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In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
−Removed: Except for the New Risk Factors and the Updated Risk Factors included below, this Item 1A.
−Removed: Risk Factors section in this Form 10-K/A has not been updated to reflect developments occurring subsequent to the filing of the Company’s Original Form 10-K.
−Removed: All risk factors, however, should be considered in the context of the New Risk Factors and the Updated Risk Factors.
−Removed: New Risk Factors
−Removed: The restatement of our previously issued consolidated financial statements for the Affected Periods has resulted in unanticipated costs, stockholder litigation and regulatory actions, and may adversely affect investor confidence, our stock price, our ability to raise capital in the future and our reputation.
−Removed: We have incurred unanticipated costs for accounting and legal fees in connection with the restatements.
−Removed: The restatements may erode investor confidence in our company, our financial reporting, accounting practices and processes, and may raise reputational issues for our business.
−Removed: The restatements may negatively impact the trading price of our securities and make it more difficult for us to raise capital on acceptable terms, or at all.
−Removed: In addition, the restatements and related material weaknesses in our internal control over financial reporting have resulted in stockholder litigation against us and adverse regulatory consequences.
−Removed: These and any future regulatory consequences, litigation, claims or disputes, whether successful or not, could subject us to additional costs, divert the attention of our management, or impair our reputation.
−Removed: Each of these consequences could have a material adverse effect on our business, results of operations and financial condition.
−Removed: We engage in R&D Services Contracts, which are generally partially co-funded by agencies like the European Space Agency (“ESA”) or National Aeronautics and Space Administration (“NASA”).
−Removed: The cost of providing the services and activities pursuant to these agreements initially exceed the revenue they generate.
−Removed: Even if technology is successfully developed pursuant to these R&D Services Contracts and is eventually commercialized, it may never yield a profit.
−Removed: We engage in R&D Services Contacts to further several promising space technologies and solutions.
−Removed: These R&D Services Contracts generally follow a co-funding structure.
−Removed: Spire usually funds a portion of the research itself and bills the customer, a government agency like ESA or NASA, the other portion, typically 50% of the total costs.
−Removed: Through this co-funding arrangement, the total costs of providing the related R&D services initially exceed the revenue they generate.
−Removed: Even if technology is successfully developed pursuant to these R&D Services Contracts and is eventually commercialized, it may never yield enough profit to recover all of the expenses incurred for these contracts.
−Removed: As a result, our ability to continue these activities may be jeopardized, particularly because of our negative cash flows from operation.
−Removed: Updated Risk Factors
−Removed: We have identified material weaknesses in our internal control over financial reporting that have resulted in the restatement of our financial statements for the Affected Periods.
−Removed: If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in future material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
−Removed: We have identified material weaknesses in our internal control over financial reporting.
−Removed: 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.
−Removed: These material weaknesses are as follows:
−Removed: We did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company.
−Removed: Specifically, we 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.
−Removed: Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions.
−Removed: This material weakness contributed to the following additional material weaknesses:
−Removed: We 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 our financial statements.
−Removed: 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;
−Removed: We did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations.
−Removed: Specifically, certain personnel have the ability to both (a) create and post journal entries within our general ledger system, and (b) prepare and review account reconciliations;
−Removed: The 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.
−Removed: We did not design and maintain effective controls over the accounting for our Space Services and R&D Services Solutions contracts with customers.
−Removed: Specifically, we did not design and maintain effective controls over the identification of performance obligations to ensure revenue is recognized at the time performance obligations are satisfied, the identification and accounting for embedded leases, the classification and accounting for costs incurred in connection with performing services, and the recognition of allowances for current expected credit losses.
−Removed: This material weakness resulted in the restatement of our previously filed financial statements for the Affected Periods.
−Removed: We did not design and maintain effective controls related to the identification of and accounting for certain non-routine, unusual or complex transactions, including the proper application of GAAP to such transactions.
−Removed: Specifically, we did not design and maintain:
−Removed: controls to timely identify and account for warrant instruments, which resulted in the restatement of the previously issued financial statements of NavSight related to adjustments to warrant liabilities and equity;
−Removed: controls to account for business combinations, including the associated valuation estimates and the completeness and accuracy of the opening balance sheet, which did not result in a misstatement to our consolidated financial statements;
−Removed: controls to timely identify and account for the fair value of the contingent earnout liability, which resulted in an error in the fair value of the contingent earnout liability in, and the restatement of, our previously issued unaudited condensed consolidated financial statements as of and for each of the interim periods ended September 30, 2021, March 31, 2022 and June 30, 2022 and our consolidated financial statements as of and for the year ended December 31, 2021.
−Removed: Additionally, each of the material weaknesses described above 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.
−Removed: We did not design and maintain effective controls over certain information technology general controls for information systems that are relevant to the preparation of our financial statements.
−Removed: Specifically, we did not design and maintain:
−Removed: 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;
−Removed: program change management controls for our 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;
−Removed: testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements.
−Removed: These IT deficiencies did not result in a misstatement to the financial statements;
−Removed: however, the deficiencies, when aggregated, could impact our 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.
−Removed: Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.
−Removed: We are taking certain measures to remediate these material weaknesses described above as described in Part II, Item 9A of this Form 10-K/A, however such material weaknesses had not been remediated as of December 31, 2023.
−Removed: While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period, we are committed to continuous improvement and will continue to diligently review our internal control over financial reporting.
−Removed: 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.
−Removed: In addition, due to the material weaknesses in internal control over financial reporting, we have also determined that our disclosure controls and procedures were ineffective as of December 31, 2023.
−Removed: We are working to remediate the material weaknesses as efficiently and effectively as possible, but there can be no assurance as to when the material weaknesses will be remediated.
−Removed: At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan;
−Removed: however, these remediation measures will be time consuming, will result in us incurring significant costs, and will place significant demands on our financial and operational resources.
−Removed: We cannot assure that the measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to our 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.
−Removed: The effectiveness of our 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.
−Removed: Any failure to design, implement and maintain effective internal control over financial reporting and effective disclosure controls and procedures, or any difficulties
−Removed: encountered in their implementation or improvement, may result in additional material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition and results of operations.
−Removed: Certain of our Space Services Contracts are highly customized and require significant judgment in determining the appropriate accounting treatment, which could increase the risk of material misstatements in our consolidated financial statements.
−Removed: Certain of our Space Services Contracts are so highly customized that significant judgment is required in determining the appropriate accounting treatment for such contracts.
−Removed: As a result, the risk of errors in our consolidated financial statements may be higher than the corresponding risk faced by other companies that do not have customized agreements.
−Removed: The restatement of our consolidated financial statements in this Form 10-K/A is partially the result of accounting errors associated with certain of these Space Services Contracts, and there continues to be risk of material misstatements related to such contracts in the future, which may adversely affect our business, financial condition, and results of operations.
−Removed: We have been involved, are currently involved, and may in the future become involved, in claims, lawsuits, government investigations, and other proceedings that could adversely affect our business, financial condition, and results of operations.
−Removed: From time to time, we have been involved, are currently involved, and may in the future become involved, in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
−Removed: For example, the restatements and related material weaknesses in our internal control over financial reporting have resulted in stockholder litigation against us and adverse regulatory consequences.
−Removed: Claims against us, whether meritorious or not, are frequently time-consuming, result in costly litigation, harmful to our reputation, require significant management attention, and divert significant resources.
−Removed: In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate and subject to change.
−Removed: The risk of litigation may be heightened among public companies, like us, that have previously undergone a merger with a special purpose acquisition company, as well as for companies, like us, that have restated their financial statements.
−Removed: Determining reserves for pending litigation or investigations is a complex and fact-intensive process that requires significant subjective judgment.
−Removed: It is possible that a resolution of one or more such proceedings or investigations could result in substantial damages, settlement costs, fines, and penalties that could adversely affect our business, financial condition, and results of operations.
−Removed: These proceedings or investigations could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in our business practices.
−Removed: Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements.
−Removed: Any of these consequences could adversely affect our business, financial condition, and results of operations.
−Removed: Our failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair our ability to produce timely and accurate financial statements or comply with applicable regulations.
−Removed: As a public company, we are 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 New York Stock Exchange (“NYSE”).
−Removed: Section 404(a) of the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: We are required to provide an annual management report on the effectiveness of our internal controls over financial reporting.
−Removed: The standards required for a public company under Section 404(a) are significantly more stringent than those that were required of us as a privately-held company.
−Removed: We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we 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 our principal executive and financial officers.
−Removed: We are also continuing to improve our internal control over financial reporting.
−Removed: We have expended and anticipate that we will continue to expend resources in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting.
−Removed: Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business, including increased complexity resulting from any international expansion.
−Removed: Further, weaknesses in our disclosure controls and our internal control over financial reporting have been identified, and others may be discovered in the future.
−Removed: Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the
−Removed: increased regulatory compliance and reporting requirements.
−Removed: Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, such as the restatements of our financial statements for the Affected Periods.
−Removed: Any failure to implement and maintain effective internal control over financial reporting in a timely manner or with adequate compliance could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
−Removed: Ineffective disclosure controls and procedures and internal control over financial reporting could also have a material adverse effect on our business and cause investors to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our common stock.
−Removed: In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.
−Removed: Our results of operations vary and are unpredictable from period to period, which could cause the market price of our Class A common stock to decline.
−Removed: Our results of operations may fluctuate from period to period as a result of a number of factors, many of which are outside of our control and may be difficult to predict.
−Removed: Some of the factors that may cause our results of operations to fluctuate from period to period include:
−Removed: • our ability to attract new customers, retain existing customers, and expand the adoption of our platform, particularly to our largest customers;
−Removed: • market acceptance and the level of demand for our platform;
−Removed: • the quality and level of the execution of our business strategy and operating plan;
−Removed: • the effectiveness of our sales and marketing programs;
−Removed: • the competitive conditions in the industry, including consolidation within the industry, strategic initiatives by us or by competitors, or introduction of new services by us or our competitors;
−Removed: • the length of our sales cycle, including the timing of upgrades or renewals;
−Removed: • the volume of sales generated by subscription sales as opposed to Space Services and R&D Services Contracts;
−Removed: • our ability to successfully expand internationally and penetrate key markets;
−Removed: • pricing pressure as a result of competition or otherwise;
−Removed: • our ability to develop and respond to new technologies;
−Removed: • the impact and costs, including those with respect to integration, related to the acquisition of businesses, talent, technologies, or intellectual property rights;
−Removed: • increases in and the timing of operating expenses that we may incur to grow our operations and to remain competitive;
−Removed: • the cost and availability of components, including any changes to our supply or manufacturing partners;
−Removed: • 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;
−Removed: • service outages or security breaches or incidents and any related occurrences;
−Removed: • trade protection measures, such as tariffs or duties;
−Removed: • changes in the legislative or regulatory environment;
−Removed: • adverse litigation judgments, settlements, or other litigation-related costs;
−Removed: • general economic conditions in either domestic or international markets, including currency exchange rate fluctuations, supply chain impacts, inflation and geopolitical uncertainty and instability, such as the conflicts in Ukraine and Gaza and their impacts on the regional and global economies.
−Removed: Any one or more of the factors above may result in significant fluctuations in our results of operations.
−Removed: In addition, our results of operations may fluctuate from quarter to quarter depending on customer buying habits, and whether they are purchasing a
−Removed: subscription or a project-based data solution.
−Removed: The timing of customer acceptance on project-based deliverables may impact or delay our recognition of revenue from such projects.
−Removed: The variability of our results of operations or other operating estimates could result in our failure to meet our expectations or those of securities analysts or investors.
−Removed: If we fail to meet or exceed such expectations for these or any other reasons, the market price of our Class A common stock could decline and we could face costly lawsuits, including securities class action suits.
−Removed: Our current cash and cash equivalents and investment in marketable securities balances and expected future financial results have raised substantial doubt as to our ability to continue as a going concern.
−Removed: Given the expected delay in the closing of the Transactions (as defined below), we intend to seek additional equity or debt financing (including securities convertible or exchangeable for equity) and may seek waivers of or amendments to contractual obligations, delay, limit, reduce, or terminate certain commercial efforts, or pursue merger, disposition or other strategies, any of which could adversely affect our business, results of operations, and financial condition.
−Removed: The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
−Removed: Our ability to continue as a going concern for the next 12 months from the date of reissuance of the accompanying consolidated financial statements is dependent upon our ability to obtain sufficient cash to meet our obligations, including the repayment of all amounts owed pursuant to the Blue Torch Financing Agreement (as amended, and as defined below).
−Removed: We have failed to meet our leverage ratio and minimum liquidity financial covenants and SEC periodic filing requirement non-financial covenant under the Blue Torch Financing Agreement, and therefore Blue Torch Finance LLC (“Blue Torch”) has the right to accelerate and declare all or any portion of the loans outstanding under the Blue Torch Financing Agreement to be due and payable.
−Removed: Further, upon the filing of this Form 10-K/A, we will fail to comply with the non-financial covenant requiring us to have a report or opinion of our auditor without an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.
−Removed: Based on our current cash and cash equivalents and investment in marketable securities balances and expected future financial results, if the Transactions (as defined below) do not close, we will not have sufficient liquidity to continue operations for at least the next twelve months from the reissuance of the accompanying consolidated financial statements.
−Removed: Furthermore, we will not have sufficient cash to repay the balance of the loans outstanding under the Blue Torch Financing Agreement in the event Blue Torch declares all or any portion of the loans to be due and payable.
−Removed: We entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”).
−Removed: The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.
−Removed: The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.
−Removed: The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.
−Removed: The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.
−Removed: We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied.
−Removed: Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.
−Removed: Buyer has cited various reasons for declining to close, which we have rejected.
−Removed: We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.
−Removed: As a result of the foregoing, on February 10, 2025, we filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement.
−Removed: In the complaint, we also requested a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing.
−Removed: Kpler removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court.
−Removed: The District of Delaware initially selected a March 4 trial date, but on February 26, 2025, the court set a trial date of May 28-30, 2025.
−Removed: There is no assurance as to what action the District of Delaware will take with respect to the proceeding initiated by us and there is no assurance as to whether or not the Transactions will be consummated on the terms contemplated or at all.
−Removed: The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time.
−Removed: We intend to use the proceeds from the closing of the Transactions to repay all amounts owed under the Blue Torch Financing Agreement.
−Removed: However, as described above, there is currently no assurance that the Transactions will close or when the Transactions may close.
−Removed: Given the expected delay in the closing of the Transactions, we intend to seek additional equity or debt financing (including securities convertible or exchangeable for equity) and may seek waivers of or amendments to contractual obligations, delay, limit, reduce, or terminate certain commercial efforts, or pursue merger, disposition or other strategies, any of which could adversely affect our business, results of operations, and financial condition.
−Removed: There is no assurance that we will be successful in achieving any of the foregoing.
−Removed: Due to our projected cash needs, including amounts owed pursuant to the Blue Torch Financing Agreement and our breach of our covenants under the Blue Torch Financing Agreement, there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the date of reissuance of the accompanying consolidated financial statements.
−Removed: The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Risks Related to Our Industry and Business
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Further, if we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected.
−Removed: Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, trade uncertainties, military conflicts, and rising interest rates, cause instability and volatility in the global financial markets and disruptions within our industries that have negatively impacted, and could continue to negatively impact our business, our financial results, and our stock price.
+Added: Our current cash and cash equivalents and expected future financial results have raised substantial doubt as to our ability to continue as a going concern.
+Added: The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
+Added: Our ability to continue as a going concern for the next 12 months from the date of issuance of the accompanying consolidated financial statements is dependent upon our ability to obtain sufficient cash to meet our obligations, including the repayment of all amounts owed pursuant to the Blue Torch Financing Agreement (as amended, and as defined below).
+Added: Based on our current cash and cash equivalents and expected future financial results, if the Transactions do not close, we will not have sufficient liquidity to continue operations for at least the next twelve months from the issuance of the accompanying consolidated financial statements.
+Added: We entered into the Purchase Agreement with Buyer, pursuant to which we agreed to complete the Transactions.
+Added: The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.
+Added: The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.
+Added: The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.
+Added: The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.
+Added: We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied.
+Added: Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.
+Added: Buyer has cited various reasons for declining to close, which we have rejected.
+Added: We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.
+Added: As a result of the foregoing, on February 10, 2025, we filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement.
+Added: In the complaint, we also requested a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing.
+Added: Buyer removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court.
+Added: The District of Delaware initially selected a March 4 trial date, but on February 26, 2025, the court set a trial date of May 28-30, 2025.
+Added: There is no assurance as to what action the District of Delaware will take with respect to the proceeding initiated by us and there is no assurance as to whether or not the Transactions will be consummated on the terms contemplated or at all.
+Added: The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time.
+Added: We intend to use the proceeds from the closing of the Transactions to repay all amounts owed under the Blue Torch Financing Agreement.
+Added: However, as described above, there is currently no assurance that the Transactions will close or when the Transactions may close.
+Added: Given the delay in the closing of the Transactions, on March 14, 2025, we closed a private placement of
+Added: Class A common stock and pre-funded warrants for gross proceeds of $40.0 million, before deducting offering expenses.
+Added: We may seek additional equity or debt financing (including securities convertible or exchangeable for equity) and may seek waivers of or amendments to contractual obligations, delay, limit, reduce, or terminate certain commercial efforts, or pursue merger, disposition or other strategies, any of which could adversely affect our business, results of operations, and financial condition.
+Added: There is no assurance that we will be successful in achieving any of the foregoing.
+Added: Due to our projected cash needs, including amounts owed pursuant to the Blue Torch Financing Agreement, there is substantial doubt about our ability to continue as a going concern for a period of at least 12 months from the date of issuance of the accompanying consolidated financial statements.
+Added: The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
+Added: We engage in customer-funded or co-funded research and development arrangements (“R&D Services Contracts”), which are generally partially co-funded by agencies like the European Space Agency (“ESA”) or National Aeronautics and Space Administration (“NASA”).
+Added: The cost of providing the services and activities pursuant to these agreements initially exceed the revenue they generate.
+Added: Even if technology is successfully developed pursuant to these R&D Services Contracts and is eventually commercialized, it may never yield a profit.
+Added: We engage in R&D Services Contacts to further several promising space technologies and solutions.
+Added: These R&D Services Contracts generally follow a co-funding structure.
+Added: We usually fund a portion of the research ourselves and bill the customer, a government agency like ESA or NASA, the other portion, typically 50% of the total costs.
+Added: Through this co-funding arrangement, the total costs of providing the related R&D services initially exceed the revenue they generate.
+Added: Even if technology is successfully developed pursuant to these R&D Services Contracts and is eventually commercialized, it may never yield enough profit to recover all of the expenses incurred for these contracts.
+Added: As a result, our ability to continue these activities may be jeopardized, particularly because of our negative cash flows from operation.
+Added: Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, trade uncertainties, military conflicts, and elevated interest rates, cause instability and volatility in the global financial markets and disruptions within our industries that have negatively impacted, and could continue to negatively impact our business, our financial results, and our stock price.
Prolonged economic uncertainties or downturns have adversely affected, and could continue to adversely affect our business, financial condition, and results of operations.
−Removed: Negative conditions in the general economy in either the United States or abroad, including conditions resulting from financial and credit market fluctuations, increased inflation, changes in interest rates and 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, delays in the approval of US federal appropriations bills, or armed conflicts, could continue to cause a decrease in corporate spending on data offerings in general and negatively affect the growth of our business.
+Added: Negative conditions in the general economy in either the United States or abroad, including conditions resulting from financial and credit market fluctuations, elevated inflation, changes in interest rates and economic policy, trade uncertainty, including changes in sanctions, international treaties, and other trade restrictions, the recent changes to tariffs, which could cause interruptions in our supply chain or increase spending to meet our obligations, the occurrence of a natural disaster or global public health crisis, delays in the approval of US federal appropriations bills, or armed conflicts, could continue to cause a decrease in corporate spending on data offerings in general and negatively affect the growth of our business.
These conditions could make it extremely difficult for us and our customers to forecast and plan future business activities accurately and have caused, and could continue to cause, our customers to re-evaluate their decision to purchase our offerings, resulting in delay and lengthening of our sales cycles and/or contract cancellations.
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Increasing interest rates in 2024 resulted in higher interest expenses for us, as our credit facility is based on a floating interest rate.
−Removed: Further, the Russian invasion of Ukraine and the continuing conflict led to additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers, which delayed our revenue recognition of certain sales contracts.
+Added: Further, the Russian invasion of Ukraine and the continuing conflict led to additional global sanctions, which at times caused scheduling shifts or launch cancellations by third-party satellite launch providers, which delayed our revenue recognition of
+Added: certain sales contracts.
These sanctions and potential additional sanctions or related issues from global conflicts could further negatively impact our business and financial results.
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Further, climate change has increased, and may continue to increase, the rate, size, and scope of natural disasters.
−Removed: In the event of
−Removed: such a natural disaster or other disruption, we could experience disruptions to our operations or the operations of suppliers, subcontractors, distributors, or customers, which could affect our ability to maintain launch schedules or fulfill our customer contracts.
+Added: In the event of such a natural disaster or other disruption, we could experience disruptions to our operations or the operations of suppliers, subcontractors, distributors, or customers, which could affect our ability to maintain launch schedules or fulfill our customer contracts.
The availability of our services depends on the continuing operation of our satellite operations infrastructure, satellite manufacturing operations, information technology and communications systems.
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There can be no assurance that any contract with the government of any jurisdiction will not be terminated or suspended in the future.
−Removed: For example, the National Oceanic and Atmospheric Administration ("NOAA") did not renew one of its sales orders with us for the time period from mid-July 2023 through mid-January 2024.
−Removed: We expected this sales order to provide approximately $9.9 million of revenue over that time period, and while we were awarded a new order for $9.4 million, commencing in January 2024 and running for eight months, there can be no assurance that renewals or new orders will be awarded in full, for the full period and on favorable terms, or at all, in the future.
+Added: For example, the National Oceanic and Atmospheric Administration ("NOAA") did not
+Added: fully renew one of its sales orders with us for the time period September 2024 through September 2025.
+Added: We expected this sales order to provide approximately $7.0 million of revenue over this time period, and while we were awarded a new order for $3.8 million, there can be no assurance that renewals or new orders will be awarded in full, for the full period and on favorable terms, or at all, in the future.
Although we attempt to ensure that government contracts have standard provisions such as termination for convenience language which reimburses us for reasonable costs incurred, the payments are not assured and would likely not be sufficient to fully compensate us for any early termination of a contract.
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and foreign governments and their prime and subcontractors, we may compete for contracts in a competitive bidding process.
−Removed: We may compete directly with other suppliers or align with a
−Removed: prime or subcontractor competing for a contract.
+Added: We 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 us.
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As our revenue grows, we may be deemed to be “other than small,” which could reduce our eligibility for proposal opportunities or reduce our ability to secure new contracts.
+Added: political and economic environment could materially impact our business operations and financial performance, and future budget and program decisions by the new U.S.
+Added: presidential administration may directly affect us.
+Added: The political and economic environment in the U.S.
+Added: and elsewhere has resulted in and may continue to result in uncertainty.
+Added: Changing regulatory policies because of the changing political environment could impact our regulatory and compliance costs and future revenues, all of which could materially and adversely affect our business, financial condition and operating results.
+Added: Failure to adapt to or comply with evolving regulatory requirements or investor or stakeholder expectations and standards could also negatively impact our reputation, access to capital and our stock price.
+Added: Additionally, levels of U.S.
+Added: federal government spending are difficult to predict and subject to significant risk.
+Added: Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new U.S.
+Added: presidential administration and Congress and what challenges budget reductions will present for us and our industry generally.
+Added: For example, recent changes at the National Oceanic and Atmospheric Administration, including significant reductions in staffing levels, could impact our existing contracts and/or the timing of payments under those contracts.
+Added: We are unable to predict whether budget reduction initiatives will impact our contracts with government agencies, and if so, the extent of those impacts.
+Added: Pressures on and uncertainty surrounding the U.S.
+Added: federal government’s budget, and potential changes in budgetary priorities, could adversely affect the funding of federal programs on which we rely, which could in turn adversely affect our business, financial condition and operating results.
Our 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 our reputation, business, financial condition, and results of operations.
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We regularly develop and introduce new product enhancements, including changes to our satellite designs, upgrades to our operating systems and enhancements to our user interfaces.
−Removed: Failure to adequately de-risk these developments before they are
−Removed: deployed may adversely affect our ability to collect, process and deliver data.
+Added: Failure to adequately de-risk these developments before they are deployed may adversely affect our ability to collect, process and deliver data.
From time to time we may introduce a high concentration of changes at once, which could amplify these risks.
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In addition, certain components of our 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 us to limit the operations of, or completely shut down, components of our system, including our ground stations or other portions of our infrastructure.
−Removed: 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.
+Added: 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
+Added: required for success.
Any system failures, repeated solution failures, shortened satellite commercial service life, or extended reduced levels of service could reduce our sales, increase costs, or result in warranty or liability claims and seriously harm our business, financial results, and results of operations.
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We face competition and could face pricing pressure from, and lose market share to, our competitors, which would adversely affect our business, financial condition, and results of operations.
−Removed: 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.
+Added: The maritime, aviation, and weather and climate 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.
Our primary competitors in these industries include companies that specialize in one or more services similar to those offered by us on a local or regional basis.
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In addition, such governments could sell or provide free of charge similar data and analytics and thereby compete with our offerings.
−Removed: Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather data vertical, GeoOptics, Inc.
+Added: Some of our primary competitors include, in our maritime data vertical, Orbcomm Inc., in our aviation data vertical, Aireon LLC, and in our weather and climate data vertical, GeoOptics, Inc.
with respect to our radio occultation data services.
−Removed: Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., MeteoGroup (acquired by DTN, LLC), Tomorrow.ai, Climavision and The Weather Company with respect to predictive analytics.
+Added: Some of our primary competitors also include analytics companies such as AccuWeather, Inc., Weathernews Inc., DTN, LLC, Tomorrow.io, Climavision and The Weather Company with respect to predictive analytics.
We compete with companies such as AAC Clyde Space, GomSpace A/S, NanoAvionics LLC, ISISSpace and Open Cosmos Ltd.
in our Space Services channel.
−Removed: Additionally, many governmental agencies, such as NOAA, provide weather data at little to no cost.
+Added: Additionally, many governmental agencies, such as NOAA, provide weather and climate data at little to no cost.
We are constantly exposed to the risk that our competitors may utilize data they receive from us to develop and offer competing products and services to their customers, which may reduce the overall demand for our products and services.
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Additionally, competition continues to increase in the markets in which we operate, and we expect competition to further increase in the future, including from new and emerging companies, which could lead to increased pricing pressures.
−Removed: Our 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 our platform, including through selling at zero or negative margins, offering concessions, bundling offerings, or maintaining closed technology platforms.
+Added: Our 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 our platform, including through selling at zero or negative
+Added: margins, offering concessions, bundling offerings, or maintaining closed technology platforms.
Any decrease in the subscription prices for our services, without a corresponding decrease in costs or increase in volume, would adversely impact our ability to achieve or maintain profitability.
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New service solutions and technologies could render our offerings obsolete or less competitive by satisfying customer demand in more attractive ways or through the introduction of incompatible standards.
−Removed: For example, if new transmitters are deployed that emit in the same frequencies as automatic identification system (“AIS”), they might cause our AIS services to be severely compromised or disabled, or alternatively, if a material number of vessels were to turn off their AIS transmitting devices during their voyages, then this would reduce the utility of our AIS data services.
+Added: For example, if new transmitters are deployed that emit in the same frequencies as AIS, they might cause our AIS services to be severely compromised or disabled, or alternatively, if a material number of vessels were to turn off their AIS transmitting devices during their voyages, then this would reduce the utility of our AIS data services.
Particular technological developments that could adversely affect us include the deployment by our competitors of new satellites with greater power, flexibility, efficiency, or capabilities, as well as continuing improvements in terrestrial technologies.
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For certain of our offerings, we are dependent on the continued operation of and access to allocated bands in the radio frequency spectrum and various GNSS.
−Removed: Any curtailment of the operating capability of these systems or limitations on our access to, or use of the signals, or discontinuance of service could result in degradation of our services or performance and may have an adverse effect on our business.
+Added: Any curtailment of the operating capability of these systems or limitations on our access to, or use
+Added: of the signals, or discontinuance of service could result in degradation of our services or performance and may have an adverse effect on our business.
In addition, as we introduce new services or enter into new markets, we may face new technological, operational, compliance, regulatory, and administrative risks and challenges, including risks and challenges unfamiliar to us.
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The length of our sales cycle, from initial contact with our sales team to a contractual commitment from a customer, can also vary substantially from customer to customer based on customer size, industry, maturity, profitability, whether we are launching a new solution, and deal complexity and customization.
−Removed: Our sales cycle can vary considerably and is made more uncertain by regional or global events, inflation, rising interest rates and other global economic and political uncertainties.
+Added: Our sales cycle can vary considerably and is made more uncertain by regional or global events, inflation, elevated interest rates and other global economic and political uncertainties.
Such events have resulted in and may continue to cause a general reduction in spending on data by our customers, which will further affect our ability to estimate not only the length of the sales cycle, but also the anticipated size of potential subscriptions.
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Our customers may depend on our technical support services to resolve issues relating to our platform.
−Removed: If we do not succeed in helping our customers quickly resolve issues or provide effective ongoing education related to our platform, our reputation
−Removed: could be harmed, and our existing customers may not renew or upgrade their subscriptions or may cancel their contracts.
+Added: If we do not succeed in helping our customers quickly resolve issues or provide effective ongoing education related to our platform, our reputation could be harmed, and our existing customers may not renew or upgrade their subscriptions or may cancel their contracts.
To the extent that we are unsuccessful in hiring, training, and retaining adequate customer support resources, our ability to provide adequate and timely support to our customers, and our customers’ satisfaction with our platform, will be adversely affected.
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In addition, our 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.
−Removed: Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, Israel’s war with Hamas, and rising interest rates may result in longer and unpredictable sales cycles, could result in potential customers deciding not to contract with us or current customers deciding not to renew, could cause delays in renewal, upgrade, or expansion decisions for some of our existing customers, may reduce the effectiveness of our sales and marketing efforts, and could reduce the duration of subscriptions.
+Added: Uncertain macroeconomic and geopolitical factors, including as a result of inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, Israel’s war with Hamas, and elevated interest rates may result in longer and unpredictable sales cycles, could result in potential customers deciding not to contract with us or current customers deciding not to renew, could cause delays in renewal, upgrade, or expansion decisions for some of our existing customers, may reduce the effectiveness of our sales and marketing efforts, and could reduce the duration of subscriptions.
In addition, these situations could result in increased customer churn, a lengthening of our sales cycle with some of our potential customers, or reduced contract value with prospective or existing customers.
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The success of any new or enhanced features depends on several factors, including market demand for the enhanced features, timely completion and delivery, adequate quality testing, and competitive pricing.
−Removed: If we are unable to successfully develop new features, enhance our existing
−Removed: features to meet customer requirements, or otherwise gain broader market acceptance, our business, financial condition, and results of operations would be adversely affected.
+Added: If we are unable to successfully develop new features, enhance our existing features to meet customer requirements, or otherwise gain broader market acceptance, our business, financial condition, and results of operations would be adversely affected.
If our 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 our platform, including tiered and premium features or project-based services, our business, financial condition, and results of operations would be adversely affected.
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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.
−Removed: We may find it difficult or costly to update our 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 our customers’ needs.
+Added: We may find it difficult or costly to update our services and to develop new services quickly enough to work effectively with new or changed technologies, to
+Added: keep pace with evolving industry standards or to meet our customers’ needs.
In addition, our industries may be slow to accept new technologies that we develop because of, among other things, existing regulations or standards written specifically for older technologies and a general unfamiliarity with new technologies.
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This difficulty or failure may lead to service interruptions or degradations in the services offered to our customers, which could cause our revenues to decline materially and could adversely affect our ability to market our services and generate future revenues and profit.
−Removed: Further, our 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 inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, and rising interest rates.
+Added: Further, our 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 inflationary pressures, currency exchange rate fluctuations, the Russian invasion of Ukraine, and elevated interest rates.
As a result, we may experience operational delays and may have to evaluate replacement suppliers for our satellite components, equipment, and operational services.
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The data, software, and services provided by these third parties are critical to our ability to increase our sales to customers, operate and maintain our platform, and accurately maintain books and records.
−Removed: Any disruption in these services could reduce the quality or volume of
−Removed: data we are able to provide to our customers, impair our ability to execute on our operating plan, and disrupt our business.
+Added: Any disruption in these services could reduce the quality or volume of data we are able to provide to our customers, impair our ability to execute on our operating plan, and disrupt our business.
Further, if these services cease to be available to us on commercially reasonable terms, or at all, we may be required to use additional or alternative services, or to develop additional capabilities within our business, any of which may not be available or could require significant resources and adversely affect our business, financial condition, and results of operations.
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Our manufacturing site is vulnerable to damage or interruption from floods, fires, power loss, or aging infrastructure.
−Removed: An infrastructure failure could result in the destruction of satellites under construction or inventory, manufacturing delays, or additional costs incurred, and we do not maintain back-up manufacturing facilities or operations.
+Added: An infrastructure failure could result in the destruction of satellites under construction or inventory, manufacturing delays, or
+Added: additional costs incurred, and we do not maintain back-up manufacturing facilities or operations.
We may not be able to replace or supplement the satellite manufacturing process with third-party manufacturers, and even if we are able to do so, there could be a substantial period of time in which new satellites would not be manufactured.
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In the event that a launch is delayed, our timing for the recognition of revenue tied to customer acceptance of project-based deliverables may similarly be delayed.
−Removed: During the fiscal year ended December 31, 2023, one of our launch partners experienced a launch failure, but we did not have any satellites on the failed launch.
+Added: For example, one of our launch partners experienced a launch failure, but we did not have any satellites on the failed launch.
The launch partner then delayed future launches until it completed its investigations and obtained the necessary approvals to resume launches.
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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;
+Added: • greater risk of unexpected changes in regulatory requirements, tariffs and tax laws, trade laws, export quotas, customs duties, treaties, and other trade restrictions;
• challenges inherent to efficiently recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture and employee programs across all of our offices;
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• risks associated with trade restrictions and foreign legal requirements, including any importation, certification, and localization of our platform that may be required in foreign countries;
−Removed: • greater risk of unexpected changes in regulatory requirements, tariffs and tax laws, trade laws, export quotas, customs duties, treaties, and other trade restrictions;
• 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 laws and regulations;
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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;
−Removed: • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our results of operations and result in restatements of, or irregularities in, financial statements;
+Added: • heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact our results of operations and result in restatement of, or irregularities in, financial statements;
• the uncertainty of protection for intellectual property rights in some countries;
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Any of the foregoing could adversely affect our business, financial condition, and results of operations.
+Added: Risks Related to the Transactions
+Added: Failure to complete the Transactions would have a material adverse effect on us.
+Added: On November 13, 2024, we entered into a Share Purchase Agreement (the “Purchase Agreement”) with Kpler Holding SA, a Belgian corporation (“Buyer”), pursuant to which we agreed to sell our maritime business to Buyer and enter into certain ancillary agreements (the “Transactions”).
+Added: The maritime business to be sold pursuant to the Transactions does not include any part of our satellite network or operations.
+Added: The purchase price to be paid by Buyer to us at the closing of the Transactions is a cash payment based upon an enterprise value of $233.5 million, subject to certain adjustments.
+Added: The Transactions also include a twelve-month transition service and data provision agreement for $7.5 million.
+Added: The Purchase Agreement provides that the closing of the Transactions is subject to the satisfaction or waiver of certain closing conditions set forth in the Purchase Agreement.
+Added: We believe all conditions to closing contained in the Purchase Agreement have been satisfied or could be satisfied.
+Added: Notwithstanding our notice to Buyer to that effect, Buyer has failed to consummate the closing.
+Added: Buyer has cited various reasons for declining to close, including a review of the Transactions by the UK Competition and Markets Authority.
+Added: We have rejected these reasons.
+Added: We believe that Buyer’s failure to close is not consistent with the terms of the Purchase Agreement, which do not give Buyer the option to delay closing once all closing conditions have been met.
+Added: As a result of the foregoing, on February 10, 2025, we filed a complaint in the Delaware Court of Chancery against Buyer seeking a grant of specific performance ordering Buyer to satisfy its obligations under the Purchase Agreement and consummate the closing in accordance with the terms of the Purchase Agreement.
+Added: In the complaint, we also requested a declaratory judgment declaring that Buyer has breached its obligations under the Purchase Agreement and is not excused from performing its obligations under the Purchase Agreement, including proceeding with the closing.
+Added: Buyer removed the matter to the District of Delaware, pursuant to a contract term in the Purchase Agreement promising not to contest removal to that court.
+Added: The District of Delaware initially selected a March 4 trial date, but on February 26, 2025, the court set a trial date of May 28-30, 2025.
+Added: There is no assurance as to what action the District of Delaware will take with respect to the proceeding initiated by us and there is no assurance as to whether or not the Transactions will be consummated on the terms contemplated or at all.
+Added: The amount of any damages which may be sought or obtained from Buyer cannot be determined at this time.
+Added: If the Transactions are not completed, the market price of our Class A common stock could decline as a result and our business would be adversely affected, including as a result of the need to pay expenses relating to the uncompleted Transactions, such as legal, accounting, printing and financial advisory fees;
+Added: negative reactions from our employees, customers, suppliers and financing sources, from other persons with whom we have important business relationships and from regulators;
+Added: and litigation related to the Transactions.
+Added: If the Purchase Agreement is terminated and we seek to negotiate a similar deal with a different counterparty, we might not be able to find a party willing to enter into a transaction with terms equivalent to or more attractive than the terms agreed to in the Purchase Agreement.
+Added: The Transactions, and uncertainty regarding the Transactions, may adversely affect our relationships with customers, suppliers, strategic partners and others and could adversely affect our ability to manage our business.
+Added: There is currently uncertainty regarding the completion of the Transactions.
+Added: This uncertainty and the prospect of the Transactions itself have caused and may continue to cause customers, suppliers, strategic partners and others that deal with us to delay or defer entering into contracts with us or making other decisions concerning us or to seek changes in or cancellation of existing business relationships with us.
+Added: Delays or deferrals of contracts or other decisions or changes in or cancellations of existing agreements or relationships could in some individual cases or in the aggregate have an adverse impact on our business, regardless of whether the Transactions are ultimately completed.
+Added: In addition, under the terms of the Purchase Agreement, we are subject to certain restrictions on the conduct of our business prior to the completion of the Transactions, including being obligated to use commercially reasonable efforts to carry on our business in the ordinary course and not to engage in specified types of actions, subject to certain exceptions.
+Added: These restrictions could delay or otherwise adversely affect our ability to execute certain of our business strategies or limit our ability to respond to competitive or other developments that arise prior to the completion of the Transactions and could negatively affect our business and operations.
+Added: Uncertainties associated with the Transactions may result in our losing management and other key personnel, which could adversely affect our business and operations.
+Added: We are dependent on the experience and industry knowledge of our officers and other key management, technical and professional personnel to execute our business plans.
+Added: Our success will depend in part upon our ability to retain key management and other key personnel.
+Added: Current and prospective employees of ours may experience uncertainty about their roles with us following the Transactions or have other concerns regarding the timing of the Transactions or the operations of the Company following the Transactions, any of which may have an adverse effect on our ability to retain, attract or motivate key management and other key personnel.
+Added: If we are unable to retain personnel, including key management, who are critical to future operations, we could face disruptions in our operations, loss of customers, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs.
+Added: In addition, the loss of key personnel could diminish the anticipated benefits of the Transactions.
+Added: We have incurred and expect to incur significant transaction costs in connection with the Transactions.
+Added: We have incurred and expected to continue to incur a number of non-recurring costs associated with negotiating and completing the Transactions, including, among others, fees paid to financial, legal, accounting and other advisors, employee retention, severance and benefit costs, filing fees and, potentially, termination fees.
+Added: These fees and costs have been, and will continue to be, substantial and, in many cases, will be borne by us whether or not the Transactions are completed, and could have an adverse effect on our financial position, results of operations and cash flows.
+Added: There is no assurance that we will be able to realize the anticipate benefits from the Transactions.
+Added: Even if the Transactions are completed, there is no assurance that we will be able to realize the anticipated benefits from the Transactions.
+Added: In the event that we complete the Transactions, we will be highly dependent on the success of our remaining
+Added: Moreover, there may be post-closing risks associated with the Transactions, which could result in liability to us following the closing of the Transactions.
Risks Related to Intellectual Property, Privacy, Cybersecurity, and Technical Infrastructure
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Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could impair the functionality of our services and technology, delay introductions of enhancements to our services and technology, result in us substituting inferior or more costly technologies into our service offerings, or harm our reputation and brand.
−Removed: In addition, we may be required to license additional technology from third parties
−Removed: to develop and market new features, which may not be on commercially reasonable terms, or at all, and could adversely affect our ability to compete.
+Added: In addition, we may be required to license additional technology from third parties to develop and market new features, which may not be on commercially reasonable terms, or at all, and could adversely affect our ability to compete.
Claims by others that we infringed their proprietary technology or other intellectual property rights would harm our business.
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We include open source software in some of our technology to improve functionality and reduce engineering time and cost and make the source code of some of our proprietary platform features available as open source to facilitate collaboration, but this may also enable others to compete more effectively.
−Removed: addition, the public availability of such open source software may make it easier for others to compromise our services and technology.
+Added: In addition, the public availability of such open source software may make it easier for others to compromise our services and technology.
Some open source licenses contain requirements that could require us to make available source code for modifications or derivative works we create pursuant to the terms of such open source licenses.
If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public.
−Removed: This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a loss of our competitive advantages.
+Added: This would allow our competitors to create similar offerings with lower development effort
+Added: and time and ultimately could result in a loss of our competitive advantages.
Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all our software.
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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.
−Removed: Any security breaches or other incidents owing to these or other causes could result in loss of or unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, or destruction or other unauthorized processing of, our data or our customers’ data, or disrupt our ability to operate our platform for a lengthy period of time.
+Added: Any security breaches or other incidents owing to these or other causes could result in loss of or
+Added: unauthorized access to, damage to, disablement or encryption of, use or misuse of, disclosure of, modification of, or destruction or other unauthorized processing of, our data or our customers’ data, or disrupt our ability to operate our platform for a lengthy period of time.
Any actual or perceived security breach or incident could interrupt our operations, harm our reputation and brand, result in remediation and cybersecurity protection costs, result in lost revenue, lead to litigation and legal risks, increase our insurance premiums, result in other financial exposure, lead to loss of user confidence in us or decreased use of our platform, and otherwise damage our competitiveness, business, financial condition, and results of operations.
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Our platform depends, in significant part, on the virtual cloud infrastructure hosted in AWS.
−Removed: Any incident affecting AWS infrastructure that may be caused by tsunamis, tornados, floods, hurricanes, other extreme or unusual weather events, earthquakes, fires, acts of war or terrorism, or other catastrophic events, power loss, telecommunications failures, cyberattacks, and other similar events beyond our control, could adversely affect our cloud-native platform.
+Added: Any incident affecting AWS infrastructure that may be caused by tsunamis, tornados, floods, hurricanes, other extreme or unusual weather events, earthquakes, fires, acts of war or terrorism, or other catastrophic events, power loss, telecommunications failures,
+Added: cyberattacks, and other similar events beyond our control, could adversely affect our cloud-native platform.
Additionally, AWS may experience threats or attacks from computer malware, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks.
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In addition, we are required to maintain similar licenses and permits in Luxembourg, Singapore and Canada, which impose regulatory and operational requirements.
−Removed: License approval can include an interagency review of safety, operational, radio
−Removed: frequency interference, national security, and foreign policy, and international obligations implications, as well as a review of foreign ownership.
+Added: 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.
Further, because regulations in each country differ, we may not be aware if some of our partners or persons with whom we or our partners do business do not hold the requisite licenses and approvals.
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public sector customers, some of which are required to report any suspension or debarment when submitting a proposal.
+Added: We have been involved, are currently involved, and may in the future become involved, in claims, lawsuits, government investigations, and other proceedings that could adversely affect our business, financial condition, and results of operations.
+Added: From time to time, we have been involved, are currently involved, and may in the future become involved, in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
+Added: For example, the restatement and related material weaknesses in our internal control over financial reporting have resulted in stockholder litigation against us and adverse regulatory consequences.
+Added: Claims against us, whether meritorious
+Added: or not, are frequently time-consuming, result in costly litigation, harm our reputation, require significant management attention, and divert significant resources.
+Added: In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate and subject to change.
+Added: The risk of litigation may be heightened among public companies, like us, that have previously undergone a merger with a special purpose acquisition company, as well as for companies, like us, that have restated their financial statements.
+Added: Determining reserves for pending litigation or investigations is a complex and fact-intensive process that requires significant subjective judgment.
+Added: It is possible that a resolution of one or more such proceedings or investigations could result in substantial damages, settlement costs, fines, and penalties that could adversely affect our business, financial condition, and results of operations.
+Added: These proceedings or investigations could also result in harm to our reputation and brand, sanctions, consent decrees, injunctions, or other orders requiring a change in our business practices.
+Added: Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements.
+Added: Any of these consequences could adversely affect our business, financial condition, and results of operations.
Our ability to obtain or maintain licensing authorization for our platform is subject to government rules and processes which can cause delays or failures in obtaining authorizations requested.
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If we obtain a required authorization but we do not receive customer acceptance of project-based deliverables regarding the construction, launch, and operation of a satellite by deadlines that may be established in the authorization, we may lose our authorization to operate a satellite using certain frequencies in an orbital location.
−Removed: authorizations we may obtain may also impose operational restrictions or permit interference that could affect our use of planned satellites.
+Added: Any authorizations we may obtain may also impose operational restrictions or permit interference that could affect our use of planned satellites.
Countries or their regulatory authorities, or the International Telecommunication Union ("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 our existing authorizations and the frequency allocations that we rely on for use of our satellites to be changed or cancelled, require us to incur additional costs, impose or change existing price ceilings, or otherwise adversely affect our operations or revenues.
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export controls laws and regulations, U.S.
−Removed: economic sanctions, or other similar laws or regulations in other jurisdictions, we 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 our export or import privileges.
+Added: economic sanctions, or other similar laws or regulations in other jurisdictions, we could be subject to both civil and criminal penalties, including substantial fines, possible incarceration for
+Added: employees and managers for willful violations, and the possible loss of our export or import privileges.
Compliance with the EAR, ITAR, and other applicable regulatory requirements regarding the export of our services, including new releases and/or the performance of services, may create delays in the introduction of our services in non-U.S.
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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.
−Removed: We have failed, and could 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,
−Removed: government investigations and civil and criminal penalties.
+Added: We have failed, and could 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, government investigations and civil and criminal penalties.
Additionally, monitoring and ensuring compliance with these complex export control laws, regulations and sanctions is particularly challenging because our offerings are widely distributed throughout the world.
26 unchanged sentences
The relevant taxing authorities may disagree with our determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions.
−Removed: If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which
−Removed: could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.
+Added: If such a disagreement were to occur, and our position was not sustained, we 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 our operations.
There is also a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth by the Organization for Economic Co-operation and Development, and unilateral measures being implemented by various countries due to a lack of consensus on these global initiatives.
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As a result, even if we earn net taxable income in the future, our ability to use our or Legacy Spire’s Net Operating Losses and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially adversely affect our cash flows and result in increased future income tax liability.
−Removed: The Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, includes changes to U.S.
+Added: The Tax Cuts and Jobs Act (the "Tax Act"), as amended by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, includes changes to U.S.
federal tax rates and the rules governing Net Operating Losses.
6 unchanged sentences
Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction.
−Removed: Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future.
+Added: jurisdictions in which we do not collect such taxes may assert that such taxes are applicable, which could result in tax assessments, penalties, and interest, and we may be required to collect such taxes in the future.
Such tax assessments, penalties, interest, or future requirements could adversely affect our financial condition and results of operations.
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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.
−Removed: Changes in accounting principles applicable to us, or varying
−Removed: interpretations of current accounting principles, in particular, with respect to revenue recognition of our solutions, could have a significant effect on our reported results of operations.
+Added: Changes in accounting principles applicable to us, or varying interpretations of current accounting principles, in particular, with respect to revenue recognition of our solutions, could have a significant effect on our reported results of operations.
Further, any difficulties in the implementation of changes in accounting principles, including the ability to modify our accounting systems, could cause us to fail to meet our financial reporting obligations and/or lead to a determination of ineffective controls, which could result in regulatory discipline and harm investors’ confidence in us.
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Our estimates and judgments relating to our critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock.
+Added: Certain of the contracts in our “Space as a Service” business (the “Space Services Contracts”) are highly customized and require significant judgment in determining the appropriate accounting treatment, which could increase the risk of material misstatements in our consolidated financial statements.
+Added: Certain of our Space Services Contracts are so highly customized that significant judgment is required in determining the appropriate accounting treatment for such contracts.
+Added: As a result, the risk of errors in our consolidated financial statements may be higher than the corresponding risk faced by other companies that do not have customized agreements.
+Added: The restatement of our consolidated financial statements in our Annual Report on Form 10-K/A for the year ended December 31, 2023 and our Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2024 is partially the result of accounting errors associated with certain of these Space Services Contracts, and there continues to be risk of material misstatements related to such contracts in the future, which may adversely affect our business, financial condition, and results of operations.
+Added: We have identified material weaknesses in our internal control over financial reporting that have resulted in the restatement of our financial statements as of and for the fiscal years ended December 31, 2023 and December 31, 2022, unaudited condensed consolidated financial statements as of the quarter ends and for the interim periods in the fiscal years ended December 31, 2023 and 2022, and unaudited condensed consolidated financial statements for the three-month period ended, and as of, March 31, 2024 (the “Affected Periods”).
+Added: If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting or disclosure controls and procedures, it may result in future material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition, and results of operations.
+Added: We have identified material weaknesses in our internal control over financial reporting.
+Added: 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.
+Added: These material weaknesses are as follows:
+Added: We did not design and maintain an effective control environment commensurate with the financial reporting requirements of a public company.
+Added: Specifically, we 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.
+Added: Additionally, the lack of a sufficient number of professionals resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, amongst other things, insufficient segregation of duties in our finance and accounting functions.
+Added: This material weakness contributed to the following additional material weaknesses:
+Added: We 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 our financial statements.
+Added: 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;
+Added: We did not design and maintain effective controls over the segregation of duties related to journal entries and account reconciliations.
+Added: Specifically, certain personnel have the ability to both (a) create and post journal entries within our general ledger system, and (b) prepare and review account reconciliations;
+Added: The 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.
+Added: We did not design and maintain effective controls over the accounting for our Space Services Contracts and R&D Services Contracts with customers.
+Added: Specifically, we did not design and maintain effective controls over the identification of performance obligations to ensure revenue is recognized at the time performance obligations are satisfied, the identification and accounting for embedded leases, the classification and accounting for costs incurred in connection with performing services, and the recognition of allowances for current expected credit losses.
+Added: This material weakness resulted in the restatement of our previously filed financial statements for the Affected Periods.
+Added: We did not design and maintain effective controls related to the identification of and accounting for certain non-routine, unusual or complex transactions, including the proper application of GAAP to such transactions.
+Added: Specifically, we did not design and maintain:
+Added: controls to timely identify and account for warrant instruments, which resulted in the restatement of the previously issued financial statements of NavSight related to adjustments to warrant liabilities and equity;
+Added: controls to account for business combinations, including the associated valuation estimates and the completeness and accuracy of the opening balance sheet, which did not result in a misstatement to our consolidated financial statements;
+Added: controls to timely identify and account for the fair value of the contingent earnout liability, which resulted in an error in the fair value of the contingent earnout liability in, and the restatement of, our previously issued unaudited condensed consolidated financial statements as of and for each of the interim periods ended September 30, 2021, March 31, 2022 and June 30, 2022 and our consolidated financial statements as of and for the year ended December 31, 2021.
+Added: Additionally, each of the material weaknesses described above 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.
+Added: As a result of our filing of the Annual Report prior to the completion of PwC’s audit, as further described in the “Explanatory Note” to this Annual Report on Form 10-K/A, we have reevaluated the effectiveness of our disclosure controls and procedures and identified a material weakness in our disclosure controls and procedures.
+Added: Specifically, subsequent to the filing of the Annual Report, our principal executive officer and principal financial officer concluded that, in addition to the previously disclosed material weaknesses in internal control over financial reporting, our disclosure controls and procedures were not effective as of December 31, 2024 because we did not design and maintain effective policies and procedures related to the communication between the finance and accounting teams regarding the status of the review and approval of documents to be filed with the SEC.
+Added: We are taking certain measures to remediate these material weaknesses as described in Part II, Item 9A of this Annual Report on Form 10-K/A, however such material weaknesses had not been remediated as of December 31, 2024.
+Added: While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period, we are committed to continuous improvement and will continue to diligently review our internal control over financial reporting.
+Added: 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.
+Added: In addition, due to the material weaknesses in internal control over financial reporting, we have also determined that our disclosure controls and procedures were ineffective as of December 31, 2024.
+Added: We are working to remediate the material weaknesses as efficiently and effectively as possible, but there can be no assurance as to when the material weaknesses will be remediated.
+Added: At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan;
+Added: however, these remediation measures will be time consuming, will result in us incurring significant costs, and will place significant demands on our financial and operational resources.
+Added: We cannot assure that the measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to our 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.
+Added: The effectiveness of our 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.
+Added: Any failure to design, implement and maintain effective internal control over financial reporting and effective disclosure controls and procedures, or any difficulties encountered in their implementation or improvement, may result in additional material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations, which may adversely affect our business, financial condition and results of operations.
+Added: Our failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair our ability to produce timely and accurate financial statements or comply with applicable regulations.
+Added: As a public company, we are 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 New York Stock Exchange (“NYSE”).
+Added: Section 404(a) of the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
+Added: We are required to provide an annual management report on the effectiveness of our internal controls over financial reporting.
+Added: The standards required for a public company under Section 404(a) are significantly more stringent than those that were required of us as a privately-held company.
+Added: We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we 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 our principal executive and financial officers.
+Added: We are also continuing to improve our internal control over financial reporting.
+Added: We have expended and anticipate that we will continue to expend resources in order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting.
+Added: Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business, including increased complexity resulting from any further international expansion.
+Added: Further, weaknesses in our disclosure controls and our internal control over financial reporting have been identified, and others may be discovered in the future.
+Added: Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements.
+Added: Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, such as the restatement of our financial statements for the Affected Periods.
+Added: Any failure to implement and maintain effective internal control over financial reporting in a timely manner or with adequate compliance could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
+Added: Ineffective disclosure controls and procedures and internal control over financial reporting could also have a material adverse effect on our business and cause investors to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our common stock.
+Added: In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE.
Our metrics and estimates, used to evaluate our performance and to make results of operations projections, rely in large part upon assumptions and analyses developed by us, and are subject to inherent challenges in measurement.
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These metrics are calculated using internal company data and have not been evaluated by a third party, and our estimates are inherently subject to assumptions and forward-looking projections.
−Removed: Our metrics and estimates may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or the assumptions on which we rely.
+Added: Our metrics and estimates may differ from
+Added: estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or the assumptions on which we rely.
While we believe our assumptions and the data underlying our metrics and estimates are reasonable, these metrics and estimates may not be accurate and the conditions supporting our metrics and estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
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We have substantial indebtedness under our credit facility and our obligations thereunder may limit our operational flexibility or otherwise adversely affect our financial condition.
−Removed: As of December 31, 2023, we had $115.5 million outstanding under our financing agreement (the "Blue Torch Financing Agreement") that we entered into with Blue Torch in June 2022, which matures on June 13, 2026.
+Added: As of December 31, 2024, we had $98.4 million outstanding under our financing agreement (the "Blue Torch Financing Agreement") that we entered into with Blue Torch Finance LLC (“Blue Torch”) in June 2022, which matures on June 13, 2026.
There can be no assurance that we will be able to repay this indebtedness when due, or that we will be able to refinance this indebtedness on acceptable terms or at all.
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• engage in certain intercompany transactions and other transactions with affiliates.
−Removed: In addition, the Blue Torch Financing Agreement requires that we comply with certain financial covenants.
−Removed: We cannot guarantee that we will be able to maintain compliance with these various covenants or, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.
+Added: In addition, the Blue Torch Financing Agreement requires that we comply with certain covenants.
+Added: In the past, we have had points in time where we have been in non-compliance with the leverage ratio and minimum liquidity financial covenants under the Blue Torch Financing Agreement.
+Added: As of March 12, 2025, we are back in compliance with all of our covenants, but we cannot guarantee that we will be able to maintain compliance with these various covenants or, if we would be able to obtain waivers from the lenders and/or amend the covenants if needed.
Even if we comply with all of the applicable covenants, the restrictions on the conduct of our business could adversely affect our business by, among other things, limiting our ability to take advantage of financing opportunities, mergers, acquisitions, investments, and other corporate opportunities that may be beneficial to our business.
−Removed: A change in control or a breach of any of the covenants in the Blue Torch Financing Agreement could result in an event of default, which, if not cured or waived, could trigger acceleration of our indebtedness and an increase in the interest rates applicable to such indebtedness.
−Removed: This may result in the acceleration of, or default under, any other debt we may incur in the future to which a cross-acceleration or cross-default provision applies.
+Added: As of December 31, 2024, we were in breach of certain of our covenants under the Blue Torch Financing Agreement, which resulted in recording our debt as current on our consolidated balance sheets.
+Added: The balance due was reflected as a current liability in the consolidated balance sheets as of December 31, 2024.
The acceleration of the indebtedness under our credit agreements or under any other indebtedness could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: In the event of any default under our 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.
+Added: While we are no longer in default under the Blue Torch Financing Agreement following the Waiver and Amendment No.
+Added: 5 to Financing Agreement with Blue Torch and certain lenders, which was entered into on March 12, 2025, in the event of any further default under our 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, our obligations under the Blue Torch Financing Agreement are secured by a security interest in substantially all of our assets.
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Our ability to make scheduled payments on or to refinance our debt obligations depends on our 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 our control.
−Removed: We may not be able to maintain a level of cash flows from
−Removed: operating activities sufficient to permit us to pay the principal, premium, if any, and/or interest on our indebtedness.
+Added: We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and/or interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments, acquisitions, capital expenditures, and payments on account of other obligations, seek additional capital, restructure or refinance our indebtedness, or sell assets.
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In addition, we cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms, or at all.
−Removed: If we are at any point unable to repay or otherwise refinance our indebtedness when due, or if any other event of default (including as a result of our failure to comply with any of our affirmative or negative covenants) is not cured or waived, the applicable lenders could accelerate our outstanding obligations or proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation.
+Added: If we are at any point unable to repay or otherwise refinance our indebtedness when due, or if any future event of default (including as a result of our failure to comply with our affirmative or negative covenants) is not cured or waived, the applicable lenders could accelerate our outstanding obligations or proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation.
In the event the applicable lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
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In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (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.
+Added: Our results of operations vary and are unpredictable from period to period, which could cause the market price of our Class A common stock to decline.
+Added: Our results of operations may fluctuate from period to period as a result of a number of factors, many of which are outside of our control and may be difficult to predict.
+Added: Some of the factors that may cause our results of operations to fluctuate from period to period include:
+Added: • our ability to attract new customers, retain existing customers, and expand the adoption of our platform, particularly to our largest customers;
+Added: • market acceptance and the level of demand for our platform;
+Added: • the quality and level of the execution of our business strategy and operating plan;
+Added: • the effectiveness of our sales and marketing programs;
+Added: • the competitive conditions in the industry, including consolidation within the industry, strategic initiatives by us or by competitors, or introduction of new services by us or our competitors;
+Added: • the length of our sales cycle, including the timing of upgrades or renewals;
+Added: • the volume of sales generated by subscription sales as opposed to Space Services Contracts and R&D Services Contracts;
+Added: • our ability to successfully expand internationally and penetrate key markets;
+Added: • pricing pressure as a result of competition or otherwise;
+Added: • our ability to develop and respond to new technologies;
+Added: • the impact and costs, including those with respect to integration, related to the acquisition of businesses, talent, technologies, or intellectual property rights;
+Added: • increases in and the timing of operating expenses that we may incur to grow our operations and to remain competitive;
+Added: • the cost and availability of components, including any changes to our supply or manufacturing partners;
+Added: • 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;
+Added: • service outages or security breaches or incidents and any related occurrences;
+Added: • trade protection measures, such as tariffs or duties;
+Added: • changes in the legislative or regulatory environment;
+Added: • adverse litigation judgments, settlements, or other litigation-related costs;
+Added: • general economic conditions in either domestic or international markets, including currency exchange rate fluctuations, supply chain impacts, inflation and geopolitical uncertainty and instability, such as the conflicts in Ukraine and Gaza and their impacts on the regional and global economies.
+Added: Any one or more of the factors above may result in significant fluctuations in our results of operations.
+Added: In addition, our 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.
+Added: The timing of customer acceptance on project-based deliverables may impact or delay our recognition of revenue from such projects.
+Added: The variability of our results of operations or other operating estimates could result in our failure to meet our expectations or those of securities analysts or investors.
+Added: If we fail to meet or exceed such expectations for these or any other reasons, the market price of our Class A common stock could decline and we could face costly lawsuits, including securities class action suits.
Our 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 our stockholders’ ability to obtain a chosen judicial forum for disputes with us or our directors, officers, employees, or stockholders.
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(ii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the first time after 11:59 p.m.
−Removed: Eastern Time on the Closing Date that both (a) such Legacy Spire Founder is no longer providing services
−Removed: to us as an officer, employee, or consultant and (b) such Legacy Spire Founder is no longer a director of the Company;
+Added: Eastern Time on the closing date of the Merger that both (a) such Legacy Spire Founder is no longer providing services to us as an officer, employee, or consultant and (b) such Legacy Spire Founder is no longer a director of the Company;
(iii) the date fixed by our board of directors that is no less than 61 days and no more than 180 days following the date that such Legacy Spire Founder’s employment with us is terminated for cause (as defined in our certificate of incorporation);
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• our ability to meet compliance requirements;
−Removed: • material weaknesses, ineffective internal control over financial reporting, ineffective disclosure controls, and restatements of our financial statements;
+Added: • material weaknesses, ineffective internal control over financial reporting, ineffective disclosure controls, and restatement of our financial statements;
• commencement of, or involvement in, litigation involving us;
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General Risk Factors
+Added: The restatement of our previously issued financial statements for the Affected Periods has resulted in unanticipated costs, stockholder litigation and regulatory actions, and may adversely affect investor confidence, our stock price, our ability to raise capital in the future and our reputation.
+Added: We have incurred unanticipated costs for accounting and legal fees in connection with the restatement of our financial statements for the Affected Periods.
+Added: The restatement may erode investor confidence in our company, our financial reporting, accounting practices and processes, and may raise reputational issues for our business.
+Added: The restatement may negatively impact the trading price of our securities and make it more difficult for us to raise capital on acceptable terms, or at all.
+Added: In addition, the restatement and related material weaknesses in our internal control over financial reporting have resulted in stockholder litigation against us and adverse regulatory consequences.
+Added: These and any future regulatory consequences, litigation, claims or disputes, whether successful or not, could subject us to additional costs, divert the attention of our management, or impair our reputation.
+Added: Each of these consequences could have a material adverse effect on our business, results of operations and financial condition.
We depend on our management team and other highly skilled personnel, and we may fail to attract, retain, motivate, or integrate highly skilled personnel, which could adversely affect our business, financial condition, and results of operations.
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In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business.
−Removed: If our senior management team fails to work together effectively and to execute our plans and strategies, our business, financial condition, and results of operations could be adversely affected.
+Added: For example, (i) effective January 1, 2025, Theresa Condor was appointed our Chief Executive Officer and Peter Platzer was
+Added: appointed our Executive Chairman, (ii) effective January 6, 2025, Celia Pelaz was appointed our Chief Operating Officer, and (iii) effective March 7, 2025, Leonardo Basola resigned as our Chief Financial Officer and Thomas Krywe was appointed our interim Chief Financial Officer.
+Added: If our senior management team fails to work together effectively and to execute our plans and strategies, including as a result of recent executive transitions, our business, financial condition, and results of operations could be adversely affected.
Our future success also depends, in part, on our ability to continue to attract and retain highly skilled personnel.
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If we are unable to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts, and employee morale, productivity, and engagement could suffer, which could adversely affect our business, financial condition, and results of operations.
−Removed: If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline.
−Removed: The trading market for our securities may be influenced by the research and reports that industry or securities analysts may publish about us, our business, market, or competitors.
−Removed: The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations.
−Removed: If few securities or industry analysts cover us, or if one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.
−Removed: If any of the analysts who cover us adversely changes its recommendation regarding our Class A common stock or provides more favorable relative recommendations about our competitors or publishes inaccurate or unfavorable research about our business, the price of our Class A common stock would likely decline.
We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
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As a result, the stockholders may not have access to certain information they may deem important.
−Removed: In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised
−Removed: accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company.
+Added: In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company.
An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.