief Executive Officer, Theresa Condor, Spire’s Executive Vice President, General Manager of Orbital Services and Earth Intelligence, Jeroen Cappaert, Spire’s Chief Technology Officer, and Joel Spark, Spire’s VP, Space Systems.

“FP” are to FP Credit Partners, L.P.

“FP Stock Grant” are to 573,176 shares of New Spire Class A Common Stock to be issued to the Senior Lender pursuant to the FP Credit Agreement.

“FP Conversion Shares” are to shares of New Spire Class A Common Stock that may be issued to FP upon its election in connection with the conversion of a portion of its specified contractual returns, pursuant to the FP Credit Agreement. For purposes of this definition, assuming that the Closing occurs prior to May 31, 2022, and a Per Share Closing Consideration of 1.726, FP would receive 945,377 shares based on contractual returns of $17,500,000.

“FP Credit Agreement” are to the Loan and Security Agreement by and among Spire, certain lenders party thereto, FP Credit Partners, L.P., as agent for the lenders, and certain of Spire’s subsidiaries as guarantors, dated as of April 15, 2021.

“GAAP” are to accounting principles generally accepted in the United States.

“Initial Stockholders” are to the Sponsor and to the independent directors of NavSight, William P. Crowell, Henry A. Crumpton, and Gilman Louie.

“IPO” are to NavSight’s initial public offering of Units, consummated on September 9, 2020.

“JOBS Act” are to the Jumpstart Our Business Startups Act of 2012.

“Merger” are to the merger of Merger Sub with and into Spire, with Spire surviving the merger as a wholly owned subsidiary of NavSight.

“Merger Sub” are to NavSight Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of NavSight.

“NavSight” are to NavSight Holdings, Inc., a Delaware corporation.

“NavSight Board” are to the board of directors of NavSight, prior to the Business Combination.

“NavSight Capital Stock” are to NavSight Common Stock and NavSight Preferred Stock.

“NavSight Class A Common Stock” are to NavSight’s Class A common stock, par value $0.0001 per share, as in effect immediately prior to the Closing.

“NavSight Class B Common Stock” are to NavSight’s Class B common stock, par value $0.0001 per share, as in effect immediately prior to the Closing.

“NavSight Common Stock” are to the NavSight Class A Common Stock and NavSight Class B Common Stock.

 

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“NavSight Preferred Stock” are to NavSight’s preferred stock, par value $0.0001 per share, as in effect immediately prior to the Closing.

“NavSight Warrants” are to the Public Warrants and the Private Placement Warrants.

“New Spire” are to the combined company after the Merger and name change from NavSight Holdings, Inc.

“New Spire Board” are to the board of directors of New Spire, immediately upon consummation of the Business Combination.

“New Spire Class A Common Stock” are to shares of New Spire Class A common stock, par value $0.0001 per share, which will be entitled to one vote per share.

“New Spire Class B Common Stock” are to shares of New Spire Class B common stock, par value $0.0001 per share, which will be entitled to nine votes per share.

“New Spire Common Stock” are to shares of both New Spire Class A Common Stock and New Spire Class B Common Stock.

“NYSE” are to the New York Stock Exchange.

“Organizational Documents” are to the Current NavSight Certificate of Incorporation and the Current NavSight Bylaws.

“PIPE Investment” are to commitments from the PIPE Investors to purchase 24,500,000 shares of New Spire Class A Common Stock for a purchase price of $10.00 per share, in a private placement.

“PIPE Investors” are to certain accredited investors that entered into the PIPE Subscription Agreements to participate in the PIPE Investment.

“PIPE Subscription Agreements” are to each of the Subscription Agreements between NavSight and the PIPE Investors pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 24,500,000 shares of New Spire Class A Common Stock at $10.00 per share for an aggregate purchase price of $245,000,000, which includes the subscription by the Sponsor Related PIPE Investors of 1,000,000 shares of New Spire Class A Common Stock for an aggregate purchase price of $10,000,000.

“Private Placement Warrants” are to the 6,600,000 warrants issued to the Sponsor in a private placement in connection with the IPO, each exercisable to purchase one share of NavSight Class A Common Stock at $11.50 per share, at a price of $1.00 per warrant.

“Proposals” are to each of the Condition Precedent Proposals and the Adjournment Proposal.

“Proposed Bylaws” are to the proposed bylaws of New Spire which will be effective upon the Closing and are attached to this proxy statement/prospectus/information statement as Annex C.

“Proposed Certificate of Incorporation” are to the proposed certificate of incorporation of New Spire which will be effective upon the Closing and is attached to this proxy statement/prospectus/information statement as Annex B.

“Proposed Organizational Documents” are to the Proposed Certificate of Incorporation and the Proposed Bylaws.

“Public Shares” are to shares of NavSight Class A Common Stock sold as part of the Units in the IPO (whether they were purchased in the IPO or thereafter in the open market).

 

iii

“Public Stockholders” are to the holders of the Public Shares.

“Public Warrants” are to the warrants included in the Units sold in the IPO, each of which is exercisable for one share of NavSight Class A Common Stock, in accordance with its terms.

“SEC” are to the U.S. Securities and Exchange Commission.

“Securities Act” are to the U.S. Securities Act of 1933, as amended.

“Spire” are to Spire Global, Inc., a Delaware corporation.

“Spire Board” are to the board of directors of Spire prior to the Business Combination.

“Spire Capital Stock” are to Spire Common Stock and Spire Preferred Stock.

“Spire Common Stock” are to Spire’s common stock, par value $0.0001 per share.

“Spire Notes” are to the 2019 Spire Notes and the 2021 Spire Notes.

“Spire Options” are to all outstanding options to purchase shares of Spire Common Stock, whether or not exercisable and whether or not vested, immediately prior to the Closing under the 2012 Plan or otherwise.

“Spire Stockholders” are to the holders of Spire Capital Stock immediately prior to the consummation of the Business Combination.

“Spire Preferred Stock” are to Spire’s Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock.

“Spire Warrants” are to all outstanding and unexercised warrants to purchase shares of Spire Capital Stock.

“Sponsor” are to Six4 Holdings, LLC, a Delaware limited liability company.

“Sponsor Related PIPE Investors” are to Robert Coleman and Jack Pearlstein.

“Trust Account” are to the trust account established pursuant to the Investment Management Trust Agreement by and between NavSight and AST, dated as of September 9, 2020.

“Units” are to units issued in the IPO, each consisting of one share of NavSight Class A Common Stock and one-half of one NavSight Warrant.

“Warrant Agreement” are to that certain Warrant Agreement by and between AST and NavSight dated September 9, 2020.

 

iv

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus/information statement contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations, including as they relate to the potential Business Combination, of NavSight Holdings, Inc. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement/prospectus/information statement, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When NavSight discusses its strategies or plans, including as they relate to the potential Business Combination, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, NavSight’s management.

Forward-looking statements in this proxy statement/prospectus/information statement and in any document incorporated by reference in this proxy statement/prospectus/information statement may include, for example, statements about:

 

•

expectations related to the terms and timing of the Business Combination and related transactions;

 

•

expectations related to the estimated conversion ratio at Closing, projected capitalization following the Closing, and estimated ownership and voting power of Founders, directors and officers, and other parties of New Spire following the Closing;

 

•

estimates around the redemption price of the Public Shares and the amount of redemption requests made by NavSight stockholders;

 

•

the expected directors and officers of New Spire following the Business Combination;

 

•

the expected benefits of the Business Combination and the combined company’s future performance;

 

•

New Spire’s financial and business performance following the Business Combination;

 

•

the projected financial information prepared by Spire’s management team in consideration of the Business Combination, such as projected revenues, projected customer acquisition, projected customer base, projected increases in market penetration, projected gross revenue retention and net revenue retention metrics, projected cost of goods sold, projected addition of sales and marketing personnel, and projected operating expenses to support projected levels of customer growth and to support a public company, among others;

 

•

changes in New Spire’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, and plans;

 

•

the implementation, market acceptance, and success of Spire’s business model;

 

•

the ability to develop new offerings, services, and features and bring them to market in a timely manner and make enhancements to its business;

 

•

the quality and effectiveness of Spire’s technology and its ability to accurately and effectively use data and engage in predictive analytics;

 

•

overall level of consumer demand for Spire’s 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;

 

•

Spire’s ability to acquire data sets, software, equipment, satellite components, and regulatory approvals from third parties;

 

•

Spire’s ability to expand its products and offerings internationally;

 

•

Spire’s ability to acquire new businesses or pursue strategic transactions;

 

•

Spire’s ability to protect patents, trademarks, and other intellectual property rights;

 

•

Spire’s ability to utilize potential net operating loss carryforwards;

 

•

developments and projections relating to Spire’s competitors and industries, such as the projected growth in demand for space-based data;

 

•

Spire’s ability to acquire new customers or obtain renewals, upgrades, or expansions from its existing customers;

 

•

Spire’s ability to compete with existing and new competitors in existing and new markets and offerings;

 

•

the conversion or planned repayment of Spire’s debt obligations;

 

•

Spire’s future capital requirements and sources and uses of cash;

 

•

Spire’s ability to obtain funding for its operations;

 

•

Spire’s business, expansion plans, and opportunities;

 

•

Spire’s 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 and their impact on demand for Spire’s markets and offerings; and

 

•

the impact of the COVID-19 pandemic, or a similar public health threat, on global capital and financial markets, general economic conditions in the United States, and Spire’s business and operations.

The forward-looking statements contained in this proxy statement/prospectus/information statement and in any document incorporated by reference in this proxy statement/prospectus/information statement are based on current expectations and beliefs concerning future developments and their potential effects on us or Spire. There can be no assurance that future developments affecting us or Spire will be those that NavSight or Spire have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond NavSight’s control or the control of Spire) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section titled “Risk Factors” beginning on page 21 of this proxy statement/prospectus/information statement. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. NavSight and Spire undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any NavSight stockholder grants its proxy or instructs how its vote should be cast or votes on the Proposals, such stockholder should be aware that the occurrence of the events described in the section titled “Risk Factors” and elsewhere in this proxy statement/prospectus/information statement may adversely affect us.

 

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QUESTIONS AND ANSWERS FOR STOCKHOLDERS OF NAVSIGHT

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the Proposals, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to NavSight’s stockholders. NavSight urges stockholders to read this proxy statement/prospectus/information statement, including the Annexes and the other documents referred to herein, carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the special meeting, which will be held at                     , on             , 2021, virtually via live webcast. To participate in the special meeting, visit                      . You may register for the meeting as early as                     . If you hold your shares through a bank, broker or other nominee, you will need to take additional steps to participate in the meeting, as described in this proxy statement.

 

Q:	Why am I receiving this proxy statement/prospectus/information statement?

 

A:

NavSight is proposing to consummate the Business Combination in accordance with the terms of the Business Combination Agreement, that is described in this proxy statement/prospectus/information statement. The Business Combination Agreement provides that, as a result of and upon the Closing, among other things, (i)(a) Merger Sub will merge with and into Spire, the separate corporate existence of Merger Sub will cease, and Spire will continue as the surviving corporation in the Merger and a wholly owned subsidiary of NavSight and (b) NavSight will change its name to “Spire Global, Inc.,” (ii) each share of outstanding Spire Capital Stock, including shares of Spire Capital Stock issued pursuant to the conversion of Spire Notes immediately prior to Closing, will be cancelled and converted into (a) the right to receive at Closing a number of shares of New Spire Class A Common Stock equal to the “Per Share Closing Consideration” calculated in accordance with the Business Combination Agreement and (b) the contingent earnout right to receive a number of shares of New Spire Class A Common Stock equal to the “Per Share Earnout Consideration,” payable in four equal tranches if the trading price of New Spire Class A Common Stock is greater than or equal to $13.00, $16.00, $19.00, or $22.00 for any 20 trading days within any 30 consecutive trading day period on or prior to the date that is five years following the date of the Business Combination Agreement, as adjusted based on the formula set forth in the Business Combination Agreement with respect to the portion of earnout value allocated to holders of Spire Options assumed by NavSight pursuant to the Business Combination, (iii) all outstanding Spire Options will be assumed and converted into option awards that are exercisable for shares of New Spire Class A Common Stock pursuant to the “Option Exchange Ratio” calculated in accordance with the Business Combination Agreement, (iv) all Spire Warrants outstanding as of immediately prior to the Closing Date will either be cancelled and “net” exercised in exchange for shares of New Spire Class A Common Stock, or assumed by New Spire and converted into warrants that are exercisable for a number of shares of Class A Common Stock determined by reference to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement, and (v) the Founders are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. Based on the aggregate number of shares of Spire Capital Stock and shares issuable pursuant to the exercise of vested Spire Options, Spire Warrants and conversion of Spire Notes outstanding as of March 31, 2021 (assuming, in the case of the Spire Notes, that the Closing occurs on August 1, 2021), the Per Share Closing Consideration would be 1.726 and the Option Exchange Ratio would be 1.850, on the terms and subject to the conditions set forth in the Business Combination Agreement (the “BCA Proposal”);

Approval of the Merger will each require the affirmative vote of the holders of a majority of the issued and outstanding NavSight Common Stock present and entitled to vote at the special meeting or any adjournment thereof.

 

Q.	Why is NavSight proposing the Business Combination?

 

A.	NavSight was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, and intends to consummate the Business Combination in furtherance of this purpose.

 

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In order to raise funds in furtherance of the Business Combination, NavSight received $230,000,000 from its IPO (including net proceeds from the exercise in full by the underwriters of their over-allotment option), which was placed into the Trust Account immediately following the IPO. Simultaneously with the consummation of the IPO and the exercise of the underwriters’ over-allotment option, NavSight consummated the private sale of 6,600,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to NavSight of $6,600,000. A total of $230,000,000, comprised of net proceeds from the IPO and a portion of the sale of the Private Placement Warrants, was placed in the Trust Account.

As of the date of this proxy statement/prospectus/information statement, there currently are 28,750,000 shares of NavSight Common Stock outstanding, consisting of 23,000,000 shares of NavSight Class A Common Stock and 5,750,000 shares of NavSight Class B Common Stock, and 18,100,000 warrants outstanding, consisting of 11,500,000 Public Warrants and 6,600,000 Private Placement Warrants. Each whole warrant entitles the holder thereof to purchase one share of NavSight Class A Common Stock at a price of $11.50 per share.

Under the Organizational Documents, NavSight must generally provide the holders of Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of NavSight’s initial business combination in conjunction with a stockholder vote.

 

Q:	What is being voted on at the special meeting?

 

A:	Below are the Proposals that NavSight’s stockholders are being asked to vote on:

 

•

Proposal No. 1—the BCA Proposal (to approve the Business Combination, as described above);

 

•

Proposal No. 2—Organizational Documents Proposal A (to authorize an increase in the authorized shares of NavSight Common Stock and NavSight Preferred Stock);

 

•

Proposal No. 3—Organizational Documents Proposal B (to authorize certain changes to NavSight’s dual class structure, including providing that the New Spire Class B Common Stock will have nine votes per share on each matter properly submitted to stockholders entitled to vote);

 

•

Proposal No. 4—Organizational Documents Proposal C (to provide that the New Spire Board be divided into three classes with only one class of directors being elected in each year and each class serving a three-year term);

 

•

Proposal No. 5— Organizational Documents Proposal D (to authorize all other changes in connection with the replacement of the Organizational Documents with the Proposed Certificate of Incorporation and Proposed Bylaws (copies of which are attached to this proxy statement/prospectus/information statement as Annex B and Annex C, respectively), including (i) changing New Spire’s name to “Spire Global, Inc.,” (ii) eliminating the waiver of corporate opportunity doctrine under the DGCL, and (iii) adopting Delaware as the exclusive forum for certain stockholder litigation, all of which the NavSight Board believes is necessary to adequately address the needs of Spire after the Business Combination);

 

•

Proposal No. 6—Director Election Proposal (to consider and vote upon a proposal, assuming the BCA Proposal and the Organizational Documents Proposals (Proposals No. 2 through 5) are approved, to elect five directors who, upon consummation of the Business Combination, will be the directors of Spire);

 

•

Proposal No. 7—The Stock Issuance Proposal (to consider and vote upon a proposal to approve for purposes of complying with the applicable provisions of Section 312.03 of the NYSE’s Listed Company Manual, the issuance of more than 20% of the issued and outstanding shares of New Spire Common Stock pursuant to the transactions contemplated by the Business Combination Agreement, including the issuance of New Spire Class A Common Stock in the Merger (including the Earnout), the issuance of shares of New Spire Class A Common Stock to the PIPE Investors pursuant to the PIPE Investment, and the sale and issuance of shares of New Spire Class B Common Stock to the Founders (the “Stock Issuance Proposal”);

 

•

Proposal No. 8—The Equity Incentive Plan Proposal (to consider and vote upon a proposal to approve the 2021 Plan);

 

•

Proposal No. 9—The ESPP Proposal (to consider and vote upon a proposal to approve the ESPP); and

 

•

Proposal No. 10—The Adjournment Proposal (to consider and vote upon a proposal to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more Proposals at the special meeting).

 

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Approval of each of the Proposals requires the affirmative vote of the holders of a majority of the issued and outstanding NavSight Common Stock present and entitled to vote at the special meeting or any adjournment thereof. As of the record date, 5,750,000 shares held by the Initial Stockholders, or approximately 20% of the outstanding NavSight Common Stock, would be voted in favor of each of the Proposals. The transactions contemplated by the Business Combination Agreement will be consummated only if the Condition Precedent Proposals are approved at the special meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in the accompanying proxy statement/prospectus/information statement.

 

Q.	What will Spire Stockholders receive in return for NavSight’s acquisition of all of the issued and outstanding equity interests?

 

A:

If the Business Combination is consummated, (i) each share of outstanding Spire Capital Stock, including shares of Spire Capital Stock issued pursuant to the conversion of Spire Notes immediately prior to Closing, will be cancelled and converted into (a) the right to receive at Closing a number of shares of New Spire Class A Common Stock equal to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement and (b) the contingent earnout right to receive a number of shares of New Spire Class A Common Stock equal to the Per Share Earnout Consideration, payable in four equal tranches if the trading price of New Spire Class A Common Stock is greater than or equal to $13.00, $16.00, $19.00, or $22.00 for any 20 trading days within any 30 consecutive trading day period on or prior to the date that is five years following the date of the Business Combination Agreement, as adjusted based on the formula set forth in the Business Combination Agreement with respect to the portion of earnout value allocated to holders of Spire Options assumed by NavSight pursuant to the Business Combination, (ii) all outstanding Spire Options will be assumed and converted into option awards that are exercisable for shares of New Spire Class A Common Stock pursuant to the Option Exchange Ratio calculated in accordance with the Business Combination Agreement, (iii) all Spire Warrants outstanding as of immediately prior to the Closing Date will either be cancelled and “net” exercised in exchange for shares of New Spire Class A Common Stock, or assumed by New Spire and converted into warrants that are exercisable for a number of shares of Class A Common Stock determined by reference to the Per Share Closing Consideration calculated in accordance with the Business Combination Agreement, and (iv) the Founders are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. Based on the aggregate number of shares of Spire Capital Stock and shares issuable pursuant to the exercise of vested Spire Options, Spire Warrants and conversion of Spire Notes outstanding as of March 31, 2021 (assuming, in the case of the Spire Notes, that the Closing occurs on August 1, 2021), the Per Share Closing Consideration would be 1.726 and the Option Exchange Ratio would be 1.850, on the terms and subject to the conditions set forth in the Business Combination Agreement. The estimated Per Share Closing Consideration set forth herein will differ from the actual Per Share Closing Consideration. For additional information on the Business Combination Agreement, the calculations of the Per Share Closing Consideration and the Option Exchange Ratio and consideration being paid to Spire Stockholders, see the section titled “BCA Proposal—Business Combination Agreement;”

 

Q:	Do any of NavSight’s directors or officers have interests that may conflict with my interests with respect to the Business Combination?

 

A:

NavSight’s directors and officers may have interests in the Business Combination that are different from your interests as a stockholder. Prior to the closing of the IPO, NavSight issued an aggregate of 5,750,000 shares of NavSight Class B Common Stock to the Sponsor, a portion of which was later sold and transferred by the Sponsor to NavSight’s independent directors, for an aggregate purchase price of $25,000. Simultaneously with the closing of the IPO and the exercise of the underwriters’ over-allotment option, NavSight consummated a private placement of 6,600,000 Private Placement Warrants with the Sponsor.

If NavSight does not consummate the Business Combination by September 14, 2022 (24 months after the consummation of the IPO), NavSight will be required to dissolve and liquidate and the securities held by the Initial Stockholders, including the Sponsor, will be worthless because the Initial Stockholders have agreed to waive their rights to any liquidation distributions.

The exercise of NavSight’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes or waivers are appropriate and in NavSight’s stockholders’ best interests.

The Sponsor Related PIPE Investors (or affiliates thereof) have subscribed for an aggregate purchase price of $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Spire Class A Common Stock.

 

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Additionally, it is anticipated that Jack Pearlstein, NavSight’s Chief Financial Officer, will serve as a director of New Spire following the Closing.

 

Q:	If the Business Combination Agreement is terminated, will Spire be required to make any payment fee to NavSight?

 

A:

Yes. If the Business Combination Agreement is terminated under certain circumstances, Spire will be required to pay to NavSight an amount of liquidated damages equal to $5,000,000 within two business days of such termination. For additional information, see the section titled “BCA Proposal—The Business Combination Agreement—Termination.”

 

Q:	When and where is the special meeting?

 

A:	The special meeting will take place on                     , on             , 2021, virtually via live webcast at                     , or at such other time, on such other date and at such other place to which the meeting may be adjourned.

 

Q:	Who may vote at the special meeting?

 

A:

Only holders of record of NavSight Common Stock as of the close of business on           , 2021 (the record date) may vote at the special meeting. As of           , 2021, there were 28,750,000 shares of NavSight Common Stock outstanding and entitled to vote. For additional information, see the section titled “Special Meeting of NavSight—Record Date; Who is Entitled to Vote.”

 

Q:	What is the quorum requirement for the special meeting?

 

A:

Stockholders representing a majority of the shares of NavSight Common Stock issued and outstanding as of the record date and entitled to vote at the special meeting must be virtually present or represented by proxy in order to hold the special meeting and conduct business. This is called a quorum. NavSight Common Stock will be counted for purposes of determining if there is a quorum if the stockholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card or voting instructions through a broker, bank or custodian. In the absence of a quorum, the special meeting will be adjourned to the next business day at the same time and place or to such other time and place as the directors may determine.

 

Q:	What vote is required to approve the Proposals?

 

A:

Approval of each of the Proposals will require the affirmative vote of the holders of a majority of the issued and outstanding NavSight Common Stock present and entitled to vote at the special meeting or any adjournment thereof. Since each of the Proposals require the affirmative vote of a majority of the NavSight Common Stock present and entitled to vote at the special meeting or any adjournment thereof, attending the special meeting either virtually or by proxy and abstaining from voting will have the same effect as voting “AGAINST” the Proposals and failing to instruct your bank, brokerage firm or nominee to attend and vote your shares will have no effect on any of the Proposals.

 

Q:	How will the Initial Stockholders vote?

 

A:

The Initial Stockholders, including the Sponsor, who as of the record date, owned 5,750,000 shares of NavSight Class B Common Stock, or approximately 20% of the issued and outstanding NavSight Common Stock, have agreed to vote their respective shares acquired by them prior to the IPO in favor of the Proposals. The Initial Stockholders have also agreed that they will vote any shares they purchased in the open market in or after the IPO in favor of each of the Proposals.

 

Q:	What do I need to do now?

 

A:

NavSight urges you to read carefully and consider the information contained in this proxy statement/prospectus/information statement, including the Annexes, and consider how the Business Combination will affect you as a NavSight stockholder. You should vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus/information statement and on the enclosed proxy card.

 

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Q:	How can I vote?

 

A:

If you were a holder of record of NavSight Common Stock on                     , 2021, the record date for the special meeting, you may vote with respect to the Proposals virtually at the special meeting, or by submitting a proxy by mail so that it is received prior to 10:00 a.m. Eastern Time on                     , 2021, in accordance with the instructions provided to you under the section titled “Special Meeting of NavSight—Record Date; Who is Entitled to Vote.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide voting instructions (including any telephone or Internet voting instructions). You should contact your broker, bank or nominee in advance to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote virtually, obtain a proxy from your broker, bank or nominee.

 

Q:	Do I need to attend the special meeting to vote my shares?

 

A:

No. You are invited to attend the special meeting virtually to vote on the Proposals described in this proxy statement/prospectus/information statement. However, you do not need to attend the special meeting to vote your NavSight Common Stock. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card in the pre-addressed postage paid envelope. Your vote is important. NavSight encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus/information statement.

 

Q:	Am I required to vote against the BCA Proposal in order to have my NavSight Common Stock redeemed?

 

A:

No. You are not required to vote against the BCA Proposal in order to have the right to demand that NavSight redeem your NavSight Common Stock for cash equal to your pro rata share of the aggregate amount then on deposit in the Trust Account (including interest earned on the funds held in the Trust Account and not previously released to NavSight to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses)) before payment of deferred underwriting commissions. These redemption rights in respect of the NavSight Common Stock are sometimes referred to herein as “redemption rights.” If the Business Combination is not completed, holders of NavSight Common Stock electing to exercise their redemption rights will not be entitled to receive such payments and their NavSight Common Stock will be returned to them.

 

Q:	Do I have redemption rights?

 

A:	You will be entitled to receive cash for any Public Shares to be redeemed only if you:

(i) (a) hold Public Shares or (b) hold Public Shares through Units and you elect to separate your Units into the underlying Public Shares and Public Warrants prior to exercising your redemption rights with respect to the Public Shares; and

(ii) prior to 5:00 p.m., Eastern time, on                     , 2021, (a) submit a written request to the AST that NavSight redeem your Public Shares for cash and (b) deliver your public shares to AST, physically or electronically through DTC.

Holders of Units must elect to separate the underlying Public Shares and Public Warrants prior to exercising redemption rights with respect to the Public Shares. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with NavSight’s consent, until the Closing.

Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses) in connection with the liquidation of the Trust Account, unless NavSight completes an alternative business combination prior to September 14, 2022.

 

Q:	How do I exercise my redemption rights?

 

A:

If you are a holder of Public Shares, you may redeem your Public Shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to us to pay our taxes, by (ii) the total number of then-outstanding Public Shares; provided, that NavSight will not redeem any shares of common stock issued in the IPO to the extent that the redemption

 

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would result in NavSight having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A Public Stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of common stock included in the Units sold in our IPO without the prior consent of NavSight. Holders of the Public Warrants do not have redemption rights in connection with the Business Combination. The Initial Stockholders have agreed to waive their redemption rights with respect to any Public Shares they may hold in connection with the consummation of the Business Combination, and their shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the Trust Account of                      as of                      2021, the estimated per share redemption price would have been approximately $                    .

In order to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on                     , 2021 (two business days before the special meeting), that NavSight redeem your shares for cash, and (ii) submit your request in writing to NavSight’s transfer agent, at the address listed at the end of this section and deliver your shares to NavSight’s transfer agent (physically, or electronically using the DWAC (Deposit/Withdrawal At Custodian) system) at least two business days prior to the vote at the special meeting.

Any corrected or changed written demand of redemption rights must be received by AST two business days prior to the special meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to AST at least two business days prior to the vote at the special meeting.

Public Stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of NavSight Common Stock as of the record date. Any Public Stockholder who holds NavSight Common Stock on or before                     , 2021 (two business days before the special meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account at the consummation of the Business Combination, including interest earned on the funds held in the Trust Account and not previously released to NavSight to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses). If you have questions regarding the certification of your position or delivery of your shares, please contact:

American Stock Transfer & Trust Company, LLC

6201 15^th Ave, Brooklyn NY 11219

Attn: Felix Orihuela

E-mail: admin42@astfinancial.com

Telephone: 718-921-8380

 

Q:	If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

 

A:

No. Under NYSE rules, your broker, bank or nominee cannot vote your NavSight Common Stock with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. NavSight believes the Proposals are non-discretionary and, therefore, your broker, bank or nominee cannot vote your NavSight Common Stock without your instruction. Broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the special meeting. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your NavSight Common Stock; this indication that a bank, broker or nominee is not voting your NavSight Common Stock is referred to as a “broker non-vote.” Your bank, broker or other nominee can vote your NavSight Common Stock only if you provide instructions on how to vote. You should instruct your broker to vote your NavSight Common Stock in accordance with directions you provide.

 

Q:	What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

 

A:

NavSight will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the special meeting. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal.

 

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Q:	What happens if I sell my NavSight Common Stock before the special meeting?

 

A:

The record date for the special meeting is earlier than the date that the Business Combination is expected to be consummated. If you transfer your NavSight Common Stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you would retain your right to vote at the special meeting. However, you would not be entitled to receive any shares of Spire following the consummation of the Business Combination because only NavSight’s stockholders at the time of the consummation of the Business Combination will be entitled to receive shares of Spire in connection with the Business Combination.

 

Q:	What is the PIPE Investment?

 

A:

In connection with the execution of the Business Combination Agreement, on February 28, 2021, NavSight entered into the PIPE Subscription Agreements with the PIPE Investors, the form of which is attached to this proxy statement/prospectus/information statement as Annex H. Pursuant to the PIPE Subscription Agreements, immediately prior to the closing of the Business Combination, the PIPE Investors agreed to purchase, in the aggregate, 24,500,000 shares of New Spire Class A Common Stock at $10.00 per share for an aggregate purchase price of $245,000,000. The Sponsor Related PIPE Investors (or affiliates thereof) have subscribed for an aggregate purchase price of $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Spire Class A Common Stock. The PIPE Subscription Agreements provide that New Spire is required to file with the SEC, within 45 calendar days of the Closing, a registration statement covering the resale of shares issued pursuant to the PIPE Investment and to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable (within certain timing parameters). The obligation of the parties to consummate the purchase and sale of the shares covered by the PIPE Subscription Agreements is subject to, among other customary closing conditions, the consummation of the Business Combination. For additional information, see the section titled “BCA Proposal—Related Agreements—PIPE Subscription Agreements.”

 

Q:	What equity stake will the current stockholders of NavSight, the PIPE Investors, and the Spire Stockholders hold in Spire after the consummation of the Business Combination?

 

A:	The following table illustrates varying ownership levels and voting power in New Spire immediately following the consummation of the Business Combination based on the assumptions below.

These percentages are based on shares outstanding as of March 31, 2021 and assume an estimated per Share Closing Consideration of 1.726 and that New Spire issues 24,500,000 shares of New Spire Class A Common Stock to the PIPE Investors pursuant to the PIPE Investment. For additional information on the Business Combination Agreement, the calculations of the Per Share Closing Consideration and consideration being paid to the stockholders of Spire, see the section titled “BCA Proposal—Business Combination Agreement” in the accompanying proxy statement/prospectus/information statement.

These share ownership figures and percentages exclude shares issuable in connection with (i) the exercise of the Public Warrants, as such securities are not exercisable until the later of (a) the date that is 30 days after the first date on which NavSight completes a merger, share exchange, asset acquisitions, share purchase, reorganization or similar transaction involving NavSight and one or more businesses and (b) the date that is 12 months from the date of the closing of the IPO, (ii) the exercise of the Private Placement Warrants, (iii) the exercise of options under the 2012 Plan or the 2021 Plan, and (iv) the Earnout.

As described more fully elsewhere in this proxy statement/prospectus/information statement, following the Closing, shares of NavSight Class B Common Stock will be immediately exchanged for an equivalent number of shares of New Spire Class A Common Stock. Additionally, the Founders are anticipated to purchase a number of shares of New Spire Class B Common Stock equal to the number of shares of New Spire Class A Common Stock that each Founder is anticipated to receive at Closing. New Spire Class B Common Stock will carry nine votes per share, will not have dividend rights, will be entitled to receive a maximum of $0.0001 per share of New Spire Class B Common Stock upon liquidation, will be subject to certain additional restrictions on transfer, and will be subject to forfeiture in certain circumstances. These shares are not included the columns titled “Number of Shares” or “Percentage of Outstanding Shares” columns because they lack economic rights but are included in the “Voting Power” columns.

 

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		No Redemptions(1)												Maximum Redemptions(2)
		Number of Shares				Percentage of Outstanding Shares				Percentage of Voting Power(3)				Number of Shares				Percentage of Outstanding Shares				Percentage of Voting Power(3)
Spire Stockholders (not including Founders)(4)			89,018,584				57.6	%			33.7	%			89,018,584				67.1	%			36.7	%
Founders(4)			12,201,880				7.9	%			46.2	%			12,201,880				9.2	%			50.3	%
NavSight’s Public Stockholders			23,000,000				14.9	%			8.7	%			3,583,159				0.9	%			0.5	%
Initial Stockholders			5,750,000				3.7	%			2.2	%			5,750,000				4.3	%			2.4	%
PIPE Investors (not including Sponsor Related PIPE Investors)(5)			23,500,000				15.2	%			8.9	%			23,500,000				17.7	%			9.7	%
Sponsor Related PIPE Investors(6)			1,000,000				0.6	%			0.4	%			1,000,000				0.8	%			0.4	%
Total			154,470,464				100.0	%			100.	0%			135,053,623				100.0	%			100.	0%

 

(1)	Assumes that no holders of NavSight Class A Common Stock exercise their redemption rights upon consummation of the Business Combination.

(2)

Assumes that holders of 19,416,841 shares of NavSight Class A Common Stock exercise their redemption rights upon consummation of the Business Combination (assumed redemption price of $10.00 per share based on the funds held in the Trust Account as of December 31, 2020) for aggregate redemption proceeds of $194,168,410.

(3)	The Voting Power columns include nine votes per share for holders of New Spire Class B Common Stock and one vote per share for holders of New Spire Class A Common Stock.

(4)	The table above does not reflect Spire Options or any Public Shares held by such Spire Stockholders, if any, prior to the consummation of the Business Combination.

(5)	Consists of shares to be issued to the PIPE Investors in connection with the PIPE Investment, excluding shares subscribed to by the Sponsor Related PIPE Investors.

(6)	Consists of shares to be issued to the Sponsor Related PIPE Investors in connection with the PIPE Investment.

Additionally, in April 2021, Spire entered into the FP Credit Agreement, pursuant to which it expects to issue shares to FP upon the satisfaction of certain funding conditions set forth therein. This table does not represent the issuance of the FP Stock Grant or FP Conversion Shares pursuant to the FP Credit Agreement.

The information in the table above is based on the assumptions and exclusions described above, and differs from the pro forma financial information provided in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” due to measurement date.

If the actual facts are different than these assumptions (which they are likely to be), the ownership percentages in New Spire will be different. Additionally, the estimated Per Share Closing Consideration set forth herein will differ from the actual Per Share Closing Consideration.

 

Q:	Are Spire’s stockholders required to approve the Business Combination?

 

A:

Yes.

 

Q:	Is the consummation of the Business Combination subject to any conditions?

 

A:	Yes. The obligations of each of NavSight, Spire and Merger Sub to consummate the Business Combination are subject to conditions, as more fully described in the section titled “BCA Proposal—The Business Combination Agreement” in this proxy statement/prospectus/information statement.

 

Q:	What happens if I fail to take any action with respect to the special meeting?

 

A:

If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and consummated, you will continue to be a stockholder of the combined company. Regardless of whether you vote for or against the BCA Proposal or any other Proposal described in this proxy statement/prospectus/information statement and whether you held NavSight Common Stock as of the record date or acquired them after the record date, you may elect to exchange your Public Shares for a pro rata share of the funds held in the Trust Account. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will continue to be a stockholder of NavSight while NavSight searches for another target business with which to complete a business combination.

 

Q:	Can I change my vote after I have mailed my proxy card?

 

A:

Yes. You may change your vote at any time before your proxy is voted at the special meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the special meeting virtually and casting your vote by hand or by ballot (as applicable) or by submitting a written revocation stating that you would like to revoke your proxy that NavSight’s proxy solicitor receives prior to the special meeting. If you hold your NavSight Common Stock through a bank, brokerage firm or nominee, you should follow the instructions of your bank, brokerage firm or nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

D.F. King & Co, Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Call Toll-Free: (800) 207-3158

Banks and Brokers Call: (212) 269-5550

NSH@dfking.com

 

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Q.	Did the NavSight Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

No. The NavSight Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, NavSight’s management, the members of the NavSight Board and the other representatives of NavSight have substantial experience in evaluating the operating and financial merits of companies similar to Spire, and reviewed certain financial information of Spire and compared it to a select group of comparable public companies within vertical Software as a service (“SaaS”), high-growth data and analytics, and emerging space technologies sectors selected based on the experience and the professional judgment of NavSight’s management team, which enabled them to value Spire in the context of a business combination transaction with a special purpose acquisition company. Accordingly, investors will be relying solely on the judgment of the NavSight Board in valuing Spire’s business and assuming the risk that the NavSight Board may not have properly valued such business. For additional information regarding the process by which the parties to the transaction agreed to an enterprise value of $1.1 billion, and a $1.2 billion pro forma enterprise value for Spire (inclusive of transaction costs, the shares held by the Initial Stockholders, and the FP Stock Grant and FP Conversion Shares) and the projected financial information and comparable company analysis the NavSight Board reviewed in its valuation of Spire and its determination that the transaction satisfied the 80% test, see the section titled “BCA Proposal-Satisfaction of 80% Test.”

 

Q:	When is the Business Combination expected to occur?

 

A:	Assuming the requisite stockholder approvals are received, NavSight expects that the Business Combination will occur as soon as practicable following the special meeting.

 

Q:	What happens if the Business Combination is not consummated?

 

A:

If the Business Combination is not consummated, NavSight may seek another suitable business combination. If NavSight does not consummate a business combination by the date that is 24 months from the closing of the IPO, then pursuant to Article 25 of the Current NavSight Certification of Incorporation, NavSight’s officers must take all actions necessary in accordance with the DGCL to dissolve and liquidate NavSight as soon as reasonably practicable. Following dissolution, NavSight will no longer exist as a company. In any liquidation, the funds held in the Trust Account, plus any interest earned thereon (net of taxes payable), together with any remaining out-of-trust net assets will be distributed pro-rata to holders of NavSight Common Stock who acquired such shares in the IPO or in the aftermarket. The estimated consideration that each share of NavSight Common Stock would be paid at liquidation would be approximately $                     per share for stockholders based on amounts on deposit in the Trust Account as of                     , 2021. The closing price of NavSight Common Stock on NYSE as of                 , 2021 was $                    . The Sponsor and other Initial Stockholders waived the right to any liquidation distribution with respect to any NavSight Common Stock held by them.

 

Q:	What happens to the funds deposited in the Trust Account following the Business Combination?

 

A:

Following the closing of the Business Combination, holders of NavSight Common Stock exercising redemption rights will receive their per share redemption price out of the funds in the Trust Account. The balance of the funds will be released to Spire and utilized to fund a portion of the cash consideration portion of the Merger consideration. As of                     , 2021, there was approximately $                     in the Trust Account. NavSight estimates that approximately $                     per outstanding share issued in the IPO will be paid to the Public Stockholders exercising their redemption rights.

 

Q:	What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

Holders of NavSight Class A Common Stock who exercise their redemption rights to receive cash in exchange for their Public Shares generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the redemption in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of NavSight Class A Common Stock redeemed. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the redemption. A

 

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stockholder’s tax basis in his, her or its shares of NavSight Class A Common Stock generally will equal the cost of such shares. A stockholder who purchased Units will have to allocate the cost between the Public Shares and Public Warrants comprising the Units based on their relative fair market values at the time of the purchase. See the sections entitled “Certain U.S. Federal Income Tax Considerations” and “Risk Factors—There is uncertainty regarding the federal income tax consequences of the redemption to the holders of NavSight Class A Common Stock.”

 

Q:	What are the recommendations of NavSight’s board of directors?

 

A:

NavSight’s board of directors believes that the BCA Proposal and the other Proposals to be presented at the special meeting are in the best interest of NavSight’s shareholders and unanimously recommends that its shareholders vote “FOR” the BCA Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Equity Incentive Plan Proposal, “FOR” the ESPP Proposal, and “FOR” the Adjournment Proposal, in each case, if presented to the special meeting.

The existence of financial and personal interests of one or more of NavSight’s directors may result in a conflict of interest on the part of such director(s) between what she, he or they may believe is in the best interests of NavSight and its shareholders and what she, he or they may believe is best for herself, himself or themselves in determining to recommend that shareholders vote for the proposals. In addition, NavSight’s officers have interests in the Business Combination that may conflict with your interests as a shareholder. See the section titled “BCA Proposal—Interests of NavSight’s Directors and Executive Officers in the Business Combination” for a further discussion of these considerations.

 

Q:	Who can help answer my questions?

 

A:	If you have questions about the Proposals or if you need additional copies of this proxy statement/prospectus/information statement or the enclosed proxy card you should contact NavSight’s proxy solicitor at:

D.F. King & Co, Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Call Toll-Free: (800) 207-3158

Banks and Brokers Call: (212) 269-5550

NSH@dfking.com

You may also obtain additional information about NavSight from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

 

 

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RISK FACTORS

Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus/information statement, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. The following risk factors apply to the business and operations of Spire and will also apply to the business and operations of New Spire following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of the post-combination company. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus/information statement, including matters addressed in the section titled “Cautionary Statement Regarding Forward-Looking Statements.” NavSight or Spire may face additional risks and uncertainties that are not presently known to NavSight or Spire, or that NavSight or Spire currently deems immaterial, which may also impair NavSight’s or Spire’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.

Summary Risk Factors

The following summary risk factors and other information included in this proxy statement/prospectus/information statement should be carefully considered. The summary risks and uncertainties described below are not the only ones Spire faces. Additional risks and uncertainties not currently known to Spire or that it currently deems less significant may also affect Spire’s business operations or financial results. If any of the following risks actually occur, Spire’s stock price, business, financial condition, and results of operations could be materially adversely affected. For additional information, see below for more detailed descriptions of each risk factor.

Risks Related to Spire

 

•

Spire’s revenue growth rate and financial performance in recent periods may not be indicative of future performance.

 

•

Spire has a history of net losses and may not be able to achieve or maintain profitability in the future.

 

•

Spire’s results of operations vary and are unpredictable from period to period, which could cause the market price of its common stock to decline.

 

•

The global COVID-19 pandemic has harmed and could continue to harm Spire’s business, financial condition, and results of operations.

 

•

Satellites use highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks, including exposure to space debris and other spacecraft, while in orbit.

 

•

Spire’s contracts with government entities are subject to a number of uncertainties.

 

•

Spire’s satellites and platform could fail to perform or perform at reduced levels of service because of technological malfunctions, satellite failures or deficiencies, or other performance failures, which would seriously harm its reputation, business, financial condition, and results of operations.

 

•

Satellites are subject to construction and launch delays, launch failures, damage or destruction during launch, the occurrence of which can materially and adversely affect Spire’s operations.

 

•

Spire faces intense competition and could face pricing pressure from, and lose market share to, its competitors, which would adversely affect its business, financial condition, and results of operations.

 

21

•

Rapid and significant technological changes in the satellite industry or the introduction of a new service solution to the market that reduces or eliminates Spire’s service performance advantage may harm its business, financial condition, and results of operations.

 

•

Spire may fail to cost-effectively acquire new customers or obtain renewals, upgrades, or expansions from its existing customers, which would adversely affect its business, financial condition, and results of operations.

 

•

The markets for Spire’s offerings are evolving, and its future success depends on the growth of these markets and its ability to adapt, keep pace, and respond effectively to evolving markets.

 

•

Spire relies on third parties for its supply of certain of its data, equipment, satellite components software, and operational services to manage and operate its business, and any failure or interruption with these third parties could adversely affect Spire’s business, financial condition, and results of operations.

 

•

Spire manufactures its satellites in-house at a single manufacturing facility in the United Kingdom. Any impairment to its manufacturing facility could cause Spire to incur additional costs and delays in the production and launch of its satellites which would materially affect its business, financial condition, and results of operations.

 

•

Spire is dependent on third parties to launch its satellites into space, and any launch delay, malfunction, or failure could have a material adverse impact to its business, financial condition, and results of operations.

 

•

Spire incorporates technology and terrestrial data sets from third parties into its platform, and its inability to maintain rights and access to such technology and data sets would harm its business and results of operations.

 

•

The rapidly evolving framework of privacy, data protection, data transfers, or other laws or regulations worldwide may limit the use and adoption of Spire’s services and adversely affect its business.

 

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•

Spire relies on Amazon Web Services to deliver its platform to its customers, and any disruption of, or interference with, Spire’s use of Amazon Web Services could adversely affect its business, financial condition, and results of operations.

 

•

Spire’s business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply with such laws and regulations could harm its business, financial condition, and results of operations.

 

•

Spire’s ability to obtain or maintain licensing authorization for its platform is subject to government rules and processes which can cause delays or failures in obtaining authorizations requested. Further, regulators may adopt new rules and regulations which could impose new requirements impacting Spire’s business, financial condition, and results of operations. If Spire does not maintain regulatory authorizations for its existing satellites, associated ground facilities and terminals, services it provides, or obtain authorizations for its future satellites, associated ground facilities and terminals, and services it provides, Spire may not be able to operate its existing satellites or expand its operations.

 

•

Spire is subject to domestic and international governmental export and import controls that would impair its ability to compete in international markets or subject Spire to liability if it is not in compliance with applicable laws or if it does not secure or maintain the required export authorizations.

 

•

Spire identified material weaknesses in its internal control over financial reporting. If Spire is unable to remediate these material weaknesses, or if it identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal controls, it may result in material misstatements of its consolidated financial statements or cause it to fail to meet its periodic reporting obligations, which may adversely affect Spire’s business, financial condition, and results of operations.

 

•

Spire has substantial indebtedness under its credit facilities and its obligations thereunder may limit Spire’s operational flexibility or otherwise adversely affect its financial condition.

 

•

If NavSight is unable to complete the Business Combination with Spire or is unable to complete another business combination by September 14, 2022, NavSight will cease all operations except for the purpose of winding up and it would redeem its Public Shares and liquidate the Trust Account, in which case our public shareholders may only receive approximately $10.00 per share and the NavSight Warrants will expire worthless.

 

•

The dual class structure of the combined company’s common stock will have the effect of concentrating voting power with the Founders, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control. Additionally, two of the Founders, Peter Platzer and Theresa Condor, are husband and wife, which may further concentrate the influence of the Founders and further limit an investor’s ability to influence the combined company.

 

•

NavSight does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for NavSight to complete the Business Combination even if a substantial majority of NavSight’s stockholders do not agree.

 

•

If the anticipated benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of New Spire’s securities may decline.

Risks Related to Spire’s Industry and Business

Spire’s revenue growth rate and financial performance in recent periods may not be indicative of future performance.

Spire has grown rapidly over recent periods, and therefore its revenue growth rate and financial performance should not be considered indicative of its future performance. For example, Spire’s revenue was $28.5 million and $18.5 million for the years ended December 31, 2020 and 2019, respectively. In addition, due to the COVID-19 pandemic, Spire’s revenue and other results of operations have been negatively impacted. The circumstances that have impacted the growth of Spire’s business stemming from the effects of the COVID-19 pandemic may continue in the future, and the growth rates in revenue may decline in future periods. You should not rely on Spire’s revenue for any previous

 

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quarterly or annual period as any indication of its revenue or revenue growth in future periods. As Spire grows its business, Spire expects its revenue growth rates to decline compared to prior fiscal years due to a number of reasons, which may include more challenging comparisons to prior periods as Spire’s revenue grows, slowing demand for its platform, increasing competition, a decrease in the growth of its overall market or market saturation, and its failure to capitalize on growth opportunities.

Spire may fail to effectively manage its growth, which would adversely affect its business, financial condition, and results of operations.

Spire is a rapidly growing company, and Spire’s future growth depends, in part, on its ability to manage its growth successfully. For example, the number of Spire’s Annual Recurring Revenue (“ARR”) Customers was 144 as of December 31, 2020, increased from 82 as of December 31, 2019. To effectively manage this growth, Spire will need to continue to improve and expand its operating and administrative systems, financial infrastructure, financial controls, technological operations infrastructure, and its internal IT systems, which it may not be able to do efficiently in a timely manner, or at all. To do so, Spire may seek to deploy products and services from third-party providers, which may not be available on commercially reasonable terms, or at all, and may not perform to its expectations. For the definition of ARR and ARR Customers, see the section titled “Spire’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics.”

Spire’s ability to manage its growth will also depend in large part upon a number of other factors, including its ability to rapidly attract and retain qualified technical personnel in order to continue to develop reliable and flexible solutions and services that respond to evolving customer needs, improve and expand its sales team to keep customers informed regarding the key selling points and features of its platform, and obtain adequate capital required to fund its growth plans. Spire must also successfully implement its sales and marketing strategy and respond to competitive developments.

Any future growth would add complexity to Spire’s organization and require effective coordination across its organization. Because Spire’s operations are geographically diverse and increasingly complex, its personnel resources and infrastructure could become strained, and Spire’s reputation in the market and its ability to successfully manage and grow its business may be adversely affected. The complex nature of Spire’s Orbital Services business and the expansion of its platform, services, and customer base have placed increased demands on its management and operations, and further growth, if any, may place additional strains on its resources in the future. If Spire is unable to effectively manage its growth, its business, financial condition, and results of operations would be adversely affected.

Spire has a history of net losses and may not be able to achieve or maintain profitability in the future.

Spire has incurred net losses since its inception, and Spire expects to continue to incur net losses in the near future. Spire incurred net losses of $32.5 million for the year ended December 31, 2020 and $32.3 million for the year ended December 31, 2019. Spire expects its operating expenses to increase significantly over the next several years, as it continues to hire additional personnel, particularly in sales and marketing and research and development, expand its operations and infrastructure, both domestically and internationally, and continue to develop its platform’s features. These efforts may be more costly than Spire may expect and may not result in increased revenue or growth in its business. In addition to the expected costs to grow its business, Spire also will significantly increase legal, accounting, and other expenses as a public company. Any failure to increase Spire’s revenue sufficiently to offset the increases in its operating expenses will limit Spire’s ability to achieve or maintain profitability in the future. Further, if Spire is unable to successfully address these risks and challenges as it encounters them, Spire’s business, financial condition, and results of operations could be adversely affected.

Spire’s results of operations vary and are unpredictable from period to period, which could cause the market price of its common stock to decline.

Spire’s results of operations may fluctuate from period to period as a result of a number of factors, many of which are outside of its control and may be difficult to predict. Some of the factors that may cause Spire’s results of operations to fluctuate from period to period include:

 

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Spire’s ability to attract new customers, retain existing customers, and expand their adoption of its platform, particularly to its largest customers;

 

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•

market acceptance and the level of demand for Spire’s platform;

 

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the quality and level of Spire’s execution of its business strategy and operating plan;

 

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the effectiveness of Spire’s sales and marketing programs;

 

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the competitive conditions in the industry, including consolidation within the industry, strategic initiatives by Spire or by competitors, or introduction of new services by Spire or its competitors;

 

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the length of Spire’s sales cycle, including the timing of upgrades or renewals;

 

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the cost and availability of components, including any changes to Spire’s supply or manufacturing partners;

 

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the volume of sales generated by subscription sales as opposed to orbital service sales;

 

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service outages or security breaches and any related occurrences could impact Spire’s reputation;

 

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limited availability of appropriate launch windows, satellite damage or destruction during launch, launch failures, incorrect orbital placement of satellites, or losses due to satellites otherwise deorbiting prior to the end of their useful life;

 

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trade protection measures, such as tariffs or duties;

 

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Spire’s ability to successfully expand internationally and penetrate key markets;

 

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Spire’s ability to develop and respond to new technologies;

 

•

increases in and the timing of operating expenses that Spire may incur to grow its operations and to remain competitive;

 

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pricing pressure as a result of competition or otherwise;

 

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delays in Spire’s sales cycle, decreases in sales to new customers, and reductions in upselling and cross-selling to existing customers due to the impact on global business and data spending as a result of the COVID-19 pandemic;

 

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the implementation of cost-saving activities as a result of the COVID-19 pandemic;

 

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the impact and costs, including those with respect to integration, related to the acquisition of businesses, talent, technologies, or intellectual property rights;

 

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changes in the legislative or regulatory environment;

 

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adverse litigation judgments, settlements, or other litigation-related costs; and

 

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general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability.

Any one or more of the factors above may result in significant fluctuations in Spire’s results of operations. Spire also intends to continue to invest significantly to grow its business in the near future rather than optimizing for profitability or cash flows. In addition, Spire’s quarterly results of operations may fluctuate from quarter to quarter depending on customer buying habits, and whether they are purchasing a subscription or a project-based data solution. The timing

 

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of completion of milestones and customer approval thereof may impact or delay Spire’s recognition of revenue from milestone-based projects. The variability of Spire’s results of operations or other operating estimates could result in its failure to meet its expectations or those of securities analysts or investors. If Spire fails to meet or exceed such expectations for these or any other reasons, the market price of its common stock could decline and Spire could face costly lawsuits, including securities class action suits.

The global COVID-19 pandemic has harmed and could continue to harm Spire’s business, financial condition, and results of operations.

The COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods, and services worldwide, including in the geographic areas in which Spire conducts its business operations and from which Spire generates its revenue. It has also caused extreme societal, economic, and financial market volatility, resulting in business shutdowns and potentially leading to a global economic downturn. The magnitude and duration of the resulting decline in business activity cannot currently be estimated with any degree of certainty and the decline has had several effects on Spire’s business and results of operations, including, among other things:

 

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negatively impacting global data spending, which has adversely affected demand and may continue to adversely affect demand for Spire’s platform, caused potential customers to delay or forgo purchases of orbital services or subscriptions to Spire’s platform, and caused some existing customers to fail to renew subscriptions, defer their renewal, reduce their usage, or fail to expand their usage of Spire’s platform within their business;

 

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disrupting Spire’s supply chain for the manufacturing and launch of its satellites, delaying its ability to launch new satellites, and limiting its ability to perform maintenance on its ground stations;

 

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slowing its recruiting, hiring, and onboarding processes, and

 

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restricting Spire’s sales operations and marketing efforts, including limiting the ability of its sales force to travel to existing customers and potential customers, and reducing the effectiveness of such efforts in some cases.

The COVID-19 pandemic may cause Spire to continue to experience the foregoing challenges in Spire’s business in the future and could have other effects on its business, including delaying or lengthening Spire’s sales cycle, increasing customer churn, depressing upsell opportunities, delaying collections or resulting in an inability to collect accounts receivable as a result of extended payment terms, concessions, or customer inability to pay, and disrupting its ability to develop new offerings, enhance existing offerings, market, and sell access to its platform, and conduct business activities generally. Further, unemployment rates have been volatile, and financial markets are experiencing significant levels of volatility and uncertainty, which could have an adverse effect on consumer and commercial spending and negatively affect demand for Spire’s customers’ products and services, particularly in markets such as aviation and maritime. Changes in government administration and national and international priorities, including in response to the COVID-19 pandemic, could have a significant impact on government budgets and spending priorities. Spire has historically derived a significant portion of its revenue from contracts with governments, therefore, any reduced government spending overall on services that Spire provides could adversely affect Spire’s business.

In light of the uncertain and rapidly evolving situation relating to the spread of COVID-19, Spire has taken precautionary measures intended to reduce the risk of the virus spreading to its employees, its customers, and the communities in which it operates, and Spire may take further actions as required by government entities or that it determines are in the best interests of its employees, customers, partners, and suppliers. In particular, governmental authorities have instituted shelter-in-place policies or other restrictions in many jurisdictions in which Spire operates, which policies require most of its employees to work remotely. Even once shelter-in-place policies or other governmental restrictions are reduced or lifted, Spire expects to take a measured and careful approach to have employees returning to offices and traveling for business. Some employees may be unwilling or unable to receive a COVID-19 vaccine, necessitating the implementation of additional safety or social distancing protocols, and impeding their return to pre-pandemic work routines. These precautionary measures and policies could negatively impact employee recruiting, productivity, training and development, and collaboration, or otherwise disrupt Spire’s business

 

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operations. The extent and duration of working remotely may also affect Spire’s ability to attract and retain employees, manage employee expectations regarding returning to offices, and expose Spire to increased risks of security breaches or incidents. Spire may need to enhance the security of its platform, its data, and its internal IT infrastructure, which may require additional resources and may not be successful. Furthermore, for part of fiscal year 2020, Spire took a number of proactive actions to manage its operating expenses in light of the uncertainty caused by the COVID-19 pandemic, including temporarily limiting the addition of new employees and third-party contracted services, curtailing most travel expenses except where critical to the business, and acting to limit discretionary spending, and Spire may be required to take similar or other actions in the future.

The extent to which the COVID-19 pandemic continues to impact Spire’s business and results of operations will also depend on future developments that are highly uncertain and cannot be predicted, such as the duration and spread of the outbreak, the extent and effectiveness of containment actions, and the effectiveness of vaccination efforts. An extended period of global supply chain and economic disruption as a result of the COVID-19 pandemic could have a material negative impact on Spire’s business, results of operations, and financial condition, though the full extent and duration is uncertain. To the extent the COVID-19 pandemic continues to adversely affect Spire’s business and financial results, it is likely to also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Satellites use highly complex technology and operate in the harsh environment of space and therefore are subject to significant operational risks, including exposure to space debris and other spacecraft, while in orbit.

Satellites utilize highly complex technology and operate in the harsh environment of space and, accordingly, are subject to significant operational risks while in orbit. These risks include malfunctions, or anomalies, that have occurred and may continue to occur in Spire’s satellites. Exposure of Spire’s satellites to an unanticipated catastrophic event, such as a meteor shower, Coronal Mass Ejection (“CME”) or a collision with space debris, could reduce the performance of, or completely destroy, the affected satellite and/or constellation. In addition, satellites in low earth orbit have a limited life cycle and they could become compromised over their designated operational life span. Spire anticipates that its satellites will have an expected end-of-commercial-service life of three years. It is possible that the actual commercial service lives of Spire’s satellites will be shorter than anticipated.

Some of the principal satellite anomalies that may affect the actual commercial service lives of Spire’s satellites include:

 

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Mechanical and electrical failures due to manufacturing error or defect, including:

 

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mechanical failures that degrade the functionality of a satellite, such as the failure of solar array panel drive mechanisms, rate gyros, or momentum wheels;

 

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antenna failures and defects that degrade the communications capability of the satellite;

 

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circuit failures that reduce the power output of the solar array panels on the satellites;

 

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failure of the battery cells that power the payload and spacecraft operations during daily solar eclipse periods;

 

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power system failures that result in a shutdown or loss of the satellite;

 

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avionics system failures, including GPS, that degrade or cause loss of the satellite;

 

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altitude control system failures that degrade or cause the inoperability of the satellite;

 

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transmitter or receiver failures that degrade or cause the inability of the satellite to communicate with Spire’s ground stations;

 

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communications system failures that affect overall system capacity;

 

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•

satellite computer or processor re-boots or failures that impair or cause the inoperability of the satellites; and

 

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radio frequency interference emitted internally or externally from the spacecraft affecting the communication links.

 

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Equipment degradation during the satellite’s lifetime, including:

 

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degradation of the batteries’ ability to accept a full charge;

 

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degradation of solar array panels due to radiation;

 

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general degradation resulting from operating in the harsh space environment, such as from solar flares;

 

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degradation or failure of reaction wheels;

 

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degradation of the thermal control surfaces;

 

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degradation and/or corruption of memory devices; and

 

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system failures that degrade the ability to reposition the satellite.

 

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Deficiencies of control or communications software, including:

 

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failure of the charging algorithm that may damage the satellite’s batteries;

 

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problems with the communications functions of the satellite;

 

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limitations on the satellite’s digital signal processing capability that limit satellite communications capacity; and

 

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problems with the fault control mechanisms embedded in the satellite.

Spire has experienced, and may in the future experience, anomalies in some of the categories described above. The effects of these anomalies include, but are not limited to, failure of the satellite, degraded communications performance, reduced power available to the satellite in sunlight and/or eclipse, battery overcharging or undercharging and limitations on satellite communications capacity. Some of these effects may be increased during periods of greater message traffic and could result in Spire’s system requiring more than one attempt to send messages before they get through to its satellites. Although these multiple re-try effects do not result in lost messages, they could lead to increased messaging latencies for the end user and reduced throughput for Spire’s system. Spire considers a satellite “failed” only when it can no longer provide any data service, and Spire does not intend to undertake further efforts to return it to service. While Spire has already implemented a number of system adjustments, it cannot provide assurance that these actions will succeed or adequately address the effects of any anomalies in a timely manner or at all. While certain software deficiencies may be corrected remotely, most, if not all, of the satellite anomalies or debris collision damage cannot be corrected once the satellites are placed in orbit. Any satellite anomalies in the future may result in monetary losses, delays, and impairment of services, all of which may adversely affect Spire’s business, financial condition, and results of operations.

Spire relies on a limited number of customers to provide a substantial portion of the revenue it derives from sales to government entities.

Spire has historically derived a significant portion of its revenue from contracts with federal, state, local, and foreign governments, which accounted for approximately 66% of Spire’s revenues for the fiscal year ended December 31, 2020. Spire believes that the future success and growth of its business will depend in part on its ability to continue to

 

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maintain and procure government contracts. Within the government channel, approximately 55% of revenue in 2020 was generated by three government customers. Contracts with any government entity may be terminated or suspended by the government at any time, with or without cause. There can be no assurance that any contract with the government of any country will not be terminated or suspended in the future. Although Spire attempts to ensure that government contracts have standard provisions such as termination for convenience language which reimburses it for reasonable costs incurred, the payments are not assured and may not be sufficient to fully compensate Spire for any early termination of a contract. The loss of one or more of Spire’s government customers, or any significant decrease in sales to these customers, could reduce its net sales and adversely affect its business, financial condition, and results of operations.

Spire’s contracts with government entities are subject to a number of uncertainties.

Spire’s services are incorporated into many different domestic and international government programs. Whether it contracts directly with the U.S. government, a foreign government, or one of their respective agencies, or indirectly as a subcontractor or team member, Spire’s contracts and subcontracts are subject to special risks. For example:

 

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Changes in government administration and national and international priorities, including developments in the geo-political environment and measures implemented in response to the COVID-19 pandemic, could have a significant impact on national or international government spending priorities and the efficient handling of routine contractual matters. These changes could have a negative impact on Spire’s business in the future.

 

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Because Spire contracts to supply services to U.S. and foreign governments and their prime and subcontractors, Spire competes for contracts in a competitive bidding process. Spire may compete directly with other suppliers or align with a prime or subcontractor competing for a contract. Further, foreign governments may favor their domestic providers when awarding contracts over Spire. Spire may not be awarded the contract if the pricing or solution offering is not competitive, either at Spire’s level or the prime or subcontractor level. In addition, in the event Spire is awarded a contract, Spire is subject to protests by losing bidders of contract awards that can result in the reopening of the bidding process and changes in governmental policies or regulations and other political factors. In addition, Spire may be subject to multiple rebid requirements over the life of a government program in order to continue to participate in such program, which can result in the loss of the program or significantly reduce Spire’s revenue or margin from the program. Government program requirements for more frequent technology refreshes may lead to increased costs and lower long-term revenues.

Government contracts often contain provisions and are subject to laws and regulations that provide government customers with additional rights and remedies not typically found in commercial contracts. These rights and remedies allow government customers, among other things, to:

 

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Terminate existing contracts for convenience with short notice;

 

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Reduce orders under or otherwise modify contracts;

 

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For contracts subject to the Truth in Negotiations Act, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate, and current;

 

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For some contracts, (i) demand a refund, make a forward price adjustment, or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (ii) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated;

 

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Cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;

 

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•

Decline to exercise an option to renew a multi-year contract;

 

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Claim rights in solutions, systems, or technology produced by Spire, appropriate such work-product for their continued use without continuing to contract for Spire’s services, and disclose such work-product to third parties, including other government agencies and Spire’s competitors, which could harm Spire’s competitive position;

 

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Prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment;

 

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Subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend Spire’s performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction, or modification of the awarded contract;

 

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Suspend or debar Spire from doing business with the applicable government;

 

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Demand a set-off of amounts due to Spire on other contracts to satisfy amounts due to a contract default termination on a specific contract; and

 

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Control or prohibit the export of Spire’s services.

If a customer were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of Spire’s significant contracts, or if a government were to suspend or debar Spire from doing business with such government, its business, financial condition, and results of operations would be materially harmed.

 

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Spire contracts with U.S. and international government contractors or directly with the U.S. government on a commercial item basis, eliminating the requirement to disclose and certify cost data. To the extent that there are interpretations or changes in the Federal Acquisition Regulation (the “FAR”) regarding the qualifications necessary to sell commercial items, there could be a material impact on Spire’s business and operating results. For example, there have been legislative proposals to narrow the definition of a “commercial item” (as defined in the FAR) or to require cost and pricing data on commercial items that could limit or adversely impact Spire’s ability to contract under commercial item terms. Changes could be accelerated due to changes in Spire’s mix of business, in Federal regulations, or in the interpretation of Federal regulations, which may subject Spire to increased oversight by the Defense Contract Audit Agency, for certain of Spire’s services. Such changes could also trigger contract coverage under the Cost Accounting Standards (the “CAS”), further impacting Spire’s commercial operating model and requiring compliance with a defined set of business systems criteria. Growth in the value of certain of Spire’s contracts has increased its compliance burden, requiring it to implement new business systems to comply with such requirements. Failure to comply with applicable CAS requirements could adversely impact Spire’s ability to win future CAS-type contracts.

 

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Spire is subject to the Defense Federal Acquisition Regulation Supplement (the “DFARS”), and the Department of Defense, and other federal cybersecurity requirements, in connection with Spire’s defense work for the U.S. government and prime contractors. Amendments to cybersecurity requirements such as through amendments to the FAR or DFARS, may increase Spire’s costs or delay the award of contracts if Spire is unable to certify that it satisfies such cybersecurity requirements.

 

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The U.S. government or a prime contractor customer could require Spire to relinquish data rights to a product in connection with performing work on a government contract, which could lead to a loss of valuable technology and intellectual property in order to participate in a government program.

 

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•

The U.S. government or a prime contractor customer could require Spire to enter into cost reimbursable contracts that could offset Spire’s cost efficiency initiatives.

 

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Sales to Spire’s U.S. prime defense contractor customers as part of foreign military sales programs combine several different types of risks and uncertainties highlighted above, including risks related to government contracts, risks related to defense contracts, timing and budgeting of foreign governments, and approval from the U.S. and foreign governments related to the programs, all of which may be impacted by macroeconomic and geopolitical factors outside of Spire’s control.

 

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Spire may need to invest additional capital to build out higher level security infrastructure at certain of its facilities to win contracts related to government programs with higher level security requirements. Failure to invest in such infrastructure may limit Spire’s ability to obtain new contracts with such government programs.

 

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Spire faces risks associated with bid protests, in which Spire’s competitors could challenge the contracts Spire has obtained, or suspension, debarment, or similar ineligibility from serving government customers.

 

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Spire has certain contracts which were awarded to Spire as part of the U.S. federal government’s small business program. As Spire’s revenue grows, Spire may be deemed to be “other than small,” which could reduce Spire’s eligibility for proposal opportunities or reduce Spire’s ability to secure new contracts.

Spire’s satellites and platform could fail to perform or perform at reduced levels of service because of technological malfunctions, satellite failures or deficiencies, or other performance failures, which would seriously harm its reputation, business, financial condition, and results of operations.

Spire’s satellites and platform are exposed to the risks inherent in large-scale, complex satellite systems employing advanced technology. Spire relies on data collected from a number of sources including data obtained from our satellites and from third parties and may become unable or limited in its ability to receive such data. For example, satellites can temporarily go out of service and be recovered, or cease to function for reasons beyond Spire’s 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. Electrostatic storms, collisions with other objects or actions by malicious actors, including cyber related, could also damage the satellites and subject Spire to liabilities for any damages caused to other spacecrafts. Additionally, in certain instances, governments may discontinue for periods of time the access to or operation of a satellite for any particular area on the Earth and for various reasons may not permit transmission of certain data, whether from a satellite owned by the government or not.

Satellites can experience malfunctions, commonly referred to as anomalies, which have occurred and may occur in the future with respect to Spire’s satellites. Any single anomaly could materially and adversely affect Spire’s ability to utilize the 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 and could have a material adverse effect on Spire’s business. In addition, if a satellite experiences a malfunction, Spire’s backup satellite capacity may be insufficient to meet all of its customers’ needs or cause service interruptions, and Spire may need to potentially blackout or reduce service to certain customers, which would adversely affect its relationships with its customers and result in loss of revenues. Although Spire works to determine and eliminate the cause of anomalies in new satellites and provide for redundancies of many critical components in the satellites and service levels, it may not be able to prevent the impacts of anomalies in the future.

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. Certain Spire satellites are nearing the end of their expected useful lives. As satellites near the end of their expected

 

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useful lives, the performance of each satellite could start to gradually decline. Spire can offer no assurance that satellites will maintain their prescribed orbits or remain operational and it may not have replacement satellites that are immediately available. There can be no assurance as to the actual useful life of a satellite or that the useful life of individual components will be consistent with their design life. A number of factors will impact the useful lives of Spire’s satellites, including, among other things, the quality of their design and construction, the durability of their component parts and availability of any replacement components, and the occurrence of any anomaly or series of anomalies or other risks affecting the satellites during launch and in orbit. In addition, any improvements in technology may make obsolete Spire’s existing satellites or any component of its satellites prior to the end of their lives. If Spire’s satellites and related equipment have shorter useful lives than it currently anticipates, this may lead to increased expenses from earlier than expected replacement satellites and/or declines in actual or planned revenues, which would have a material adverse effect on its business, financial condition, and results of operations.

Spire’s satellites, despite extensive testing and quality control, have in the past and may in the future contain defects, errors, or vulnerabilities, or may not perform as contemplated. These defects, errors, or vulnerabilities could result in exposure of data, data loss, data leakage, unanticipated downtime, or other events that would result in harm to Spire’s reputation, loss of customers or revenue, refunds, service terminations, or lack of market acceptance of Spire’s platform. Errors, viruses, or bugs may also be present in data, software, or hardware that Spire acquires or licenses from third parties and incorporates into Spire’s platform or in third party software or hardware that Spire’s customers use in conjunction with its platform. Spire’s customers’ proprietary software and network firewall protections may corrupt data from Spire’s offerings and create difficulties in implementing Spire’s solutions.

Any disruption to Spire’s satellites, platform, services, information systems, or infrastructure could result in the inability or reduced ability of Spire’s customers to receive its services for an indeterminate period of time. These customers include government agencies conducting mission-critical work throughout the world, as well as consumers and businesses located in remote areas of the world and operating under harsh environmental conditions. Any disruption to Spire’s services or extended periods of reduced levels of service could cause it to lose customers or revenue, result in delays or cancellations of future implementations of Spire’s services, result in failure to attract customers, or result in litigation, customer service, or repair work that would involve substantial costs and distract management from operating Spire’s business.

In addition, certain components of Spire’s platform are located in foreign countries, and as a result, are potentially subject to governmental, regulatory, or other actions in such countries which could force Spire to limit the operations of, or completely shut down, components of Spire’s system, including its ground stations or other portions of Spire’s infrastructure. The failure of any of the diverse and dispersed elements of the system, including satellites, network control center or backup control center, and ground stations, to function and coordinate as required could render the system unable to perform at the quality and capacity levels required for success. Any system failures, repeated solution failures, shortened satellite commercial service life, or extended reduced levels of service could reduce Spire’s sales, increase costs, or result in warranty or liability claims and seriously harm its business, financial results, and results of operations.

Satellites are subject to construction and launch delays, launch failures, damage or destruction during launch, the occurrence of which can materially and adversely affect Spire’s operations.

Delays in the construction of future satellites and the procurement of requisite components and third-party launch vehicles, limited availability of appropriate launch windows, possible delays in obtaining regulatory approvals, satellite damage or destruction during launch, launch failures, or incorrect orbital placement could have a material adverse effect on Spire’s business, financial condition, and results of operations. 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, Spire might not be able to accommodate customers with sufficient data to meet minimum service level agreements until replacement satellites are available, and it may not have on hand, or be able to obtain in a timely manner, the necessary funds to cover the cost of any necessary satellite replacement. In addition, appropriate launch windows for satellites in Spire’s 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 beyond planned contingency, launch failure, underperformance, delay or perceived delay could have a material adverse effect on Spire’s business prospects, financial condition, and results of operations.

 

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Technical malfunctions, performance failures, or other issues or difficulties with Spire’s ground stations could harm its business, financial condition, and results of operations.

The ongoing operations of Spire’s satellite constellation and data services rely on the functionality of its ground stations. While Spire believes that the overall health of its ground stations remains stable, it has in the past experienced and may continue to experience technical difficulties or mechanical issues with its ground stations which may negatively impact service in the region covered by that ground station. Spire’s ground stations are often located in remote regions of the world and not easily accessible. For example, the COVID-19 pandemic significantly curtailed the ability for Spire’s employees and any third parties that Spire contracts with to travel to the ground stations in order to perform maintenance. Any continued or future restrictions on travel may affect Spire’s ability to repair or service its ground stations which could have a material adverse effect on its business, financial condition, and results of operations.

Spire may experience a partial or total loss of one or more of its ground stations due to natural disasters such as tornados, floods, hurricane, or earthquakes, fire, acts of war or terrorism, or other catastrophic events. While Spire’s ground stations are able to provide overlapping geographic coverage, a failure at one or more of its ground stations could cause a delayed, partial, or complete loss of service for its customers. Spire may experience a failure in the necessary equipment at its ground stations, or in the communication links between its ground stations. Additionally, Spire’s ground stations are located on property that is not owned by Spire. A failure at any of Spire’s ground stations, facilities, or in the communications links between its facilities, or in Spire’s ability to maintain its ground station leases for any reason, could adversely affect its business, financial condition, and results of operations.

Further, Spire relies on third parties to perform maintenance on and repair its ground stations. If Spire’s relationship with these third parties deteriorates or the third parties become unable or unwilling to maintain the ground stations, or if there are changes in the applicable regulations that require Spire to give up any or all of its ownership interests in any of the ground stations, its control over its satellite data could be diminished and the business, financial condition, and results of operations could be harmed.

Spire faces intense competition and could face pricing pressure from, and lose market share to, its competitors, which would adversely affect its business, financial condition, and results of operations.

The maritime, aviation, and weather data industries are fragmented and highly competitive and characterized by rapid changes in technology, customer requirements, and industry standards, and frequent introductions of improvements to existing offerings. Spire’s primary competitors in these industries include companies that specialize in one or more services similar to those offered by Spire on a local or regional basis. Spire also competes with global, national, regional, and local firms and government entities specializing in these industries. Both commercial and government organizations have indicated that they might build and launch satellites capable of collecting earth observation information from space. The U.S. government and foreign governments have developed and may in the future develop their data collection tools and develop their own data analytics solutions, which could reduce their need to rely on Spire and other commercial suppliers. In addition, such governments could sell or provide free of charge similar data and analytics and thereby compete with Spire’s offerings.

Some of Spire’s primary competitors include Orbcomm Inc. and exactEarth Ltd. in its maritime data vertical, Aireon LLC in its aviation data vertical, and GeoOptics, Inc. in its weather data vertical, with respect to its radio occultation data services. In the weather industry, Spire also competes more broadly with analytics companies and government agencies such as AccuWeather, Inc., Weathernews Inc., MeteoGroup (acquired by DTN, LLC), ClimaCell, Inc., the European Centre for Medium-Range Weather Forecasts (“ECMWF”), National Oceanic and Atmospheric Administration (“NOAA”), and The Weather Company. Additionally, many governmental agencies, such as NOAA, provide weather data at little to no cost. Spire competes with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionika LLC, and Open Cosmos Ltd., in its orbital services business. Spire is constantly exposed to the risk that its competitors may utilize data they receive from Spire to develop and offer competing products and services to their customers, which may reduce the overall demand for Spire’s products and services. Spire’s competitors may also implement disruptive technology, or new technology before Spire does, or may offer lower prices, additional offerings or other incentives that Spire cannot or will not offer. Spire can give no assurances that it will be able to compete successfully against existing or future competitors or increase its market share.

 

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Spire’s 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 Spire and have offerings that have functionalities similar to those offered by Spire. Spire expects 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 Spire is unable to anticipate or effectively react to these competitive challenges, its competitive position would weaken, and its business, financial condition, and results of operations would be adversely affected.

Many of Spire’s existing competitors have, and some of its potential competitors could have, substantial competitive advantages, such as:

 

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greater name recognition, longer operating histories, and larger customer bases;

 

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larger sales and marketing budgets and resources;

 

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broader distribution and established relationships with suppliers, manufacturers, and customers;

 

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greater customer support resources;

 

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greater resources to make acquisitions and enter into strategic partnerships;

 

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lower labor and research and development costs;

 

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larger and more mature intellectual property rights portfolios; and

 

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substantially greater financial, technical, and other resources.

Conditions in Spire’s markets could change rapidly and significantly as a result of technological advancements, the emergence of new entrants into the market, partnering or acquisitions by Spire’s competitors, or continuing market consolidation. New innovative start-up companies and competitors that are making significant investments in research and development may invent similar or superior offerings and technologies that compete with Spire’s offerings. In addition to satellite-based competitors, terrestrial data service providers could further expand into rural and remote areas and provide some of the same general types of offerings that Spire provides. Potential customers may also believe that substitute technologies that have similar functionality or features as Spire’s platform are sufficient for their needs, or they may believe that point solutions that address narrower industry segments overall are nonetheless adequate for their needs. Some of Spire’s current or potential competitors have made or could make acquisitions of businesses or establish cooperative relationships that may allow them to offer more directly competitive and comprehensive offerings than were previously offered and may adapt more quickly to new technologies and customer needs. As a result of such acquisitions, Spire’s current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these products and services to market, initiate or withstand substantial price competition, or develop and expand their product and service offerings more quickly than Spire. These competitive pressures in Spire’s market or Spire’s failure to compete effectively may result in fewer orders, reduced revenue and margins, and loss of market share. In addition, it is possible that industry consolidation may impact customers’ perceptions of the viability of smaller or even mid-size companies and consequently customers’ willingness to purchase from such firms.

Additionally, competition continues to increase in the markets in which Spire operates, and Spire expects competition to further increase in the future, including from new and emerging companies, which could lead to increased pricing pressures. Spire’s competitors vary in size, and some may have substantially broader and more diverse offerings, which may allow them to leverage their relationships based on other offerings or incorporate functionality into existing offerings to gain business in a manner that discourages customers from purchasing access to Spire’s platform, including through selling at zero or negative margins, offering concessions, bundling offerings, or maintaining closed

 

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technology platforms. In addition, certain customer bases and industries have been more severely impacted by the ongoing effects of the COVID-19 pandemic, which may lead to increased pricing pressure, increased customer churn, or a reduced ability or willingness to replace a competitor’s offering with Spire’s solutions. Any decrease in the subscription prices for Spire’s services, without a corresponding decrease in costs or increase in volume, would adversely impact Spire’s ability to achieve or maintain profitability. Spire’s profitability could also be adversely affected by a shift towards lower-tiered subscription packages. If Spire is unable to maintain its pricing or market share due to competitive pressures or other factors, its business, financial condition, and results of operations would be adversely affected.

Spire’s reputation and brand are important to its success, and Spire may not be able to maintain and enhance its reputation and brand, which would adversely affect its business, financial condition, and results of operations.

Spire believes that maintaining and enhancing its reputation as a leading global provider of space-based data and analytics is critical to its relationship with its existing customers and its ability to attract new customers. The successful promotion of Spire’s brand will depend on a number of factors, including its marketing efforts, its ability to continue to develop high-quality features for its platform, its ability to successfully differentiate its platform from those of its competitors, its ability to promote and maintain the reputation of its platform for data security, and its ability to obtain, maintain, protect, and enforce its intellectual property and proprietary rights. Spire’s brand promotion activities may not be successful or yield increased revenue. In addition, independent industry analysts often provide reports of Spire’s platform, as well as the offerings of Spire’s competitors, and perception of Spire’s platform in the marketplace may be significantly influenced by these reports. If these reports are negative, or less positive as compared to those of Spire’s competitors, Spire’s reputation and brand may be adversely affected. Additionally, the performance of Spire’s channel partners may affect Spire’s reputation and brand if customers do not have a positive experience with its platform as implemented by its channel partners or with the implementation generally. At times, competitors may adopt trade names or trademarks similar to Spire’s, thereby impeding Spire’s ability to build brand identity and possibly leading to market confusion. Additionally, Spire’s registered or unregistered trademarks or trade names may be challenged, infringed, circumvented, or declared generic or determined to be infringing on other marks, or if Spire is otherwise unable to establish name recognition based on Spire’s trademarks and trade names, then Spire may not be able to compete effectively and its business may be adversely affected. The promotion of Spire’s brand requires it to make substantial expenditures, and Spire anticipates that the expenditures will increase as its market becomes more competitive, as Spire expands into new geographies and markets and as more sales are generated through its channel partners. Any increase in revenue from such brand promotion initiatives may not offset the increased expenses Spire incurs. If Spire does not successfully maintain and enhance its reputation and brand, its business, financial condition, and results of operations would be adversely affected.

Rapid and significant technological changes in the satellite industry or the introduction of a new service solution to the market that reduces or eliminates Spire’s service performance advantage may harm its business, financial condition, and results of operations.

The satellite communications industry is subject to rapid advances and innovations in technology. Spire may face competition in the future from companies using new service solutions, innovative technologies, and equipment, including new low earth orbit constellations and expansion of existing geostationary satellite systems or new technology that could eliminate the need for a satellite system. New service solutions and technologies could render Spire’s offerings obsolete or less competitive by satisfying customer demand in more attractive ways or through the introduction of incompatible standards. For example, if new transmitters are deployed that emit in the same frequencies as Automation Identification System (“AIS”), they might cause Spire’s AIS services to be severely compromised or disabled. Particular technological developments that could adversely affect Spire include the deployment by its competitors of new satellites with greater power, flexibility, efficiency, or capabilities, as well as continuing improvements in terrestrial technologies. In order for Spire’s business to keep pace with technological changes and remain competitive, it may need to make significant capital expenditures, including capital to design and launch new platform features and services. New technologies may also be protected by patents or other intellectual property laws and therefore may not be available. Any failure to implement new technology within Spire’s platform may compromise its ability to compete.

Spire believes that its orbital services and system solutions for its aviation, maritime, weather, and earth intelligence verticals provide a competitive performance solution in the market, which in turn factors into Spire’s ability to generate

 

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market share and revenues and margins. There is a risk that a competitor in the future may conceive of and implement a different technology solution that would approach or exceed the performance capability of Spire’s solutions with consequent impact to revenues and market shares.

For certain of Spire’s offerings, Spire is dependent on the continued operation and access to allocated bands in the radio frequency spectrum and various GNSS systems. Any curtailment of the operating capability of these systems or limitations on access to, or use of the signals, or discontinuance of service could result in degradation of Spire’s services or performance and may have an adverse effect on its business.

In addition, as Spire introduces new services or enters into new markets, Spire may face new technological, operational, compliance, regulatory, and administrative risks and challenges, including risks and challenges unfamiliar to Spire. Spire may not be able to mitigate these risks and challenges to achieve its anticipated growth or successfully increase its market share, which could materially adversely affect its business, financial condition, and results of operations.

Changes to Spire’s subscription model could adversely affect its ability to attract or retain customers.

Spire offers a multi-tiered subscription model for its platform, in addition to its project-based orbital services. Spire is continuing to iterate and optimize its business models as it evaluates customer preferences, needs, and use of its platform and services, and expects that its business models will continue to evolve. Many factors could significantly affect Spire’s pricing strategies, including operating costs, its competitors’ pricing and marketing strategies, customer use patterns, and general economic conditions. Spire may face downward pressure from its customers regarding its pricing and competitors with different pricing models may attract customers that prefer the competitors’ pricing models over Spire’s multi-tiered subscription model, which would cause Spire to lose business or modify its subscription model, both of which could adversely affect its business, financial condition, and results of operations. Changes to Spire’s subscription model and model for its orbital services may also affect its revenue recognition and other accounting policies, which may adversely affect its results of operations in any given fiscal period.

Certain of Spire’s competitors or potential competitors offer, or may in the future offer, lower-priced solutions, a broader range of services and features, or greater flexibility and customization in their offerings. Similarly, certain competitors may use marketing strategies that enable them to attract or retain new customers at a lower cost. Moreover, Spire’s customers may demand substantial price discounts as part of the negotiation of contracts. There can be no assurance that Spire will not be forced to reduce the pricing for its services or to increase its sales and marketing and other expenses to attract and retain customers in response to competitive pressures. Spire has launched, and may in the future launch, new pricing strategies and initiatives, or modify existing business models, any of which may not ultimately be successful in attracting and retaining customers. Any such changes to Spire’s subscription model or the model for its orbital services or its ability to efficiently price its services could adversely affect its business, financial condition, and results of operations.

Spire’s sales cycle can be long and unpredictable for certain channels and services, and its sales efforts require considerable time and expense.

Spire’s quarterly results of operations fluctuate, in part, because of the resource intensive nature of its sales efforts and the length and variability of its sales cycle for certain of its offerings, such as Spire’s orbital services, and for certain of its customers, such as government departments and agencies. The length of Spire’s sales cycle, from initial contact with its sales team to a contractual commitment from a customer, can also vary substantially from customer to customer based on customer size, industry, maturity, profitability, whether Spire is launching a new solution, and deal complexity and customization. Spire’s sales cycle can vary considerably and may be lengthened and made more uncertain by regional or global events, such as the COVID-19 pandemic. Such events have resulted in and may continue to cause a general reduction in spending on data by Spire’s customers, which will further affect its ability to estimate not only the length of the sales cycle, but also the anticipated size of potential subscriptions. Further, Spire’s sales cycle may lengthen as it continues to focus its sales efforts on large enterprises and on its orbital services. For example, large organizations often undertake a significant evaluation process that results in a lengthy sales cycle and product purchases by large organizations are frequently subject to budget constraints, multiple approvals and unanticipated administrative, processing and other delays.

 

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In addition, Spire’s results of operations depend, in part, on subscription renewals from customers and increasing sales and upgrades to Spire’s existing customers, which may also be reduced as a result of regional or global events. If a customer does not renew on time or as expected, it can negatively affect its revenue for a given period. It is difficult to predict exactly whether or when Spire will make a sale to a potential customer or if it can increase sales to its existing customers. As a result, initial sales or renewals have, in some cases, occurred in quarters subsequent to what Spire anticipated, or have not occurred at all. Spire may in the future make changes to its subscription model, which may affect the length of its sales cycle and its ability to predict the length of its sales cycle or the anticipated size of potential subscriptions. The loss or delay of one or more transactions in a quarter could impact Spire’s results of operations for that quarter and any future quarters for which revenue from that transaction is delayed.

Spire depends on its sales force, and it may fail to attract, retain, motivate, or train its sales force, which could adversely affect Spire’s business, financial condition, and results of operations.

Spire’s ability to increase its customer base, achieve broader market acceptance of its platform, grow its revenue, and achieve and sustain profitability will depend, to a significant extent, on its ability to effectively expand its sales and marketing operations and activities, particularly its direct sales efforts. Spire depends on its sales force to obtain new customers and to drive additional sales to existing customers by selling them new subscriptions and expanding the value of their existing subscriptions. Spire believes that there is significant competition for sales personnel, including sales representatives, sales managers, and sales engineers, with the skills and technical knowledge that Spire requires. Spire’s ability to achieve revenue growth will depend, in part, on its ability to recruit, train, and retain sufficient numbers of sales personnel to support its growth. Spire’s hiring, training, and retention efforts have been, and may further be, hindered by the constraints placed on its business as a result of the COVID-19 pandemic, including measures that Spire takes proactively and those that are imposed upon Spire by government authorities. New hires require significant training and may take significant time before they achieve full productivity, and Spire’s remote and online onboarding and training processes may be less effective and take longer. Further, hiring sales personnel in new countries requires additional set up and upfront costs that Spire may not recover if the sales personnel fail to achieve full productivity. If Spire is unable to attract, retain, motivate, and train sufficient numbers of effective sales personnel, if its sales personnel do not reach significant levels of productivity in a timely manner, or if its sales personnel are not successful in converting potential customers into new customers, or increasing sales to Spire’s existing customer base, Spire’s business, financial condition, and results of operations would be adversely affected.

In addition, Spire spends significant amounts on advertising and other marketing campaigns to acquire new customers. While Spire seeks to deploy its marketing strategies in a manner most likely to encourage efficient customer acquisition, Spire may fail to identify marketing opportunities that satisfy its anticipated return on marketing spend as it scales its investments in marketing, and accurately predict customer acquisition and behavior. If any of Spire’s advertising and other marketing campaigns prove less successful than anticipated in attracting new customers, its business, financial condition and results of operations could be adversely affected. There can be no assurance that Spire’s marketing efforts will result in increased sales.

The COVID-19 pandemic has also changed the way Spire interacts with its customers and prospective customers. Spire has, and may continue to, alter, postpone, or cancel planned customer, employee, and industry events or shift them to a virtual only format. Spire’s operating results may also suffer if sales and marketing personnel are unable to maintain the same level of productivity while working remotely during the COVID-19 pandemic. These and other changes in the ways in which Spire interacts with and markets to its customers and prospective customers could adversely impact its business if they prove to be less effective than in-person events.

Spire’s ability to increase sales depends, in part, on the quality of Spire’s customer support and the ease of Spire’s customer experience, and a failure to offer high quality customer support and customer experience would harm its reputation and adversely affect its business, financial condition, and results of operations.

Spire’s customers sometimes depend on its technical support services to resolve issues relating to Spire’s platform. If Spire does not succeed in helping its customers quickly resolve issues or provide effective ongoing education related to its platform, Spire’s reputation could be harmed, and its existing customers may not renew or upgrade their subscriptions or may cancel or may not renew their orbital services contracts. To the extent that Spire is unsuccessful in hiring, training, and retaining adequate customer support resources, its ability to provide adequate and timely support to its customers, and its customers’ satisfaction with its platform, will be adversely affected. Spire’s failure to provide and maintain high quality customer support would harm its reputation and brand and adversely affect its business, financial condition, and results of operations.

 

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Spire provides minimum service level commitments to certain of its customers, and Spire’s failure to meet these commitments could cause Spire to issue credits or pay penalties, which could harm Spire’s results of operations.

Certain of Spire’s customer agreements currently, and may in the future, provide minimum service level commitments, such as specifications regarding the availability, functionality, and performance of its platform. The loss of one or more of Spire’s satellites or problems with its ground stations could cause Spire’s service to fall below minimum service level commitments. Any failure of or disruption to Spire’s infrastructure could impact the performance of its platform and the availability of its services to customers. If Spire is unable to meet its stated service level commitments or if Spire suffers extended periods of poor performance or unavailability of its platform, Spire may be contractually obligated to provide affected customers with service credits or services at no or reduced cost, and, in certain cases, face contract termination with refunds of prepaid amounts related to unused subscriptions. If Spire suffers performance issues or downtime that exceeds the service level commitments under Spire’s contracts with its customers, its business, financial condition, and results of operations would be adversely affected.

Further, in the normal course of business, Spire has entered and may in the future enter into agreements that provide for indemnification and guarantees to counterparties in transactions involving debt financing, sales of services, purchases and development of assets and operating leases. The nature of almost all of these indemnifications may prevent Spire from making a reasonable estimate of the maximum potential amount that Spire could be required to pay counterparties. If these payments were to become significant, future liquidity, capital resources, and Spire’s credit risk profile may be adversely affected.

Spire may fail to cost-effectively acquire new customers or obtain renewals, upgrades, or expansions from its existing customers, which would adversely affect its business, financial condition, and results of operations.

Spire’s continued growth depends, in part, on its ability to cost-effectively acquire new customers. Numerous factors, however, may impede Spire’s ability to add new customers, its failure to attract, effectively train, retain, and motivate sales and marketing personnel, its failure to develop or expand relationships with third parties, its inability to convert initial usage into ongoing utilization of its solutions, and its failure to successfully deliver its services and provide quality customer support once delivered.

Spire’s success also depends, in part, on its customers renewing their subscriptions when existing contract terms expire, and its ability to expand its relationships with its existing customers. Spire’s customers have no obligation to renew or upgrade their subscriptions, and in the normal course of business, some customers have elected not to renew. In addition, Spire’s customers may decide not to renew their subscriptions with a similar contract period or at the same prices or terms or may decide to downgrade their subscriptions. For example, the impact of the COVID-19 pandemic on the current economic environment has caused, and may in the future cause, such customers to defer services to a subsequent year or request concessions including extended payments terms or better pricing. Spire believes that the COVID-19 pandemic has also resulted in longer and unpredictable sales cycles and caused delays in renewal, upgrade, or expansion decisions for some of Spire’s existing customers, has reduced effectiveness of Spire’s sales and marketing efforts, and has reduced the duration of subscriptions. In addition, the COVID-19 pandemic could result in increased customer churn, a lengthening of Spire’s sales cycle with some of its potential customers, or reduced contract value with prospective or existing customers. Spire’s customer retention or its customers’ use of its platform may decline or fluctuate as a result of a number of factors, including Spire’s customers’ satisfaction with its platform and its customer support, its subscription model, its project-based orbital services model, the prices, features, or perceived value of competing offerings, changes to its offerings, or general economic conditions. Spire will need to continue to maintain or improve its ARR Net Retention Rate to support its growth, and its ability to expand its relationships with customers may require more sophisticated and costly sales efforts. If Spire customers’ renewals or expansions fall below expectations, and as a result its ARR Net Retention Rate decreases, its business, financial condition, and results of operations would be adversely affected.

In addition, Spire’s ability to expand its relationship with its customers depends in large part on Spire’s ability to enhance and improve its platform, introduce compelling new features, and address additional use cases. The success of any new or enhanced features depends on several factors, including market demand for the enhanced features,

 

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timely completion and delivery, adequate quality testing, and competitive pricing. If Spire is unable to successfully develop new features, enhance its existing features to meet customer requirements, or otherwise gain broader market acceptance, Spire’s business, financial condition, and results of operations would be adversely affected. If Spire’s customers do not renew, upgrade, or expand their subscriptions, defer their subscriptions to a later date, renew their subscriptions on less favorable terms, or fail to increase adoption of its platform, including tiered and premium features or project-based orbital services, Spire’s business, financial condition, and results of operations would be adversely affected.

The markets for Spire’s offerings are evolving, and its future success depends on the growth of these markets and its ability to adapt, keep pace, and respond effectively to evolving markets.

The markets for Spire’s offerings are in a relatively early stage of development within the industries in which Spire operates, and demand for its offerings may not grow, or may even contract, either generally or in particular industries and markets, for particular types of services or during particular time periods. As such, any predictions or forecasts about Spire’s future growth, revenue, and expenses may not be as accurate as they would be if Spire had a longer operating history or operated in more predictable markets. Any expansion in Spire’s markets depends on a number of factors, including the cost, performance, and perceived value associated with its offerings and the offerings of its competitors. A lack of demand could impair Spire’s ability to sell access to its platform, develop and successfully market new services, and could exert downward pressure on prices.

The markets for Spire’s offerings are also characterized by rapid technological changes and evolving industry standards and changing regulatory requirements. This constant evolution may reduce the effectiveness of or demand for Spire’s services or render them noncompetitive or obsolete. Spire’s continued success and growth depend upon its ability to anticipate these challenges and to innovate by enhancing its existing services and developing and successfully implementing new services to keep pace with the ever-changing and increasingly sophisticated needs of its customers. Spire has in the past experienced delays in improving Spire’s offerings due to budgetary constraints and evolving customer demands which could continue in the future.

New service introductions that are responsive to new technologies and changing industry and regulatory standards can be complex and expensive as they require significant planning, design, development, and testing. Spire may find it difficult or costly to update its services and to develop new services quickly enough to work effectively with new or changed technologies, to keep pace with evolving industry standards or to meet its customers’ needs. In addition, Spire’s industries may be slow to accept new technologies that it develops because of, among other things, existing regulations or standards written specifically for older technologies and a general unfamiliarity with new technologies. As a result, any new services that Spire may develop may not be successful for a period of time, if at all. If Spire is unable to successfully enhance or update existing services or develop, identify, and market new services to meet these challenges, Spire’s business, financial condition, and results of operations may be adversely affected.

Spire relies on third parties for its supply of certain of its data, equipment, satellite components, software, and operational services to manage and operate its business, and any failure or interruption with these third parties could adversely affect Spire’s business, financial condition, and results of operations.

Spire purchases equipment and satellite components from third-party suppliers and it depends on those suppliers to deliver and support its operations at the contracted specifications in order for Spire to continue to meet its service and contractual commitments to its customers. Spire may experience difficulty if these suppliers, particularly its top suppliers, do not meet their obligations to deliver and support the equipment and satellite components, given approximately 37% of the costs attributed to satellite parts is generated by three vendors for the year ended December 31, 2020. Spire may also have trouble or failure when implementing, operating and maintaining this equipment and satellite components, or when providing services using this equipment. This difficulty or failure may lead to service interruptions or degradations in the services offered to Spire’s customers, which could cause Spire’s revenues to decline materially and could adversely affect Spire’s ability to market its services and generate future revenues and profit.

Spire also relies on a number of third-party data, software, and services to manage and operate its business, including FleetMon provided by JAKOTA Cruise Systems GmbH, NAVTOR AS, AirNav, LLC, NOAA, ECMWF, HubSpot, Inc., AWS, Ohio State University, Google Services, R-Systems, and NetSuite provided by Oracle Corporation. The data, software, and services provided by these third parties are critical to Spire’s ability to increase its sales to customers, operate and

 

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maintain its platform, and accurately maintain books and records. Any disruption in these services could reduce the quality or volume of data Spire is able to provide to its customers, impair Spire’s ability to execute on its operating plan, and disrupt its business. Further, if these services cease to be available to Spire on commercially reasonable terms, or at all, it may be required to use additional or alternative services, or to develop additional capabilities within its business, any of which could require significant resources and adversely affect its business, financial condition, and results of operations.

Spire also relies on third-party cloud service providers such as AWS and Google Services to process the data it provides to service its customers. These third-party services are critical to Spire’s ability to provide reliable service to its customers. Any disruption in these services would negatively impact Spire’s data service uptime and its ability to service customers reliably and consistently, which could reduce sales and adversely affect Spire’s business, financial condition and results of operations.

Further, Spire’s suppliers may become capacity-constrained or could face financial difficulties as a result of a surge in demand, a natural disaster, or other event, including the impacts of the COVID-19 pandemic. As a result, Spire may experience operational delays and may have to evaluate replacement suppliers for its satellite components, equipment, and operational services. If Spire fails to effectively address these issues, it could suffer delays, which could reduce its ability to launch new satellites and manage and operate its business, which could harm Spire’s reputation, business, financial condition, and results of operations.

Spire’s business may be adversely affected if any of its direct or indirect relationships with its third-party suppliers of data, equipment, satellite components, or operational services are terminated or modified. If Spire’s arrangements with its third parties are terminated, its search for additional or alternate third-party suppliers could result in significant launch delays, added expense, reduced quality of Spire’s data, and an inability to maintain or expand its customer base. Any of these events could require Spire to take unforeseen actions or devote additional resources to provide its services and could adversely affect its business, financial condition, and results of operations.

Spire manufactures its satellites in-house at a single manufacturing facility in the United Kingdom. Any impairment to its manufacturing facility could cause Spire to incur additional costs and delays in the production and launch of its satellites which would materially affect its business, financial condition, and results of operations.

Spire currently manufactures its satellites in-house at a single manufacturing facility in the United Kingdom. The availability of Spire’s services depends on the continuing operation of its satellite manufacturing infrastructure and operations. Any impairment such as downtime, damage to, or failure of Spire’s manufacturing facility could result in interruptions in its production of satellites, which could materially affect Spire’s business. Spire’s 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, including the impacts of the COVID-19 pandemic. Spire’s 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 Spire does not maintain back-up manufacturing facilities or operations. Although Spire may be able to replace or supplement the satellite manufacturing process with third-party manufacturers, there could be a substantial period of time in which new satellites would not be manufactured. Further, any new relationship may involve higher costs and delays in development and delivery. Spire may also encounter technical challenges in successfully replicating the manufacturing processes in other facility or with a third party. The occurrence of any of the foregoing could result in lengthy interruptions in Spire’s production and launch of its satellites which could materially affect its business, financial condition, and results of operations.

Spire is dependent on third parties to launch its satellites into space, and any launch delay, malfunction, or failure could have a material adverse impact to its business, financial condition, and results of operations.

Spire is dependent on third-party launch vehicles to deliver its satellites into space, including but not limited to PSLV, Falcon 9, Soyuz, Vega, and Electron. Currently, the number of companies who offer launch services is limited, and if this sector fails to grow or experiences consolidation among current providers, Spire may not be able to secure space on a launch vehicle or incur higher prices for such space. This could cause delays in Spire’s ability to meet its customers’ needs or an increase in the price for its offerings, adversely affecting Spire’s business, financial condition, and results of operations.

 

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The technology related to launch capabilities is evolving rapidly as existing launch providers iterate on their existing capabilities and new providers enter the market. Spire’s launch partners may encounter launch, deployment, or in-orbit delays or failures, leading to the damage or complete loss of Spire satellites, including customer assets. One of our third-party launch providers recently experienced a launch failure unrelated to Spire. The same provider failed to deploy two of Spire’s satellites. Additionally, as a result of the COVID-19 pandemic, Spire experienced launch delays for all of its scheduled satellite launches in 2020. In the event that a launch is delayed, Spire’s timing for the recognition of revenue tied to the achievement of contractually defined milestones may similarly be delayed. While launch delays are common in Spire’s industry, they could negatively impact Spire’s financial statements or earnings for a given time period.

Spire’s international operations and continued international expansion subject Spire to additional costs and risks, which could adversely affect Spire’s business, financial condition, and results of operations.

Spire’s business and its business objectives are inherently worldwide. As such, Spire’s growth strategy depends, in part, on its continued international expansion. Spire is continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will be successful. In addition, efforts to expand Spire’s platform in certain foreign countries may be complicated, constrained, or even prohibited due to legal requirements Spire must comply with in the United States or other jurisdictions that may contravene with legal requirements in the new country’s markets to which Spire seeks access.

Spire’s international sales and operations are subject to a number of risks, including the following:

 

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greater difficulty in enforcing contracts and managing collections in countries where Spire’s recourse may be more limited, as well as longer collection periods;

 

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higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for Spire’s international operations;

 

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differing labor regulations, especially in the European Union (“EU”), where labor laws may be more favorable to employees;

 

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greater risks of unexpected changes in regulatory practices, tariffs, trade disputes, and tax laws and treaties, particularly due to the United Kingdom’s exit from the EU pursuant to Article 50 of the Treaty on European Union;

 

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challenges inherent to efficiently recruiting and retaining talented and capable employees in foreign countries and maintaining Spire’s company culture and employee programs across all its offices;

 

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fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where Spire does business;

 

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management communication and integration problems resulting from language and cultural differences and geographic dispersion;

 

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difficulties in penetrating new markets due to established and entrenched competitors;

 

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difficulties in developing services that are tailored to the needs of local customers;

 

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lack of local acceptance, recognition, or knowledge of Spire’s brand and services;

 

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unavailability of or difficulties in establishing relationships with local customers;

 

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significant investments, including the development, deployment, and maintenance of dedicated facilities in certain countries with laws that require such facilities to be installed and operated within their jurisdiction to connect the traffic coming to and from their territory;

 

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difficulties in obtaining required regulatory or other governmental approvals;

 

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costs associated with language localization of Spire’s platform;

 

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risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of Spire’s platform that may be required in foreign countries;

 

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greater risk of unexpected changes in regulatory requirements, tariffs and tax laws, trade laws, export quotas, customs duties, treaties, and other trade restrictions;

 

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costs of compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations, including, but not limited to data privacy, data protection, and data security regulations, particularly in the EU;

 

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compliance with anti-bribery laws, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. Travel Act, and the UK Bribery Act 2010, violations of which could lead to significant fines, penalties, and collateral consequences for the company;

 

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risks relating to the implementation of exchange controls, including restrictions promulgated by the Office of Foreign Assets Control (“OFAC”), and other similar trade protection regulations and measures;

 

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heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact Spire’s financial condition and result in restatements of, or irregularities in, financial statements;

 

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the uncertainty of protection for intellectual property rights in some countries;

 

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exposure to regional or global public health issues, such as the recent outbreak of the COVID-19 pandemic, and to travel restrictions and other measures undertaken by governments in response to such issues;

 

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general economic and political conditions in these foreign markets, including political and economic instability in some countries;

 

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foreign exchange controls or tax regulations that might prevent Spire from repatriating cash earned outside the United States; and

 

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double taxation of Spire’s international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which Spire operates.

These and other factors could harm Spire’s ability to generate revenue outside of the United States and, consequently, adversely affect Spire’s business, financial condition, and results of operations.

Spire depends on Spire’s management team, key employees, and other highly skilled personnel, including its engineering team, and Spire may fail to attract, retain, motivate, or integrate highly skilled personnel, which could adversely affect its business, financial condition, and results of operations.

Spire depends on the continued contributions of its management team, key employees, and other highly skilled personnel, including its engineering team. Spire’s management team, key employees, and other highly skilled personnel are at-will employees, which means they may terminate their relationship with Spire at any time. The loss of the services of any of Spire’s key personnel or delays in hiring required personnel, particularly within its research and development and engineering teams, could adversely affect Spire’s business, financial condition, and results of operations.

 

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Spire’s future success also depends, in part, on its ability to continue to attract and retain highly qualified and technically skilled personnel given the constant technological developments in its business. The available talent pool of individuals with relevant experience in the satellite, data, and geospatial industries is limited, and the process of identifying and recruiting personnel with the skills necessary to operate Spire’s system can be costly. New employees generally require substantial training, which requires significant resources and management attention. Competition for these personnel is intense, and the industries in which Spire operates are generally characterized by significant competition for skilled personnel as well as high employee attrition. Spire may not be successful in attracting, retaining, training, or motivating qualified personnel to fulfill its current or future needs. Additionally, the former employers of Spire’s new employees may attempt to assert that Spire’s new employees or Spire have breached their legal obligations, which may be time-consuming, distracting to management, and may divert Spire’s resources. Current and potential personnel also often consider the value of equity awards they receive in connection with their employment, and to the extent the perceived value of Spire’s equity awards declines relative to its competitors, its ability to attract and retain highly skilled personnel may be harmed. If Spire fails to attract and integrate new personnel or retain and motivate its current personnel, its business, financial condition, and results of operations could be adversely affected.

In the future, Spire may pursue acquisitions, dispositions, or strategic transactions, and if Spire fails to successfully integrate acquired companies into its business or if such acquisitions fail to deliver the expected return on investment, Spire’s business, financial condition, and results of operations could be adversely affected.

Spire has in the past acquired, and may in the future acquire or invest in, businesses, offerings, technologies, or talent that it believes could complement or expand its platform, enhance its technical capabilities, or otherwise offer growth opportunities. Spire may not be able to fully realize the anticipated benefits of such acquisitions or investments. The pursuit of potential acquisitions may divert the attention of management and cause Spire to incur significant expenses related to identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated.

There are inherent risks in integrating and managing acquisitions. If Spire acquires additional businesses, it may not be able to assimilate or integrate the acquired personnel, operations, solutions, and technologies successfully, or effectively manage the combined business following the acquisition. Spire also may not achieve the anticipated benefits or synergies from the acquired business due to a number of factors, including, without limitation:

 

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unanticipated costs or liabilities associated with the acquisition, including claims related to the acquired company, its offerings, or technology;

 

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incurrence of acquisition-related expenses, which would be recognized as a current period expense;

 

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inability to generate sufficient revenue to offset acquisition or investment costs;

 

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inability to maintain relationships with customers and partners of the acquired business;

 

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challenges with incorporating acquired technology and rights into Spire’s platform and maintaining quality and security standards consistent with Spire’s brand;

 

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inability to identify security vulnerabilities in acquired technology prior to integration with Spire’s technology and platform;

 

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inability to achieve anticipated synergies or unanticipated difficulty with integration into Spire’s corporate culture;

 

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delays in customer purchases due to uncertainty related to any acquisition;

 

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the need to integrate or implement additional controls, procedures, and policies;

 

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challenges caused by distance, language, and cultural differences;

 

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harm to Spire’s existing business relationships with business partners and customers as a result of the acquisition;

 

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potential loss of key employees;

 

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use of resources that are needed in other parts of Spire’s business and diversion of management and employee resources;

 

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inability to recognize acquired deferred revenue in accordance with Spire’s revenue recognition policies; and

 

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use of substantial portions of Spire’s available cash or the incurrence of debt to consummate the acquisition.

Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process. Spire may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect its financial condition or the market price of New Spire Class A Common Stock. The sale of equity or issuance of equity-linked debt to finance any future acquisitions could result in dilution to New Spire’s stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also include covenants or other restrictions that would impede Spire’s ability to manage its operations. Any of the foregoing could adversely affect Spire’s business, financial condition, and results of operations.

Spire’s business could be adversely affected by global economic conditions.

Prolonged economic uncertainties or downturns could adversely affect Spire’s business, financial condition, and results of operations. Negative conditions in the general economy in either the United States or abroad, including conditions resulting from financial and credit market fluctuations, changes in economic policy, trade uncertainty, including changes in tariffs, sanctions, international treaties, and other trade restrictions, the occurrence of a natural disaster or global public health crisis, such as the COVID-19 pandemic, or armed conflicts, could continue to cause a decrease in corporate spending on data offerings in general and negatively affect the growth of Spire’s business.

These conditions could make it extremely difficult for Spire and its customers to forecast and plan future business activities accurately and could cause its customers to reevaluate their decision to purchase Spire’s offerings, which could delay and lengthen its sales cycles or result in cancellations. For example, the impact of the COVID-19 pandemic on the current economic environment has caused and may in the future cause Spire’s customers to reduce their spending on, or duration of, their contracts with Spire, or request concessions including extended payment terms or better pricing. Further, during challenging economic times, Spire’s customers may face issues in gaining timely access to sufficient credit, which could result in an impairment of their ability to make timely payments to Spire, if at all. If that were to occur, Spire may be required to increase its allowance for doubtful accounts, which would adversely affect its results of operations.

A substantial downturn in any of the industries in which Spire’s customers operate may cause firms to react to worsening conditions by reducing their capital expenditures in general or by specifically reducing their spending on data offerings. Customers in these industries may delay or cancel projects or seek to lower their costs by renegotiating vendor contracts. To the extent purchases of Spire’s offerings are perceived by customers and potential customers to be discretionary, Spire’s revenue may be disproportionately affected by delays or reductions in general information technology spending.

Spire cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry or geography. Any economic downtowns of the general economy or industries in which Spire operates would adversely affect its business, financial condition, and results of operations. For example, the full impact of the COVID-19 pandemic is unknown at this time but could result in adverse changes in Spire’s results of operations for an unknown period of time as the virus and its related social and economic impacts spread.

 

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Spire’s business could be adversely affected by pandemics, natural disasters, political crises, or other unexpected events.

Spire is vulnerable to natural disasters and significant disruptions including tsunamis, floods, earthquakes, fires, water shortages, other extreme or unusual weather conditions, epidemics or pandemics, acts of terrorism or disruptive political events where Spire’s facilities or the launch facilities of Spire’s transport partners are located, or where Spire’s third-party suppliers’ facilities are located, power shortages and blackouts, aging infrastructures and telecommunications failures. Further, climate change has, and may continue to, increased the rate, size, and scope of these natural disasters. In the event of such a natural disaster or other disruption, Spire could experience disruptions to its operations or the operations of suppliers, subcontractors, distributors, or customers, which could affect Spire’s ability to maintain launch schedules or fulfill its customer contracts.

The availability of Spire’s services depends on the continuing operation of its satellite operations infrastructure, satellite manufacturing operations, information technology and communications systems. Any downtime, damage to or failure of Spire’s systems could result in interruptions in its service, which could reduce Spire’s revenue and profits. Spire’s systems are vulnerable to damage or interruption from floods, fires, power loss, aging infrastructure, telecommunications failures, computer viruses, computer denial of service attacks, or other attempts to harm Spire’s systems. In the event Spire is unable to collect, process, and deliver data from its facilities, Spire’s daily operations and operating results would be materially and adversely affected. In addition, Spire’s ground stations are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, aging infrastructure, telecommunications failures and similar events. Spire’s satellite manufacturing facilities are also subject to risks associated with an aging infrastructure. An infrastructure failure could result in the destruction of satellites under construction or inventory, manufacturing delays, or additional costs incurred. Spire does not maintain back-up manufacturing facilities or operations. The occurrence of any of the foregoing could result in lengthy interruptions in Spire’s services and/or damage its reputation, which could have a material adverse effect on its business, financial condition, and results of operations.

Risks Related to Intellectual Property, Privacy, Cybersecurity, and Technical Infrastructure

Any failure to obtain, maintain, protect, or enforce Spire’s intellectual property and proprietary rights could harm Spire’s business, financial condition, and results of operations.

Spire’s success depends, in part, upon its ability to obtain, maintain, protect, and enforce its intellectual property rights, including its proprietary technology, know-how, and its brand. Spire relies on a combination of patents, copyrights, trademarks, service marks, trade secret laws, and contractual provisions in an effort to establish and protect its proprietary rights. However, the steps Spire takes to obtain, maintain, protect, and enforce its intellectual property rights may be inadequate, and if Spire fails to protect or enforce its intellectual property rights or trade secrets adequately, Spire’s competitors might gain access to its proprietary technology and develop and commercialize similar services or technologies, and its business, financial condition, results of operations, or prospects could be adversely affected. Although Spire has been issued patents in the United States and Canada and has additional patent applications pending, there can be no assurance that its patent applications will result in issued patents. Even if Spire continues to seek patent protection in the future, it may be unable to obtain or maintain patent protection for its technology. In addition, any patents issued from pending or future patent applications or that are licensed to Spire in the future may not provide Spire with competitive advantages or may be successfully challenged by third parties. Any of Spire’s patents, trademarks, or other intellectual property rights may be challenged or circumvented by others or invalidated or held unenforceable through administrative process or litigation in the U.S., Canada, or in other foreign jurisdictions. There can be no guarantee that others will not infringe on Spire’s trademarks or patents, independently develop offerings that are similar to Spire’s intellectual property or trade secrets, duplicate any of its offerings, or design around its patents or other intellectual property rights. Further, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights may be uncertain. Moreover, policing unauthorized use of Spire’s technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. Accordingly, despite Spire’s efforts, it may be unable to prevent third parties from infringing upon, misappropriating, or otherwise violating its intellectual property rights.

 

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Spire relies, in part, on trade secrets, proprietary know-how, and other confidential information to maintain its competitive position. While Spire generally enters into confidentiality and invention assignment agreements with its employees and consultants and enters into confidentiality agreements with third parties, including the parties with whom it has strategic relationships and business alliances, these agreements may not be effective in controlling access to, distribution, use, misuse, misappropriation, reverse engineering, or disclosure of Spire’s proprietary information, know-how, and trade secrets. Further, these agreements do not prevent Spire’s competitors or partners from independently developing offerings that are substantially equivalent or superior to Spire’s offerings. These agreements may be breached, and Spire may not have adequate remedies for any such breach. Enforcing a claim that a party violated confidentiality obligations or illegally disclosed or misappropriated a trade secret or know-how is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets and know-how.

Spire may be required to spend significant resources in order to monitor and protect its intellectual property rights and trade secrets, and some violations may be difficult or impossible to detect. Litigation may be necessary in the future to enforce Spire’s intellectual property rights, and such litigation could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of its intellectual property. Spire’s efforts to enforce its intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of its intellectual property rights, and, if such defenses, counterclaims, and countersuits are successful, Spire could lose valuable intellectual property rights. Spire’s inability to protect its proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of Spire’s management’s attention and resources, could impair the functionality of its services and technology, delay introductions of enhancements to its services and technology, result in Spire substituting inferior or more costly technologies into its service offerings, or harm its reputation and brand. In addition, Spire 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 Spire’s ability to compete.

Claims by others that Spire infringed their proprietary technology or other intellectual property rights would harm its business.

Spire may become subject to intellectual property disputes. Spire’s success depends, in part, on its ability to develop and commercialize its services without infringing, misappropriating, or otherwise violating the intellectual property rights of third parties. However, Spire may not be aware if its services are infringing, misappropriating, or otherwise violating third-party intellectual property rights, and such third parties may bring claims alleging such infringement, misappropriation, or violation. Companies in technology industries, including some of Spire’s current and potential competitors, are subject to litigation based on allegations of infringement or other violations of intellectual property rights. In addition, certain companies and rights holders seek to enforce and monetize patents or other intellectual property rights they own, have purchased, or otherwise obtained. Many potential litigants, including some of Spire’s potential competitors and patent-holding companies, have the ability to dedicate substantial resources to assert their intellectual property rights and to defend claims that may be brought against them.

Any claim of infringement by a third party, even those without merit, against Spire or for which it is required to provide indemnification could cause Spire to incur substantial costs defending against the claim, could distract Spire’s management from its business, and could require Spire to cease or modify its use of such intellectual property. Further, because of the substantial amount of discovery required in connection with intellectual property litigation, Spire risks compromising its confidential information during this type of litigation. Spire may be required to make substantial payments for legal fees, settlement fees, damages, royalties, or other fees in connection with a claimant securing a judgment against it, Spire may be subject to an injunction or other restrictions that cause it to cease commercializing certain aspects of its business and technology, Spire may be required to redesign any allegedly infringing portion of its services and technology, or Spire may agree to a settlement that prevents it from commercializing certain aspects of its services or technology, any of which could adversely affect its business, financial condition, and results of operations. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it would have a substantial adverse effect on Spire’s business, results of operations, or the market price of New Spire Class A Common Stock.

 

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With respect to any intellectual property rights claim, Spire may have to seek out a license to continue operations found to be in violation of such rights, which may not be available on favorable or commercially reasonable terms and may significantly increase its operating expenses. Some such licenses may be non-exclusive, and therefore Spire’s competitors may have access to the same technology licensed to Spire. If a third party does not offer Spire a license to its intellectual property on commercially reasonable terms, or at all, Spire may be required to develop alternative, non-infringing technology, which could require significant time (during which Spire would be unable to continue to offer its affected features), effort, and expense, and may ultimately not be successful. Any of these events would adversely affect Spire’s business, financial condition, and results of operations.

When engaging in preliminary commercial discussions, Spire enters into non-disclosure agreements with potential partners. These agreements permit the parties to exchange confidential information conditioned on compliance with the terms contained therein . Any claim that Spire has not adhered to the terms of a non-disclosure agreement, even claims without merit, could cause Spire to incur substantial costs defending against the claim, could distract Spire’s management from its business, and, were a court to rule against Spire, could require Spire to cease or modify its services, in addition to potentially paying substantial payments for legal fees, settlement fees, damages, royalties, or other fees in connection with a claimant securing a judgment against it. Moreover, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it would have a substantial adverse effect on Spire’s business, financial condition, and results of operations.

Spire’s services and technology contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict Spire’s ability to deliver its platform or subject the company to litigation or other actions.

Spire’s technology includes software modules licensed to it by third-party authors under “open source” licenses, and Spire expects to continue to incorporate such open source software in its platform in the future. Spire also contributes 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 of the code. Spire includes open source software in some of its technology to improve functionality and reduce engineering time and cost and makes the source code of some of its proprietary platform features available as open source to facilitate collaboration, but this may also enable others to compete more effectively. In addition, the public availability of such open source software may make it easier for others to compromise Spire’s services and technology.

Some open source licenses contain requirements that could require Spire to make available source code for modifications or derivative works Spire creates pursuant to the terms of such open source licenses. Spire seeks to ensure that its proprietary software is not combined with, and does not incorporate, open source software in ways that would require the release of the source code of Spire’s proprietary software to the public. However, if Spire combines its proprietary software with open source software in a certain manner, Spire could, under certain open source licenses, be required to release the source code of Spire’s proprietary software to the public. This would allow Spire’s competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of Spire’s competitive advantages. Alternatively, to avoid the public release of the affected portions of Spire’s source code, Spire could be required to expend substantial time and resources to re-engineer some or all its software. Certain of Spire’s technology incorporates software that is licensed under an open source license which would require release of proprietary code if such technology was released or distributed to third parties. Spire takes steps to ensure that the source code in its proprietary software is not released or distributed. Additionally, some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis, which, if not properly addressed, could negatively affect the performance of Spire’s technology.

Although Spire monitors its use of open source software to avoid subjecting its platform to conditions Spire does not intend, 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 in a way that could impose unanticipated conditions or restrictions on Spire’s ability to provide or distribute its platform. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their platform, and the licensors of such open source software provide no warranties or indemnities with respect to such claims. As a result, Spire and

 

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Spire’s customers could be subject to lawsuits by parties claiming ownership of what Spire believes to be open source software. Moreover, Spire cannot assure that its processes for controlling its use of open source software in its platform will be effective. If Spire is held to have breached or failed to fully comply with all the terms and conditions of an open source software license, or if an author or other third party that distributes such open source software were to allege that Spire had not complied with the conditions of one or more of these licenses, Spire could be required to incur significant legal expenses defending against such allegations, could be subject to significant direct or indirect damages, enjoined from the sale of subscriptions to its platform or other liability, or be required to seek costly licenses from third parties to continue providing Spire’s platform on terms that are not economically feasible, to re-engineer Spire’s platform, to discontinue or delay the provision of Spire’s platform if re-engineering could not be accomplished on a timely basis, or to make generally available, in source code form, Spire’s proprietary code, any of which would adversely affect Spire’s business, financial condition, and results of operations.

Spire incorporates technology and terrestrial data sets from third parties into its platform, and its inability to maintain rights and access to such technology and data sets would harm its business and results of operations.

Spire relies on technology and data from a number of different sources, including, terrestrial data sets from third parties that it integrates with its platform or incorporates into its solutions and services. Spire cannot be certain that its licensors are not infringing the intellectual property rights of third parties or that these third parties have sufficient rights to the licensed intellectual property in all jurisdictions in which Spire may sell its subscription services and project-based orbital services. In addition, many technology licenses are non-exclusive, and therefore Spire’s competitors may have access to the same technology licensed to Spire. Some of Spire’s agreements with these third parties may be terminated for convenience by them, or otherwise provide for a limited term. If Spire is unable to continue to license any of this technology for any reason, Spire’s ability to develop and sell access to its platform containing such technology could be harmed. Similarly, if Spire is unable to license necessary technology from third parties now, or in the future, on commercially reasonable terms or at all, Spire may be forced to develop alternative technology, which it may be unable to do in a commercially feasible manner, or at all, and it may be required to use alternative technology of lower quality or performance standards, which would adversely affect Spire’s business, financial condition, and results of operations.

In addition, Spire incorporates terrestrial data sets from third parties into its solutions and subscription services. Spire relies on such third parties to provide accurate supplementary data sets that it can utilize to deliver comprehensive data and analytics to its customers. If Spire is unable to obtain the necessary data sets from third parties on commercially reasonable terms or at all or if Spire experiences errors or delays in receiving these data sets, its customers may have a negative experience with Spire’s platform, its brand and reputation may be adversely affected and its customers may be less inclined to continue utilizing Spire’s platform or recommend it to other potential customers. Similarly, if Spire is unable to purchase terrestrial data sets from third parties now, or in the future, on commercially reasonable terms or at all, Spire may be forced to produce terrestrial data sets itself, which it may be unable to do in a commercially feasible manner, or at all, which would adversely affect Spire’s business, financial condition, and results of operations.

Any actual or perceived security or privacy breach could interrupt Spire’s operations, harm its reputation and brand, result in financial exposure, and lead to loss of user confidence in Spire or decreased use of its platform, any of which could adversely affect Spire’s business, financial condition, and results of operations.

The use of Spire’s platform involves the collection, storage, processing, and transmission of customers’ data. In addition, Spire collects, processes, stores, and transmits its own data as part of its business operations. Spire’s data or its customers’ data may include personal data or confidential or proprietary information. Increasingly, threats from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse, and general hacking have become more prevalent in Spire’s industry. Any of these security incidents could result in unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of, or loss of Spire’s data or Spire’s customers’ data, or disrupt Spire’s ability to operate its platform. Any actual or perceived security breach or incident could interrupt Spire’s operations, harm its reputation and brand, result in remediation and cybersecurity protection costs, result in lost revenue, lead to litigation and legal risks, increase its insurance premiums, result in any other financial exposure, lead to loss of user confidence in Spire or decreased use of its platform, and otherwise damage Spire’s competitiveness, business, financial condition, and results of operations.

 

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Spire has taken steps and implemented measures designed to protect the data that Spire has access to, but Spire’s security measures or those of its third-party service providers could be insufficient and breached or otherwise fail as a result of third-party action, employee errors, technological limitations, defects, or vulnerabilities in Spire’s offerings or those of its third-party service providers, malfeasance, or otherwise. Additionally, with many of Spire’s employees currently working remotely due to the COVID-19 pandemic, Spire may be exposed to increased risks of security breaches or incidents. Spire may need to enhance the security of its platform, its data, and the other data Spire maintains or that Spire or its third-party service providers maintain or otherwise process, and Spire’s internal IT infrastructure, which may require additional resources and may not be successful. Furthermore, because Spire does not control its third-party service providers and Spire’s ability to monitor their data security is limited, Spire cannot ensure the security measures they take will be sufficient to protect Spire’s and Spire’s customers’ data. There can be no assurance that any security measures that Spire or its third-party service providers have implemented will be effective against current or future security threats. Spire’s security measures or those of its third-party service providers could fail and result in unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of, or loss of such data. Further, because there are many different security breach techniques and such techniques continue to evolve and are generally not detected until after an incident has occurred, Spire may be unable to implement adequate preventative measures, anticipate attempted security breaches or other security incidents, or react in a timely manner. In addition, Spire has recently seen an increase in phishing attempts and spam emails in connection with the COVID-19 pandemic.

Any security breach or other security incident that Spire or its third-party service providers experience, or the perception that one has occurred, could result in a loss of customer confidence in the security of Spire’s platform, harm its reputation and brand, reduce the demand for its platform, disrupt normal business operations, require Spire to spend material resources to investigate or correct the breach and to prevent future security breaches and incidents, expose Spire to legal liabilities, including litigation, regulatory enforcement actions, proceedings, and orders, disputes, investigations, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, other claims and liabilities, and significant costs for remediation of and otherwise responding to such breaches or incidents, any of which could adversely affect Spire’s results of operations. In addition, Spire’s remediation efforts may not be successful. Spire also may face difficulty or delay in identifying, remediating, and otherwise responding to security breaches and incidents. Spire cannot ensure that any limitation of liability provisions in its customer and user agreements, contracts with third-party vendors and service providers, and other contracts for a security lapse or breach or other security incident would be enforceable or adequate or would otherwise protect Spire from any liabilities or damages with respect to any particular claim. These risks may increase as Spire continues to grow and collect, process, store, and transmit increasingly large amounts of data.

Many governments have enacted laws requiring companies to notify individuals of data security incidents or unauthorized transfers involving certain types of personal data. Accordingly, security incidents experienced by Spire’s competitors, by its customers or by Spire may lead to negative publicity. Further, if a security breach occurs with respect to another service provider, Spire’s customers and potential customers may lose trust in the security of software delivered through the cloud generally, which could adversely impact its ability to retain existing customers or attract new ones, which could adversely affect Spire’s business, financial condition, and results of operations.

Moreover, Spire’s insurance coverage may not be adequate for liabilities incurred or cover any indemnification claims against it relating to any security incident or breach or an insurer may deny coverage of claims. In the future, Spire may not be able to secure insurance for such matters on commercially reasonable terms, or at all. The successful assertion of one or more large claims against Spire that exceed available insurance coverage, or the occurrence of changes in its insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect Spire’s business, financial condition, and results of operations.

The rapidly evolving framework of privacy, data protection, data transfers, or other laws or regulations worldwide may limit the use and adoption of Spire’s services and adversely affect its business.

Spire is subject to a variety of federal, state, local, and international laws, directives, and regulations, as well as contractual obligations, relating to the collection, use, retention, security, disclosure, transfer, and other processing of personal information and other data. The regulatory framework for privacy, data protection, and data transfers worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, the European Court of Justice in July 2020 struck down the EU-U.S. Privacy Shield framework, which provided companies with a

 

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mechanism to comply with data protection requirements when transferring personal data from the EU to the United States. In some cases, data privacy laws and regulations, such as the EU’s General Data Protection Regulation (“GDPR”), which took effect in May 2018, impose obligations on Spire and on many of its customers. In addition, domestic data privacy laws, such as the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020, and the recently passed California Privacy Rights Act (the “CPRA”), and the Virginia Consumer Data Protection Act (the “CDPA”), each of which take effect January 1, 2023, continue to evolve and could expose Spire to further regulatory or operational burdens. Some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of delivering Spire’s platform. Complying with the GDPR, CCPA, CPRA, CDPA, or other laws, regulations, amendments to or re-interpretations of existing laws and regulations, and contractual or other actual or alleged obligations relating to privacy, data protection, data transfers, data localization, or information security may require Spire to make changes to its services to enable it or its customers to meet new legal requirements, incur substantial operational costs, modify Spire’s data practices and policies, and restrict Spire’s business operations. Any actual or perceived failure by Spire to comply with these laws, regulations, or other obligations may lead to significant fines, penalties, regulatory investigations, lawsuits, significant costs for remediation, damage to Spire’s reputation, or other liabilities.

In addition to government activity, privacy advocacy and other industry groups have established or may establish new self-regulatory standards that may place additional burdens on Spire’s ability to provide its services globally, and which Spire may comply with or face asserted or actual obligations to comply with. Spire’s customers also may require or expect it to meet certain voluntary certification and other standards established by third parties. If Spire is unable to maintain these certifications or meet these standards, it could adversely affect Spire’s ability to provide its services to certain customers and could harm its business. Furthermore, the uncertain and shifting regulatory environment may cause concerns regarding data privacy and may cause Spire’s customers or Spire’s customers’ customers to resist providing the data necessary to allow Spire’s customers to use its services effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of Spire’s services and limit adoption of its platform. Additionally, some statutory requirements, both in the United States and abroad, include obligations for companies to notify individuals of security breaches involving particular personal information, which could result from breaches experienced by Spire or its service providers. Any actual or perceived security breach or incident that Spire or its service providers suffer could harm Spire’s reputation and brand, expose it to potential claims, liability, and proceedings, or require it to expend significant resources on data security and in responding to any such actual or perceived breach or incident.

These laws, regulations, standards, or other obligations relating to privacy, data protection, data transfers, data localization, or information security could require Spire to take on more onerous obligations in its contracts, restrict Spire’s ability to store, transfer, and process data or, in some cases, impact its ability to offer its services in certain locations, to deploy its solutions, to reach current and prospective customers, or to derive insights from data globally. If Spire is obligated to fundamentally change its business activities and practices or modify its platform, Spire may be unable to make such changes and modifications in a commercially reasonable manner, or at all, and its ability to develop new platform features could be limited. The costs of compliance with, and other burdens imposed by, these laws, regulations, standards, and obligations, or any inability to adequately address privacy, data protection, or information security-related concerns, even if unfounded, may limit the use and adoption of Spire’s services, reduce overall demand for its services, make it more difficult to meet expectations from or commitments to customers, impact Spire’s reputation, or slow the pace at which it closes sales transactions, any of which could harm Spire’s business, financial condition, and results of operations.

Spire relies on Amazon Web Services to deliver its platform to its customers, and any disruption of, or interference with, Spire’s use of Amazon Web Services could adversely affect its business, financial condition, and results of operations.

Amazon Web Services (“AWS”) is a third-party provider of cloud infrastructure services. Spire outsources substantially all of the infrastructure relating to Spire’s platform to AWS. Spire’s customers need to be able to access its platform at any time, without interruption or degradation of performance. Spire’s platform depends, in part, on the virtual cloud infrastructure hosted in AWS. Although Spire has disaster recovery plans that utilize multiple AWS locations, any incident affecting their infrastructure that may be caused by fire, flood, severe storm, earthquake or other natural disasters, power loss, telecommunications failures, cyber-attacks, terrorist or other attacks, and other similar events beyond Spire’s control, could adversely affect its cloud-native platform. Additionally, AWS may

 

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experience threats or attacks from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks. In addition, employee theft or misuse and general hacking have become more prevalent in Spire’s industry. Any of these security incidents could result in unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, destruction of, or loss of Spire’s data or Spire customers’ data or disrupt Spire’s ability to provide its platform or service. A prolonged AWS service disruption affecting Spire’s platform for any of the foregoing reasons would adversely impact Spire’s ability to serve its customers and could damage its reputation with current and potential customers, expose Spire to liability, result in substantial costs for remediation, cause Spire to lose customers, or otherwise harm its business, financial condition, or results of operations. Spire may also incur significant costs for using alternative hosting sources or taking other actions in preparation for, or in reaction to, events that damage the AWS services Spire uses.

Spire’s end-user license agreement with AWS will remain in effect until it is terminated by AWS or Spire with or without cause subject to at least 30 days’ advance notice. Termination upon a material breach is subject to providing the breaching party prior notice and a 30-day cure period. AWS may terminate the agreement immediately upon notice if (i) Spire’s subscription has been suspended, (ii) AWS can no longer provide the Services due changes in software or other technology, or (iii) required by law or other government entities. In the event that Spire’s AWS service agreement is terminated, elimination of AWS services or features that Spire utilizes, or damage to such facilities, Spire could experience interruptions in access to its platform as well as significant delays and additional expense in arranging for or creating new facilities or re-architecting Spire’s platform for deployment on a different cloud infrastructure service provider, which would adversely affect Spire’s business, financial condition, and results of operations.

Risks Related to Legal and Regulatory Matters

Spire may become involved in claims, lawsuits, government investigations, and other proceedings that could adversely affect Spire’s business, financial condition, and results of operations.

From time to time, Spire may become involved in various legal proceedings relating to matters incidental to the ordinary course of its business, including intellectual property, commercial, employment, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings. Any claims against Spire, whether meritorious or not, could be time-consuming, result in costly litigation, be harmful to its reputation, require significant management attention, and divert significant resources. In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate and subject to change. Determining reserves for Spire’s pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation. It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines, and penalties that could adversely affect Spire’s business, financial condition, and results of operations. These proceedings could also result in harm to Spire’s reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in Spire’s business practices. Because of the potential risks, expenses, and uncertainties of litigation, Spire may, from time to time, settle disputes, even where Spire has meritorious claims or defenses, by agreeing to settlement agreements. Any of these consequences could adversely affect Spire’s business, financial condition, and results of operations.

Spire’s business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply with such laws and regulations could harm its business, financial condition, and results of operations.

Spire’s business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing laws and regulations related to the deployment and operation of satellites, ground stations, privacy and data protection, intellectual property, investment screening, labor and employment, worker classification, product safety, anti-bribery laws, import and export controls, federal securities laws, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than in the United States. These laws and regulations impose added costs on Spire’s business. Spire monitors these developments and devotes a significant amount of management’s time and external resources towards compliance with these laws, regulations, and guidelines, and such compliance places a significant burden on management’s time and other resources, and it may limit Spire’s ability to expand into certain jurisdictions. Moreover, changes in law, the imposition of new or additional regulations, or the enactment of any new or more stringent legislation that impacts Spire’s business could require it to change the way Spire operates. In addition, changes in laws and regulations applicable to Spire or its third-party partners referenced herein or changes in their enforcement or regulatory

 

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interpretation could result in changes in the legal requirements affecting Spire (including with retroactive effect) or its partners and suppliers. Any changes in the laws and regulations to which Spire or its partners and suppliers are subject could adversely affect Spire’s business, financial condition and results of operations. It is impossible to predict whether there will be any future changes in the regulatory regimes to which Spire will be subject or the effect of any such change.

Failure to comply with these laws or regulations or failure to satisfy any criteria or other requirements under such laws or regulations, such as with respect to obtaining and maintaining licenses, certificates, authorizations, and permits critical for the operation of Spire’s business, may result in civil penalties or private lawsuits, or result in a delay or the denial, suspension, or revocation of licenses, certificates, authorizations, or permits, which would prevent Spire from operating its business. For example, Spire’s business requires licenses and permits from the FCC, and review by other agencies of the U.S. government. In addition, Spire is required to maintain similar licenses and permits in Luxembourg and Singapore which impose regulatory and operational requirements. License approval can include an interagency review of safety, operational, radio frequency interference, national security, and foreign policy, and international obligations implications, as well as a review of foreign ownership. Spire must also comply with laws and regulations relating to the formation, administration, and performance of contracts with the public sector, including U.S. federal governmental organizations, which affects how Spire does business with governmental agencies. Selling Spire’s services to the U.S. government also subjects Spire to certain regulatory and contractual requirements. Failure to comply with these requirements could subject Spire to investigations, fines, and other penalties, which would have an adverse effect on its business, financial condition, and results of operations.

The rules and regulations of U.S. and foreign authorities, and their interpretation and application, may change, and such authorities may adopt regulations that limit or restrict Spire’s operations as presently conducted or currently contemplated. Such authorities may also make changes in the licenses of Spire’s competitors that affect Spire’s spectrum. These changes in rules or regulatory policy may significantly affect Spire’s business. For example, the FCC has an open notice of proposed rulemaking relating to mitigation of orbital debris which could affect Spire and its operations. Application of these laws to Spire’s business may negatively impact its performance in various ways, limiting the collaborations Spire may pursue, further regulating the export and re-export of Spire’s services and technology from the United States and abroad, and increasing Spire’s costs and the time necessary to obtain required authorization. The adoption of a multi-layered regulatory approach to any one of the laws or regulations to which Spire is or may become subject, particularly where the layers are in conflict, could require alteration of Spire’s manufacturing processes or operational parameters which may adversely impact its business.

Further, because regulations in each country differ, Spire may not be aware if some of its partners or persons with whom Spire or Spire’s partners do business do not hold the requisite licenses and approvals. Spire’s failure to provide services in accordance with the terms of its licenses or Spire’s failure to operate its satellites or ground stations as required by its licenses and applicable laws and government regulations could result in the imposition of government sanctions on Spire, including the suspension or cancellation of Spire’s licenses. Spire’s failure or delay in obtaining the approvals required to operate in other countries would limit or delay Spire’s ability to expand its operations into those countries. Spire’s failure to obtain industry-standard or government-required certifications for its services could compromise Spire’s ability to generate revenue and conduct its business in other countries. Any imposition of sanctions, loss of license, or failure to obtain the authorizations necessary to use Spire’s assigned radio frequency spectrum and to distribute its services in the United States or foreign jurisdictions could cause Spire to lose sales, hurt its reputation and impair Spire’s ability to pursue its business plan.

Noncompliance with applicable regulations or requirements could subject Spire to:

 

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investigations, enforcement actions, orders, and sanctions;

 

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mandatory changes to Spire’s global satellite system;

 

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disgorgement of profits, fines, and damages;

 

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civil and criminal penalties or injunctions;

 

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claims for damages by Spire’s customers;

 

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termination of contracts;

 

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loss of intellectual property rights; and

 

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temporary or permanent debarment from sales to government organizations.

The results of any such claims, lawsuits, arbitration proceedings, government investigations, or other legal or regulatory proceedings cannot be predicted with any degree of certainty. Any claims against Spire, whether meritorious or not, could be time-consuming, result in costly litigation, be harmful to its reputation, require significant management attention, and divert significant resources. Determining reserves for Spire’s pending litigation is a complex and fact-intensive process that requires significant subjective judgment and speculation. It is possible that a resolution of one or more such proceedings could result in substantial damages, settlement costs, fines, and penalties that could adversely affect Spire’s business, financial condition, and results of operations. These proceedings could also result in harm to Spire’s reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in Spire’s business practices. Any of these consequences could adversely affect Spire’s business, financial condition, and results of operations. Further, under certain circumstances, Spire has contractual and other legal obligations to indemnify and to incur legal expenses on behalf of its business and commercial partners and current and former directors and officers.

Further, a temporary or permanent debarment by the U.S. federal government could have a negative impact on Spire’s ability to obtain contracts with agencies of U.S. states and localities as well as with non-U.S. public sector customers, some of which are required to report any suspension or debarment when submitting a proposal.

Spire’s ability to obtain or maintain licensing authorization for its platform is subject to government rules and processes which can cause delays or failures in obtaining authorizations requested. Further, regulators may adopt new rules and regulations which could impose new requirements impacting Spire’s business, financial condition, and results of operations. If Spire does not maintain regulatory authorizations for its existing satellites, associated ground facilities and terminals, services it provides, or obtain authorizations for its future satellites, associated ground facilities and terminals, and services it provides, Spire may not be able to operate its existing satellites or expand its operations.

If Spire fails to obtain or maintain particular authorizations for any of the required licenses for its ground stations, satellite launches, satellite constellations, or for its ability to uplink or downlink satellite data on acceptable terms, such failure could delay or prevent Spire from offering some or all of its services, including subscription services and project-based orbital services, which could adversely affect Spire’s results of business, financial condition, and results of operations.

Spire may not be able to obtain all of the required regulatory authorizations for the construction, launch, and operation of any of its future satellites or export or import of data. Even if Spire can obtain the necessary authorizations and licenses, they may impose significant operational restrictions, or not protect Spire from interference that could affect the use of Spire’s satellites. Spire’s ability to secure all requisite governmental approvals is not assured, and the process of obtaining governmental authorizations and licenses can be time consuming, time sensitive, and require compliance with a wide array of administrative and procedural rules. Any failure to obtain required approvals could compromise Spire’s ability to generate revenue or conduct its business in one or more countries.

Spire holds FCC and foreign governmental licensing authority licenses, permits, or approvals for its satellite constellations and earth stations. As Spire builds out its satellite constellation, it will require new licenses, permits, or approvals from the FCC and/or foreign governmental licensing authorities or modifications to existing licenses, permits, or approvals. Changes to its satellite constellation and earth stations may also require prior approval from the FCC or other governmental authorities. These modifications or changes may take time: for example, the FCC typically processes satellite applications for new orbital locations or frequencies on a first come, first served basis. From time to time, Spire may have pending applications for permanent or temporary changes in frequencies and technical design. From time to time, Spire has filed or will need to file applications to replace or add satellites to its

 

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satellite constellation. These licenses, permits, and approvals are also subject to modification by the FCC and foreign government licensing authorities. In addition, Spire’s licenses, permits, and approvals require coordination with various entities, including other federal government agencies. There can be no assurance that the FCC or foreign governmental licensing authorities will renew the licenses Spire holds, modify the licenses Spire currently holds, or grant new licenses, or that coordination conditions can continue to be met. If the FCC or a foreign governmental licensing authority revokes, modifies or fails to renew the licenses Spire holds, or fails to grant a new license or modification, or if Spire fails to satisfy any of the conditions of its licenses, Spire may not be able to continue to provide its services.

Spire believes its current operations are in compliance with FCC and non-U.S. licensing jurisdiction requirements. In some cases, Spire relies upon partners or persons with whom it does business to obtain and maintain required non-U.S. regulatory approvals. However, if Spire or its partners do not maintain the authorizations necessary to operate its platform, Spire will not be able to operate the satellites covered by those authorizations, unless Spire obtains authorization from another licensing jurisdiction. Some of Spire’s authorizations provide waivers of regulations. If Spire does not maintain these waivers, Spire will be subject to operational restrictions or interference that will affect Spire’s use of existing satellites. Loss of a satellite authorization could cause Spire to lose the revenue from services provided by that satellite at a particular orbital location or using a particular frequency band, to the extent these services cannot be provided by satellites at other orbital locations or with a different frequency band.

Spire’s launch and operation of its platform may require additional regulatory authorizations from the FCC or a non-U.S. licensing jurisdiction. Obtaining launch windows for planned satellites and ground stations, preparing for launch, and working with the requisite equipment in foreign jurisdictions may require coordination with U.S. and foreign regulators. If any of Spire’s current operations are deemed not to be in compliance with applicable regulatory requirements, Spire may be subject to various sanctions, including fines, loss of authorizations, or denial of applications for new authorizations or renewal of existing authorizations. It is not uncommon for licenses for new satellites or additional operational parameters to be granted just prior to launch, and Spire expects to receive such licenses for all planned satellites. If Spire does not obtain required authorizations in the future, Spire will not be able to operate its planned satellites. If Spire obtains a required authorization but Spire does not meet milestones regarding the construction, launch, and operation of a satellite by deadlines that may be established in the authorization, Spire may lose its authorization to operate a satellite using certain frequencies in an orbital location. Any authorizations Spire may obtain may also impose operational restrictions or permit interference that could affect Spire’s use of planned satellites.

Countries or their regulatory authorities or the International Telecommunications Union (the “ITU”), a specialized technical agency of the United Nations, may adopt new laws, policies, or regulations, or change their interpretation of existing laws, policies, or regulations, that could cause Spire’s existing authorizations and the frequency allocations that Spire relies on for use of its satellites to be changed or cancelled, require Spire to incur additional costs, impose or change existing price ceilings, or otherwise adversely affect Spire’s operations or revenues. As a result, any currently held regulatory authorizations and licenses are subject to rescission and renewal and may not remain sufficient or additional authorizations may be necessary that Spire may not be able to obtain on a timely basis or on terms that are not unduly burdensome. There is no guarantee that such licenses will be renewed. Further, because the regulatory schemes vary by country, Spire may be subject to regulations in foreign countries of which Spire is not presently aware that it is not in compliance with, and as a result could be subject to sanctions by a foreign government.

Spire may be subject to claims that Spire has wrongfully hired an employee from a competitor, or that Spire’s employees, consultants, independent contractors, or advisors have wrongfully used or disclosed confidential information of third parties or that Spire’s employees have wrongfully used or disclosed alleged trade secrets of their former employers.

Many of Spire’s employees, consultants, independent contractors, and advisors, or individuals that may in the future serve as Spire employees, consultants, independent contractors, and advisors, are currently or were previously employed at companies including Spire’s competitors or potential competitors. Although Spire tries to ensure that its employees, consultants, independent contractors, and advisors do not use the confidential or proprietary information, trade secrets, or know-how of others in their work for Spire, Spire may inadvertently or otherwise use or disclose confidential or proprietary information, trade secrets, or know-how of these third parties, or confidential or proprietary information, trade secrets, or know-how that its employees, consultants, independent contractors, or advisors obtained

 

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from current or former employers. If Spire fails in defending any such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel. Litigation may be necessary to defend against these claims. Even if Spire is successful in defending against these claims, litigation could result in substantial cost and be a distraction to Spire’s management and employees. Claims that Spire, its employees, consultants, independent contractors, or advisors have misappropriated the confidential or proprietary information, trade secrets, or know-how of third parties could have a material adverse effect on Spire’s business, financial condition, and results of operations.

Spire is dependent on the availability and unimpaired use of allocated bands within the radio frequency spectrum and failure to secure spectrum use rights to support its operations and future technological development could impede its growth. Further, Spire’s platform may be subject to harmful interference from new or modified spectrum uses.

Spire’s platform is dependent on the use of satellite signals and on terrestrial communication bands. International allocations of radio frequency are made by the ITU. These allocations are further governed by radio regulations that have treaty status and which may be subject to modification every three to four years by the World Radiocommunication Conference. Each country also has regulatory authority over how each band is used in the country. In the United States, the FCC and the National Telecommunications and Information Administration share responsibility for radio frequency allocations and spectrum usage regulations.

Any ITU or local reallocation of radio frequency bands, including frequency band segmentation and sharing of spectrum, or other modifications of the permitted uses of relevant frequency bands, may materially and adversely affect the utility and reliability of Spire’s platform and have significant negative impacts on its customers, both of which could reduce demand for its platform. Spire is licensed to uplink and downlink its data over certain bands. Other countries have considered proposals for use of frequencies used by Spire’s platform as well as adjacent bands that could cause harmful interference to its platform.

Spire’s platform also uses other radio frequency bands, such as the GPS and Galileo frequencies, together with the GNSS signal, to provide enhanced GNSS capabilities, such as near real-time kinematics precision. The continuing availability of these non-GNSS radio frequencies is essential to provide enhanced GNSS products to Spire’s commercial and government markets. In addition, transmissions and emissions from other services and equipment operating in adjacent frequency bands or in-band may impair the utility and reliability of Spire’s platform. Any regulatory changes in spectrum allocation or in allowable operating conditions could have a material adverse effect on Spire’s business, financial condition, and results of operations.

Spire is subject to domestic and international governmental export and import controls that would impair its ability to compete in international markets or subject Spire to liability if it is not in compliance with applicable laws or if it does not secure or maintain the required export authorizations.

In many cases, Spire’s services are or may in the future be subject to U.S. export control laws and regulations including the Export Administration Regulations (“EAR”), and the International Traffic in Arms Regulations (“ITAR”), and subject to trade and economic sanctions maintained by OFAC. Spire is also subject to export control and trade sanctions laws and regulations in the EU, the United Kingdom, Singapore and other jurisdictions in which it operates. As such, an export license may be required to export or re-export Spire’s technology and services to certain countries or end-users, or for certain end-uses. If Spire were to fail to comply with such U.S. export controls laws and regulations, U.S. economic sanctions, or other similar laws or regulations in other jurisdictions, it could be subject to both civil and criminal penalties, including substantial fines, possible incarceration for employees and managers for willful violations, and the possible loss of Spire’s export or import privileges. Compliance with the EAR, ITAR, and other applicable regulatory requirements regarding the export of Spire’s services, including new releases and/or the performance of services, may create delays in the introduction of Spire’s services in non-U.S. markets, prevent Spire’s customers with non-U.S. operations from deploying these services throughout their global systems or, in some cases, prevent the export of the services to some countries altogether.

Obtaining the necessary export license for a particular sale or offering may not be possible, may be time-consuming, and may result in the delay or loss of sales opportunities. In addition, compliance with the directives of the Directorate of Defense Trade Controls (“DDTC”), may result in substantial expenses and diversion of management attention. Any

 

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failure to adequately address the directives of DDTC could result in civil fines or suspension or loss of Spire’s export privileges, any of which could materially adversely affect Spire’s business, financial condition, results of operations and growth prospects. Further, U.S. export control laws and economic sanctions as well as similar laws and regulations in other jurisdictions prohibit the export of offerings to certain U.S. embargoed or sanctioned countries, governments, and persons, as well as for prohibited end-uses. Spire has failed, and may in the future fail, to secure or maintain at all times all required export authorizations, which could have negative consequences on our business, including reputational harm and civil and criminal penalties. Further, Spire has failed, and may fail to secure or maintain at all times, all required export authorizations, which could have negative consequences on its business, including reputational harm, and lead to government investigations and criminal and civil penalties. Additionally, even though Spire takes precautions to ensure that Spire complies with all relevant export control laws and regulations, monitoring and ensuring compliance with these complex export controls and sanctions is particularly challenging because Spire’s offerings are widely distributed throughout the world. Even though we take precautions to ensure that Spire and its partners comply with all relevant export control laws and regulations, any failure by Spire or its partners to comply with such laws and regulations could have negative consequences for us, including reputational harm, government investigations and penalties.

Any change in domestic or international export or import laws or regulations, economic sanctions, or related legislation, shift in the enforcement or scope of existing export, import, or sanctions laws or regulations, or change in the countries, governments, persons, or technologies targeted by such export, import, or sanctions laws or regulations, could result in decreased use of Spire’s platform by, or in its decreased ability to export or sell access to Spire’s platform to, existing or potential end-customers with international operations. Any decreased use of Spire’s platform or limitation on its ability to export to or sell access to Spire’s platform in international markets would adversely affect its business, financial condition, and results of operations.

Spire is subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject Spire to criminal penalties or significant fines, harm Spire’s reputation, and adversely affect Spire’s business, financial condition, results of operations, and growth prospects.

Spire is subject to the FCPA, the U.K. Bribery Act 2010, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and other anti-corruption, anti-bribery, and anti-money laundering laws and regulations in the jurisdictions in which Spire has offices or does business, both domestic and abroad. These laws and regulations generally prohibit companies, their employees, business partners, third-party intermediaries, representatives, and agents from authorizing, offering, or providing, directly or indirectly, improper payments to government officials, political candidates, political parties, or commercial partners for the purpose of obtaining or retaining business or securing an improper business advantage.

Spire has interactions with foreign officials, including in furtherance of sales to governmental entities in the United States and in non-U.S. countries. Spire sometimes leverages third parties to conduct its business abroad, and Spire’s third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. Spire may be held liable for the corrupt or other illegal activities of its employees or these third-parties, even if Spire does not explicitly authorize such activities. The FCPA and other applicable laws and regulations also require that Spire keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. While Spire has policies and procedures to address compliance with such laws, Spire cannot assure you that all of its employees, business partners, third-party intermediaries, representatives, and agents will not take actions in violation of Spire’s policies and applicable law, for which Spire may be ultimately held responsible. Spire’s exposure for violating these laws increases as its international presence expands and as Spire increases sales and operations in foreign jurisdictions.

Any violation of the FCPA or other applicable anti-bribery, anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, settlements, prosecution, enforcement actions, fines, damages, or suspension or debarment from government contracts, any of which could adversely affect Spire’s reputation, business, stock price, financial condition, results of operations, and growth prospects. In addition, responding to any investigation or action will likely result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.

 

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Changes in domestic and international tax laws and regulations and those which Spire is subject to in various tax jurisdictions could adversely affect Spire’s business, financial condition, and results of operations.

In December 2017, the legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), was enacted, which contains significant changes to U.S. tax law, including a reduction in the corporate tax rate and a transition to a new territorial system of taxation. The primary impact of the new legislation on Spire’s provision for income taxes was a reduction of the future tax benefits of Spire’s deferred tax assets as a result of the reduction in the corporate tax rate. However, since Spire has recorded a full valuation allowance against its deferred tax assets, these changes did not have a material impact on its condensed consolidated financial statements. The impact of the Tax Act will likely be subject to ongoing technical guidance and accounting interpretation, which Spire will continue to monitor and assess. As Spire expands the scale of its international business activities, any changes in the U.S. or foreign taxation of such activities may increase its worldwide effective tax rate and harm its business, financial condition, and results of operations.

Spire’s international operations subject it to potentially adverse tax consequences. Spire generally conducts its international operations through subsidiaries and report Spire’s taxable income in various jurisdictions worldwide based upon its business operations in those jurisdictions. Spire’s intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant taxing authorities may disagree with Spire’s determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and Spire’s position were not sustained, it could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of Spire’s operations.

There is also a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth by the Organisation for Economic Co-operation and Development (the “OECD”), and unilateral measures being implemented by various countries due to a lack of consensus on these global initiatives. As an example, the OECD has put forth two proposals-Pillar One and Pillar Two-that revise the existing profit allocation and nexus rules (profit allocation based on location of sales versus physical presence) and ensure a minimal level of taxation, respectively. Further, unilateral measures such as digital services tax and corresponding tariffs in response to such measures are creating additional uncertainty. If these proposals are passed, it is likely that Spire will have to pay higher income taxes in countries where such rules are applicable.

Spire’s ability to use its net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2020, Spire had $135.1 million of federal and $26.8 million of state net operating loss carryforwards (“Net Operating Losses”), available to reduce future taxable income. Of the approximately $135.1 million in U.S. federal operating loss carryforward, approximately $52.6 million will be carried forward indefinitely for U.S. federal tax purposes and approximately $82.5 million will expire between 2032 and 2037. Spire’s $26.8M of state Net Operating Losses will expire in various tax years beginning in 2032. It is possible that Spire will not generate taxable income in time to use Net Operating Losses before their expiration, or at all. In addition, the federal and state net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383, respectively of the Internal Revenue Code of 1986, as amended, and similar provisions under state law. Under those sections of the Internal Revenue Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income or tax liability may be limited. In general, an “ownership change” will occur if there is a cumulative change in Spire’s ownership by “5-percent stockholders” that exceeds 50 percentage points over a rolling three-year period. Spire has not yet undertaken an analysis of whether the Business Combination constitutes an “ownership change” for purposes of Internal Revenue Code Section 382 and Section 383. Spire may experience ownership changes in the future as a result of subsequent shifts in its stock ownership. To the extent Spire is not able to offset future taxable income with its Net Operating Losses or other tax attributes, Spire’s cash flows may be adversely affected.

The Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, among other things, includes changes to U.S. federal tax rates and the rules governing Net Operating Losses. For Net Operating Losses arising in tax years beginning after December 31, 2017, the Tax Act, as modified by the CARES Act, limits a

 

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taxpayer’s ability to utilize Net Operating Losses to 80% of taxable income (as calculated before taking the Net Operating Losses, and certain other tax attributes, into account) for taxable years beginning after December 31, 2020. In addition, Net Operating Losses arising in tax years ending after December 31, 2017 and before January 1, 2021 may be carried back to each of the five taxable years preceding the tax year of such loss, but Net Operating Losses arising in taxable years beginning after December 31, 2020 may not be carried back. Net Operating Losses arising in tax years beginning after December 31, 2017 can be carried forward indefinitely. Net Operating Losses generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation and will continue to have a two-year carryback and twenty-year carryforward period. As Spire maintains a full valuation allowance against its U.S. Net Operating Losses and has been in U.S. taxable losses since inception, these changes did not impact its consolidated balance sheet as of December 31, 2020. However, in future years, if and when a net deferred tax asset is recognized related to Spire’s Net Operating Losses, the changes in the new limitation on the use of Net Operating Losses may significantly impact Spire’s valuation allowance assessments for Net Operating Losses generated after December 31, 2017.

There is also a risk that due to federal or state regulatory changes, such as suspensions on the use of Net Operating Losses, in light of the needs of various jurisdictions, including some states, to raise additional revenue to help counter the fiscal impact from the COVID-19 pandemic, possibly with retroactive effect, or other unforeseen reasons, Spire’s existing Net Operating Losses could expire or otherwise be unavailable to offset future income tax liabilities.

Taxing authorities may successfully assert that Spire should have collected or in the future should collect sales and use, value added, or similar taxes, and any such assessments could adversely affect its business, financial condition, and results of operations.

Spire does not collect sales and use, value added, and similar taxes in all jurisdictions in which it has sales, based on its belief that such taxes are not applicable. Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction. Certain jurisdictions in which Spire does not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and Spire may be required to collect such taxes in the future. Such tax assessments, penalties, interest, or future requirements would adversely affect Spire’s financial condition and results of operations. Further, in June 2018, the Supreme Court held in South Dakota v. Wayfair, Inc. that states could impose sales tax collection obligations on out-of-state sellers even if those sellers lack any physical presence within the states imposing the sales taxes. Under Wayfair, a person requires only a “substantial nexus” with the taxing state before the state may subject the person to sales tax collection obligations therein. An increasing number of states (both before and after the publication of Wayfair) have considered or adopted laws that attempt to impose sales tax collection obligations on out-of-state sellers. The Supreme Court’s Wayfair decision has removed a significant impediment to the enactment and enforcement of these laws, and it is possible that states may seek to tax out-of-state sellers on sales that occurred in prior tax years, which could create additional administrative burdens for Spire, put Spire at a competitive disadvantage if such states do not impose similar obligations on its competitors, and decrease its future sales, which would adversely impact Spire’s business, financial condition, and results of operations.

Risks Relating to Financial and Accounting Matters

Spire’s current insurance does not protect it against all satellite-related losses that it may experience.

Spire’s business is subject to a number of risks and hazards including adverse conditions. Such occurrences could result in damage to equipment, personal injury or death, monetary losses, and possible legal liability. In addition, changes in the regulatory environment could impose additional insurance requirements on satellite operators. Despite any insurance coverage which Spire currently has or may secure in the future, the nature of these risks is such that liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or it may elect not to insure against such liabilities due to high premium costs or other reasons, in which event it could incur significant costs that could have a material adverse effect on its financial position.

Spire’s current insurance does not protect it against all satellite-related losses that it may experience. Spire’s insurance does not protect it against business interruption, loss of revenues, or delay of revenues. In addition, Spire only carries third-party liability insurance outside of the United States. Spire’s existing third-party liability, launch, and in-orbit insurance policies may include, and any future policies that Spire may obtain may include, specified exclusions,

 

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deductibles and material change limitations. Typically, these insurance policies exclude coverage for damage or losses arising from acts of war, anti-satellite devices, electromagnetic or radio frequency interference, and other similar potential risks for which exclusions are customary in the industry at the time the policy is written. In addition, they typically exclude coverage for satellite health-related problems affecting Spire’s satellites that are known at the time the policy is written or renewed. Any claims under existing policies are subject to settlement with the insurers.

The price, terms, and availability of satellite insurance has increased significantly in recent years. These increases may be attributed to recent satellite launch or in-orbit failures and general conditions in the insurance industry, including the limited number of insurance providers. Launch and in-orbit policies on satellites may not continue to be available on commercially reasonable terms or at all or Spire may determine that it is not in its interest to purchase insurance in certain circumstances. To the extent Spire experiences a launch or in-orbit failure that is not fully insured or not insured at all, such failures could harm Spire’s financial position. In addition, higher premiums on insurance policies increase costs, thereby reducing Spire’s available cash. In addition to higher premiums, insurance policies may provide for higher deductibles, shorter coverage periods, higher loss percentages required for constructive total loss claims and additional satellite health-related policy exclusions. If Spire experiences significant uninsured losses, such events could have a material adverse impact on its business, financial condition, and results of operations.

Spire may face fluctuations in currency exchange rates, which could adversely affect Spire’s financial condition and results of operations.

As Spire continues to expand internationally, it will become more exposed to fluctuations in currency exchange rates. A portion of Spire’s operating expenses are incurred outside of the United States and denominated in foreign currencies. The strengthening of the U.S. dollar relative to foreign currencies increases the real cost of Spire’s platform for its customers outside of the United States, which could lead to the lengthening of Spire’s sales cycle or reduced demand for its platform. The fluctuations in currency exchange rates could increase the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as overseas capital expenditures. As Spire continues its international expansion, increased international sales may result in foreign currency denominated sales, increasing its foreign currency risk. Moreover, this continued expansion will increase operating expenses incurred outside the United States and denominated in foreign currencies. If Spire is not able to successfully hedge against the risks associated with currency fluctuations, the company’s financial condition and results of operations would be adversely affected. To date, Spire has not entered into any hedging transactions in an effort to reduce its exposure to foreign currency exchange risk While Spire may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited and Spire may not be able to successfully hedge its exposure, which would adversely affect its business, financial condition, and results of operations.

Spire’s results of operations may be adversely affected by changes in accounting principles applicable to it.

GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC, and other various bodies formed to promulgate and interpret appropriate accounting principles. Changes in accounting principles applicable to it, or varying interpretations of current accounting principles, in particular, with respect to revenue recognition of Spire’s solutions, could have a significant effect on Spire’s reported results of operations. Further, any difficulties in the implementation of changes in accounting principles, including the ability to modify Spire’s accounting systems, could cause Spire to fail to meet its financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in Spire.

Spire’s estimates or judgments relating to its critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause its results of operations to fall below expectations of securities analysts and investors, resulting in a decline in the market price of New Spire Class A Common Stock.

Spire’s estimates or judgments relating to its critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause its results of operations to fall below expectations of securities analysts and investors, resulting in a decline in the market price of New Spire Class A Common Stock.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in Spire’s financial statements and accompanying notes. Spire bases its estimates on historical experience and on various other assumptions that Spire believes to be reasonable under the

 

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circumstances, as described in the section titled “Spire’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the recognition and measurement of certain assets and liabilities and revenue and expenses that is not readily apparent from other sources. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management’s significant estimates include assumptions in revenue recognition, and fair value of the Company’s common stock, equity awards and warrant liabilities. Actual results could differ from those estimates. If Spire’s assumptions change or if actual circumstances differ from those in its assumptions, Spire’s results of operations could be adversely affected, which could cause its results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of New Spire Class A Common Stock.

Spire may fail to maintain an effective system of disclosure controls and internal control over financial reporting, which could impair its ability to produce timely and accurate financial statements or comply with applicable regulations.

Following the Closing, New Spire will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the listing standards of the NYSE. The Sarbanes-Oxley Act requires, among other things, that Spire maintain effective disclosure controls and procedures and internal control over financial reporting. Spire is continuing to develop and refine its disclosure controls and other procedures that are designed to ensure that information required to be disclosed by New Spire in the reports that New Spire will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to New Spire’s principal executive and financial officers. Spire is also continuing to improve its internal control over financial reporting. Spire has expended, and anticipates that it will continue to expend, significant resources in order to maintain and improve the effectiveness of its disclosure controls and procedures and internal control over financial reporting.

Spire’s current controls and any new controls that Spire develops may become inadequate because of changes in the conditions in its business, including increased complexity resulting from any international expansion. Further, weaknesses in Spire’s disclosure controls or its internal control over financial reporting have been and may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm Spire’s results of operations or cause it to fail to meet its reporting obligations and may result in a restatement of Spire’s financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of New Spire’s internal control over financial reporting that it will eventually be required to include in its periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in New Spire’s reported financial and other information, which would likely adversely affect the market price of New Spire Class A Common Stock. In addition, if New Spire is unable to continue to meet these requirements, it may not be able to remain listed on the NYSE. As a public company, New Spire will be required to provide an annual management report on the effectiveness of its internal control over financial reporting commencing with its annual report on Form 10-K.

Spire identified material weaknesses in its internal control over financial reporting. If Spire is unable to remediate these material weaknesses, or if it identifies additional material weaknesses in the future or otherwise fails to maintain effective internal control over financial reporting, it may result in material misstatements of its consolidated financial statements or cause it to fail to meet its periodic reporting obligations, which may adversely affect Spire’s business, financial condition, and results of operations.

In connection with the preparation of Spire’s financial statements, material weaknesses in Spire’s internal control over financial reporting were identified as of December 31, 2020. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Spire did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company. Specifically, Spire lacked a sufficient number of professionals with an appropriate level of internal controls and accounting knowledge, training, and experience to appropriately analyze, record and disclose accounting matters timely and accurately. Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of Spire’s financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in its finance and accounting functions. This material weakness contributed to the following additional material weaknesses:

 

(i)

Spire did not design and maintain an effective risk assessment process at a precise enough level to identify new and evolving risks of material misstatement in its financial statements. Specifically, changes to existing controls or the implementation of new controls have not been sufficient to respond to changes to the risks of material misstatement in the financial statements:

 

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(ii)

Spire did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations. Specifically, certain personnel have the ability to both (a) create and post journal entries within the Company’s general ledger system, and (b) prepare and review account reconciliations;

These material weaknesses above resulted in certain immaterial audit adjustments, which were recorded prior to the issuance of the consolidated financial statements as of and for the year ended December 31, 2020. Additionally, these material weaknesses could result in a misstatement of substantially all of our accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

 

(iii)

Spire did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of Spire’s financial statements. Specifically, Spire did not design and maintain:

 

(a)

user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel;

 

(b)

program change management controls for its financial systems to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized, and implemented appropriately; and

 

(c)

testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.

These IT deficiencies did not result in a misstatement to the financial statements, however, the deficiencies, when aggregated, could impact Spire’s ability to maintain effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.

Spire will take certain measures to remediate these material weaknesses described above, including the following:

 

(i)

hiring additional accounting and IT personnel, to bolster its reporting, technical accounting, and IT capabilities;

 

(ii)

establishing appropriate authorities and responsibilities, including segregation of duties, in pursuit of our financial reporting objectives;

 

(iii)

engaging a third party to assist in designing and implementing controls, including controls to ensure appropriate segregation of duties related to journal entries and account reconciliations;

 

(iv)

designing and implementing a formal risk assessment process to identify and evaluate changes in Spire’s business and the impact on its internal controls; and

 

(v)

designing and implementing IT general controls, including controls over the review and update of user access rights and privileges, change management, and program development approvals and testing.

We have begun to hire additional accounting and IT personnel to establish appropriate authorities and responsibilities in our financial reporting function, engaged a third-party resource to assist us in designing and implementing controls, and begun to implement appropriate segregation of duties related to journal entries and reconciliations. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective.

We are working to remediate the material weaknesses as efficiently and effectively as possible and expect full remediation could potentially go beyond December 31, 2021. At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, will result in Spire incurring significant costs, and will place significant demands on our financial and operational resources.

Spire cannot assure that the measures it has taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to its material weaknesses in internal control over financial reporting or that they will prevent or avoid potential future material weaknesses to be identified in the future. The effectiveness of Spire’s internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error, and the risk of fraud. Any failure to design, implement, and maintain effective internal control over financial reporting or any difficulties encountered in their implementation or improvement may result in material misstatements of its consolidated financial statements or cause it to fail to meet its periodic reporting obligations, which may adversely affect Spire’s business, financial condition, and results of operations.

Spire’s metrics and estimates used to evaluate its performance and make operating results projections, rely in large part upon assumptions and analyses developed by Spire, are subject to inherent challenges in measurement, and any real or perceived inaccuracies in those estimates may harm its reputation and negatively affect its business.

Spire regularly reviews and may adjust its processes for calculating its metrics and estimates used to make projections about its operating results, evaluate its growth, measure its performance, and make strategic decisions. Spire’s analysis

 

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is based on data such as renewal and upsell rates, number of new customers, average selling prices, sales pipeline analysis, sales quota targets and expected achievement, bookings, billings, number of satellites to be built and launched, number of ground stations to be built and put into service, headcount that is required to support the business, and non-headcount spending that is required to support the business. These metrics are calculated using internal company data and have not been evaluated by a third party. Spire’s metrics and estimates may differ from estimates published by third parties or from similarly titled metrics of its competitors due to differences in methodology or the assumptions on which Spire relies. While Spire believes its assumptions and the data underlying its metrics and estimates are reasonable, these metrics and estimates may not be accurate and the conditions supporting Spire’s metrics and estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, Spire’s metrics and estimates of the total addressable market, as well as the expected growth rate for the total addressable market, may prove to be inaccurate. Even if the markets in which Spire competes meet the size estimates and growth Spire has forecasted, Spire’s business could fail to grow at similar rates, if at all. If securities analysts or investors do not consider Spire’s metrics or estimates to be accurate representations of its business, or if Spire discovers material inaccuracies in its metrics or estimates, then the market price of New Spire Class A Common Stock could decline, Spire’s reputation and brand could be harmed, Spire’s actual results might diverge from its operating results projections, and Spire’s business, financial condition, and results of operations could be adversely affected.

Spire has substantial indebtedness under its credit facilities and its obligations thereunder may limit Spire’s operational flexibility or otherwise adversely affect its financial condition.

Spire has an existing credit facility with Eastward Fund Management, LLC (“Eastward”) for a secured credit facility in an aggregate principal amount of up to $25.0 million, of which Spire has borrowed $15.0 million. In addition, Spire’s Luxembourg subsidiary has an existing credit facility with European Investment Bank (“EIB”) for a secured credit facility in an aggregate principal amount of up to EUR 20.0 million, of which Spire’s subsidiary has borrowed EUR 12.0 million. In April 2021, Spire entered into the FP Credit Agreement that will, upon the satisfaction of certain funding conditions set forth therein, provide Spire with access to a senior secured convertible credit facility in an aggregate principal amount of $70.0 million with expected funding in May 2021. Spire will use a portion of the proceeds from the term loan to repay its outstanding obligations under its existing credit facilities with Eastward and EIB. There can be no assurance that Spire will be able to repay this indebtedness when due, or that Spire will be able to refinance this indebtedness on acceptable terms or at all.

Spire’s indebtedness could adversely impact its business. For example, these obligations could, among other things:

 

•

make it difficult for Spire to pay other obligations;

 

•

increase Spire’s cost of borrowing from other sources;

 

•

make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, investments, acquisitions, debt service requirements, or other purposes;

 

•

restrict Spire from making acquisitions or cause it to make divestitures or similar transactions;

 

•

adversely affect Spire liquidity and result in a material adverse effect on its financial condition upon repayment of the indebtedness;

 

•

require Spire to dedicate a substantial portion of its cash flow from operations to service and repay the indebtedness, reducing the amount of cash flow available for other purposes;

 

•

limit Spire’s ability to hire or properly support company’s infrastructure which could have adverse impact on revenue, margins and overall financial performance;

 

•

increase Spire’s vulnerability to adverse economic conditions;

 

•

place Spire at a competitive disadvantage compared to its less leveraged competitors; and

 

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•

limit Spire’s flexibility in planning for and reacting to changes in its business.

Restrictions imposed by Spire’s outstanding indebtedness and any future indebtedness may limit its ability to operate its business and to finance its future operations or capital needs or to engage in acquisitions or other business activities necessary to achieve growth.

The terms of Spire’s credit agreements restrict it from engaging in specified types of transactions. These covenants restrict Spire’s ability to, among other things:

 

•

incur additional indebtedness;

 

•

create or incur liens;

 

•

engage in consolidations, amalgamations, mergers, liquidations, dissolutions or dispositions;

 

•

sell, transfer or otherwise dispose of assets;

 

•

pay dividends and distributions on, or purchase, redeem, defease, or otherwise acquire or retire for value, Spire’s capital stock;

 

•

make acquisitions, investments, loans (including guarantees), advances, or capital contributions; and

 

•

engage in certain intercompany transactions and other transactions with affiliates.

In addition, the FP Credit Agreement requires that, prior to consummating certain transactions, including the Business Combination, Spire maintain unrestricted cash of at least $15.0 million, as of the last day of each fiscal quarter and as determined in accordance with the FP Credit Agreement, unless Spire is able to maintain positive EBITDA. Spire cannot guarantee that it will be able to maintain compliance with these various covenants or, if Spire fails to do so, that it will be able to obtain waivers from the applicable lender(s) and/or amend the covenants. Even if Spire complies with all of the applicable covenants, the restrictions on the conduct of its business could adversely affect its business by, among other things, limiting Spire’s ability to take advantage of financing opportunities, mergers, acquisitions, investments, and other corporate opportunities that may be beneficial to Spire’s business.

A change in control or a breach of any of the covenants in the credit agreements governing Spire’s credit facilities could result in an event of default, which, if not cured or waived, could trigger acceleration of its indebtedness and an increase in the interest rates applicable to such indebtedness, and may result in the acceleration of or default under any other debt Spire may incur in the future to which a cross-acceleration or cross-default provision applies. The acceleration of the indebtedness under Spire’s credit agreements or under any other indebtedness, could have a material adverse effect on its business, results of operations, and financial condition. In the event of any default under Spire’s existing or future credit facilities, the applicable lenders could elect to terminate borrowing commitments and declare all borrowings and loans outstanding, together with accrued and unpaid interest and any fees and other obligations, to be due and payable. In addition, Spire’s obligations under its credit facilities with Eastward and EIB (and, upon funding of the term loan under the FP Credit Agreement and repayment of the obligations under the Eastward and EIB credit agreements, its obligations under the FP Credit Agreement) are (or will be) secured by a security interest in substantially all of Spire’s assets. During the existence of an event of default under Spire’s credit agreements, the applicable lender could exercise its rights and remedies thereunder, including by way of initiating foreclosure proceedings against any assets constituting collateral for Spire’s obligations under such credit facility.

Spire may be unable to generate sufficient cash flow to satisfy its significant debt service obligations, which could have a material adverse effect on its business, financial condition, results of operations, and cash flows.

Spire’s ability to make scheduled payments on or to refinance its debt obligations depends on its financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond Spire’s control. Spire may not be able to maintain

 

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a level of cash flows from operating activities sufficient to permit it to pay the principal, premium, if any, and/or interest on its indebtedness. If Spire’s cash flows and capital resources are insufficient to fund Spire’s debt service obligations, it may be forced to reduce or delay investments, acquisitions, capital expenditures, and payments on account of other obligations, seek additional capital, restructure or refinance its indebtedness, or sell assets. These alternative measures may not be successful and may not permit Spire to meet its scheduled debt service obligations. Spire’s ability to restructure or refinance its debt will depend on the condition of the capital markets and its financial condition at such time. Any refinancing of Spire’s debt could be at higher interest rates and could require Spire to comply with more onerous covenants, which could further restrict its business operations. In addition, Spire cannot assure you that it will be able to refinance any of its indebtedness on commercially reasonable terms, or at all.

If Spire is at any point unable to repay or otherwise refinance its indebtedness when due, or if any other event of default (including as a result of Spire’s failure to comply with any of its affirmative or negative covenants) is not cured or waived, the applicable lenders could accelerate Spire’s outstanding obligations or proceed against the collateral granted to them to secure that indebtedness, which could force Spire into bankruptcy or liquidation. In the event the applicable lenders accelerate the repayment of Spire’s borrowings, Spire and its subsidiaries may not have sufficient assets to repay that indebtedness. Any acceleration of amounts due under the agreements governing Spire’s credit facility or the exercise by the applicable lenders of their rights under the security documents would likely have a material adverse effect on its business.

Risks Related to the Business Combination and NavSight

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us,” or “our,” refer to NavSight prior to the consummation of the Business Combination.

If NavSight is unable to complete the Business Combination with Spire or is unable to complete another business combination by September 14, 2022, NavSight will cease all operations except for the purpose of winding up and it would redeem its Public Shares and liquidate the Trust Account, in which case our public shareholders may only receive approximately $10.00 per share and the NavSight Warrants will expire worthless.

If NavSight is unable to complete the Business Combination with Spire or unable to complete another business combination by September 14, 2022, as such date may be extended at a duly called special meeting, it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to NavSight to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of NavSight’s remaining stockholders and the NavSight Board, liquidate and dissolve, subject in each case to NavSight’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, the Public Stockholders may only receive approximately $10.00 per share and the NavSight Warrants will expire worthless.

New Spire may redeem your unexpired NavSight Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your NavSight Warrants worthless.

New Spire will have the ability to redeem outstanding NavSight Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of NavSight Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date New Spire sends the notice of redemption to NavSight Warrant holders and provided certain other conditions are met. If and when the NavSight Warrants become redeemable by New Spire, New Spire may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, New Spire may redeem the NavSight Warrants as set forth above even if the holders are otherwise unable to exercise the NavSight Warrants. Redemption of the outstanding NavSight Warrants could force you (i) to exercise your NavSight Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your NavSight Warrants at the then-current market price when

 

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you might otherwise wish to hold your NavSight Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding NavSight Warrants are called for redemption, NavSight expects would be substantially less than the market value of your NavSight Warrants. None of the Private Placement Warrants will be redeemable by New Spire so long as they are held by the Sponsor or its permitted transferees.

In addition, NavSight has the ability to redeem outstanding NavSight Warrants ninety days after they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their NavSight Warrants prior to redemption for a number of NavSight Class A Common Stock determined based on the redemption date and the fair market value of NavSight Class A Common Stock and provided certain other conditions are met. NavSight would redeem the NavSight Warrants in this manner when NavSight believes it is in NavSight’s best interest to update its capital structure to remove the NavSight Warrants and pay fair market value to the NavSight Warrant holders. NavSight can also redeem the NavSight Warrants for NavSight Common Stock when the NavSight Class A Common Stock is trading at a price starting at $10, which is below the exercise price of $11.50, because it will provide certainty with respect to NavSight’s capital structure and cash position while providing NavSight Warrant holders with fair market value in the form of shares of NavSight Class A Common Stock. If NavSight chooses to redeem the NavSight Warrants when the NavSight Class A Common Stock is trading at a price below the exercise price of the NavSight Warrants, this could result in the NavSight Warrant holders receiving fewer shares of NavSight Class A Common Stock than they would have received if they had chosen to wait to exercise their NavSight Warrants for shares of NavSight Class A Common Stock if and when the NavSight Class A Common Stock trades at a price higher than the exercise price of $11.50. Any such redemption may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the NavSight Warrants are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the value of the NavSight Class A Common Stock had your NavSight Warrants remained outstanding. Finally, this redemption feature provides a ceiling to the value of your NavSight Warrants since it locks in the redemption price in the number of NavSight Class A Common Stock to be received if NavSight chooses to redeem the NavSight Warrants for NavSight Common Stock.

NavSight will require Public Stockholders who wish to redeem their shares of NavSight Class A Common Stock in connection with the Business Combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

NavSight will require the Public Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to NavSight’s transfer agent prior to the expiration date set forth in the tender offer documents mailed to such holders, or in the event NavSight distributes proxy materials, up to two business days prior to the vote on the proposal to approve the Business Combination, or to deliver their shares to the transfer agent electronically using DTC’s Deposit/Withdrawal At Custodian System, or DWAC System, at the holder’s option. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC, and NavSight’s transfer agent will need to act to facilitate this request. It is NavSight’s understanding that stockholders should generally allot at least one week to obtain physical certificates from the transfer agent. However, because NavSight does not have any control over this process or over the brokers or DTC, it may take significantly longer than one week to obtain a physical stock certificate. While NavSight has been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under the Current NavSight Bylaws, NavSight is required to provide at least 10 days advance notice of any stockholder meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. Accordingly, if it takes longer than NavSight anticipates for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a stockholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem Public Shares, its shares may not be redeemed.

Additionally, despite NavSight’s compliance with the proxy rules, stockholders may not become aware of the opportunity to redeem their shares.

If a Public Stockholder fails to receive notice of NavSight’s offer to redeem their shares of NavSight Class A Common Stock in connection with the Business Combination, or fails to comply with the procedures for tendering its share of NavSight Class A Common Stock, such shares may not be redeemed.

 

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NavSight will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with the initial business combination. Despite NavSight’s compliance with these rules, if a stockholder fails to receive NavSight’s tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that NavSight will furnish to holders of its Public Shares in connection with the initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem Public Shares. For example, NavSight may require the Public Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to NavSight’s transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the Business Combination in the event NavSight distributes proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.

There is uncertainty regarding the federal income tax consequences of the redemption to the holders of NavSight Class A Common Stock.

There is some uncertainty regarding the federal income tax consequences to holders of NavSight Class A Common Stock who exercise their redemption rights. The uncertainty of tax consequences relates primarily to the individual circumstances of the taxpayer and include whether the redemption results in a dividend, taxable as ordinary income, or a sale, taxable as capital gain. Whether the redemption qualifies for sale treatment, resulting in taxation as capital gain rather than ordinary income, will depend largely on whether the holder owns (or is deemed to own) any shares of NavSight Class A Common Stock following the redemption, and if so, the total number of shares of NavSight Class A Common Stock held by the holder both before and after the redemption relative to all shares of NavSight Class A Common Stock outstanding both before and after the redemption. The redemption generally will be treated as a sale, rather than a dividend, if the redemption (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in NavSight, or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Due to the personal and subjective nature of certain of such tests and the absence of clear guidance from the Internal Revenue Services, or IRS, there is uncertainty as to whether a holder who elects to exercise its redemption rights will be taxed on any gain from the redemption as ordinary income or capital gain. For additional information, see the section titled “Certain U.S. Federal Income Tax Considerations.”

NavSight’s ability to utilize Spire’s net operating losses and tax credit carryforwards to offset future taxable income may be subject to certain limitations.

In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards, or “NOLs,” to offset future taxable income. The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. If Spire has experienced an ownership change at any time since its incorporation, Spire may already be subject to limitations on its ability to utilize its existing NOLs and other tax attributes to offset taxable income or tax liability. In addition, the Business Combination, the PIPE Investment and future changes in NavSight’s stock ownership, which may be outside of NavSight’s control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit NavSight’s use of Spire’s accumulated state tax attributes. As a result, even if NavSight earns net taxable income in the future, its ability to use its or Spire’s pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to NavSight.

There is also a risk that changes in law or regulatory changes made in response to the need for some jurisdictions to raise additional revenue to help counter the fiscal impact from the COVID-19 pandemic or for other unforeseen reasons, including suspensions on the use of net operating losses or tax credits, possibly with retroactive effect, may result in Spire’s existing net operating losses or tax credits expiring or otherwise being unavailable to offset future income tax liabilities. A temporary suspension of the use of certain net operating losses and tax credits has been enacted in California, and other states may enact suspensions as well.

NavSight does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for NavSight to complete the Business Combination even if a substantial majority of NavSight’s stockholders do not agree.

 

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The Current NavSight Certification of Incorporation does not provide a specified maximum redemption threshold, except that NavSight will only redeem its Public Shares so long as (after such redemption) NavSight’s net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of its initial business combination and after payment of underwriters’ fees and commissions (so that NavSight does not then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the Business Combination. As a result, NavSight may be able to complete the Business Combination even if a substantial majority of the Public Stockholders do not agree with the Business Combination and have redeemed their shares. In the event the aggregate cash consideration NavSight would be required to pay for all shares of NavSight Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Business Combination exceed the aggregate amount of cash available to NavSight, NavSight will not complete the Business Combination or redeem any shares, all shares of NavSight Class A Common Stock submitted for redemption will be returned to the holders thereof, and NavSight instead may search for an alternate business combination.

If a stockholder or a “group” of stockholders are deemed to hold in excess of 15% of the NavSight Class A Common Stock, such stockholder or group will lose the ability to redeem all such shares in excess of 15% of the NavSight Class A Common Stock.

The Current NavSight Certification of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the IPO, which NavSight refers to as the “Excess Shares,” without NavSight’s prior written consent. However, the Current NavSight Certification of Incorporation does not restrict NavSight stockholders’ ability to vote all of their shares (including Excess Shares) for or against NavSight’s initial business combination. The inability of a stockholder to redeem the Excess Shares will reduce its influence over NavSight’s ability to complete its initial business combination and such stockholder could suffer a material loss on its investment in NavSight if it sells such Excess Shares in open market transactions. Additionally, a stockholder will not receive redemption distributions with respect to the Excess Shares if NavSight completes its initial business combination. And as a result, such stockholder will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell its stock in open market transactions, potentially at a loss.

There can be no assurance that New Spire’s Class A Common Stock will be approved for listing on the NYSE or that New Spire will be able to comply with the continued listing standards of the NYSE.

In connection with the Closing, NavSight intends to list the New Spire Class A Common Stock on the NYSE under the symbol “SPIR.” New Spire’s continued eligibility for listing may depend on the number of NavSight’s shares that are redeemed. If, after the Business Combination, the NYSE delists New Spire’s shares from trading on its exchange for failure to meet the listing standards and NavSight is not able to list such securities on another national securities exchange, NavSight expects such securities could be quoted on an over-the-counter market. If this were to occur, New Spire and its stockholders could face significant material adverse consequences including:

 

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a limited availability of market quotations for New Spire’s securities;

 

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reduced liquidity for New Spire’s securities;

 

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a determination that the New Spire Class A Common Stock is a “penny stock” which will require brokers trading the New Spire Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of New Spire Class A Common Stock;

 

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a limited amount of news and analyst coverage; and

 

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a decreased ability to issue additional securities or obtain additional financing in the future.

NavSight’s Sponsor, officers, and directors have agreed to vote in favor of the Business Combination, regardless of how the Public Stockholders vote.

 

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NavSight’s Sponsor, officers, and directors have agreed to vote any shares of NavSight Common Stock held by them in favor of the Business Combination. NavSight expects that the Sponsor, officers, and directors (and their permitted transferees) will own at least approximately 20% of the outstanding shares of NavSight Common Stock at the time of any such stockholder vote. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their shares of NavSight Common Stock in accordance with the majority of the votes cast by the Public Stockholders.

Spire’s management has limited experience in operating a public company.

Spire’s executive officers have limited experience in the management of a publicly traded company. Spire’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result in less time being devoted to the management and growth of New Spire. Spire may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices, or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for New Spire to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that New Spire will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

NavSight’s ability to successfully effect the Business Combination and New Spire’s ability to successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel of Spire. The loss of such key personnel could negatively impact the business, financial condition, and results of operations of New Spire.

NavSight’s ability to successfully effect the Business Combination and New Spire’s ability to successfully operate the business following the Closing is dependent upon the efforts of certain key personnel of Spire. Although NavSight expects key personnel to remain with New Spire following the Business Combination, there can be no assurance that they will do so. It is possible that Spire will lose some key personnel, the loss of which could negatively impact the operations and profitability of New Spire. Further, following the Closing, certain of the key personnel of Spire may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause New Spire to have to expend time and resources helping them become familiar with such requirements.

The NavSight Board did not obtain a fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.

In analyzing the Business Combination, the NavSight Board conducted significant due diligence on Spire. For additional information regarding the factors utilized by the NavSight Board in approving the Business Combination, see the section titled “BCA Proposal—NavSight’s Board of Directors’ Reasons for the Business Combination.” The NavSight Board believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that Spire’s fair market value was at least 80% of the value of the Trust Account (excluding any taxes payable on interest earned).

Notwithstanding the foregoing, the NavSight Board did not obtain a fairness opinion to assist it in its determination. Accordingly, the NavSight Board may be incorrect in its assessment of the Business Combination.

The Sponsor or NavSight’s directors, officers, advisors, or their affiliates may enter into certain transactions, including purchasing shares or warrants from the public, which may influence the outcome of the Business Combination and reduce the public “float” of the NavSight Class A Common Stock.

The Sponsor or NavSight’s directors, officers, advisors, or their affiliates may purchase Public Shares or Public Warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the consummation of the Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of NavSight’s shares is

 

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no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor or NavSight’s directors, officers, advisors, or their affiliates purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Additionally, at any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor or NavSight’s directors, officers, advisors, or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire Public Shares, vote their Public Shares in favor of the Business Combination or not redeem their Public Shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. The purpose of any such transaction could be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination where it appears that such requirement would otherwise not be met, or (ii) reduce the number of NavSight Warrants outstanding. This may result in the consummation of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of NavSight Class A Common Stock or NavSight Warrants and the number of beneficial holders of NavSight’s securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of NavSight’s securities on a national securities exchange.

If third parties bring claims against NavSight, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

NavSight’s placing of funds in the Trust Account may not protect those funds from third-party claims against NavSight. Although NavSight has sought to have all vendors, service providers, prospective target businesses, and other entities with which it does business execute agreements with NavSight waiving any right, title, interest, or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility, or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against NavSight’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, NavSight’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to NavSight than any alternative. Making such a request of potential target businesses may make NavSight’s acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that NavSight might pursue. Marcum LLP, NavSight’s independent registered public accounting firm, will not execute agreements with NavSight waiving such claims to the monies held in the Trust Account.

Examples of possible instances where NavSight may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts, or agreements with NavSight and will not seek recourse against the Trust Account for any reason. Upon redemption of the Public Shares, if NavSight has not completed its initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with its initial business combination, NavSight will be required to provide for payment of claims of creditors that were not waived that may be brought against NavSight within the 10 years following redemption. Accordingly, the per share redemption amount received by Public Stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to NavSight if and to the extent any claims by a third party (except for NavSight’s independent registered public accounting firm) for services rendered or products sold to NavSight, or by a prospective target business with which NavSight has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes. This liability will not

 

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apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under NavSight’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. NavSight has not independently verified whether the Sponsor, which is a newly formed entity, has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of NavSight. NavSight has not asked the Sponsor to reserve for such indemnification obligations. Therefore, NavSight cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for NavSight’s initial business combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, NavSight may not be able to complete its initial business combination, and its stockholders would receive such lesser amount per Public Share in connection with any redemption of their Public Shares. None of NavSight’s officers will indemnify NavSight for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Public Stockholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate their investment, therefore, Public Stockholders may be forced to sell their Public Shares or Public Warrants, potentially at a loss.

Public Stockholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) the consummation of NavSight’s initial business combination, and then only in connection with those shares of NavSight Class A Common Stock that such Public Stockholder elected to redeem, subject to the limitations described herein, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Current NavSight Certification of Incorporation (a) to modify the substance or timing of NavSight’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of the Public Shares if NavSight does not complete its initial business combination within 24 months from the closing of the IPO or (b) with respect to any other provisions relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of the Public Shares if NavSight has not completed its initial business combination within 24 months from the closing of the IPO, subject to applicable law and as further described herein. In addition, if NavSight has not completed an initial business combination within the allocated time period for any reason, compliance with Delaware law may require that NavSight submit a plan of dissolution to its then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account. In that case, Public Stockholders may be forced to wait beyond the end of such period before they receive funds from the Trust Account. In no other circumstances will a stockholder have any right or interest of any kind to the funds in the Trust Account. Holders of NavSight Warrants will not have any right to the proceeds held in the Trust Account with respect to the NavSight Warrants. Accordingly, to liquidate their investment, the Public Stockholders may be forced to sell their Public Shares or Public Warrants, potentially at a loss.

NavSight’s independent directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, NavSight’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While NavSight currently expects that its independent directors would take legal action on NavSight’s behalf against the Sponsor to enforce its indemnification obligations to NavSight, it is possible that NavSight’s independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If NavSight’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to the Public Stockholders may be reduced below $10.00 per Public Share.

 

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NavSight’s stockholders may be held liable for claims by third parties against NavSight to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to the Public Stockholders upon the redemption of the Public Shares in the event NavSight does not complete the initial business combination within the required time period may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is NavSight’s intention to redeem the Public Shares as soon as reasonably possible following the 24th month from the closing of the IPO in the event NavSight does not complete the initial business combination and, therefore, NavSight does not intend to comply with the foregoing procedures.

Because NavSight will not be complying with Section 280, Section 281(b) of the DGCL requires NavSight to adopt a plan, based on facts known to NavSight at such time that will provide for NavSight’s payment of all existing and pending claims or claims that may be potentially brought against NavSight within the 10 years following its dissolution. However, because NavSight is a blank check company, rather than an operating company, and NavSight’s operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from NavSight’s vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If NavSight’s plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. NavSight cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, NavSight’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of NavSight’s stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the Trust Account distributed to the Public Stockholders upon the redemption of the Public Shares in the event NavSight does not complete the initial business combination within the required time period is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

If, after NavSight distributes the proceeds in the Trust Account to the Public Stockholders, NavSight files a bankruptcy petition or an involuntary bankruptcy petition is filed against NavSight that is not dismissed, a bankruptcy court may seek to recover such proceeds, and NavSight and the NavSight Board may be exposed to claims of punitive damages.

If, after NavSight distributes the proceeds in the Trust Account to the Public Stockholders, NavSight files a bankruptcy petition or an involuntary bankruptcy petition is filed against NavSight that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by NavSight’s stockholders. In addition, the NavSight Board may be viewed as having breached its fiduciary duty to NavSight’s creditors and/or having acted in bad faith, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and NavSight to claims of punitive damages. If, before distributing the proceeds in the Trust Account to the Public Stockholders, NavSight files a bankruptcy petition or an involuntary bankruptcy petition is filed against NavSight that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of NavSight’s stockholders and the per-share amount that would otherwise be received by NavSight’s stockholders in connection with NavSight’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the Public Stockholders, NavSight files a bankruptcy petition or an involuntary bankruptcy petition is filed against it that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in NavSight’s bankruptcy estate and

 

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subject to the claims of third parties with priority over the claims of NavSight’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by NavSight’s stockholders in connection with NavSight’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the Public Stockholders, NavSight files a bankruptcy petition or an involuntary bankruptcy petition is filed against NavSight that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in NavSight’s bankruptcy estate and subject to the claims of third parties with priority over the claims of NavSight’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by NavSight’s stockholders in connection with NavSight’s liquidation may be reduced.

When considering the NavSight Board’s recommendation that NavSight’s stockholders vote in favor of the approval of the BCA Proposal, NavSight’s stockholders should be aware that certain of the Sponsor, executive officers and directors have interests in the Business Combination that may be different from, or in addition to, the interests of NavSight’s stockholders. These interests include:

 

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Prior to the IPO, the Sponsor purchased 5,750,000 shares of NavSight Class B Common Stock for an aggregate purchase price of $25,000, or approximately $0.004 per share. The Sponsor then transferred 25,000 of such shares to each of Mr. Crowell and Ambassador Crumpton and 32,500 such shares to Mr. Louie, each an independent director of NavSight, at their original purchase price. As a result of the significantly lower investment per share of the Initial Stockholders as compared with the investment per share of the Public Stockholders, a transaction which results in an increase in the value of the investment of the Initial Stockholders may result in a decrease in the value of the investment of the Public Stockholders. In addition, if NavSight does not consummate a business combination within the applicable time period, it would cease all operations except for the purpose of winding up, redeeming all of the outstanding Public Shares for cash and, subject to the approval of its remaining stockholders and its board of directors, liquidating and dissolving, subject in each case to its obligations under applicable law. In such event, the shares owned by the Initial Stockholders and the Private Placement Warrants would be worthless and NavSight’s directors and officers have agreed to waive their respective rights to liquidating distributions from the Trust Account in respect of any NavSight Common Stock held by it or them, as applicable.

 

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Mr. Coleman, NavSight’s Chief Executive Officer and Chairman, and Mr. Pearlstein, NavSight’s Chief Financial Officer, are the co-managing members of the Sponsor. Consequently, they have sole voting and dispositive power over the 5,667,500 shares of NavSight Class B Common Stock and 6,600,000 Private Placement Warrants held by the Sponsor. Messrs. Coleman and Pearlstein disclaim beneficial ownership of any securities other than to the extent they may have a pecuniary interest therein, directly or indirectly;

 

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The Sponsor Related PIPE Investors (or affiliates thereof) have subscribed for an aggregate purchase price of $10,000,000 of the PIPE Investment, for which they will receive 1,000,000 shares of New Spire Class A Common Stock;

 

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NavSight’s directors will not receive reimbursement for any out-of-pocket expenses incurred by them on NavSight’s behalf incident to identifying, investigating, and completing a business combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless a business combination is completed;

 

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the anticipated continuation of Mr. Pearlstein, NavSight’s Chief Financial Officer, as a director of New Spire following the Closing; and

 

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the continued indemnification of current directors and officers of NavSight and the continuation of directors’ and officers’ liability insurance after the Business Combination.

These interests may influence NavSight’s directors in making their recommendation that you vote in favor of the BCA Proposal, and the transactions contemplated thereby.

NavSight may amend the terms of the Public Warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding Public Warrants. As a result, the exercise price of your Public Warrants could be increased, the exercise period could be shortened and the number of shares of NavSight Class A Common Stock purchasable upon exercise of a Public Warrant could be decreased, all without your approval.

The Public Warrants were issued in registered form under the Warrant Agreement between AST, as warrant agent, and NavSight. The Warrant Agreement provides that the terms of the Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants and, solely with respect to any amendment to the

 

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terms of the Private Placement Warrants or working capital warrants or any provision of the Warrant Agreement with respect to the Private Placement Warrants or working capital warrants, 50% of the number of the then outstanding Private Placement Warrants or working capital warrants, as applicable. Accordingly, NavSight may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment. Although NavSight’s ability to amend the terms of the Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the NavSight Warrants, convert the NavSight Warrants into cash or stock, shorten the exercise period, or decrease the number of shares of NavSight Class A Common Stock issuable upon exercise of a NavSight Warrant.

We may issue additional common stock or preferred stock to complete the Business Combination or under an employee incentive plan after the Closing. NavSight may also issue shares of NavSight Class A Common Stock upon the conversion of the NavSight Class B Common Stock at a ratio greater than one-to-one at the time of the Business Combination as a result of the anti-dilution provisions contained in the Current NavSight Certification of Incorporation. Any such issuances would dilute the interest of NavSight’s stockholders.

The Current NavSight Certification of Incorporation authorizes the issuance of up to 111,000,000 shares of NavSight Common Stock, consisting of (i) 100,000,000 shares NavSight Class A Common Stock and (ii) 10,000,000 shares of NavSight Class B Common Stock, and 1,000,000 shares of NavSight Preferred Stock. NavSight may issue a substantial number of additional shares of common stock or shares of preferred stock to complete the Business Combination (including pursuant to a specified future issuance) or under an employee incentive plan after the Closing. NavSight may also issue shares of NavSight Class A Common Stock to redeem the NavSight Warrants when the price per share of NavSight Class A Common Stock equals or exceeds $10.00 or upon conversion of the NavSight Class B Common Stock at a ratio greater than one-to-one at the time of the Business Combination as a result of the anti-dilution provisions contained in the Current NavSight Certification of Incorporation. NavSight Class B Common Stock shall only be convertible at the time of the Business Combination. However, the Current NavSight Certification of Incorporation provides, among other things, that prior to the Business Combination, NavSight may not issue additional securities that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote as a class with the Public Shares (a) on any initial business combination or (b) to approve an amendment to the Current NavSight Certification of Incorporation. The restriction on issuing additional shares of securities described in the prior sentence will expire upon consummation of the initial business combination. The issuance of additional shares of common or preferred stock:

 

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may significantly dilute the equity interest of investors from the IPO, which dilution would increase if the anti-dilution provisions in the NavSight Class B Common Stock resulted in the issuance of NavSight Class A Common Stock on a greater than one-to-one basis upon conversion of the NavSight Class B Common Stock;

 

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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded NavSight Common Stock;

 

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could cause a change of control if a substantial number of shares of NavSight Common Stock is issued, which may affect, among other things, NavSight’s ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of NavSight’s present officers and directors;

 

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may have the effect of delaying or preventing a change of control of NavSight by diluting the stock ownership or voting rights of a person seeking to obtain control of NavSight;

 

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may adversely affect prevailing market prices for the Units, NavSight Class A Common Stock and/or the Public Warrants; and

 

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may not result in adjustment to the exercise price of NavSight Warrants.

Delaware law and Spire’s Proposed Organizational Documents contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

 

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The Proposed Organizational Documents that will be in effect upon the consummation of the Business Combination contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the New Spire Board and therefore depress the trading price of New Spire’s Class A Common Stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the New Spire Board or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Organizational Documents include provisions regarding:

 

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a dual-class common stock structure, which provides the Founders with the ability to determine or significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of outstanding New Spire Class A Common Stock and New Spire Class B Common Stock;

 

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the New Spire Board will be classified into three classes of directors with staggered three-year terms and directors will only able to be removed from office for cause;

 

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authorizing “blank check” preferred stock, which could be issued by the New Spire Board without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to New Spire Common Stock;

 

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limiting the liability of, and providing indemnification to, New Spire’s directors and officers;

 

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prohibiting cumulative voting in the election of directors;

 

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providing that vacancies on the New Spire Board may be filled only by majority of directors then in office, including those who have so resigned, of the New Spire Board, even though less than a quorum;

 

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prohibiting the ability of New Spire stockholders to call special meetings;

 

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establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to the New Spire Board; and

 

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specifying that special meetings of New Spire stockholders can be called only by a majority of the New Spire Board, the chairperson of the New Spire Board, or the president of New Spire.

These provisions may frustrate or prevent any attempts by New Spire stockholders to replace or remove New Spire’s current management by making it more difficult for stockholders to replace members of the New Spire Board, which is responsible for appointing the members of New Spire’s management. In addition, because New Spire is incorporated in Delaware, it is governed by the provisions of Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

The Proposed Bylaws provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit New Spire stockholders’ ability to obtain a chosen judicial forum for disputes with New Spire or its directors, officers, employees, or stockholders.

The Proposed Bylaws will require, to the fullest extent permitted by law, that derivative actions brought in New Spire’s name, actions against directors, officers, and employees for breach of fiduciary duty and other similar actions may be brought in the Court of Chancery in the State of Delaware or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in shares of New Spire Capital Stock shall be deemed to have notice of and consented to the forum provisions in the Proposed Bylaws. In addition, the Proposed Bylaws will provide that the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with New Spire or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the Proposed Bylaws to be inapplicable or unenforceable in an action, New Spire may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, financial condition, and results of operations.

 

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The dual class structure of the combined company’s common stock will have the effect of concentrating voting power with the Founders, which will limit an investor’s ability to influence the outcome of important transactions, including a change in control. Additionally, two of the Founders, Peter Platzer and Theresa Condor, are husband and wife, which may further concentrate the influence of the Founders and further limit an investor’s ability to influence the combined company.

Upon the Closing, the dual-class structure of New Spire’s common stock will have the effect of concentrating voting power with its Founders, which will limit your ability to influence the outcome of matters submitted to New Spire’s stockholders for approval, including the election of the New Spire Board, the adoption of amendments to its certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of Spire’s assets, or other major corporate transaction. New Spire Class A Common Stock will have one vote per share and New Spire Class B Common Stock, to be received by the Founders on the Closing, will have nine votes per share. Upon the Closing, the Founders will together hold all of the issued and outstanding shares of New Spire Class B Common Stock. Accordingly, upon the Closing and assuming no redemptions of Public Shares, the Founders will hold approximately 46% of the voting power of New Spire’s outstanding capital stock in the aggregate. Additionally, two of the Founders, Peter Platzer and Theresa Condor, who are husband and wife, will hold approximately 32% of the voting power of New Spire’s outstanding capital stock in the aggregate. As a result, Peter Platzer and Theresa Condor and the other Founders will be able to determine or significantly influence any action requiring the approval of Spire’s stockholders, including the election of its board of directors, the adoption of amendments to its certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of its assets, or other major corporate transaction. The Founders may have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. This concentrated control may have the effect of delaying, preventing, or deterring a change in control of New Spire, could deprive New Spire’s stockholders of an opportunity to receive a premium for their capital stock as part of a sale of New Spire, and might ultimately affect the market price of New Spire’s Class A Common Stock. Further, the separation between voting power and economic interests could cause conflicts of interest between the Founders and New Spire’s other stockholders, which may result in the Founders undertaking, or causing Spire to undertake, actions that would be desirable for themselves but would not be desirable for Spire’s other stockholders.

Future transfers by the holders of New Spire Class B Common Stock will generally result in those shares automatically transferring to New Spire for no consideration, subject to limited exceptions, such as certain transfers effected for estate planning or other transfers among the Founders and their family members.

In addition, each share of New Spire Class B Common Stock will automatically be transferred to New Spire for no consideration upon the following events: (i) on the affirmative written election of such holder to transfer such share of New Spire Class B Common Stock to New Spire, or if later, at the time or the happening of a future event specified in such written election (which election may be revoked by such holder prior to the date on which the automatic transfer to New Spire would otherwise occur unless otherwise specified by such holder); (ii) the date fixed by the New Spire Board that is no less than 61 days and no more than 180 days following the first time after 11:59 p.m. Eastern Time on the Closing that both (a) such Founder is no longer providing services to New Spire as an officer, employee, or consultant and (b) such Founder is no longer a director of New Spire; (iii) the date fixed by the New Spire Board that is no less than 61 days and no more than 180 days following the date that such Founder’s employment with New Spire is terminated for cause (as defined in the Proposed Certificate of Incorporation); and (iv) upon the death or disability (as defined in the Proposed Certificate of Incorporation) of such Founder. For additional information about New Spire’s dual-class structure, see the section titled “Description of New Spire Securities.”

The numbers of shares and percentage interests set forth above are based on a number of assumptions, including that (i) none of the Public Stockholders exercise their redemption rights, (ii) Spire does not issue any additional equity securities prior to the Business Combination, and that no other event occurs that would change the Per Share Closing Consideration from what it would have been as of the date of the initial signing of the Business Combination Agreement, and (iii) there are no future exercises of the NavSight Warrants. If the actual facts differ from these assumptions, the numbers of shares and percentage interests set forth above will be different.

 

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Because NavSight has no current plans to pay cash dividends on NavSight Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell NavSight Class A Common Stock for a price greater than that which you paid for it.

We may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion of the NavSight Board and will depend on, among other things, NavSight’s results of operations, financial condition, cash requirements, contractual restrictions and other factors that the NavSight Board may deem relevant. In addition, NavSight’s ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness Kensington or its subsidiaries incur. As a result, you may not receive any return on an investment in NavSight Class A Common Stock unless you sell NavSight Class A Common Stock for a price greater than that which you paid for it. For additional information, see the section titled “Market Price and Dividend Information—Dividend Policy.”

New Spire does not expect to declare any dividends in the foreseeable future.

After the Closing, New Spire does not anticipate declaring any cash dividends to holders of its common stock in the foreseeable future. Consequently, investors may need to rely on sales of their shares after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

If the anticipated benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of New Spire’s securities may decline.

If the perceived benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of NavSight’s securities prior to the Closing may decline. The market values of New Spire’s securities at the time of the Business Combination may vary significantly from their prices on the date the Business Combination Agreement was executed, the date of this proxy statement/prospectus/information statement, or the date on which NavSight’s stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of New Spire’s securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for Spire’s capital stock. Accordingly, the valuation NavSight has ascribed to Spire in the Business Combination may not be indicative of the price that will be implied in the trading market for New Spire’s securities following the Business Combination. If an active market for New Spire’s securities develops and continues after the Business Combination, the trading price of such securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond New Spire’s control. Any of the factors listed below could have a material adverse effect on your investment in New Spire’s securities and New Spire’s securities may trade at prices significantly below the price you paid for them or that were implied by the conversion of Spire Capital Stock you owned into New Spire’s securities as a result of the Business Combination. In such circumstances, the trading price of New Spire’s securities may not recover and may experience a further decline.

Factors affecting the trading price of New Spire’s securities may include:

 

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actual or anticipated fluctuations in New Spire’s quarterly financial results or the quarterly financial results of companies perceived to be similar to it;

 

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changes in the market’s expectations about New Spire’s operating results;

 

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success of competitors;

 

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New Spire’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

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changes in financial estimates and recommendations by securities analysts concerning New Spire or the satellite data and analytics industry in general;

 

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operating and share price performance of other companies that investors deem comparable to New Spire;

 

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New Spire’s ability to bring its services and technologies to market on a timely basis, or at all;

 

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•

changes in laws and regulations affecting New Spire’s business;

 

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New Spire’s ability to meet compliance requirements;

 

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commencement of, or involvement in, litigation involving New Spire;

 

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changes in New Spire’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

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the volume of New Spire’s shares of common stock available for public sale;

 

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any major change in the New Spire Board or management;

 

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sales of substantial amounts of New Spire’s shares of common stock by New Spire’s directors, executive officers, or significant stockholders or the perception that such sales could occur; and

 

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general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations, and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of New Spire’s securities irrespective of New Spire’s operating performance. The stock market in general, and the NYSE in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of New Spire’s securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to New Spire could depress New Spire’s share price regardless of New Spire’s prospects, business, financial conditions, or results of operations. A decline in the market price of New Spire’s securities also could adversely affect New Spire’s ability to issue additional securities and New Spire’s ability to obtain additional financing in the future.

Following the Closing, New Spire will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition, and results of operations.

Following the Closing, New Spire will face increased legal, accounting, administrative, and other costs and expenses as a public company that Spire does not incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require New Spire to carry out activities Spire has not done previously. For example, New Spire will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if management or New Spire’s independent registered public accounting firm identifies additional material weaknesses in the internal control over financial reporting), New Spire could incur additional costs rectifying those issues, and the existence of those issues could adversely affect New Spire’s reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with New Spire’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the New Spire Board or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting, and administrative activities. These increased costs will require New Spire to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about New Spire, its business, or its market, or if they change their recommendations regarding New Spire’s securities adversely, the price and trading volume of New Spire’s securities could decline.

The trading market for New Spire’s securities may be influenced by the research and reports that industry or securities analysts may publish about New Spire, its business, market, or competitors. Securities and industry analysts do not

 

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